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Lugosch v. Congel

March 7, 2006

J. DANIEL LUGOSCH, III; ROBERT L. UNGERER; JOHN A. BERSANI; EDWARD A. KELLOGG; JOHN C. CHARTERS; PETER C. STEINGRABER; RICHARD K. ASKIN; WILLIAM TAPELLA, PLAINTIFFS
v.
ROBERT J. CONGEL, INDIVIDUALLY AND AS GENERAL PARTNER OF WOODCHUCK HILL ASSOC., RIESLING ASSOC., MADEIRA ASSOC., AND MOSELLE ASSOC.; PYRAMID COMPANY OF ONONDAGA; EKLECCO, L.L.C.; WOODCHUCK HILL ASSOC.; RIESLING ASSOC.; MADEIRA ASSOC.; MOSELLE ASSOC. JAMES A. TUOZZOLO; ROBERT BRVENIK; MARC A. MALFITANO; SCOTT R. CONGEL, DEFENDANTS.
IN RE THE HERALD COMPANY AND CAPITAL NEWSPAPERS DIVISION OF THE HEARST CORPORATION, PROPOSED INTERVENORS.



The opinion of the court was delivered by: Randolph F. Treece U.S. Magistrate Judge

REPORT RECOMMENDATION and ORDER*fn1

I. INTRODUCTION

Proposed Intervenors, The Herald Company, publisher of The Syracuse Post-Standard, and Capital Newspapers Division of the Hearst Corporation, publisher of the Albany Times Union, ("Proposed Intervenors" or "Newspapers"), move, via Order to Show Cause, to intervene in the above action for the limited purposes of (1) unsealing and obtaining immediate public access to and permission to copy the Summary Judgment Motion papers filed by the parties under seal; (2) directing that no additional or future summary judgment filings by the respective parties be made under seal, absent compliance with constitutional and common law principles; and (3) authorizing Newspaper movants' reporters to attend oral argument on the Summary Judgment Motions' return date, in the event such argument is conducted by the Court. See Dkt. No. 356, Proposed Order to Show Cause Submitted by Proposed Intervenors; Dkt. No. 380, Order granting Application for Order to Show Cause and establishing filing deadlines.

The Defendants' Motions for Summary Judgment, which is the focal point of the Intervention Motion, is presently pending before the Honorable Norman A. Mordue, United States District Judge. The matter is now fully briefed and oral argument was scheduled but subsequently adjourned; it appears the matter will now be considered on submit.*fn2 See Text Orders, signed by Judge Mordue on May 17, May 23, and June 28, 2005. On July 20, 2004, Judge Mordue referred the Proposed Intervenors' Order to Show Cause, and intervention issues raised therein, to this Court. Dkt. No. 377.

By Agreement, executed on November 5, 2004, the litigants narrowed, to some degree, the documents at issue [hereinafter referred to as "Subject Documents" or "Contested Documents"] in the Intervention Motion. According to the terms of the Stipulated Agreement, the Defendants will "make publicly available the parties' respective summary judgment motion papers . . . subject to the redaction of (1) information allegedly protected by the attorney-client privilege and (2) the "personal identifiers" mandated by Local Rule 8.1." Dkt. No. 396, Nov. 5th Agreement. The Agreement further noted that, with regard to Local Rule 8.1, the Defendants' redactions will be limited to the five mandatory categories specified therein (social security numbers, names of minor children, dates of birth, financial account numbers, and home addresses) and will not include information within the purview of its suggested cautionary categories (personal identifying number, such as a driver's license number; medical records, treatment and diagnosis; employment history; individual financial information; and proprietary or trade secret information).

Id. at n.1 (emphasis in original).

A. The April 15th and June 24th 2005 Orders

On April 15, 2005, after receiving several letter briefs from the Proposed Intervenors demanding immediate resolution of their Motion to Intervene, the latter of which threatened mandamus action, this Court issued an Order holding in abeyance the Motion to Intervene pending Judge Mordue's resolution of the Motions for Summary Judgment. Dkt. No. 404, Lugosch v. Congel, 2005 WL 1523412 (N.D.N.Y. Apr. 15, 2005) (Treece, M.J.) ("Lugosch III"), approved by, Lugosch v. Congel, 2005 WL 1523409 (N.D.N.Y. June 24, 2005) (Mordue, D.J.) ("Lugosch IV"), vacated and remanded sub nom, Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110 (2d Cir. 2006) ("Lugosch V"). Such determination rested upon our reading of the relevant caselaw in this Circuit, which up to that point had been somewhat unclear. We first noted that the presumption of public access under both the common law and the First Amendment only attached to judicial documents. In reciting the Second Circuit's definition of what constitutes a judicial document, we found that such a determination in this case would be premature in that, at least to our knowledge, the District Judge had not reviewed any of the numerous documents encompassed within the Defendants' Motions for Summary Judgment or Plaintiffs' Opposition thereto. Dkt. No. 404 at pp. 2-3; Lugosch III, 2005 WL 1523412, at *1-2.*fn3

On April 22, 2005, the Proposed Intervenors appealed that decision to Judge Mordue pursuant to Federal Rule of Civil Procedure 72 and Local Rule of Practice for the Northern District of New York 72. Dkt. Nos. 406-07. Defendants opposed the appeal while Plaintiffs apparently took no stance. Dkt. Nos. 409-12. On June 24, 2005, Judge Mordue adopted this Court's finding that it was premature to decide whether the subject documents were judicial documents. Dkt. No. 417; Lugosch IV, 2005 WL 1523409. Going one step further, Judge Mordue found that even if the documents were deemed judicial documents to which the presumption of access applied, the weight of such presumption could not legitimately be determined until after the resolution of Defendants' Motions for Summary Judgment. Dkt. No. 417 at pp. 7-8; Lugosch IV, 2005 WL 1523409, at *3 (emphasis added). Concomitantly, just as the Court would be stymied in assessing the strength of the weight of the presumption, so too would the Court be unable to balance the presumption of access against any countervailing factors or compelling interests, such as the Defendants' privacy interests and attorney-client privilege. Dkt. No. 417 at pp. 8-10; Lugosch IV, 2005 WL 1523409, at *3-4.

B. The Second Circuit Mandate

On July 13, 2005, the Proposed Intervenors*fn4 filed a Notice of Appeal to the Second Circuit appealing both this Court's April 15th Order and Judge Mordue's June 24th Order. Dkt. Nos. 419 & 421-22. On January 10, 2006, the Second Circuit issued its Decision and Mandate on the Newspapers' appeals. Dkt. No. 428 (docketed by the Clerk of the District Court on Jan. 19, 2006); Lugosch V, 435 F.3d 110.

Initially, the Second Circuit recited the history of the underlying litigation, while at the same time expressed its antipathy over the amount of time the Motions for Intervention and Summary Judgment had been pending with the District Court. The Second Circuit then grappled with the issue of whether it had the requisite jurisdiction to entertain the Newspapers' appeal from an Order which was not a final judgment; ultimately, the Second Circuit ruled that jurisdiction existed under the collateral order doctrine.*fn5 Dkt. No. 428 at pp. 11-14; Lugosch V, 435 F.3d at 117-19.

Two rights of public access are at issue in this case. The first is the common law right of public access and the second is the public and press' qualified First Amendment right. The Second Circuit first addressed the common law right of public access to judicial documents, which "is firmly rooted in our nation's history[;]" the Second Circuit then noted that such presumption of access is based upon the need for the public to monitor the federal courts in the performance of Article III functions. Dkt. No. 428 at p. 14; Lugosch V, 435 F.3d at 119 (quoting United States v. Amodeo, 71 F.3d 1044, 1048 (2d Cir. 1995) ("Amodeo II") ("Monitoring both provides judges with critical views of their work and deters arbitrary judicial behavior. Without monitoring, moreover, the public could have no confidence in the conscientiousness, reasonableness, or honesty of judicial proceedings.") (other citations omitted). Before the common law right attaches, however, "a court must first conclude that the documents at issue are indeed 'judicial documents.'" Dkt. No. 428 at pp. 14-15; Lugosch V, 435 F.3d at 119. Then, once it is determined that the documents at issue are judicial documents, the weight of the presumption of access must be determined. Dkt. No. 428 at p. 15; Lugosch V, 435 F.3d at 119. The weight of the presumption is governed by the "role of the material at issue in the exercise of Article III judicial power and the resultant value of such information to those monitoring the federal courts." Dkt. No. 428 at p. 15; Lugosch V, 435 F.3d at 119 (quoting Amodeo II, 71 F.3d at 1049). Finally, and only after determining the weight of the presumption of access, a court must "balance competing considerations against it." Dkt. No. 428 at p. 15; Lugosch V, 435 F.3d at 120 (quoting Amodeo II, 71 F.3d at 1050).

