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D&D Associates, Inc v. Board of Education of North Plainfield

May 13, 2011


The opinion of the court was delivered by: Cooper, District Judge



This matter comes before the Court on the motion of the plaintiff, D&D Associates, Inc. ("D&D"), to compel the production of documents and overrule claims of privilege and attorney work product. (Dkt. entry no. 413, Mot. to Compel.) The defendant Board of Education of North Plainfield (the "Board") opposes the motion. (Dkt. entry no. 417, Board Br.) The Court heard oral argument on the motion on April 21, 2011. For the reasons that follow, the Court will deny in part the motion, order production of certain documents for in camera review, and hold in abeyance the remainder of the motion pending such in camera review.


The facts of this case are well-known to the parties and will be briefly summarized here. The Board, in 2001, requested bids for a $30 million project for the renovation and expansion of five schools in its District (the "Project"). D&D Assocs., Inc. v. N. Plainfield Bd. of Educ., No. 03-1026, 2007 WL 4554208, at *2 (D.N.J. Dec. 21, 2007). The Project was funded in part by grants from the New Jersey Economic Development Authority ("NJEDA"). D&D, as the lowest bidder for the general construction work, became the general contractor for the Project. Id. The contracts between D&D and the Board for this construction work required D&D to post performance and payment bonds, which D&D obtained from American Motorists Insurance Company (the "Surety"). Id. The Board also entered into contracts with defendant Vitetta Group, Inc. ("Vitetta") for architectural design and supervision of the Project, and with defendant Bovis Land Lease, Inc. ("Bovis") to perform construction management services for the Project. Id. Defendant Robert Epstein ("Epstein"), an attorney, served as counsel to the Board in connection with the Project. Id.

Delays plagued the Project from the outset, and Epstein, on behalf of the Board, issued a letter to D&D on October 19, 2001, advising that D&D was in default of its obligations under the contracts. Id. at *3. (See dkt. entry no. 417, Vogt Decl., Ex. 3.)*fn1 D&D attempted to continue to perform the construction work, but the parties' relationship became more adversarial, resulting in further default notices, a decision by the Board to terminate D&D's employment as the general contractor for the Project, and a lockout of D&D from the construction sites in February 2003. 2007 WL 4554208, at *4-6. The Board then entered into Takeover Agreements with the Surety whereby the Surety would complete the construction work originally contracted to D&D. Id.

The current motion revisits a motion to compel brought by D&D and decided by the Magistrate Judge on July 28, 2006, addressing whether defendants improperly asserted the attorney-client privilege and work product doctrine with regard to certain withheld documents. (Dkt. entry no. 126, D&D Mot. to Compel; dkt. entry no. 179, 7-28-06 Order.) D&D argued that the defendants, including the Board, Epstein, Bovis, and Vitetta could not assert a "common interest" or "joint defense" type privilege as to all communications among them, given that the defendants' interests may be adverse to one another.*fn2 The defendants responded that their common interests were sufficient to assert such a privilege, disclosure among one another did not waive the privilege, and the work product doctrine covers documents predating the litigation because all parties involved should have reasonably anticipated litigation from the start of the Project in September 2001.

The Board has produced seven privilege logs, which have been referred to in this litigation as Privilege Logs A-G:

Privilege Log A: Documents from Bovis's paper files stored at the Somerset School Privilege Log B: Documents from Bovis's electronic files

Privilege Log C: Documents from McManimon & Scotland

(Board's bond counsel)

Privilege Log D: Documents from Vitetta Group's files Privilege Log E: Documents from the Board's offices Privilege Log F: Documents withheld by Greenberg

Traurig (Epstein's documents)

