The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge
Plaintiff G-I Holdings ("Holdings") seeks an order compelling
defendant Joseph Rice ("Rice") of defendant law firm Ness,
Motley, Loadholt, Richardson & Poole ("Ness Motley") and
defendant Perry Weitz ("Weitz") of defendant law firm Weitz &
Luxenberg to answer deposition questions concerning legal advice
given by their respective law firms to their respective clients.
Holdings also seeks to compel Weitz to answer questions
concerning his exercise of independent professional judgment with
respect to certain advice provided to clients of Weitz and
For the reasons set forth herein, the motion is denied.
The status of this litigation and certain of the prior
determinations are contained in G-I Holdings, Inc. v. Baron &
Budd, No. 01 Civ. 0216, 2004 WL 638141 (S.D.N.Y. Mar. 30, 2004);
G-I Holdings, Inc. v. Baron & Budd, 2004 WL 540456 (S.D.N.Y.
Mar. 17, 2004); G-I Holdings, Inc. v. Baron & Budd, 2004 WL
374450 (S.D.N.Y. Feb. 27, 2004); G-I Holdings, Inc. v. Baron &
Budd, 218 F.R.D. 409 (S.D.N.Y. 2003); G-I Holdings, Inc. v.
Baron & Budd, 213 F.R.D. 146 (S.D.N.Y. 2003); G-I Holdings, Inc. v. Baron & Budd, 02 Civ.
0216, 2002 WL 31251702 (S.D.N.Y. Oct. 8, 2002); G-I Holdings,
Inc. v. Baron & Budd, 238 F. Supp. 2d 521 (S.D.N.Y. 2002); and
G-I Holdings v. Baron & Budd, 179 F. Supp. 2d 233 (S.D.N.Y.
2001), familiarity with which is presumed.
The present discovery dispute first arose on October 15, 2004,
when Holdings sought an order from the Court compelling Weitz and
Rice to answer deposition questions concerning the steps their
respective law firms took to comply with the April 15, 2004
settlement agreement (the "Futures Agreement") executed by
Michael F. Rooney of the Center For Claims Resolution ("CCR") as
sole agent for CCR's members (including GAF Corporation, the
predecessor to Holdings) and Weitz in his individual capacity and
as agent of Plaintiff Counsel. In open Court on October 27, 2004,
it was determined that Weitz and Rice could be required to
describe actions taken in order to comply with the Futures
Agreement but not the mental process that resulted from any such
action. On October 27, 2004, this Court stated:
[T]he opinion of the firm rendered to its client is
covered by the privilege. I think that it is possible
[that] in the peculiar circumstances of this case
that it might be that the privilege should be broken,
but I am not at that point yet. I don't think that
issue will probably be ripe until I get the motions
for summary judgment, and it is possible, it seems to
me, that the issue may still be out there.
October 27, 2004 Transcript, at 20:11-18. On February 2, 2005, Holdings wrote to the Court seeking an
order (1) compelling Weitz to answer questions concerning the
exercise of his independent professional judgment in connection
with the Futures Agreement, (2) compelling the Ness Motley
defendants to produce a complete list of clients who deferred
their claims in the period from June 1997 to January 2000 so that
a representative sample could be developed, and (3) granting
Holdings leave to take discovery based on this sample set. In
open court on February 16, 2005, this Court stated:
I tried to make clear at the first go-round of this
issue that I didn't want to invade the
attorney-client privilege or have you invade the
attorney-client privilege, but [that what] I did want
. . . is factual procedures, what factual procedures
you went through in order to make your decisions.
I would permit a further deposition, and the question
would be and it may not be necessary to have the
deposition because the answer may be none referring
to these procedures. . . .
February 16, 2005 Transcript, at 38:4-14.