Turning to the qualified First Amendment right, the Second Circuit noted that "it is well established that the public and the press have a 'qualified First Amendment right to attend judicial proceedings and to access certain judicial documents.'" Dkt. No. 428 at p. 15; Lugosch V, 435 F.3d at 120 (quoting Hartford Courant Co. v. Pellegrino, 380 F.3d 83, 91 (2d Cir. 2004)). Two approaches have been articulated as to whether the First Amendment right applies. Dkt. No. 428 at p. 15; Lugosch V, 435 F.3d at 120 (quoting Hartford Courant Co. v. Pellegrino, 380 F.3d at 92). The first approach is the "experience and logic" approach wherein courts are to consider whether the documents "have historically been open to the press and general public and whether public access plays a significant positive role in the functioning of the particular process in question." Dkt. No. 428 at pp. 15-16; Lugosch V, 435 F.3d at 120 (internal quotation marks and citations omitted). The second approach, known as the "necessary corollary approach," "considers the extent to which the judicial documents are derived from or [are] a necessary corollary of the capacity to attend the relevant proceedings." Dkt. No. 428 at p. 16; Lugosch V, 435 F.3d at 120 (internal quotation marks and citations omitted). Once a court concludes that the qualified First Amendment right of access applies to judicial documents, the subject documents may be sealed "if specific, on the record findings are made demonstrating that closure is essential to preserve higher values and is narrowly tailored to serve that interest." Dkt. No. 428 at p. 16; Lugosch V, 435 F.3d at 120 (quoting In re New York Times Co., 828 F.2d 110, 116 (2d Cir. 1987)).

Acknowledging that the District Court correctly stated the above legal frameworks, the Second Circuit nevertheless found that the decision to hold the Motion to Intervene in abeyance was in error. The Second Circuit made clear, to the extent such clarity had been lacking in this Circuit, that "documents submitted to a court for its consideration in a summary judgment motion are -- as a matter of law -- judicial documents to which a strong presumption of access attaches, under both the common law and the First Amendment." Dkt. No. 428 at pp. 17 & 20-21; Lugosch V, 435 F.3d at 120-21. In reviewing prior Second Circuit precedent, the Second Circuit reasoned that, as stated in Joy v. North, "summary judgment is an adjudication, and '[a]n adjudication is a formal act of government, the basis of which should, absent exceptional circumstances, be subject to public scrutiny.'" Dkt. No. 428 at p. 17; Lugosch V, 435 F.3d at 121 (quoting Joy v. North, 692 F.2d 880, 893 (2d Cir. 1982)). Thus, absent the most compelling reasons, "documents used by parties moving for, or opposing, summary judgment should not remain under seal[.]" Dkt. No. 428 at p. 17; Lugosch V, 435 F.3d at 121 (quoting Joy v. North, 692 F.2d at 893). Pointedly, presuming the parties complied with Rule 56 of the Federal Rules of Civil Procedure in submitting admissible evidence in support of their respective positions, the fact that a court may ultimately deny the relief sought does not in any way diminish the fact that the documents submitted to the court, regardless of who submitted them, were indeed judicial documents. Dkt. No. 428 at p. 19; Lugosch V, 435 F.3d at 121-22 (citing Republic of the Philippines v. Westinghouse Elec. Corp., 949 F.2d 653, 660 (3d Cir. 1991) and noting that the logic applied by the Third Circuit "applies equally to the plaintiffs' responsive submissions on summary judgment, as they may similarly be assumed to have supported their papers with admissible evidence and non-frivolous arguments"). In making this clear statement of the law, the Second Circuit appears to now be in accord with other sister circuit courts who have similarly held that whether documents are deemed to be judicial documents to which a presumption of access applies is not dependent upon how the court ultimately rules on the motion. Dkt. No. 428 at pp. 19-20; Lugosch V, 435 F.3d at 122-23 (citing cases).

As to the weight of the common law presumption of access, the Second Circuit provided some guidance on how such analysis should proceed. First, the Second Circuit reiterated that with regard to the documents at issue in this case, such being summary judgment documents, "the presumption is of the highest[.]" Dkt. No. 428 at p. 21; Lugosch V, 435 F.3d at 123. As with the judicial document determination, the weight of the presumption is in no way affected by the extent such document is relied upon in ultimately reaching a determination of the summary judgment motion.*fn6 Dkt. No. 428 at p. 21; Lugosch V, 435 F.3d at 123 (quoting In re Coordinated Pretrial Proceedings in Petroleum Prod. Antitrust Litig, 101 F.R.D. 34, 43 (C.D. Cal. 1984) ("If the rationale behind access is to allow the public an opportunity to assess the correctness of the judge's decision . . . documents that the judge should have considered or relied upon, but did not, are just as deserving of disclosure as those that actually entered into the judge's decision.") (emphasis in original)).

Turning to the First Amendment right alleged by the Newspapers, the Second Circuit, joining the Fourth Circuit, stated clearly that the documents filed in connection with a summary judgment motion are subject to a presumption of access and, accordingly, a higher constitutional burden in requiring disclosure exists. Dkt. No. 428 at pp. 22-23; Lugosch V, 435 F.3d at 124.

After unequivocally establishing that the documents filed in connection with a summary judgment motion are subject to both the common law right of access and the First Amendment, the Second Circuit explained that "the documents may be kept under seal if countervailing factors in the common law framework or higher values in the First Amendment framework so demand." Dkt. No. 428 at pp. 23-24; Lugosch V, 435 F.3d at 124. And, since the more "stringent" First Amendment framework is applicable, continued sealing of the subject documents may only be justified with "specific, on-the-record findings that sealing is necessary to preserve higher values and only if the sealing order is narrowly tailored to achieve that aim." Dkt. No. 428 at p. 24; Lugosch V, 435 F.3d at 124. Noting that the attorney-client privilege may well constitute a compelling reason for continued sealing, the Circuit Court specifically rejected the Newspapers' contention that under Joy v. North, such privilege is waived by virtue of filing the summary judgment papers. Dkt. No. 428 at p. 24; Lugosch V, 435 F.3d at 125. The Second Circuit clarified that such waiver may occur when a party attempts to rely on its own privileged documents to win summary judgment, however, in the case at bar, it is the Plaintiffs who "have put [D]efendants' allegedly privileged documents in the record, not the

[D]efendants themselves." Dkt. No. 428 at p. 24; Lugosch V, 435 F.3d at 125. Having an incomplete record to review, the Second Circuit remanded the case to the District Court to address the "fact-specific inquiry as to whether (1) the contested documents are subject to attorney-client privilege, and (2) defendants waived the privilege by placing in issue the contents of the privileged information."*fn7 Dkt. No. 428 at p. 25; Lugosch V, 435 F.3d at 125 (citations omitted).

Lastly, the Second Circuit addressed the Defendants' contention that the Newspapers are improperly trying to modify the Confidentiality Order to which production of the Subject Documents was made during discovery. The Circuit Court first noted that the "mere existence of a confidentiality order says nothing about whether complete reliance on the order to avoid disclosure was reasonable." Dkt. No. 428 at pp. 25-26; Lugosch V, 435 F.3d at 126 (citing Sec. and Exch. Comm'n (S.E.C.) v. TheStreet.com, 273 F.3d 222, 231 (2d Cir. 2001)). The reasonableness of the Defendants' purported reliance of eternal secrecy in the disclosed documents, in the Second Circuit's estimation, may be doubtful as the Confidentiality Order at issue specifically contemplates a process by which relief from the provisions therewith may be sought at any time. Dkt. No. 428 at p. 26; Lugosch V, 435 F.3d at 126 (quoting the Confidentiality Order, "This Confidentiality Order shall not prevent anyone from applying to the Court for relief therefrom[,]" and noting that in light of such provision, "it is difficult to see how the defendants can reasonably argue that they produced documents in reliance on the fact that the documents would always be kept secret." (emphasis added)). Nevertheless, the Second Circuit granted Defendants the opportunity on remand to call to the District Court's attention "any particular circumstances surrounding the production of a contested document."*fn8 Dkt. No. 428 at p. 26; Lugosch V, 435 F.3d at 126.

In conclusion, after reiterating the important holdings made clear by their decision, the Second Circuit emphasized that the District Court "must make its findings quickly." Dkt. No. 428 at p. 27; Lugosch V, 435 F.3d at 126-27 (quoting Grove Fresh Distrib., Inc. v. Everfresh Juice Co., 24 F.3d 893, 897 (7th Cir. 1994) ("The newsworthiness of a particular story is often fleeting. To delay or postpone disclosure undermines the benefit of public scrutiny and may have the same result as complete suppression.") (other citations omitted)). Accordingly, in the interest of avoiding further delays, the Second Circuit ruled that the mandate should be complied with forthwith. Dkt. No. 428 at p. 28; Lugosch V, 435 F.3d at 127.*fn9

C. The Expedited Briefing Schedule

In accordance with the dictates set forth therein, this Court took immediate action in setting up a telephone conference with all Parties and Proposed Intervenors. Dkt. No. 427, Text Order dated Jan. 17, 2006. Such conference was held on January 20, 2006, one day after the Mandate was docketed by the Clerk of this Court. See Minute Entry, dated Jan. 20, 2006; see also Dkt. No. 428. Several reasons supported the need for a conference. First, the Motion to Intervene was first briefed by all litigants prior to entering the November 5, 2004 accord. See Dkt. Nos 356-67 & 393-94, Proposed Intervenors' Motion, Mem. of Law, Exs., and Reply; Dkt. Nos. 386-87, Pls.' Response; Dkt. Nos. 389-90, Defs.' Response; Dkt. No. 396, Lt-Agreement, dated Nov. 5, 2004. That November 5, 2004 Agreement gave the Proposed Intervenors access to virtually 99.9% of the Motions for Summary Judgment and the Oppositions thereto, constituting thousands of pages of documents, affidavits, and redacted memoranda of law. After the litigants came to an agreement and many of the Subject Documents were turned over to the Newspapers, the Defendants submitted an updated privilege log, detailing only those documents withheld on the basis of attorney-client privilege and/or work product doctrine. Dkt. No. 397. At the January 20th telephone conference, this Court discussed the inadequacies of the updated privilege log.

