The opinion of the court was delivered by: Seybert, District Judge
Pending before the Court is Defendant David Brooks' motion to dismiss the Indictment, or, in the alternative, suppress certain evidence, based on alleged violations of the attorney-client privilege and attorney work-product doctrine. On February 23-26, 2009, the Court held an evidentiary hearing on this matter. On July 9, 2009, Defendant Sandra Hatfield joined Mr. Brooks motion. Based on the evidentiary hearing, and the parties submissions, the Court has reached the following preliminary findings.*fn1
On October 25, 2007, Mr. Brooks was charged with 18 counts of alleged criminal activity stemming from his tenure as D.H.B. Industries Inc.'s ("DHB" or "the Company") Chief Executive Officer and as a member of the Company's Board of Directors. The Superseding Indictment charges that Mr. Brooks devised and carried out fraudulent schemes to defraud DHB and its shareholders of money, property, and his honest services. Among other things, the Superseding Indictment charges that Mr. Brooks participated in schemes to inflate DHB's gross profit margins, convert DBH's resources into unauthorized and undisclosed compensation, and conceal related party transactions.
Following the Indictment, the Government produced voluminous discovery material to Mr. Brooks which the Government had originally obtained from DHB and other third-parties. Combing through this material, Mr. Brooks and/or his counsel have discovered several documents that Mr. Brooks contends DHB and the other third-parties should not have produced to the Government, because they are allegedly protected by the attorney-client and joint defense (or common interest) privileges and the attorney work-product doctrine.*fn2
Mr. Brooks argues that the Government invaded applicable privileges and protections by keeping and reviewing this material, instead of returning it to its source or alerting him of potential privilege issues with respect to it. As a remedy, Mr. Brooks seeks the dismissal of the Indictment against him or, in the alternative, the suppression of all material protected by a privilege belonging to Mr. Brooks.
In connection with his motion, Mr. Brooks submitted a detailed log of privileged documents that the Government supposedly impermissibly obtained. Generally speaking, these documents fall into the following categories: (1) documents created by Huron Consulting Group ("Huron"); (2) documents created by Mr. Brooks' attorneys, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C. ("Mintz Levin"), but later disclosed to Huron; (3) documents created by Mintz Levin but produced to the Government by DHB; (4) documents created by another law firm retained by Mr. Brooks, Schlam, Stone & Dolan LLP ("Schlam Stone") or by the forensic accounting firm, Stroz Freidberg LLC ("Stroz Friedberg"), that Schlam Stone retained; (5) documents created by yet another one of Mr. Brooks' law firms, Milbank, Tweed, Hadley & McCloy, LLP; (6) alleged joint defense communications between Mr. Brooks and/or his attorneys and other persons or entities; and (7) communications monitored by Vance International, Inc. ("Vance") pursuant to Mr. Brooks' bail arrangement. Following a discussion of the applicable law and burdens, the Court will discuss each of these categories, in turn.
The attorney-client privilege protects: (1) a communication between client and counsel; that (2) was intended to be and was in fact kept confidential; and (3) was made for the purpose of obtaining or providing legal advice. See In re County of Erie, 473 F.3d 413, 419 (2d Cir. 2007).
The attorney work-product doctrine "provides qualified protection for materials prepared by or at the behest of counsel in anticipation of litigation or for trial." In re Grand Jury Subpoenas Dated Mar. 19, 2002 & Aug. 2, 2002, 318 F.3d 379, 383 (2d Cir. 2003). There are two types of work product, "fact" and "opinion." In re Grand Jury Subpoena Dated July 6, 2005, 510 F.3d 180, 183 (2d Cir. 2007). Fact work product encompasses "factual material, including the result of a factual investigation." Id. In contrast, "opinion work product reveals the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative, and is entitled to greater protection than fact work product." Id. (internal citations and quotations omitted). To be entitled to protection for opinion work product, the party must show "a real, rather than speculative, concern that the work product will reveal counsel's thought processes in relation to pending or anticipated litigation." Id. at 183-184. However, the work product doctrine is "stricter" in "the context of a pending criminal prosecution," where it "preclud[es] discovery of documents made by a defendant's attorney or the attorney's agents except with respect to 'scientific or medical reports.'" In re Grand Jury Subpoenas Dated March 19, 2002 and August 2, 2002, 318 F.3d at 383 (citing Fed. R. Crim. P. 16(b)(2)).