Holdings' present motion was submitted by letter dated March
15, 2005. It was heard and marked fully submitted on April 13,
By this motion, Holdings seeks a determination that the
particular circumstances of this case warrant invasion of the
attorney-client privilege held by certain clients of Luxenberg
and Weiss and Ness Motley. This issue i.e., whether the
circumstances of this case might justify such an invasion is
one that the Court previously declined to reach. Therefore,
defendants' argument that Holdings seeks reconsideration of
previously decided issues is unavailing.
Rule 501 of the Federal Rules of Evidence provides, in
pertinent part, that
in civil actions and proceedings, with respect to an
element of a claim or defense as to which State law
supplies the rule of decision, the privilege of a
witness, person, government, State, or political
subdivision thereof shall be determined in accordance
with State law.
Fed.R. Evid. 501. The discovery at issue here is sought for the
purpose of establishing breach of contract on the part of the
defendants. Since these are state law claims, the question of
whether or not grounds exist for the invasion of the
attorney-client privilege is also determined pursuant to sate
law. See id. In its initial papers, Holdings has cited case law from the
United States District Court for the District of New Jersey for
the proposition that pursuant to the law of the State of New
Jersey, the attorney-client privilege is qualified and can be
invaded upon a showing: (1) that the there is a legitimate need
for the evidence, (2) that the evidence is relevant and material
to the issue before the Court, and (3) that the evidence cannot
be secured from any less intrusive source. See Dome Petroleum
Ltd. v. Employers Mut. Liability Ins. Co. of Wisconsin,
131 F.R.D. 63, 70 (D.N.J. 1990) (applying New Jersey law) (citing In
re Kozlov, 79 N.J. 232
, 243-45, 398 A.2d 882
also Leonen v. Johns-Manville, 135 F.R.D. 94, 100 (D.N.J.
1990) (same). In contrast, the defendants assert that New York
law governs, and that under New York law, the attorney-client
privilege is subject to only a limited number of narrow
exceptions that are not applicable under the present
As to the state law claims at issue here, a court must apply
the choice-of-law rules prevailing in the state in which the
court sits. See, e.g., Klaxon Co. v. Stentor Elec. Mfg.
Co., 313 U.S. 487, 496 (1941); Krauss v. Manhattan Life Ins.
Co., 643 F.2d 98, 100 (2d Cir. 1981). With respect to the law of
evidentiary privileges, New York courts generally apply the law
of the place where the evidence in question will be introduced at
trial or the location of the discovery proceeding itself. See
Drimmer v. Appleton, 628 F. Supp. 1249, 1250 (S.D.N.Y. 1986)
(stating that no conflict issue exists where trial and deposition were in same
state); Brandman v. Cross & Brown Co. of Florida, Inc.,
125 Misc. 2d 185, 479 N.Y.S.2d 435, 437 (N.Y. Sup. Ct. 1984). Here,
the evidence will be introduced in New York. Therefore, New York
privilege law shall apply.
2. New York's Attorney-Client Privilege
New York's attorney-client privilege is codified in Section
4503 of the Civil Practice Laws and Rules ("C.P.L.R."), which
states, in pertinent part, as follows:
Unless the client waives the privilege, an attorney . . .
who obtains . . . a confidential communication . . .
made between the attorney . . . and the client in
the course of professional employment shall not
disclose, or be allowed to disclose such
communication, in any action.
N.Y.C.P.L.R. § 4503(a). "Although typically arising in the
context of a client's communication to an attorney, th[is]
privilege extends as well to communications from attorney to
client." Spectrum Sys. Int'l Corp. v. Chemical Bank,
78 N.Y.2d 371, 377, 575 N.Y.S.2d 809, 814, 581 N.E.2d 1055, 1060 (1991).
The purpose of this privilege is to "encourage persons needing
professional advice to disclose freely the facts in reference to
which they seek advice, without fear that such facts will be made
public to their disgrace or detriment by their attorney." Hurlburt v. Hurlburt, 128 N.Y. 420, 424, 28 N.E. 651
(1891); Matter of Jacqueline F., 47 N.Y.2d 215, 218,
417 N.Y.S.2d 884, 886, 391 N.E.2d 967, 969 (1979) ...