We emphasized that a proponent of a privilege log must "make the claim expressly and shall describe the nature of the documents, communications, or things not produced or disclosed in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the applicability of the privilege or protection." FED. R. CIV. P. 26(b)(5); see also Bowne of New York City, Inc. v. AmBase, Corp., 150 F.R.D. 465 (S.D.N.Y. 1993). Having found the privilege log to be inadequate, the Court granted Defendants a period of time to submit a more detailed privilege log which contained: 1) a description of the documents; 2) identification of the parties to the communication; 3) the relationship among the parties in the log and the litigating parties; and 4) what privilege is being asserted as well as whose privilege is at issue. Dkt. No. 430, Order, dated Jan. 20, 2006.

Since clearly the issue of attorney-client privilege would be a major focus of this Court's inquiry in light of the Second Circuit's explicit instructions, this Court found it necessary for Defendants to submit affidavits from individuals who possessed particularized knowledge of the asserted privilege. Such had not been done with the initial briefing. Both the privilege log and affidavits were necessary in order for this Court to assess whether the attorney-client privilege applies, as set forth in the Second Circuit's Mandate, and for the litigants to know the reasons behind the urging for continued sealing. See Dkt. No. 428; see also infra Part II.D.

Finally, in reviewing the initial briefs, submitted prior to the November 5th Agreement, we found the discussion of the attorney-client privilege to be somewhat lacking.*fn10 In light of the Second Circuit's decision, we determined at the conference that the litigants needed to re-brief the issues before us to ensure a proper and detailed record could be made. Specifically, we directed the parties to brief the following issues:

1. Whether the contested documents filed by Plaintiffs in Opposition to Defendants' Motion for Summary Judgment are subject to the attorney-client privilege and/or work product doctrine, and, to the extent it is in issue, privacy considerations under Local Rule 8.1;

2. Whether there has been a waiver of any privilege and what waiver applies;

3. Has this Court previously ruled on the applicability of any privilege of the documents at issue or ruled that such privilege was waived, or that it is the law of the case; and

4. Admissibility of Plaintiffs' submissions[.]

Dkt. No. 430 at p. 3

Though it was revealed at that telephone conference that the Defendants had filed with the Second Circuit an Emergency Motion to Stay the Mandate and expressed an intent, if they had not done so already, to file a Petition for an En Banc Hearing, this Court, on January 20, 2006, nevertheless found it prudent to establish expedited briefing deadlines for each litigant; such deadlines were modified by Order dated January 30, 2006. Dkt. Nos. 430 & 440. Initially, this Court set the following deadlines: 1) Defendants shall provide a more detailed privilege log to the Court, all Parties, and the Proposed Intervenors no later than January 25, 2006; 2) Defendants shall submit under seal for in camera review affidavits from individuals with particular knowledge in asserting the privilege no later than February 1, 2006; 3) Plaintiffs, Defendants, and Proposed Intervenors shall simultaneously file Memoranda of Law no later than February 3, 2006; Plaintiffs' and Defendants' respective Memoranda shall be temporarily filed under seal due to the potentially sensitive nature of the information and upon receipt of the Memoranda, the Court will undertake a review to determine the viability of continued sealing; and 4) Reply Memoranda of Law, subject to the same filing standards, shall be filed no later than February 10, 2006. See Dkt. No. 430.

Although Proposed Intervenors adequately expressed their objections at the telephone conference, they nevertheless filed a letter brief objecting for the record any temporary seal of the Memoranda of Law and affidavits. Dkt. No. 429. Proposed Intervenors also stated their objection as to Defendants' intention to file a Motion to Strike. Id. In our Order setting the briefing schedule, we denied the objection to the sealing of the Memoranda of Law and affidavits at that juncture noting that as soon as the documents were received by this Court, we would review the validity of the continued sealing. Dkt. No. 430 at pp. 3-4, n.2. In response to the stated objections regarding a possible filing of a motion to strike, we noted "that the Proposed Intervenors, who as of this moment are not parties to this litigation, are clearly not in a position to object to whether a party to this litigation will file a motion or take any other action hereto. Therefore, such objection is denied." Id. at p. 3, n.2. Proposed Intervenors later took umbrage with this ruling. Dkt. No. 437 at n.3; see also supra note 4.

On January 26, 2006, Defendants requested an extension of time to submit their privilege log. Dkt. No. 433. Though the Plaintiffs and Proposed Intervenors did not per se oppose the extension request, both litigants took the opportunity to further chastise the Defendants' purported failure to accurately ensure that the documents they deemed confidential warranted such status. Dkt. Nos. 434 & 435. Finding the extension request did not interfere with the above briefing schedule, and no real opposition being established, this Court granted the request. Dkt. No. 433. The privilege log was then filed on January 27, 2006, with service on Plaintiffs and Proposed Intervenors. Dkt. Nos. 438-39.

As set forth in the briefing schedules, due to the potentially sensitive nature of some of the submissions and, most importantly, because disclosure of such information would necessarily moot the issues before the Court, we directed that Plaintiffs' and Defendants' Memoranda of Law be filed under seal and that the affidavits would be submitted under seal for in camera review only. By letter dated January 24, 2006, Plaintiffs renewed their request made at the January 20th conference for access to Defendants' affidavits and sought reconsideration of this Court's January 20th Order which directed that such submissions be made in camera. Dkt. No. 432. Plaintiffs reasoned that they already possessed the documents at issue and wanted an opportunity to attack the Defendants' factual basis for asserting a privilege. Id. That request was denied at that juncture. Id. Then, on January 27, 2006, Proposed Intervenors requested reconsideration/clarification of the Court's January 20th Order, where they too requested that the Court reconsider its decision to keep the Affidavits and Memoranda of Law under seal. Dkt. No. 437. In light of the submissions, this Court held another telephone conference on January 30, 2006, with all litigants to discuss what, if anything, was unclear in our January 20th Order since in that Order the Court specifically stated that the purpose for the sealing was due to the "sensitive nature of the content of the documents, and because any disclosure would necessarily moot the current dispute before the Court[,]" and further stated therein that "[u]pon receiving the Plaintiffs' and Defendants' respective Memoranda of Law, the Court will determine whether the filings shall remain under seal[.]" Dkt. No. 430 at pp. 3-4. After the conference, the Court issued an Order "clarifying" our January 20th Order. Dkt. No. 440. In that Order, we reiterated the need for certain submissions to be filed under seal and that the Court would undertake immediate review to assess whether such documents should remain under seal or whether "some redacted version could be made available for public viewing." Id. at p. 2. The litigants were also assured that they would be provided an opportunity to be heard prior to this Court rendering a ruling on unsealing and/or redaction. Id. Upon consent of all litigants, the deadline for submission of the Memoranda of Law was extended to February 7, 2006.*fn11

Id. at p. 1.

In accordance with this Court's January 20th and January 30th Orders, the respective submissions were timely filed/submitted to the Court. Dkt. Nos. 441-43. On February 9, 2006, this Court held a Hearing on the record with all litigants to discuss redactions of the submissions for public viewing. Text Order, dated Feb. 8, 2006; Minute Entry, dated Feb. 9, 2006. Thereafter, this Court issued an Order directing the refiling of the Memoranda of Law and Affidavits with certain redactions to preserve any privileged information to be available on the public docket. Dkt. No. 444. At the Hearing, and in accordance with In re New York Times Co., 828 F.2d 110, this Court made "specific, on the record findings . . . demonstrating that [sealing] is essential to preserve higher values and is narrowly tailored to serve that interest." 828 F.2d 110, 116 (internal quotation marks and citations omitted) (cited in Dkt. No. 444 at p. 2). Accordingly, all redactions were specifically found to be necessary to preserve the higher value of preserving the attorney-client privilege, and this Court cannot emphasize enough that disclosure therein would necessarily moot the issue currently before the Court. In addition to setting deadlines for filing on the public docket and hard copies to be mailed to the litigants, we also reset the Reply deadline for February 15, 2006. Id.

The Plaintiffs initially filed their Reply Memorandum of Law and Exhibits under seal due to the inclusion of possibly privileged material. Based on the Court's suggestion, the litigants entered into a stipulation, which was signed by the Court, setting forth the redactions that would be made in order to place the Plaintiffs' submission on the Docket and available for public viewing. The redactions were again necessary to preserve any alleged privilege. The continuing objections of both Plaintiffs and Newspapers were noted in the Stipulation. Dkt. No. 460.