Privilege Log G: Documents withheld by Greenberg

Traurig (Epstein's emails) (Dkt. entry no. 413, Korzun Decl., Exs. A-G.) The Magistrate Judge held a hearing on July 13, 2006, and determined that the documents listed in Privilege Logs C, E, and F were "clearly privileged in their entirety," whereas documents listed in Privilege Logs A, B, and D were variously "clearly privileged," "clearly not privileged," or "unclear." (Vogt Decl., Ex. 39, 7-13-06 Hr'g Tr.; 7-28-06 Order at 2-4 & Table.)*fn3 D&D and the Board cross-moved for reconsideration of the 7-28-06 Order, and the Magistrate Judge held a hearing on August 18, 2006, reviewing in camera a number of documents previously held to be "clearly not privileged" or "unclear." (Vogt Decl., Ex. 41, 8-18-06 Hr'g Tr. at 53:17-54:9, 69:5-6, 70:6-15.) The Magistrate Judge entered an Order on September 13, 2006, reflecting privilege rulings as to these documents. (Dkt. entry no. 199, 9-13-06 Order.)

The Magistrate Judge's 9-13-06 Order granting in part and denying in part the cross motions for reconsideration ruled that communications between the Board, Bovis, Vitetta and Epstein as of September 21, 2001, are deemed to be either attorney-client privileged or to be attorney work product, as of that date. The Court finds this date (9-21-01) as the date by which litigation was being contemplated for purposes of fixing the date that litigation was reasonably anticipated. (9-13-06 Order at 2-3.)

D&D appealed the Magistrate Judge's 7-28-06 and 9-13-06 decisions pertaining to D&D's motion to compel. (Dkt. entry no.203, Appeal.) On appeal, D&D challenged the propriety of the 9-21-01 "anticipation of litigation" cutoff date and argued, inter alia, that (1) any privilege was waived by the Board's failure to timely produce a privilege log; (2) any joint defense privilege would be improper, insofar as the defendants had entered into a Standstill Agreement, not a Joint Defense Agreement; (3) documents disclosed to the NJEDA are public records and cannot be privileged; and (4) there is no basis for considering Bovis and Vitetta, "construction professionals" working on a project for the Board, "litigation consultants" of the Board or Epstein. (Dkt. entry no. 203, Pl. Br. Supp. Appeal at 14-23, 26-27; dkt. entry no. 225, Pl. Br. Supp. Mot. to Supplement Record on Appeal at 4-5, 12-15, 20.)

D&D's appeal of the Magistrate Judge's discovery rulings was denied without prejudice, along with several other motions, on October 17, 2006. (Dkt. entry no. 217.) D&D did not renew this "appeal" until October 22, 2009. (Dkt. entry no. 342, Mot. to Supplement Discovery.) The Magistrate Judge denied that appeal, styled as a motion to supplement discovery, as moot on January 22, 2010, finding that D&D had failed to timely renew its appeal within the time directed by the Court. (Dkt. entry no. 394, 1-22-10 Order.) D&D moved for reconsideration and appealed the 1-22-10 Order. (Dkt. entry nos. 395, 396.) The Court affirmed the Magistrate Judge's order, noting that the Magistrate Judge had correctly ruled that there was no earlier appeal pending from the Magistrate Judge's 2006 orders on discovery issues. (Dkt. entry no. 411, 6-28-10 Order; dkt. entry no. 416, 6-28-10 Hr'g Tr. at 5:3-12.) Procedural problems surrounding D&D's motion to supplement discovery notwithstanding, the Court advised the parties at a June 28, 2010 hearing that it would allow D&D to file a new motion for production of documents and state which documents it was currently seeking. (Dkt. entry no. 416, 6-28-10 Hr'g Tr. at 6:15-17.)

The Court observed at that hearing that, in light of evolving case law regarding when a private attorney retained to provide legal representation to a municipal body can be considered to have acted "under color of state law" for purposes of Section 1983, it would re-visit the privilege rulings in order to ensure a fully developed record for consideration of Epstein and D&D's cross-motions for summary judgment. (6-28-10 Hr'g Tr. at 7:8-20.) See Majer v. Twp. of Long Branch, No. 06-2919, 2009 WL 3208419, at *8-9 (D.N.J. Sept. 30, 2009) (observing that whether attorney representing municipality can be held liable under Section 1983 "depends on whether he was working as an attorney," and that such attorney "becomes a state actor by going beyond the traditional attorney-client relationship," i.e., one who decides official government policies such that his conduct may be fairly attributable to the municipality).