In considering privilege questions that arise in a federal criminal prosecution case, the Court applies "principles of the common law as they may be interpreted by the courts of the United States in the light of reason and experience." Fed. R. Evid. 501. Thus, the Court turns first to the decisions of the United States Supreme Court, the Second Circuit, and the Second Circuit's district courts in settling questions concerning the attorney-client privilege and the work product doctrine (i.e., "courts of the United States"). However, because the Court must apply privilege law "in the light of reason and experience," it is "entirely appropriate for federal courts to evaluate state precedent for whatever light it might shed on" questions unsettled under federal law. 2 FED. EVID. § 5:4 (3d ed.). Thus, if not bound by Supreme Court or Second Circuit precedent, the Court may "properly consider both state judicial opinions and state statutes," along with its own reasoned understanding, in resolving federal common law privilege questions. Id.
Here, the principle privilege questions at issue concern: (1) whose burden it is to establish privilege; (2) whose burden it is to show that an applicable privilege was waived; and (3) what circumstances constitute waiver. With respect to (1), the Second Circuit has definitively held that the party asserting privilege "bears the heavy burden of establishing its applicability." In re Grand Jury Subpoena Dated July 6, 2005, 510 F.3d at 183. In the privilege context, this means that the party asserting it must show that "the information was a communication between client and counsel, that it was intended to be and was kept confidential, and [that] it was made in order to assist in obtaining or providing legal advice or services to the client." HSH Nordbank AG New York Branch v. Swerdlow, __ F.R.D. __, 2009 WL 2223476, *3 (S.D.N.Y. July 24, 2009) (collecting cases); United States v. Int'l Bhd. of Teamsters, 119 F.3d 210, 214 (2d Cir. 1997) ("[t]he burden of establishing the existence of an attorney-client privilege, in all of its elements, rests with the party asserting it").
The law is a little less clear with respect to who has the burden of establishing waiver. Within the Second Circuit, the majority view appears to be that the person asserting privilege has the burden of showing that he has not waived it, on the grounds that maintaining confidentiality is an element of the privilege itself. See, e.g., Costabile v. Westchester, New York, 254 F.R.D. 160, 163 (S.D.N.Y. 2008); Scanlon v. Bricklayers and Allied Craftworkers, Local No. 3, 242 F.R.D. 238, 246-247 (W.D.N.Y. 2007); In re Asia Global Crossing, Ltd., 322 B.R. 247, 255 (S.D.N.Y. Bnkr. 2005). This view is also found in New York State law, and applied when federal courts sitting in diversity apply New York law. See, e.g., HSH Nordbank AG New York Branch v. Swerdlow, __ F.R.D. __ (S.D.N.Y. 2009) (citing John Blair Commc'ns, Inc. v. Reliance Capital Group, L.P., 182 A.D.2d 578, 579, 582 N.Y.S.2d 720 (1st Dep't 1992)); FED. R. EVID. 501.
There is, however, a minority view that the party claiming waiver has the burden to establish it. See, e.g., JA Apparel Corp. v. Abboud, 07-CV-7787, 2008 WL 111006, *2 n.1 (S.D.N.Y. 2008); Gramm v. Horsehead Industries, Inc., 87-CV-5122, 1990 WL 142404, *2 (S.D.N.Y. 1990) ("If such a privilege is established, it then becomes the burden of plaintiffs to demonstrate the facts establishing a waiver."). This reasoning appears to be based on viewing waiver as an exception to the privilege. See JA Apparel Corp., 2008 WL 111006 at *2 (citing 24 FED. PRAC. & PROC. 5507).