As previously directed, the Parties filed their respective replies and the matter was fully briefed and ripe for our review. Dkt. Nos. 445-56 & 460-462. Then, as the Court was undertaking its review of the matter, and without first obtaining Court permission, the Plaintiffs submitted to this Court, via hand delivery on February 21, 2006, the Power Point Presentation prepared by Defendants for presentation at the June 28, 2005 Oral Argument, which was subsequently cancelled. See supra note 2; see also infra notes 14, 36 and Part II.D at p. 55. According to the Plaintiffs, the Defendants had submitted the Presentation to Judge Mordue after they were informed that the Oral Argument was adjourned. The Presentation is not currently a part of the Court's docket and this Court does not possess first-hand knowledge as to whether Judge Mordue actually received the Presentation. The Court then received a letter on behalf of Defendants, dated February 22, 2006, essentially objecting to the Plaintiffs' late submission and questioning its relevance. On February 23, 2006, the Court held another Hearing on the record with all litigants to discuss whether the Court would accept the Plaintiffs' late submission and whether the submission should be shared with the Newspapers. After hearing all arguments, the Court issued an Order whereby we noted the untimeliness of the submission and further questioned the relevance of the submission in light of the Second Circuit's Mandate as well as the fact that the Presentation itself is not currently a part of the record. Dkt. No. 463. Therefore, the Court did not accept the submission nor make it a part of the record. Nevertheless, we did preserve the submission in a sealed envelope. Due to some attorney-client privileged information contained in the Presentation, we directed that the Presentation remain under seal and not be served on the Newspapers.*fn12 On February 24, 2006, the Newspapers informed the Court that subsequent to the Hearing but prior to the issuance of the February 23rd Order, the Newspapers received both Plaintiffs' and Defendants' letters.*fn13 Dkt. No. 465. At that point, the Court again reviewed the letters and determined that in light of the service of the letters and the fact that no privileged information was disclosed therein, the portion of our February 23rd Order directing sealing of the letters was stricken, but all other provisions of that letter remained in effect. Dkt. No. 466, Text Order, dated Feb. 24, 2006. Thereafter, upon stipulation by the litigants which was endorsed by the Court, a redacted version of the Power Point Presentation was shared with the Newspapers. Dkt. No. 469.*fn14

II. DISCUSSION

A. Nature of the Instant Application to Intervene

Initially, the Court is compelled to address the procedural mechanism by which the Proposed Intervenors seek to join this civil action. Federal Rule of Civil Procedure 24 governs when parties seek to intervene, whether the intervention sought is as of right or with permission from the court. According to Rule 24, a party shall be permitted to intervene as of right,

(1) when a statute of the United States confers an unconditional right to intervene; or

(2) when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest, unless the applicant's interest is adequately represented by existing parties. FED. R. CIV. P. 24(a).

Permissive intervention, however, is governed by Rule 24(b), which states that anyone may be permitted to intervene,

(1) when a statute of the United States confers a conditional right to intervene; or

(2) when an applicant's claim or defense and the main action have a question of law or fact in common. . . . In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.

FED. R. CIV. P. 24(b).

Regardless of whether intervention is sought as of right or on permission, the Rule requires pursuit of a "timely application." Determination of the timeliness of an intervention application, whether by right or permission, is within the sound discretion of the trial court viewed from all circumstances. United States v. Pitney Bowes, Inc., 25 F.3d 66, 70 (2d Cir. 1994). The Second Circuit has suggested the following four factors in considering whether a motion to intervene is timely: "(1) how long the applicant had notice of the interest before it made the motion to intervene; (2) prejudice to existing parties resulting from any delay; (3) prejudice to the applicant if the motion is denied; and (4) any unusual circumstances militating for or against a finding of timeliness." Id.; see also Brooks v. Sussex County State Bank, 167 F.R.D. 347, 350 (N.D.N.Y. 1996) (quoting factors set forth in Pitney Bowes).

Though the Newspapers failed to specify whether they were seeking intervention as of right or by permission, the Second Circuit has suggested that Rule 24(b) is the proper procedural route for intervention by a non-party into a private civil action for the purpose of challenging a confidentiality order in an effort to gain public access to the court record. See Palmieri v. State, 779 F.2d 861, 864 (2d Cir. 1985); Martindell v. Int'l Tel. and Tel. Corp, 594 F.2d 291, 293 (2d Cir. 1979); United States v. Town of Moreau, 979 F. Supp. 129, 132 (N.D.N.Y. 1997) (Kahn, D.J.); see also Diversified Group, Inc. v. Daugerdas, 217 F.R.D. 152, 157 (S.D.N.Y. 2003) (stating that Rule 24(b) is the proper procedure for a third party to seek modification of a protective order in a private suit) (citing cases).

We find that, essentially, through their Intervention Motion, the Newspapers seek modification of the March 2001 Confidentiality Order since, by their Motion, they seek access to documents that were filed under seal pursuant to the Confidentiality Order. Dkt. No. 55, Confidentiality Order at ¶ 12 (specifically covering motions and other filings with the Court as subject to the terms of the Order); see also infra App. B.*fn15 This Court is fully acquainted with both the terms and applicability of the Protective Order at issue since we have written multiple decisions and entertained countless discussions on this somewhat infamous order. The Protective Order to which we refer was signed by the Honorable Ralph W. Smith, retired United States Magistrate Judge, on March 14, 2001, and has been utilized, with equal force, by all parties throughout the various and lengthy stages of this litigation. Dkt. No. 55.

When a party has reasonably relied on a protective order granted under Federal Rule of Civil Procedure 26(c), a court should not modify such order "absent a showing of improvidence in the grant[ing] of [the] order or some extraordinary circumstance or compelling need." S.E.C. v. TheStreet.com, 273 F.3d 222, 229 (2d Cir. 2001) (quoting Martindell v. Int'l Tel. & Tel. Corp., 594 F.2d 291, 296 (2d Cir. 1979) (other citations omitted). Unlike in Martindell, we deal here with documents submitted in opposition to Motions for Summary Judgment, not simply exchanged discovery materials. And, as noted by the Second Circuit, any reasonable reliance of the perpetual secrecy of the documents exchanged is doubtful in light of the specific terms of this Confidentiality Order. Accordingly, the strong presumption against modification enunciated in Martindell and SEC does not have as much weight here. SEC v. TheStreet.com, 273 F.3d at 229-30 (quoting FED. R. CIV. P. 26(c) ("Without an ability to restrict public dissemination of certain discovery materials that are never introduced at trial, litigants would be subject to needless 'annoyance, embarrassment, oppression, or undue burden or expense.'"); Martindell v. Int'l Tel. & Tel. Corp., 594 F.2d at 295-96 ("[T]he vital function of a protective order issued under Rule 26(c) . . . is to "secure the just, speedy, and inexpensive determination" of civil disputes . . . by encouraging full disclosure of all evidence that might conceivably be relevant."); see also FED. R. CIV. P. 26(c).

As noted by the Second Circuit, during the pendency of this litigation, Defendants have been "involved in lobbying the New York State Senate and the governor's office to obtain various tax credits and other sources of public funding to construct a highly publicized mega-mall in Syracuse, New York called "DestiNY USA." Dkt. No. 428 at p. 4; Lugosch V, 435 F.3d at 113. Indeed, in support of their Motion to Intervene, the Newspapers submit various affidavits with attached articles chronicling the extensive coverage of the DestiNY USA undertaking. See generally Dkt. Nos. 358, 360, 363, 367, & 368. Thus, thought not a critical element of the underlying litigation, the Newspapers have an interest in reporting on matters affecting the DestiNY USA undertaking. Though the Newspapers have known about the Confidentiality Order for some time, the Motion to Intervene was timely filed as it relates to the public's right of access to the documents filed in connection with Defendants' Motions for Summary Judgment. Furthermore, while the Plaintiffs and Defendants have both endured significant briefing on the Intervention issue, there exists no undue delay of the litigation at this point since the Summary Judgment Motions are fully briefed and ready for the District Judge's review. The potential prejudice to the Newspapers, however, in seeking to intervene on behalf of the public, is considerable. Again, while the reasonable reliance on the Confidentiality Order has been called into question by the Second Circuit, this Court need not address reliance here as it relates to the Newspapers' standing to intervene since the common law and First Amendment right to judicial documents, which the Second Circuit found clearly applicable here, are without doubt proper bases to modify the Protective Order at issue. "The Second Circuit Court of Appeals and its district courts consistently have held that news agencies have standing to challenge protective orders in cases of public interest." Savitt v. Vacco, 1996 WL 663888, at *7 (N.D.N.Y. Nov. 8, 1996) (citing, inter alia, In re Dow Jones & Co., Inc., 842 F.2d 603, 608 (2d Cir.), cert. denied, 488 U.S. 946 (1988)). We find therefore, that the Newspapers may properly intervene in this action. We now analyze whether they are entitled to the specific relief sought through their intervention.

B. Admissibility of Summary Judgment Documents

We first address the Defendants' contention that the Subject Documents are not judicial documents. The Defendants reason that, in finding the documents submitted in a summary judgment motion were judicial documents, the Second Circuit assumed that the documents submitted were admissible as governed by Federal Rule of Civil Procedure 56. Rule 56(e) states that a motion for summary judgment may be supported by affidavits which "shall set forth such facts as would be admissible in evidence" and all papers referred to in such affidavits shall be attached thereto. Defendants deduce that since the documents submitted by the Plaintiffs were not "admissible" documents, such documents are simply not judicial documents.

