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Gloucester Township Housing Authority v. Franklin Square Associates

United States District Court, D. New Jersey

August 12, 2014

GLOUCESTER TOWNSHIP HOUSING AUTHORITY, Plaintiff,
v.
FRANKLIN SQUARE ASSOCIATES and SHAUN DONOVAN, Secretary, United States Department of Housing and Urban Development, Defendants

Page 493

For GLOUCESTER TOWNSHIP HOUSING AUTHORITY, Plaintiff: AMY ELIZABETH SHOTMEYER, LEAD ATTORNEY, ALICE M. BERGEN, CATHERINE E. TAMASIK, DECOTIIS, FITZPATRICK & COLE, LLP, TEANECK, NJ.

For FRANKLIN SQUARE ASSOCIATES, Defendant, Cross Claimant, Counter Claimant: TIMOTHY JOHN HIGGINS, LEAD ATTORNEY, LAW OFFICES OF TIMOTHY J. HIGGINS, CHERRY HILL, NJ.

For SHAUN DONOVAN, Secretary, United States Department of Housing and Urban Development, Defendant, Cross Defendant: KYLE A. FORSYTH, LEAD ATTORNEY, U.S. DEPARTMENT OF JUSTICE, CIVIL DIVISION, WASHINGTON, DC.

For GLOUCESTER TOWNSHIP HOUSING AUTHORITY, Counter Defendant: ALICE M. BERGEN, CATHERINE E. TAMASIK, DECOTIIS, FITZPATRICK & COLE, LLP, TEANECK, NJ.

[Doc. No. 72]

Page 494

MEMORANDUM OPINION AND ORDER

ANN MARIE DONIO, UNITED STATES MAGISTRATE JUDGE.

Presently before the Court is Defendant/Cross-Defendant Shaun Donovan's (hereinafter, " HUD" ) motion pursuant to Federal Rule of Civil Procedure 26(b)(5)(B) to resolve an issue of privilege concerning two (2) letters produced in discovery by Defendant/Counter-Claimant/Cross-Claimant Franklin Square Associates (hereinafter, " Franklin Square" ).[1] HUD generally contends that the disputed letters do not constitute information protected by the attorney-client privilege and, alternatively, that Franklin Square waived any applicable privilege through production of the disputed letters in discovery. Defendant Franklin Square asserts that the information constitutes core attorney-client communications, and that Franklin Square's inadvertent disclosure of the information fails to operate as a waiver of the privilege. The Court decides this matter pursuant to Federal Rule of Civil Procedure 78(b). For the reasons set forth herein, the Court grants HUD's motion.

This action generally arises out of the parties' " tripartite contractual relationship" to provide subsidized residential housing pursuant to 42 U.S.C. § 1437f(a) (hereinafter, " Section 8" ).[2] (See Complaint [Doc. No. 1], ¶ ¶ 1-8, 26.) Plaintiff specifically alleges that Section 8 authorizes HUD " to enter into an [annual contributions contract] with a public housing agency ('PHA'), pursuant to which the PHA then enters into a [housing assistance payments] contract with the private landlord." (Id. at ¶ 20.) Plaintiff asserts in this action that it executed an annual contributions contract (hereinafter, " ACC" ) with HUD on August 22, 1977. (Id. at ¶ ¶ 32-35.) In connection with the ACC, HUD purportedly obligated the United States of America " to fund the annual housing assistance payments" provided to Franklin Square by Plaintiff pursuant to the housing assistance payments (hereinafter, " HAP" ) contract executed by Plaintiff and Franklin Square. (Id. at ¶ ¶ 32-35.) In a related state court action, Plaintiff asserts that Franklin Square alleges that Plaintiff breached the HAP contract by refusing to grant certain rent contract increases (id. at ¶ 79), and seeks " a judgment against [Plaintiff] for almost $1.8 million." (Id. at ¶ 80.) In this federal action, Plaintiff seeks a declaratory judgment that it did not breach the HAP agreement, and that HUD constitutes the solely liable party for any breach because HUD's breach of the ACC " necessarily" caused any breach of

Page 495

the HAP contract. (Id. at ¶ 85.) Plaintiff also seeks a declaration that HUD must reimburse Plaintiff for all fees and costs incurred in defending against the state court litigation and in connection with this federal litigation. (Id. at ¶ ¶ 89-97.)

The present privilege dispute concerns Franklin Square's production in discovery of two (2) attorney-client letters.[3] (See generally HUD's Brief in Support of its Fed.R.Civ.P. 26(b)(5) Motion for Determination of Privilege Claim (hereinafter, " Def. HUD's Br." ) [Doc. No. 73].) Specifically, the parties do not dispute that Franklin Square produced during discovery: (1) a June 25, 2003 letter from Mr. Scott Schaffer (the Managing Agent of Franklin Square) to Ms. Barbara Adams, Esquire; and (2) a July 15, 2003 response letter from Ms. Adams to Mr. Schaffer. (Id.) HUD, however, generally asserts that these letters fail to constitute information protected by the attorney-client privilege because they do not " disclose confidential client information necessary to obtain informed legal advice." (See Def. HUD's Br. [Doc. No. 73], 9.) Rather, HUD contends that the letters generically refer to certain non-privileged information, and that Ms. Adams' response fails to " implicate" the interests underpinning the attorney-client privilege. (Id. at 11-12.) In addition, HUD asserts that Franklin Square's production of these letters in discovery waives any applicable privilege, because Franklin Square failed to notify HUD and Plaintiff of the inadvertent disclosure for in excess of three (3) months.[4] (See Def. HUD's Br. [Doc. No. 73], 6-7.)

Franklin Square asserts that the June 25, 2003 and July 15, 2003 letters constitute attorney-client communications because they memorialize communications wherein Plaintiff conveyed confidential client information and sought legal advice from its counsel. (See Defendant, Franklin Square Associate's Opposition to Defendant Shaun Donovan, Secretary of the United Sates Department of Housing and Urban Development's Motion for Determination of Privilege Claim (hereinafter, " Franklin Square's Opp'n" ) [Doc. No. 77], 4-8 on the docket.) In response ...


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