Finally, there appears to be an intermediate view. Under this approach, the party asserting waiver "has the burden of proving that waiver occurred," unless the purportedly privileged documents have already been disclosed to third parties. 2 FED. EVID. § 5:33. But once a third party possesses the purportedly privileged material, "the court may require the holder to show that he did not waive the privilege." Id.; see also Business Integration Services, Inc. v. AT&T Corp., 251 F.R.D. 121, 124 (S.D.N.Y. 2008) (once disclosure occurs, the party claiming privilege has the "burden to show that its privilege was not waived through disclosure") (citations and quotations omitted); Denney v. Jenkens & Gilchrist 362 F. Supp. 2d 407, 412 (S.D.N.Y. 2004) ("It is therefore [the party asserting privilege's] burden to show that its privilege was not waived through disclosure to Jenkens.").*fn3
As there is no definitive Second Circuit precedent on point, the Court has decided -- in the exercise of its own "reason and experience" -- to apply its own burden-shifting framework, which most closely resembles the intermediate view described above. See Fed. R. Evid. 501. Consistent with Second Circuit precedent, the Court assigns Mr. Brooks the initial burden of showing that he communicated with his attorneys in confidence, and intended to keep those communications confidential. See In re County of Erie, 473 F.3d at 419. If Mr. Brooks can meet that initial burden, he does not need to go through the burdensome (and borderline impossible) task of showing that he did not waive privilege with respect to each and every document in question. Instead, the burden shifts to the Government to show that Mr. Brooks waived privilege, such as by disclosing the documents in question, or by disclosing documents that concern the same subject matter. See In re Grand Jury Proceedings, 219 F.3d 175, 183 n.4 (2d Cir. 2000) (the disclosure of some privileged communications operates as "a waiver as to all other communications to the attorney on the same matter") (citations and quotations omitted). Among the ways that the Government can meet this burden is by showing that a third party gained possession of either the documents in question, or documents similar enough to cause subject matter waiver. Should the Government meet this burden, the burden then shifts back to Mr. Brooks to explain, with evidence, why privilege was maintained despite a third party possessing the documents (e.g., disclosure was inadvertent or unauthorized, third party was a member of a joint defense agreement, etc.). The Government can then respond with its own evidence to undercut Mr. Brooks' explanations, and/or to show that waiver nevertheless occurred. At each stage of this burden shifting framework, the Court will adopt a preponderance of the evidence standard. See Shumaker, Loop & Kendrick, LLP v. Zaremba, 403 B.R. 480, 484 (N.D.Ohio 2009).
II. Mr. Brooks' Privilege Claims
A. Were the Huron Documents Privileged?
The first category of documents that Mr. Brooks asserts privilege over concerns documents generated by Huron. Mr. Brooks contends that Huron created these documents pursuant to an engagement with his attorneys, Mintz Levin. The Government contends that Huron produced this material while working on DHB's behalf. Thus, the Government argues that Mr. Brooks can claim no privilege with respect to them.