We think the Defendants' analysis presumes too much. It is true that in assessing what constitutes a judicial document, the Second Circuit, citing to a Third Circuit case, stated that the Plaintiffs' responsive submissions on summary judgment "may similarly be assumed to have supported their papers with admissible evidence and non-frivolous arguments." Dkt. No. 428 at p. 19; Lugosch V, 435 F.3d at 122. In making this statement, the Second Circuit was addressing Defendants', and previously this Court's, view that whether a document constituted a judicial document depended on the outcome of a summary judgment motion. The Second Circuit rejected this notion as did they reject the idea that what constituted a judicial document was somehow connected to which party filed the document. In making these assertions, the Second Circuit joined other sister circuits who have held that summary judgment is an adjudication of substantive rights and that the presumption of access attaches to documents filed in connection with a summary judgment motion. Dkt. No. 428 at pp. 19-20; Lugosch V, 435 F.3d at 122-23. Thus, "by virtue of having been submitted to the court as supporting material in connection with a motion for summary judgment[,]" regardless of which party filed the submission, the documents at issue were deemed to be judicial documents under both the common law and the First Amendment. Id. Whether the District Judge ultimately finds the submitted papers to be inadmissible or improperly submitted is a decision subject to the public's right to monitor. As the Second Circuit noted, it was incorrect to assume that different types of documents receive different weights of presumption based upon the extent to which the judge relied on them in deciding the motion. "If the rationale behind access is to allow the public an opportunity to assess the correctness of the judge's decision . . . documents that the judge should have considered or relied upon, but did not, are just as deserving of disclosure as those that actually entered into the judge's decision." In re Coordinated Pretrial Proceedings in Petroleum Prod. Antitrust Litig., 101 F.R.D. 34, 43 (C.D. Cal. 1984) (emphasis in original) (internal citations omitted) (quoted in Lugosch V, 435 F.3d at 123). "Moreover, '[o]nce those submissions come to the attention of the district judge, they can fairly be assumed to play a role in the court's deliberations.'" Lugosch V, 435 F.3d at 123 (quoting Fed. Trade Comm'n v. Standard Fin. Mgmt. Corp., 830 F.2d 404, 409 (1st Cir. 1987)). Such reasoning is apropos in this case where Plaintiffs contest that the documents are subject to any privilege at all.

Clearly then, the admissibility or inadmissibility of Plaintiffs' submission is not dispositive of whether the documents are judicial documents. The Second Circuit Mandate could not be clearer on this point. Further, in assessing the weight of the presumption of access to such judicial documents, again, the fact that the documents may ultimately be deemed inadmissible does not in any manner overcome the strong presumption. This Court is not persuaded that potential admissibility constitutes a compelling interest or countervailing factors. In this regard, we agree with both the Newspapers and Plaintiffs that Defendants had other procedural vehicles to challenge the admissibility of the Plaintiffs' submission, such as a motion to strike. The Defendants could not have reasonably relied on the Confidentiality Order in failing to take timely action on Plaintiffs' purportedly improper submission since, while the Confidentiality Order does by its terms cover documents submitted in a motion, the Confidentiality Order does not give any party the authority to disobey the Federal Rules of Civil Procedure. Defendants counter that they contest the admissibility of the documents in their Reply papers. While such may be the case, the Court notes that it is not clear whether they sought the documents to be stricken from consideration altogether. We therefore recommend a finding that the issue of admissibility in no way affects the public's right of access.

C. Analysis Under Second Circuit Mandate

We now commence our analysis as directed by the Second Circuit's Mandate. Based upon the privilege log and the arguments presented by Defendants to preserve the confidentiality of these Contested Documents and the Plaintiffs' and Newspapers' opposition, we are confronted with only two asserted privileges -- attorney-client privilege and work product doctrine.

1. Attorney-Client Privilege

The attorney-client privilege is a longstanding, common law privilege recognized in New York and by the federal courts under FED. R. EVID. 501. It is one of those "bedrock principle[s] of our justice system [which has been sustained] for hundred[s] of years," dating back to the 1600s. See AM. LAW INST. - ABA - ATTORNEY-CLIENT PRIVILEGE (May 15, 2005) at p. 87; United States v. Blizerian, 926 F.2d 1285, 1292 (2d Cir. 1991) (citing 8 J. WIGMORE, EVIDENCE, at § 2290, at pp. 542-44 (McNaughton rev. 1961) (the privilege being the oldest known - "[the] most ancient of confidential communication privileges")). This rule has been immortalized as a legal doctrine for eons to encourage full engagement between a party and her attorney so that full and frank communication exists to impart all the information an attorney may need in order to give sage and cogent advice on the matter. Swidler Berlin v. United States, 524 U.S. 399, 403 (1998); United States v. Schwimmer, 892 F.2d 237, 243 (2d Cir. 1989) ("[The] communications between attorney and client endures as the oldest rule of privilege known to the common law."). Stated another way, its essential purpose is to encourage clients to be fully forthcoming with their attorney and to receive, in return, advice which will protect the client's legal rights. Upjohn Co. v. United States, 449 U.S. 383, 389 (1981); Asian Vegetable Research & Dev. Ctr. v. Inst. of Int'l Educ., 1996 WL 14448, at *4 (S.D.N.Y. Jan. 16, 1996) (citing, inter alia, In re Horowitz, 482 F.2d 72, 81 (2d Cir.), cert. denied, 414 U.S. 867 (1973)). The free-flow of information and the twin tributary of advice are the hallmarks of the privilege. For all of this to occur, there must be a zone of safety for each to participate without apprehension that such sensitive information and advice would be shared with others without their consent. In re Grand Jury Subpoena Duces Tecum Dated November 16, 1974, 406 F. Supp. 381, 386 (S.D.N.Y. 1975) ("The sine qua non of the attorney-client-privilege is . . . a confidence reposed . . . .").

When determining if there is in fact an attorney-client privilege present to cloak both the client's communication and the corresponding legal advice, a court needs to ascertain that this safety net attaches to only those communications (1) where legal advice of any kind is sought, (2) from a professional legal advisor in his or her capacity as such, (3) the communication relates to that purpose, (4) made in confidence, (5) by the client, and (6) are at his or her insistence permanently protected, (7) from disclosure by the client or the legal advisor, (8) except if the protection is waived. United States v. Int'l Bhd. of Teamsters, 119 F.3d 210, 214 (2d Cir. 1997) (citing In Re Grand Jury Subpoena Duces Tecum, 731 F.2d 1032, 1036 (2d Cir.1984)); Madanes v. Madanes, 199 F.R.D. 135, 143 (S.D.N.Y. 2001) (citing, inter alia, In re Richard Roe, Inc., 68 F.3d 38, 39-40 (2d Cir.1995) & quoting United States v. Kovel, 296 F.2d 918, 921 (2d Cir.1961)); see also 8 WIGMORE, EVIDENCE § 2292. This privilege, as previously stated, further attaches to the advice rendered by the attorney. In re Six Grand Jury Witnesses, 979 F.2d 939, 943-44 (2d Cir. 1992). The burden of proving each element of the privilege rests on the party claiming the protection. In re Horowitz, 482 F. 2d at 82.

Contrary to modern yet ill-informed perceptions, the attorney-client privilege is often "[n]arrowly defined, riddled with exceptions, and subject to continuing criticism." United States v. Schwimmer, 892 F.2d at 243. Grand as the privilege stands in our legal lexicon, it is nonetheless narrowly defined by both scholars and the courts. Univ. of Pa. v. E.E.O.C., 493 U.S. 182, 189 (1990).*fn16

The attorney-client privilege is not given broad, unfettered latitude to every communication with a lawyer, but is to be narrowly construed to meet this narrowest of missions. Fisher v. United States, 425 U.S. 391, 403 (1976) ("However, since the privilege has the effect of withholding relevant information from the factfinder, it applies only where necessary to achieve its purpose."); see also In re Horowitz, 482 F.2d at 81 (privilege ought to be "strictly confined within the narrowest possible limits consistent with the logic of its principle") (quoting 8 WIGMORE § 2292 at 70); United States v. Int'l Bhd. of Teamsters, 119 F.3d at 214.

There isn't any dispute that a corporation's "in-house counsel" is afforded the same protection as an outside counsel with respect to this privilege, Upjohn Co. v. United States, 449 U.S. 383, and it is axiomatic that the same is true for partnerships' internal attorneys. In re Bieter Co., 16 F.3d 929, 935 (8th Cir. 1994) (reasoning that the rules regarding the attorney-client privilege of corporations are no less instructive when applied to a partnership or some other client entity not an individual); Denney v. Jenkens & Gilchrist, 362 F. Supp. 2d 407, 414 n.34 (S.D.N.Y. 2004) (citing, inter alia, United States v. Campbell, 73 F.3d 44 (5th Cir. 1996) and holding that "there is no logical reason to distinguish partnerships from corporations or other legal entities in determining the client a lawyer represents" and that "the rules regarding the attorney-client privilege of corporations are no less instructive when applied to a partnership")). Consistently, the privilege also protects communications between in-house counsel and the corporation's outside attorneys as well. United States Postal Serv. v. Phelps Dodge Refining Corp., 852 F. Supp. 156, 160 (E.D.N.Y. 1994) (citing Upjohn Co. v. United States, 449 U.S. at 395).

