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United States District Court, Southern District of New York

January 29, 2003


The opinion of the court was delivered by: John S. Martin, Jr., United States District Judge


The Silverstein Parties have moved to compel production of notes taken by a Swiss Re employee, Keith Lewis, and an Allianz adjuster, Bart Pajor, at market and steering committee meetings held on September 21, October 3, and October 10, 2001. Swiss Re and Allianz oppose this motion on the basis that the notes are protected by the attorney-client and/or work product privileges. In support of this position, Swiss Re and Allianz argue that as of September 21, 2001, the insurers represented at the meetings reasonably anticipated litigation, had hired outside litigation counsel, and had entered into a joint defense agreement. Furthermore, they contend, the non-lawyer employees and the outside adjusters who attended the meetings on behalf of various insurers did so at the direction of counsel, and took notes in order to report back to counsel.

Attorney-Client Privilege

As stated in this Court's previous decisions with respect to discovery in this action, the common interest privilege is a limited exception to the general rule that the attorney-client privilege is waived when a protected communication is disclosed to a third party. SR Int'l Bus. Ins. Co. Ltd. v. World Trade Center Properties, LLC, No. 01 Civ. 9291, 2002 WL 1334821, *3 (S.D.N.Y. June 19, 2002). In determining whether a common interest privilege applies, "[t]he key consideration is that the nature of the interest be identical, not similar, and be legal, not solely commercial." Id. (citing North River Ins. Co. v. Columbia Cas. Co., No. 90 Civ. 2518, 1995 WL 5792, *3 (S.D.N.Y. Jan. 5, 1995)). In this regard, "[a] business strategy which happens to include a concern about litigation is not a ground for invoking the common interest rule." Id. at *4 (citing In re: FTC, No. M18-304, 2001 WL 396522, at *5 (S.D.N.Y. April 19, 2001)).

It does appear that the insurers who attended the market meetings at issue here did share a common legal interest. That a joint defense agreement was not actually signed on September 21, 2000 (or even at the time of the subsequent meetings) would not, in itself, defeat this privilege. The key question, which must be determined upon the specific facts of a case, is whether an alignment of interest exists that satisfies the standard. Provided there is, "the common interest doctrine protects privileged and work product materials even if there is no `final' agreement or if the parties do not ultimately unite in a common enterprise." Katz v. AT&T Corp., 191 F.R.D. 433, 437 (E.D.Pa. 2000).

Nevertheless, the testimony at depositions and the conduct of various parties in this litigation lead to the conclusion that the meetings at issue involved business, rather than legal matters, and therefore communications at those meetings are not protected from discovery by the attorney-client privilege. That an attorney took part in business meetings does not insulate business communications made in those meetings from disclosure. Upjohn v. United States, 449 U.S. 383, 396, 101 S.Ct. 677, 686 (1981) ("A party cannot conceal a fact merely by revealing it to his lawyer."); Bank Brussels Lambert v. Credit Lyonnais (Suisse), S.A., 93 Civ. 6876, 1995 U.S. Dist. LEXIS 14808, *28 (S.D.N.Y. Oct. 10, 1995) ("Discoverability of a communication depends on its nature, rather than its source.").

Mr. Raymond Mattia of Lexington, which took the initiative in organizing the meeting, testified that

the main subject of that [September 21] meeting was to try and establish who the adjusters were going to be on the various . . . different risks that we believed we had a participation on along with . . . the other members of the market, to try to reach some agreement with them. . . . That was the main focus of getting the meeting together, was to try to determine who the adjusters were and, perhaps, some of the experts that would assist in the evaluation of anything that we would need on a go-forward basis.
(Nov. 13, 2002 letter from Barry Ostrager to the Court, Ex. 3 at 166-67).

In addition, Mr. Bart Pajor of Allianz stated,

The first meeting was somewhat disorganized because there was no agenda. All the carriers didn't know what carriers were involved. There were no adjusters that were picked. So, I believe, it was at that first meeting, I believe, it was decided that a steering committee would be picked, and, I believe, that one was.
(Nov. 22, 2002 letter from Marc Wolinsky to the Court, Ex. B at 45).

According to Mr. Pajor, the purpose of the steering committee was to "represent the market in making decisions relative to the claim adjustment and administrative issues, basically, administration claim handling." (Id. at 45-46). Mr. Pajor stated further that "we discussed the need for the market to decide on adjusters and get the process started." (Id. at 46-47). Finally, Mr. Pajor stated that he had been involved previously in adjusting claims on multilayer insurance programs and that in those situations a similar group of adjusters had been created to adjust the claims for the market. (Id. at 46).