The evidence submitted thus far establishes that Mintz Levin originally retained Huron to work on Mr. Brooks' behalf, signing a formal engagement letter on March 13, 2006. (HU0001-0002). There is conflicting evidence regarding how long this arrangement lasted. In his deposition, Huron's Richard Pimentel suggested that it lasted only a week. (Mo. Ex. 3). E-mail correspondence between Huron and Mintz Levin indicates that Huron's work on Brooks' behalf lasted until April 10, 2009, when Huron and Mintz Levin agreed that Huron work directly for DHB, rather than on Mr. Brooks' personal behalf. (HUOO11). Under this arrangement, Mintz Levin agreed that, because Huron would work for DHB directly rather than any law firm, Huron would "no longer have attorney client and work product privileges" except with respect to "some of our prior communications." (Id.). Despite this apparent change of clients, Huron appeared to sometimes refer to its work as the "David Brooks" or "David H. Brooks" matter, although it also used the phrase "DHB Matter." (HU0047-155). Following April 10, 2006, Huron generally directed its bills at David Brooks in his DHB capacity, although it sometimes directed them to Mintz Levin or Jerry Gotkin, a Mintz Levin attorney. (Id.). And, at least some Huron work product produced on or around May 5, 2006 was directed to Mintz Levin. (Mo. Ex. 19). It is undisputed that Huron did not sign a formal engagement letter with DHB until November 2006, by which time Mr. Brooks was no longer DHB's Chief Executive Officer. At the evidentiary hearing, Mr. Brooks declined to call any representative from Huron or Mintz Levin who could clarify these ambiguities (Mr. Brooks did call Michelle Leinbach, a Mintz Levin records custodian, but her testimony did not enlighten the Court on these matters).
Considering the evidence and testimony received, the Court makes the following preliminary findings (subject to revision upon the introduction of further evidence): (1) Mintz Levin originally retained Huron on Mr. Brooks' behalf; and (2) on April 10, 2006, Huron's engagement with Mintz Levin terminated, and Huron began working for DHB directly. Consequently, the Court preliminarily finds that: (1) Mr. Brooks can assert privilege and/or work-product protection for Huron-created material generated before April 10, 2006,*fn4 unless he has waived these rights; (2) likewise, Mr. Brooks can assert privilege with respect to otherwise privileged communications between Mintz Levin or himself and Huron that took place before April 10, 2006; but (3) Mr. Brooks cannot assert privilege or work product protection for any Huron work performed on or after April 10, 2006.
There is one caveat with respect to (3). It may be that certain Huron work performed on or after April 10, 2006 impermissibly relied upon communications from Mr. Brooks' counsel and/or work product originally created on Mr. Brooks' behalf. And it likewise may be that Mr. Brooks or his representatives did not consent to such usage of his protected attorney-client information and work product. In this regard, the Court notes that Mintz Levin's correspondence with Huron indicates that, even after commencing its DHB engagement, Huron remained in a privileged relationship with Mintz Levin (and thus Brooks) for "some of our prior communications." (HUOO11). To the extent that Huron's DHB-work product impermissibly relied upon Mr. Brooks' privileged or work-product protected information, Mr. Brooks may be able to claim privilege with respect to it; however, whether Mr. Brooks actually can claim privilege will depend on other factors, such as whether Mr. Brooks knew that Huron was using his privileged/work product protected material and failed to object to such usage.*fn5 It is also possible that Mr. Brooks permitted Huron to use the work product it created on his behalf to assist DHB, but only as part of his joint defense agreement with DHB. Such a possibility is somewhat undercut by Huron's own belief that its relationship with DHB was non-privileged. (HUOO11). But it remains a possibility nevertheless.
At this point, however, the Court's discussion of (3) is only speculation. The Court has received no testimony from Huron or other individuals with personal knowledge concerning these matters. And none of the numerous documents that the parties have submitted suffices to sufficiently inform the Court with respect to them. Thus, for the time being, the Court cannot find that Mr. Brooks has met his burden in showing that he can assert privilege or work product with respect to any post-April 10, 2006 Huron material.
2. Was the Privilege Waived?
Mr. Brooks has established that he can assert privilege with respect to at least some Huron material (i.e., Huron-created documents pre-dating April 10, 2006). The question then turns to whether Mr. Brooks waived this privilege. The Court finds that he did not.
The April 10, 2006 e-mail authorizing Huron to work for DHB indicated that Huron would remain in a privileged relationship with Mintz Levin with respect to "some of our prior communications." (HUOO11). This suffices to show that Mr. Brooks and/or his counsel expected Huron to keep this material in confidence. And, to the extent that Huron then produced some of this material to the Government, this same e-mail ...