Factual investigations by an attorney or its agents, which include gathering statements from employees, clearly fall within the attorney-client rubric. Upjohn Co. v. United States, 449 U.S. at 390-91; United States v. Davis, 131 F.R.D. 391, 398 (S.D.N.Y. 1990) (citing Upjohn Co. for the proposition that the attorney-client privilege encompasses factual investigations). The Supreme Court observed that attorneys dealing with a complex legal problem such as this are thus faced with a 'Hobson's choice'. If he interviews employees not having 'the very highest authority', their communications to him will not be privileged. If, on the other hand, he interviews only those employees with the 'very highest authority,' he may find it extremely difficult, if not impossible, to determine what happened.

Upjohn Co., 449 U.S. at 391-392 (citations omitted).

That being so, statements made by employees, of any station or level within a corporation or a sophisticated business structure, to an attorney or the attorney's agent which were done in confidence and outside the purview of others are protected. Bruce v. County of Rensselaer, 2003 WL 355460, at *2 (N.D.N.Y. Feb. 11, 2003) (citing UpJohn Co., 449 U.S. at 393-396 & United States v. Int'l Bhd. of Teamsters, 119 F.3d at 214); United States v. Davis, 131 F.R.D. at 398. And, if the attorney-client privilege extends to employees' statements, surely it extends to the attorneys' notes, memoranda, and files pertaining to those statements. Upjohn Co., 449 U.S.at 388-90 (questionnaires submitted to corporate employees not disclosed); Carter v. Cornell Univ., 173 F.R.D. 92, 94-95 (S.D.N.Y. 1997) (interview notes not disclosed). But it should be absolutely clear that there is a line of demarcation between attorney driven versus management conducted investigations: the attorney-client privilege will not be a safe harbor for internal investigations conducted by management itself. In re Grand Jury Subpoena, 599 F.2d 504, 510 (2d Cir. 1979).

But, making statements to an in-house attorney, in and of itself, does not render the communication or the advice privileged. The curious character of an in-house counsel is that they generally have multiple roles and frequently give to their client business, management or other advice in addition to legal advice. Colton v. United States, 306 F.2d 633, 638 (2d Cir.), cert. denied 371 U.S. 951 (1963); MSF Holding, Ltd. v. Fiduciary Trust Co. Intern., 2005 WL 3338510, at * 1 (S.D.N.Y. Dec. 27, 2005). And these dual functions are very likely to become mixed, in some degree obfuscating the true nature of the function performed. Bank Russells Lambert v. Credit Lyonnais (Suisse), 220 F. Supp. 2d 283, 286 (S.D.N.Y. 2002). Therefore, the request for legal advice must be distinctly clear and void of nuances of business consultation or instruction, if it is to be privileged. United States v. Millman, 822 F.2d 305, 310 (2d Cir. 1987) (the party has to show that attorney-client communications were not related to his role as business advisor); In re Grand Jury Subpoena Duces Tecum Dated Sept. 15, 1983, 731 F.2d at 1037 ("[T]he privilege is triggered only by a client's request for legal, as contrasted with business advice."); United States Postal Serv. v. Phelps Dodge Refining Corp., 852 F. Supp. at 160 (stating that "if the communication is made to the attorney in her capacity as a business adviser . . . it ought not be privileged"); Rattner v. Netburn, 1989 WL 223059, at *6 (S.D.N.Y. June 20, 1989) (ruling that the communication must be characterized as predominately legal in order for the privilege to apply) (emphasis added). To ensure that the attorney-client privilege remains affixed to the communication and/or advice, the corporation has the burden of establishing that the communication was for the purpose of procuring legal advice. In re Grand Jury Subpoena, 599 F.2d at 510. Because of the duality of the advice, a court must assume the very complicated task of inquiring into the subject matter of the communication in order to determine its true characteristic. Elliot Assocs., L.P. v. Republic of Peru, 176 F.R.D. 93, 97 (S.D.N.Y. 1997) (citing Colton v. United States, 306 F.2d at 636) (opining that the inquiry should be of a "sufficient abstract level so as to not reveal the substance of the advice"). When the ultimate decision is based upon both legal and business considerations, the business and management aspect of the discussion will not be as fortunate in receiving protection by the privilege. TVT Records v. Island Def Jam Music Group, 214 F.R.D. 143, 144 (S.D.N.Y. 2003) (citing In re Grand Jury Subpoena Duces Tecum Dated Sept. 15, 1983, 731 F.2d at 1037 (protects legal advice not business));*fn17 Fine v. Facet Aerospace Prod. Co., 133 F.R.D. 439, 444 (S.D.N.Y. 1990); Hardy v. New York News, Inc., 114 F.R.D. 633, 643-44 (S.D.N.Y. 1987); United States v. Schenectady Sav. Bank, 525 F. Supp. 647, 650 (N.D.N.Y. Oct. 28, 1981) (citing Colton v. United States, 306 F.2d at 638, for the proposition that tax advice is not protected). To this extent, a court may have to parse not only the words but their intent in order to glean the authentic purpose of the communication.

2. Work Product Doctrine

Whenever the attorney-client privilege is raised in on-going litigation, concomitantly the work product doctrine is virtually omnipresent. They are inseparable twin issues, and when one is advanced, surely the other will follow. The work product privilege is more broad than the attorney-client privilege. In re Grand Jury Proceedings, 219 F.3d 175, 190 (2d Cir. 2000). This privilege exists to protect attorneys' mental impressions, opinions, and/or legal theories concerning litigation. Horn & Hardart Co. v. Pillsbury Co., 888 F.2d 8, 12 (2d Cir. 1989). Indeed, the work product privilege is designed to protect an adversarial system of justice and has been analyzed in that context by the Supreme Court in Hickman v. Taylor, 329 U.S. 495, 510-11 (1947). This doctrine establishes a "zone of privacy" in which a lawyer can prepare and develop theories and strategies with an eye towards litigation free from unnecessary intrusion by his or her adversaries. United States v. Adlman, 68 F.3d 1495, 1500-01 (2d Cir. 1995) ("Adlman I") (citing United States v. Nobles, 422 U.S. at 238 & Hickman v. Taylor, 329 U.S. 495); see also In re Minebea Co., Ltd., 143 F.R.D. 494, 499 (S.D.N.Y. 1992). Of course the burden, albeit not a heavy one, of establishing that the work product doctrine applies rests with that party's attorney who is claiming the protection. The work product doctrine, as well as the attorney-client privilege, "does not extend to every document generated by the attorney; it does not shield from disclosure everything a lawyer does." Rattner v. Netburn, 1989 WL 223059, at *6. The doctrine is generally invoked as soon as the attorney, in responding to a request for production of documents, serves upon the requesting party a privilege log asserting this and any other relevant privilege or provides notification that it will not be disclosed for this reason. FED. R. CIV. P. 26(b)(5) & 34(b). Failure to timely provide the privilege log or objection constitutes a waiver of any of the asserted privileges. Even if a party follows these steps, the security of the work product doctrine is not assured. There must be the omnipresent concern that revealing the attorney's mental processes is real and not just speculative. Gould Inc. v. Mitsui Mining & Smelting Co., Ltd., 825 F.2d 676, 680 (2d Cir. 1987).

FED. R. CIV. P. 26(b)(3) provides a relevant rule on the discovery of work product material. It reads in part:

[A] party may obtain discovery of documents and tangible things otherwise discoverable under subdivision (b)(1) of this rule and prepared in anticipation of litigation or for trial by or for another party or by or for that other party's representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent) only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of the party's case and that the party is unable without undue hardship to obtain the substantial equivalent of the materials by other means. In ordering discovery of such materials when the required showing has been made, the court shall protect against the disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation.

It is important to note that the work product doctrine classifies documents into two categories: "non-opinion" work product and "opinion" work product. The distinction between these two categories turns on the effort employed in obtaining disclosure pursuant to Rule 26(b)(3). For "non-opinion" work product, the party seeking this information must show a substantial need for the document and undue hardship to acquire the document or its substantial equivalent by other means. On the other hand, "opinion" work product requires a higher protection to the extent that the requesting party has to demonstrate extraordinary justification before the court will permit its release. Strougo v. BEA Assocs., 199 F.R.D. 515, 521 (S.D.N.Y. 2001) (citing In re Sealed Case, 676 F.2d 793, 809-10 (D.C. Cir. 1982)); see also Upjohn Co. v. United States, 449 U.S. at 401. At a minimum, such "opinion" work product should remain protected until and unless a highly persuasive showing is made. In re Grand Jury Proceedings, 219 F.3d at 191; United States v. Adlman, 134 F.3d 1194, 1204 (2d Cir. 1998) ("Adlman II"). In a similar vein, in most instances, the work product doctrine does not extend to facts. Generally, non-privileged facts should be freely discoverable. Compare In re Savitt/Adler Litig., 176 F.R.D. 44, 48 (N.D.N.Y. 1997) with In re Grand Jury Subpoena dated Oct. 22, 2001, 282 F.3d 156, 161 (2d Cir. 2002).