Mr. Edward Reilly of Edward Reilly & Co., an independent adjuster retained by AIG to adjust Westfield's claim with respect to the World Trade Center, described the function of an adjuster as "one who represents the interest of the insurer as a fact-finder in the area of value, damage and assessments of — in certain circumstances, assessments of coverage." (Nov. 13 letter from Barry Ostrager to the Court, Ex. 4 at 9). He went on to state that the adjuster looks to the insurer for information regarding the meaning of the language of a policy, and accepts that information as given. Accordingly, when Mr. Reilly was asked,

Would it be fair to say that with respect to your performance of your adjusting responsibilities with respect to the losses involving the Silverstein Properties, you accepted without further inquiry, the representations made by the insurers with respect to whether and what policies they had issued?
he responded, "I was never involved in that type of decision-making or investigation; that's not my responsibility." (Id. at 74-75). Thus, an adjuster, although an agent of the insurer, would not be expected to be part of a discussion about the legal issues in this case, and the testimony presented to the Court on this motion indicates that the market and steering committee 5 meetings were, in fact, business meetings that dealt with ordinary business (claim adjustment) matters — albeit in relation to an extraordinary claim. The attorney-client privilege does not shield such discussions from disclosure.

In addition, apparently in an effort to preserve the privilege with respect to certain portions of the September 21 meeting, the attorneys who were present at that meeting asked all non-lawyers to step out so that the attorneys could meet separately for some period of time. (Nov. 13 letter from Barry Ostrager to the Court, Ex. 4 at 39-40). This fact lends further support to the conclusion that the attorneys present at the general market meeting were aware that communications in that setting were not privileged.

Finally, the fact that a number of parties and independent adjusters: Travelers, Lloyd's of London, Royal, Tokio Marine, McLarens Toplis and Edward R. Reilly, have produced notes of the September 21 meeting to the Silverstein Parties indicates that, in their best judgment, the discussions reflected in those notes were not privileged. See Kiryas Joel Local Dev. Corp. v. Ins. Co. of North America, No. 90 Civ. 4970, 1992 U.S. Dist. LEXIS 460, *3-4 (S.D.N.Y. January 17, 1992).

The second market meeting, held on October 3, 2001, apparently included representatives from Willis and the Silverstein Parties. (See Dec. 6, 2002 letter from Barry Ostrager 6 to the Court, Lewis dep. transcript, at 130-31). Clearly, nothing stated at such a meeting, in the presence of an adversary or a third party (Willis) with whom the insurers could not claim a common interest, could be protected by the attorney-client privilege.

The Court has not been presented with information regarding the third steering committee meeting on October 10. Since the burden is on the party asserting the attorney-client privilege to establish its existence in all respects, Bowne of New York City, Inc. v. AmBase Corp., 150 F.R.D. 465, 470-71 (S.D.N.Y. 1990), there is no reason to find, at least at this juncture, that communications in that meeting are not subject to disclosure as well.

Work Product Privilege

A document is entitled to protection from disclosure as work product if it was created "because of anticipated litigation, and would not have been prepared in substantially similar form but for the prospect of litigation." United States v. Adlman, 134 F.3d 1194, 1195 (2d Cir. 1998). Conversely, "[p]rotection is withheld from documents that are prepared in the ordinary course of business or that would have been created in essentially similar form irrespective of the litigation." Id. at 1202. Work product protection extends to documents prepared by non-lawyer employees at the direction and under the supervision of counsel and in anticipation of litigation. Fed.R.Civ.P. Rule 26(b)(3); In re: Copper Market Antitrust Litigation, 200 F.R.D. 213, 221 (S.D.N.Y. 2001). However, it is the thought processes of the attorney that are entitled to protection; underlying facts are always discoverable, Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 682 (1981). Thus, if a document, such as the notes at issue here, merely sets forth facts that were reported to the attorney, and there is no realistic way that their disclosure would create "a real, nonspeculative danger of revealing the lawyer's thoughts," SR Int'l Bus. Ins. Co., Ltd. v. World Trade Center Properties LLC, No. 01 Civ. 9291, 2002 WL 1455346, *7-8 (S.D.N.Y. July 3, 2002), that document is not protected as work product. See also In re: Grand Jury Subpoenas dated March 9, 2001, 179 F. Supp.2d 270, 291 (S.D.N.Y. 2001) ("Conversations between lawyers where one lawyer is merely relaying factual information, such as a conversation with a third party, to another lawyer are not privileged (or protected by the work product doctrine.")); United States v. Weissman, No. S1 94 Cr. 760, 1995 WL 244522, *4 (S.D.N.Y. April 26, 1995). Consequently, notes taken at the market meetings by Keith Lewis and other employees of the insurers, even if taken in order to report to counsel regarding those meetings, must be produced.

In addition, the Silverstein Parties seek to compel production of two communications addressed to "Market Members" from Constantino Suriano, counsel to Lexington. The first is a September 20, 2001 letter, which apparently has already been produced by several parties. (November 22, 2002 letter from Marc Wolinsky to the Court, Ex. E, F). Apart from the fact that the prior voluntary production of this document moots this motion, the letter dealt only with administrative details relating to the business-related market meeting, and its disclosure clearly does not create any danger of revealing the lawyer's thoughts about anticipated litigation.

The second communication from Mr. Suriano is a fax dated September 27, 2001, to "various recipients" regarding the Silverstein market meeting. Without more information that would establish the existence of a privilege with respect to this document, the Court cannot find that it is protected from disclosure, especially given the apparently business oriented nature of the market meetings. See United States v. Davis, 131 F.R.D. 391, 402 (S.D.N.Y. 1990).


For the foregoing reasons, the Silverstein Parties' motion for an Order compelling Swiss Re to produce documents and provide testimony is granted as set forth in this Order.



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