The opinion of the court was delivered by: Kimba M. Wood, U.S.D.J.
In the instant discovery dispute, the parties have each filed objections to Magistrate Judge Francis' Memorandum and Order of July 2, 2010 (hereinafter, the "July 2 Order"). Plaintiffs object to the July 2 Order insofar as it requires Plaintiffs to produce documents for which they have asserted the attorney-client privilege, but which were created by or shared with third parties. Defendants object to the July 2 Order insofar as it denies their motion for an order compelling Plaintiffs to produce documents containing: (1) legal advice in connection with their initial investment in the COINS Strategy, a tax shelter scheme promoted by Defendants; and (2) legal advice in connection with settlements that Plaintiffs entered into with the Internal Revenue Service ("IRS") and other taxing authorities concerning their COINS Strategy investments.
For the reasons stated below, the magistrate judge's July 2 Order is AFFIRMED in part and REVERSED in part. The July 2 Order is REVERSED insofar as this Court finds that Plaintiffs Allan and Hana Green (hereinafter, the "Green Plaintiffs") did not waive the attorney-client privilege with respect to the emails that Plaintiffs' counsel emailed to the Green Plaintiffs through their son, Daniel Green, who provided necessary assistance in ensuring that those confidential communications timely reached his technologically unskilled parents. All other aspects of the July 2 Order are not clearly erroneous or contrary to law, and are thus AFFIRMED.
Pursuant to Rule 72 of the Federal Rules of Civil Procedure and its enabling statute, the Federal Magistrates Act, 28 U.S.C. § 636(b)(1), for non-dispositive matters, including discovery disputes, a district court shall reverse a magistrate's order only where it has been shown that the order is "clearly erroneous or contrary to law." 28 U.S.C. § 636(b)(1)(A) (2002); see also Fed. R. Civ. P. 72(a); Thomas E. Hoar, Inc. v. Sara Lee Corp., 900 F.2d 522, 525 (2d Cir. 1990).
III. Plaintiffs' Objections
Plaintiffs object to the magistrate judge's order requiring Plaintiffs to produce documents as to which the Plaintiffs have asserted attorney-client privilege, but which were created by or shared with non-parties who are not attorneys.
The magistrate judge rejected Plaintiffs' assertion of attorney-client privilege with respect to email communications shared with certain persons who are neither attorneys nor parties in this litigation. These persons are identified as: (1) Paul Lenker, financial advisor to Plaintiffs James Michael and Nena M. Dunigan; (2) Brenda Lazzaroni, a certified public accountant who possessed financial information regarding Plaintiffs Dean and Kathleen Janssen; (3) Terry Nielsen, the Chief Financial Officer of Ace Tomato Co., Inc., a company owned by Dean and Kathleen Janssen;*fn1 and (4) Daniel Green, the son of the Green Plaintiffs.
Plaintiffs' Financial Advisors have stated in their respective affidavits that they received particular emails from Plaintiffs' counsel, and that they were assisting in the transmission of factual information between Plaintiffs and Plaintiffs' counsel. There is, however, no evidence that their involvement was necessary to ensure the provision of legal advice, or to facilitate the delivery of any emails.
In contrast, Daniel Green, the son of the Green Plaintiffs, received email communications from counsel, which he then provided to his parents. He explained in his affidavit that his technical assistance was necessary for his parents to timely receive the email communications from counsel:
My parents are not proficient in the use [of] electronic mail and, due to the time-sensitive nature of these communications, it was necessary for these communications to be delivered to my email address to ensure a timely receipt. My parents regularly rely on me to send and receive emails for them. (Green Aff. ¶ 7).
For the reasons discussed below, the magistrate judge's order is: (1) AFFIRMED with respect to the documents shared with Plaintiffs' Financial Advisors, whose involvement was not necessary to assist in the delivery of electronic communications or in the provision of legal advice to Plaintiffs; and (2) REVERSED with respect to the emails sent by Plaintiffs' counsel to the Green Plaintiffs through their son, ...