"[W]here a party faces the choice of whether to engage in a particular course of conduct virtually certain to result in litigation and prepares documents analyzing whether to engage in the conduct based on its assessment of the likely result of the anticipated litigation, [it should be] conclude[d] that the preparatory documents should receive protection under Rule 26(b)(3)." Adlman II, 134 F.3d at 1196. The crux being that a document which has been prepared because of the prospect of litigation will not lose its protection under the work product doctrine, even though it may assist in business decisions. Adlman I, 68 F.3d at 1502; Strougo v. BEA Assocs., 199 F.R.D. at 521. But this protection will not be extended, under any circumstances, to records that are prepared in the ordinary course of business. Adlman I, 68 F.3dat 1502. Even though the work product doctrine protects the impressions, opinions, theories, and strategies of an attorney, Rule 26(b)(3) makes clear that the document at issue, either obtained or prepared by or for a party, or by or for his representative, may be cloaked by this doctrine as well. Id. This maxim makes sound sense considering how complex litigation can be and the undeniable need for others to assist in developing all that is necessary to prosecute or defend a lawsuit. Obviously, impressions and strategies are not always created in a vacuum, but, rather are generated in cogent discourse with others, including the clients and agents. Further, the exchange of such documents and ideas with those whose expertise and knowledge of certain facts can help the attorney in the assessment of any aspect of the litigation does not invoke a waiver of the doctrine. United States v. Nobles, 422 U.S. at 239; Adlman I, 68 F.3dat 1502.*fn18

In terms of the presumptive access to judicial documents that are an integral part of a motion for summary judgment, it is this Court's opinion that the attorney-client privilege and the work product doctrine are of the highest values within our judicial system.

3. Waiver of Attorney-client Privilege and Work Product Doctrine

There are circumstances, and permutations thereof, that cause waivers upon waivers to these less than sacrosanct rules. Cynthia B. Feagan, Comment, Issues of Waiver In Multiple-Party Litigation: The Attorney-Client Privilege and the Work Product Doctrine, 61 UMKC L. REV. 757 (1993); Edna Selan Epstein, The Attorney-Client Privilege and the Work-Product Doctrine, (4th ed. 2001). Considering that the attorney-client privilege protects communications and the work product doctrine protects tangible items which may contain strategies, impressions, and attorney's opinions, both the privilege and the doctrine may be waived in various ways including sharing such documents with a third party. In re Pfohl Bros. Landfill Litig., 175 F.R.D. 13, 22-28 (W.D.N.Y. 1997) (survey of the various types of implicit and explicit waivers); see also Feagan, Comment, Issues of Waiver in Multiple-Party Litigation, 61 UMKC L. REV. at 775-77. We need not now address all of the potential waivers and exceptions to the attorney-client privilege and the work product doctrine, but it is necessary in the context of this case to first draw upon those waivers which invariably cause lawyers the greatest angst, and may be problematic in this case. See In re Pfohl Bros. Landfill Litig., 175 F.R.D. 13.

a. Third Party Waiver

The waiver to which we speak is whether the client's communication(s) or the legal advice given was shared, in some form or fashion, with a third party. A waiver such as this may be done explicitly or implicitly, or rather, intentionally or inadvertently. 6 JAMES M. MOORE ET AL, MOORE'S FEDERAL PRACTICE § 26.49[5] (3d ed. 2005); In re Pfohl Bros. Landfull Litig, 175 F.R.D. at 24-26. Obviously, when communications between a party and her attorney occur in the presence of a third party, the privilege may be waived. United States v. Am. Tel. and Tel. Co., 642 F.2d 1285, 1298-99 (D.C. Cir. 1980). Yet, a disclosure to a third party does not waive the privilege unless such disclosure is inconsistent with the "maintenance of secrecy" and if the disclosure "substantially increases the possibility of an opposing party obtaining the information." GAF Corp. v. Eastman Kodak Co., 85 F.R.D. 46, 51-52 (S.D.N.Y. 1979). For example, an exemption from the waiver accrues if such communications are shared with an agent of the attorney, which may include investigators and accountants retained to assist the attorney in rendering legal advice and instruction. United States v. Schwimmer, 892 F.2d 237, 243 (2d Cir. 1989) (accountant); United States v. McPartlin, 595 F.2d 1321, 1336-37 (7th Cir. 1979) (investigator); United States v. Kovel, 296 F.2d 918, 921-24 (2d Cir. 1961) (disclosures to an accountant does not waive attorney-client privilege).

As noted above, the work product doctrine is not absolute either. Such protection, like any other privilege, can be waived and the determination of such a waiver depends on the circumstances. United States v. Nobles, 422 U.S. at 239-40. In fact, in most respects, the discussion of a third party waiver is virtually the same for both the attorney-client privilege and the work product doctrine. A voluntary disclosure of work product, for some or any inexplicable benefit, to a third party, especially if the party is an adversary, may waive the immunity. In re Steinhardt Partners, L.P., 9 F.3d 230, 234-37 (2d Cir. 2000); see also In re Grand Jury Proceedings, 219 F.3d at 191; Strougo v. BEA Associates, 199 F.R.D. at 521-22. Once a party allows an adversary to share in an otherwise privileged document, the need for the privilege disappears, and may disappear forever, even as to different and subsequent litigators. In re Steinhardt Partners, 9 F.3d at 235 (citing United States v. Nobles, 422 U.S. at 239). As an illustration, when a party makes a strategic decision, no matter how broad and sweeping or limited, to disclose privilege information, a court can find an implied waiver. In re Grand Jury Proceedings. 219 F.3d at 190-92. Moreover, a party cannot partially disclose a privileged document nor selectively waive the privilege and then expect it to remain a shield. Id. at 191. However, there is no per se rule that all voluntary disclosures constitute a waiver of the work product doctrine because there is no way the court can anticipate all of the situations when and how such disclosure is required. In re Steinhardt Partners, 9 F.3d at 236 (i.e., privilege not waived if shared with someone of common interest). There are times when a waiver can be broad and other times when it has to be narrowly construed. Each case must be judged on its own circumstances and merits. See Strougo v. BEA Associates, 199 F.R.D. at 521-22.

Plaintiffs strongly intimate that the Defendants voluntarily disclosed confidential attorney-client privilege and work product doctrine documents and failed to maintain the confidence of these documents when they revealed these documents to them pursuant to the Confidentiality Order. See Dkt. No. 55, Confidentiality Order, dated Mar. 14, 2001. Any reliance upon the Confidentiality Order by the Defendants as to documents claimed to be protected by the attorney-client privilege and the work product doctrine is, in Plaintiffs' view, inalterably incorrect and misplaced. Dkt. No. 455, Pls.' Reply Mem. of Law, dated Feb. 15, 2006, at pp. 2-4, & 5. By charging that Defendants have attempted to misinform this Court as to the breadth of the Confidentiality Order, it is the Plaintiffs who are truly misleading, or gravely mistaken. Plaintiffs disingenuously state that the Confidentiality Order protects "confidential or proprietary business information or trade secrets" and that is the "only material that Plaintiffs 'recognized' and 'agreed on the need to protect' when they entered into the Confidentiality Order . . . 'Privilege' material is not protected by this Confidentiality Order." Id. at pp. 2-3. These parties knew that during the discovery process they would be sharing millions of pages of documents, of all kinds and character, which would invariably include privileged documents, in order to avoid the tortuous and time consuming task of reviewing beforehand all of the documents for the purpose of complying with discovery requests. Hence, a more literal, accurate, and workable reading of the Confidentiality Order, as a whole, intelligently entered into by both parties, makes transparent that "inadvertent disclosure of any privileged or work product information in connection with the litigation shall not be deemed a waiver of the attorney-client privilege, the attorney work product doctrine or any other applicable privilege." Dkt. No. 55, Confidentiality Order at ¶ 19. Plaintiffs' argument is inconsistent with previous entanglements this Court had to address during the toilsome course of this litigation with regard to the exchange of confidentiality information. Thus, there was no waiver of the privilege by virtue of disclosing privilege documents under the Confidentiality Order.*fn19

b. Business Structure and Waiver Issue

The general rules governing waivers are more complicated when the issue arises in the corporate or complicated legal entity context:

As an inanimate entity, a corporation must act through agents. A corporation cannot speak directly to its lawyers. Similarly, it cannot directly waive the privilege when disclosure is in its best interest. Each of these actions must necessarily be undertaken by individuals empowered to act on behalf of the corporation.

In re Grand Jury Proceedings v. John Doe, 219 F.3d at 183 (citing Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343, 348 (1985)).

