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Au New Haven, LLC v. YKK Corp.

United States District Court, S.D. New York

January 5, 2018

AU NEW HAVEN, LLC, et al., Plaintiffs,
v.
YKK CORPORATION, et al., Defendants.

          OPINION AND ORDER

          SARAH NETBURN, UNITED STATES MAGISTRATE JUDGE

         On October 24, 2017, the Court issued an Opinion and Order holding that Defendants had “failed to remedy the many deficiencies in their privilege log and document production.” ECF No. 287 at 1. The Court ordered Defendants to produce 19 out of 20 documents that were submitted for in camera review. Id. at 19-20. The Court also directed Defendants to review the fifth iteration of their privilege log (the “Fifth Log”) and all of the documents they had withheld and produce additional documents in accordance with the guiding principles the Court had established. Id. at 20. Defendants have now submitted a motion for reconsideration and clarification of the Court's October 24, 2017 Opinion and Order. ECF No. 293. For the reasons stated below, Defendants' motion for reconsideration is GRANTED in part and DENIED in part, and their motion for clarification is GRANTED.

         In addition, in the October 24, 2017 Opinion and Order, the Court granted Plaintiffs leave “to file a motion for sanctions in the form of an award of attorneys' fees incurred in reviewing and litigating issues related to Defendants' Fifth Log.” ECF No. 287 at 20. Plaintiffs have now filed a motion for attorneys' fees. ECF No. 292. Plaintiffs' motion for attorneys' fees is GRANTED in part and DENIED in part. Plaintiffs are awarded $20, 087 in attorneys' fees and $325.89 in expenses.

         DEFENDANTS' MOTION FOR RECONSIDERATION

         Motions for reconsideration under Local Civil Rule 6.3 are governed by the same standard as motions under Federal Rules of Civil Procedure 59(e) and 60(b). In re Facebook, Inc., IPO Sec. & Derivative Litig., 43 F.Supp.3d 369, 373 (S.D.N.Y. 2014), aff'd sub nom. Lowinger v. Morgan Stanley & Co., 841 F.3d 122 (2d Cir. 2016). “[A] court may grant reconsideration where the party moving for reconsideration demonstrates an ‘intervening change in controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.'” Id. (quoting Schoolcraft v. City of New York, 298 F.R.D. 134, 136 (S.D.N.Y. 2014)). A motion for reconsideration must be accompanied by “a memorandum setting forth concisely the matters or controlling decisions which counsel believes the Court has overlooked.” Local Civil Rule 6.3.

         In the October 24, 2017 Opinion and Order, the Court held that documents Defendants or their counsel prepared before January 1, 2015, are not covered by work product immunity because the possibility of litigation was too remote before that date. ECF No. 287 at 7. Defendants now ask the Court to “reconsider that date with respect to five documents on [their] privilege log.” ECF No. 294 at 5. The Fifth Log lists Documents 51, 58, 67, 70, and 74 as work product, identifies specific attorneys who purportedly prepared them, and states that they were prepared in November 2013. ECF No. 294-1 at 2. Defendants contend that “these documents were both properly withheld from production and were properly logged”; therefore, they ask the Court to permit them to continue withholding the documents. ECF No. 294 at 5. Defendants are essentially asking the Court to conduct another in camera review of documents. The Court is hesitant to engage in this exercise again, particularly in light of the fact that the Court has already reviewed exemplars in camera on three prior occasions. Nevertheless, the Court will entertain Defendants' request under these limited circumstances to prevent manifest injustice.

         As discussed in the Court's previous opinions and orders, work product immunity “shields materials prepared in anticipation of litigation or for trial.” ACLU v. U.S. Dep't of Justice, 90 F.Supp.3d 201, 213 (S.D.N.Y. 2015) (quoting Tax Analysts v. IRS, 117 F.3d 607, 620 (D.C. Cir. 1997)). “The material must (1) be a document or tangible thing, (2) that was prepared in anticipation of litigation, and (3) was prepared by or for a party, or by or for his representative.” SEC v. Yorkville Advisors, LLC, 300 F.R.D. 152, 159 (S.D.N.Y. 2014) (quoting In re Grand Jury Subpoenas Dated Dec. 18, 1981 & Jan. 4, 1982, 561 F.Supp. 1247, 1257 (E.D.N.Y. 1982)); see also In re EchoStar Commc'ns Corp., 448 F.3d 1294, 1301-02 (Fed. Cir. 2006). A document may be withheld when it “can fairly be said to have been prepared . . . because of the prospect of litigation.” United States v. Adlman, 134 F.3d 1194, 1203-04 (2d Cir. 1998) (quoting 8 Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice and Procedure § 2024 (3d ed. 1994)); accord Waymo LLC v. Uber Techs., Inc., 870 F.3d 1350, 1362 (Fed. Cir. 2017). But “litigation must at least be a real possibility at the time of preparation or, in other words, the document must be prepared with an eye to some specific litigation.” Litton Indus., Inc. v. Lehman Bros. Kuhn Loeb Inc., 125 F.R.D. 51, 54 (S.D.N.Y. 1989) (quoting James Julian, Inc. v. Raytheon Co., 93 F.R.D. 138, 143 (D. Del. 1982)).