D&D accordingly filed the current motion to compel production of documents and overrule claims of privilege. Bovis and Vitetta have, throughout the course of these discovery disputes, maintained no position as to whether any particular documents are privileged or constitute attorney work product, except to the extent they acquiesce in the Board, as the holder of the privilege, claiming the same. (See dkt. entry no. 131, Vitetta Resp. to D&D Mot. to Compel; 8-18-06 Hr'g Tr. at 16:5-25 (statements of counsel for Vitetta and Bovis explaining that privilege was being asserted by the Board); Vogt. Decl., Ex. 37, 5-15-06 Hr'g Tr. at 50:18-51:25, 53:1-55:10.)

D&D moves for production of all documents not previously produced listed in Privilege Logs A, B, C, and D. (Dkt. entry no. 413, Proposed Order Granting Pl.'s Mot. to Compel & Overruling Claims of Privilege ("Pl. Proposed Order") at 1-2; Korzun Decl. at ¶ 40.) D&D also seeks production of a majority of the documents listed in Privilege Logs E, F, and G, arguing, inter alia: (1) the Board waived the attorney-client privilege through disclosure to third parties; (2) the protection of the work product doctrine is unavailable as to documents created by or for Bovis or Vitetta; (3) the defendants' proposed testimony regarding an alleged "consensus decision" among the defendants to terminate D&D acts as a waiver as to all documents relating to such "consensus decision," pursuant to Federal Rule of Evidence 502(a); (4) the Board waived the privilege by asserting defenses including (a) qualified immunity, (b) a lack of notice under the New Jersey Tort Claims Act, or (c) D&D was afforded a name-clearing hearing; (5) the crime-fraud exception to the attorney-client privilege; (6) the Board should produce all documents to D&D that it produced to the Surety in a state-court action brought by the Surety against the Board; and (7) the Board waived the privilege with respect to communications to, by, or about certain subcontractors. (Korzun Decl. at ¶ 41 & Table.)


I. Applicable Legal Standards

A. Attorney-Client Privilege

Communications between an attorney and a client are protected by the attorney-client privilege, the purpose of which is to promote frank discussions between a client and his or her attorney to allow the attorney to best represent the client. Fisher v. United States, 425 U.S. 391, 403 (1976). The burden of establishing the existence of a privilege falls on the party asserting the privilege. In re Bevill, Busler & Shulman Asset Mgmt. Corp., 805 F.2d 120, 126 (3d Cir. 1986). The central inquiry in determining if the privilege applies is whether the client made the communication for the purpose of obtaining legal advice. In re Spalding Sports Worldwide, Inc., 203 F.3d 800, 805 (Fed. Cir. 2000); see In re Teleglobe Commc'ns Corp., 493 F.3d 345, 359 (3d Cir. 2007) (stating that attorney-client privilege protects from disclosure "(1) a communication (2) made between privileged persons (3) in confidence (4) for the purpose of obtaining or providing legal assistance for the client") (citing Restatement (Third) of the Law Governing Lawyers § 68 (2000)). "Privileged persons" include "the client, the attorney(s), and any of their agents that help facilitate attorney-client communications or the legal representation." In re Teleglobe, 493 F.3d at 359 (citing Restatement (Third) of the Law Governing Lawyers § 70).