The authority to waive the corporate privilege rests with the corporation's management and is "normally exercised by its officers and directors." Id. at 184. The same principles hold true for a partnership. United States v. Int'l Bhd. of Teamster, 119 F.3d at 214-215 ("[A]attorney client privilege presents 'special problems' when asserted by corporations and other entities, since such entities must act through agents[.]"); United States v. Campbell, 73 F.3d 44, 47 (5th Cir. 1996) (citing Hopper v. Frank, 16 F.3d 92, 96 (5th Cir. 1994) (stating that "there is no logical reason to distinguish partnerships from corporations or other legal entities in determining the client a lawyer represents")); Meoli v. Am. Med. Serv. of San Diego, 287 B.R. 808, 816-817 (S.D. Cal. 2003) (citing, inter alia, In re Bieter Co., 16 F.3d 929, 935 (8th Cir.1994)). In the context of a partnership, a general partner who has full agency authority has the providence to waive the attorney-client privilege. Although this legal proposition is bereft of any case law pronouncing it as a bright line rule,*fn20 and maybe because the principle is so painfully obvious, this Court was initially persuaded by those cases that have ruled that a trustee of a partnership in bankruptcy, who steps into the shoes of a general partner, has the authority to waive the privilege. The pure logic of this reasoning is this: A partnership is much like a corporation inasmuch as it is an inanimate entity that can act only through its agents. When solvent, a partnership is managed by its general partners, which have the power to direct the partnership's affairs and control its property, unless otherwise limited by the partnership agreement. In the event the partnership finds itself in bankruptcy, "the trustee steps into the shoes of the general partner and removes all power of the general partner to direct affairs and control property." Weighing these broad powers, the trustee can waive the attorney-client privilege. Meoli v. Am. Med. Serv. of San Diego, 287 B.R. at 817; see also United States. v. Campbell, 73 F.3d at 47; In re Bieter Co., 16 F.3d at 935; Denney v. Jenkens & Gilchrist, 362 F. Supp. 2d 407, 414 n.34 (S.D.N.Y. 2004) (noting how other courts have extended Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343, 348 (1985), to hold that in a partnership context a trustee for a bankrupt partnership has the authority to waive the partnership's privilege); In re Sunrise Sec. Litg., 130 F.R.D. 560, 570-71 (E.D. Pa. 1989) (finding that each member of a joint venture, which is nothing more than another partnership form, can waive the privilege as to the joint venture). The inescapable conclusion then that we can reasonably extrapolate from the above discussion would be that if a trustee, who assumes the powers of a single general partner can waive the privilege, the source itself - a general partner - has the same conclusive powers. But there is conspicuous impotence with this logic as it may relate to certain partnerships that claim the privilege. We may not be able to make such a logical determination if the general partners of the partnership have delegated, by virtue of an agreement, management control over the partnership to one or more partners.

It is hornbook law that the business of a partnership is managed by the general partners who are empowered to act for and bind the partnership within the scope of the partnership. JUDSON A. CRANE AND ALAN R. BROMBERG, LAW OF PARTNERSHIP, Ch. 5, § 48 (1968); N.Y. PARTNERSHIP LAW § 20 ("Every partner is an agent of the partnership for the purpose of its business[.]").*fn21 In the absence of an agreement between the partners, each general partner is entitled to take part in the management of the business and have equal stature and voice in participating in that management. 68 C.J.S. Partnership § 90 (2005) (emphasis added); 59A AM. JUR. 2D Partnership § 274. Thus, a general partner can perform any managerial action he desires. See supra note 21. Yet, the general partners can enter into a valid agreement delegating to one or more of the partners exclusive control over the management of the entire partnership business or particular functions of the business. 68 C.J.S Partnership at § 90.

In our case, the general partners of all of the Pyramid Mall Partnerships have vested exclusive control of the particular partnership's management within an executive committee. We previously noted that in essence, each partnership is a developer of a specific yet separate real estate venture within a common and unified paradigm we now refer to as the Pyramid Malls. Each of the Malls are replicas of this paradigm and they essentially employ the same operating procedures. . . . This business/partnership model has two essential elements. There is an executive committee which, by all accounts, is the daily decision maker for the respective partnership. Although the respective committees are comprised of various personalities, the common denominator on each of these partnerships' executive committee is Robert J. Congel . . . .

Lugosch v. Congel, 219 F.R.D. 220, 228-229 (N.D.N.Y. 2003)("Lugosch II") (emphasis added).

In order to understand the background that is reflected above, this Court required the parties, at that time, to provide sample templates of the partnership agreements, appreciating that the same agreement format was used for and by all of the partnerships, and the Defendants provided a matrix that identified each mall, each partnership, each partner, and members of the executive committee.*fn22 See Lugosch II, 219 F.R.D. at 229 (citing Dkt. No. 294, Ex. A). The model partnership agreements reveal that "[t]he executive committee, with the authority granted to it under the agreement, shall have the exclusive right to manage the business of the Partnership and is hereby authorized to take any action of any kind and to do anything and everything in accordance with the provisions of this agreement."*fn23 Dkt. No. 294, Ex. A. Within the framework of the executive committee, there must be an "affirmative vote of at least fifty-one percent of the members (voting per capita) of the Executive Committee shall be required in all matters acted on by the Executive Committee."*fn24 Id.

As duly noted above, the authority to waive the corporate privilege rests with the corporation's management and is "normally exercised by its officers and directors." In re Grand Jury Proceedings v. John Doe, 219 F.3d at 183 (citing Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. at 348); United States v. Int'l Bhd. of Teamster, 119 F.3d at 214-15. In our case, authority to manage the affairs of the Pyramid Mall Partnerships rests with the respective executive committee, who make management decisions by majority vote. Generally speaking, at least two of the Defendants, Congel and Tuozzolo, serve, or have served, on a number of Pyramid Mall Partnerships' executive committees, and possibly, one Plaintiff, Robert Ungerer, serves on Crossgates Mall Partnership's executive committee.*fn25 Dkt. No. 294, Ex. A. Since the executive committee has exclusive management prerogatives and acts by majority rule, Defendants' statement that no general partner - either Defendant or Plaintiff - can waive the attorney-client privilege on their own has substantial credence. See supra note 20 (citing Dkt. No. 453 at p. 2 n.2). Following the instruction of Weintraub, we note that only the executive committees of the Pyramid Mall Partnerships would have the proper authority to explicitly waive the attorney-client privilege, if such privilege exists, and only by majority decision. Conversely then, we therefore recommend a ruling that Plaintiffs who are individual general partners do not hold the function that can waive their partnership's claim of attorney-client privilege, and by filing these privilege documents in opposition to the Motion for Summary Judgment should not be considered a waiver of either the attorney-client privilege or the work product doctrine.

c. At Issue Waiver

Plaintiffs and Intervenors exclaim there is another implied waiver that is the centerpiece of their position that the attorney-client privilege and work product doctrine should be forfeited. This waiver is commonly called "at issue" waiver, which is based upon the Fairness Doctrine. Had Defendants submitted these privileged documents with their Motions for Summary Judgment, we could with ease have concluded that presumptively the privileges were waived. See Joy v. North, 692 F.2d 880, 894 (2d Cir. 1982) ("[T]he submission of material to a court in order to obtain a summary judgment utterly precludes the assertion of the attorney-client privilege or work product immunity."). But this case is not that perfect scenario and we cannot lose sight of who actually included Defendants' claimed attorney-client privileged documents into this record. We are devilishly confronted with Plaintiffs, not Defendants, who have placed these privileged documents before the District Court in support of their Opposition to the various Motions for Summary Judgment,*fn26 and therefore we cannot readily cosign, as the Intervenor would like, that a waiver has accrued.

It is well settled law that in "certain circumstances a party's assertion of factual claims can, out of consideration of fairness to the party's adversary, result in the involuntary forfeiture of privileges for matters pertinent to the claims asserted." John Doe Co. v. United States, 350 F.3d 299, 302 (2d Cir. 2003) (citing, inter alia, United States v. Bilzerian, 926 F.2d 1285 (2d Cir. 1991)). The application of "at issue" waiver is primarily due to the fact that the party asserting the privilege has placed "a contention at issue." Id. (citing, inter alia, Worthington v. Endee, 177 F.R.D. 113, 116-117 (N.D.N.Y. 1998) and 6 JAMES WM. MOORE ET. AL, MOORE'S FEDERAL PRACTICE § 26.70[6][c] (3d ed. 1997)).*fn27

Forfeiture of the privilege turns on the consideration of fairness, or, more correctly cast, unfairness to the adversary. This unfairness to the adversary is "having to defend against a privilege holder's claim without access to pertinent privilege material that might refute the claim." John Doe Co. v. United States, 350 F.3d at 304 (emphasis in original). Thus, in the circumstances where a party contends facts to an "adjudicating authority" (a court, jury or decision maker) then relies upon the privilege "to deprive its adversary of access to [the] material that might disprove, [impeach], [effectively contest], [rebut] or undermine the party's contention" would be unfair. Id. at 302 & 303; In re von Bulow, 828 F.2d 94, 102 (2d Cir. 1987) (assertion during a judicial proceeding).*fn28 Or, where the privilege holder intends to visit prejudice upon his opponent or disclose only select portions of the privileged communication for "self serving purposes" in order to promote a claim in the litigation that in fairness may require examination of this protected communication, then the privilege may be forfeited. United States v. Blizerian, 926 F.2d at 1292 & 1293 ("[ For example, the court] cannot sanction the use of the privilege to prevent effective cross examination on matters reasonably related to those introduced in direct examination."). The Fairness Doctrine will not allow the privilege to stand when the proponents seek to use it for a purpose that is inconsistent with the privilege. What the court is attempting to avoid is ...


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