         In addition, when a party withholds documents based on work product immunity, Federal Rule of Civil Procedure 26 requires the party to “expressly make the claim” and “describe the nature of the documents, communications, or tangible things not produced or disclosed-and do so in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim.” Fed.R.Civ.P. 26(b)(5)(A). Local Civil Rule 26.2 also requires the party asserting the privilege to describe:

(i) the type of document, e.g., letter or memorandum; (ii) the general subject matter of the document; (iii) the date of the document; and (iv) the author of the document, the addressees of the document, and any other recipients, and, where not apparent, the relationship of the author, addressees, and recipients to each other . . . .

Local Civil Rule 26.2(a)(2)(A). Failure to provide the information required by Rule 26 or Local Civil Rule 26.2 may result in a waiver of privilege. Fed.R.Civ.P. 26 Advisory Committee's note to 1993 amendment; In re SmithKline Beecham Corp., 243 F.3d 565 (Fed. Cir. 2000) (unpublished table decision); Dorf & Stanton Commc'ns, Inc. v. Molson Breweries, 100 F.3d 919, 923 (Fed. Cir. 1996); United States v. Constr. Prod. Research, Inc., 73 F.3d 464, 473-74 (2d Cir. 1996); Yorkville Advisors, 300 F.R.D. at 167.

         Document 51 is a memorandum from Key Wynn, an attorney at YKK Corporation of America (“YCA”), to Jim Reed, who was then the Chief Legal Counsel of YCA. ECF No. 294 at 6. The memorandum examines the roles of judges and juries in determining the meaning of ambiguous contract terms and also discusses who authored the exclusive licensing agreement at issue in this case. Id. The memorandum appears to have been prepared in anticipation of litigation and may well be covered by work product immunity. But the Fifth Log states that the document was prepared by Melissa Ewing, which is false. By failing to provide accurate information required by Local Civil Rule 26.2, Defendants waived any claim that the document was covered by work product immunity. Document 51 must be produced.

         Document 58 contains calculations of potential damages that might be imposed by a judge and jury if Defendants were sued in connection with their sales of polyurethane zippers. ECF No. 294 at 6. The Fifth Log states that the document was prepared by Attorney Reed on November 14, 2013, and identifies it as a “[c]onfidential document reflecting attorney input regarding negotiation strategy.” ECF No. 294-1 at 2. According to their motion for reconsideration, Defendants described the document as relating to “negotiation strategy” because the calculations were used to assess what amount Defendants should offer to Plaintiffs in attempt to avoid litigation. ECF No. 294 at 7. But this is precisely the type of after-the-fact explanation the Court rejected in the October 24, 2017 Opinion and Order. ECF No. 287 at 5. The Court will rely solely on the Fifth Log's description and will not consider the additional context provided in Defendants' recent motion papers. See id. Document 58 itself makes no mention of negotiations and gives no indication that the calculations were used in formulating an offer to avoid threatened litigation. Thus, “negotiation strategy” is not an apt description of the document's subject matter. The description is vague and does not provide sufficient information to enable other parties to assess the claim of privilege. Moreover, even if the document is viewed as relating to “negotiation strategy, ” this phrase suggests that the document concerns negotiations, rather than litigation, undermining Defendants' claim that it constitutes work product. Either way, Defendants waived any claim of work product immunity by failing to provide an adequate description of the document in the Fifth Log. Document 58 must be produced.

         Document 67 consists of PowerPoint slides analyzing the claims Plaintiffs might bring if they initiated litigation against Defendants in connection with the exclusive licensing agreement, the potential damages associated with those claims, Defendants' potential defenses, and other legal strategies Defendants could utilize. Id at 7. The Fifth Log states that the document was prepared by Attorney Reed on November 5, 2013, and describes the document as a “presentation” relating to “litigation strategy, ” “negotiation strategy, ” and “rights under the license agreement.” ECF No. 294-1 at 2. This presentation seems to have been prepared because of the prospect of litigation, and its analysis suggests that the possibility of litigation was real when it was prepared. The document is covered by work product immunity. Moreover, the description in the Fifth Log appears to describe the document accurately and fairly specifically. Document 67 was adequately described in the Fifth Log, and Defendants may continue to withhold it.

         Document 70 is a PowerPoint presentation prepared by Attorney Reed on November 15, 2013. ECF No. 294 at 8. The document discusses Plaintiffs' possible claims against Defendants in connection with the exclusive licensing agreement as well as potential damages, defenses, and legal strategies associated with those claims. Id. The Fifth Log accurately identifies the document's author and date and describes the document as a “presentation . . . regarding rights under the license agreement.” ECF No. 294-1 at 2. The presentation appears to have been prepared because of a real possibility of litigation. Thus, the document constitutes work product. In addition, the Fifth Log describes the presentation and its subject matter with accuracy and relative specificity. Document 70 is adequately described in the Fifth Log and may be withheld.

         Document 74 consists of PowerPoint slides discussing Plaintiffs' potential claims against Defendants with respect to the exclusive licensing agreement and Defendants' sales of polyurethane zippers. ECF No. 294 at 8-9. The document also discusses litigation strategies Defendants might use in connection with those potential claims. Id. The Fifth Log indicates that Attorney Reed prepared the presentation on November 5, 2013, and describes the document as a “presentation” relating to “litigation strategy, ” “negotiation strategy, ” “rights under the license agreement, ” and “sales of PU zippers.” ECF No. 294-1 at 2. Again, the presentation seems to have been created because of a real ...


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