The privilege can be waived if the privileged information is communicated to outside parties. Id. at 361. But disclosure to the agent of the attorney or client does not constitute a waiver, if the agent is acting in a capacity relevant to the client's obtaining legal advice, such as facilitating the comprehension of communications between the attorney and the client. In re Grand Jury Investigation, 918 F.2d 374, 384 (3d Cir. 1990) ("[T]he presence of third parties, if essential to and in furtherance of the communication, should not void the privilege."); Sunnyside Manor, Inc. v. Twp. of Wall, No. 02-2909 (MLC), dkt. entry no. 42, 12-22-02 Mem. Op. at 4-5. The designation of the third party as a witness for trial does not preclude a party from claiming attorney-client privilege as to the privileged information. Id. at 8.

The "common-interest" privilege is an extension of the attorney-client privilege providing an exception to the general rule that voluntary disclosure of an attorney-client communication to a third party waives the attorney-client privilege; it "protects communications made between attorneys when all members of the community share a common legal interest in the shared communication." La. Mun. Police Emps. Ret. Sys. v. Sealed Air Corp., 253 F.R.D. 300, 309 (D.N.J. 2008); accord In re Teleglobe, 493 F.3d at 364 (discussing "community-of-interest" privilege, also called "common-interest" privilege). The parties' common legal interest need not be identical, but merely substantially similar. Graco, Inc. v. PMC Global, Inc., No. 08-1304, 2011 WL 666048, at *20 (D.N.J. Feb. 14, 2011); Restatement (Third) of the Law Governing Lawyers § 76, comment e ("The communication must relate to the common interest, which may be either legal, factual, or strategic in character. The interests of the separately represented clients need not be entirely congruent."). The fact that parties with common interests may also have some adverse interests does not destroy the common-interest privilege as to communications regarding the common interest. Eisenberg v. Gagnon, 766 F.2d 770, 787-88 (3d Cir. 1985).

The applicability of the attorney-client privilege is determined on a case-by-case basis. Upjohn Co. v. United States, 449 U.S. 383, 396 (1981). A court, in determining the applicability of the privilege, may make rulings on the basis of the information in the privilege log, or may conduct an in camera review. In re Grand Jury Investigation, 445 F.3d 266, 269 (3d Cir. 2006); In re Bevill, 805 F.2d at 125 (noting that in camera review is frequently the only way to resolve whether the privilege asserted applies) (citing United States v. Nixon, 418 U.S. 683 (1974)).

B. Work Product Doctrine

The work product doctrine protects "the confidentiality of papers prepared by or on behalf of attorneys in anticipation of litigation," with the aim of promoting the adversary system "by enabling attorneys to prepare cases without fear that their work product will be used against their clients." Westinghouse Elec. Corp. v. Republic of Phil., 951 F.2d 1414, 1428 (3d Cir. 1991). The doctrine is expressed in Federal Rule of Civil Procedure ("Rule") 26(b)(3), providing that "documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent)" are not discoverable, absent a showing of "substantial need for" the otherwise relevant materials and inability to obtain their substantial equivalent by other means without undue hardship. Fed.R.Civ.P. 26(b)(3)(A).

The work product doctrine's protections, like the attorney-client privilege, may be waived by intentional disclosure to a third party, but "the purpose behind the work-product doctrine requires a court to distinguish between disclosures to adversaries and disclosures to non-adversaries, and it is only in cases in which the material is disclosed in a manner inconsistent with keeping it from an adversary that the work-product doctrine is waived." In re Chevron, 633 F.3d 153, 165 (3d Cir. 2011) (citation and quotations omitted).

The party claiming the protections of the work product doctrine has the burden of proving that the materials were prepared in anticipation of litigation. Sharp v. Gov't of V.I., 77 Fed.Appx. 82, 85 (3d Cir. 2003). Materials can be fairly identified as prepared in anticipation of litigation "as long as the primary motivating purpose behind the creation of the document was to aid in possible future litigation." Id. Work product prepared in the ordinary course of business does not fall within the doctrine. Id.

C. Crime-Fraud Exception

The party seeking to apply the crime-fraud exception to the attorney-client privilege must make ...

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