United States District Court, S.D. New York
WILLIAM DURLING, JAMES MORTON, JR., TOM WOLFF, MICHAEL MORRIS and RICHARD SOBOL, for themselves and all others similarly situated, Plaintiffs,
PAPA JOHN'S INTERNATIONAL, INC., Defendant.
OPINION AND ORDER
C. MCCARTHY, UNITED STATES MAGISTRATE JUDGE
William Durling, James Morton, Jr., Tom Wolff, Michael Morris
and Richard Sobol ("Plaintiffs") commenced this
putative class action against Defendant Papa John's
International, Inc. ("PJI"), alleging that PJI pays
its pizza delivery drivers wages below the minimum wage
mandated by federal and state law. Presently before the Court
is Plaintiffs' motion to compel production of documents.
(Docket No. 242). Plaintiffs' motion challenges PJI's
decision to withhold, on privilege grounds, certain documents
involving communications between PJI and third-party Motus,
LLC ("Motus"). The motion also raises other general
document discovery issues. For the reasons set forth below,
Plaintiffs' motion is granted in part and denied in part.
Court assumes familiarity with the history of this case, and
recites only the facts necessary to this Opinion and Order.
Plaintiffs allege that PJI "systematically
under-reimbursed its delivery drivers for vehicular wear and
tear, gas and other driving-related expenses, thereby
ensuring that all of [P]I's] delivery drivers are
effectively paid well below the minimum wage." (Docket
No. 35 ¶ 2). Plaintiffs assert claims under the Fair
Labor Standards Act of 1938 ("FLSA"), 29 U.S.C.
§§ 201 et seq.; the New York Labor Law, N.Y. Lab.
Law, Art. 19 §§ 650 et seq.; the Pennsylvania
Minimum Wage Act of 1968, 43 P.S. §§ 333.101, et
seq.; the New Jersey Wage and Hour Law, N.J.S.A. 34:1 l-56a,
et seq.; and the Delaware Minimum Wage Act, 19 Del. C.
§§ 901 et seq (Id ¶ 1).
6, 2016, Plaintiffs issued their first set of document
requests, seeking, among other things, all "studies or
analyses relating to [P]Fs] determination as to how much to
reimburse Delivery Drivers." (Docket No. 244-4 ¶
7). On or about August 8, 2017, PJI provided Plaintiffs with
a privilege log listing documents it had withheld from
production. (Docket No. 244 ¶ 6). PJI subsequently
updated its privilege log as the parties conferred on
discovery issues, providing a revised privilege log (the
"Privilege Log"), (Docket No. 244-12), on August
21, 2017, (Docket No. 244 ¶ 6). PJI later provided
Plaintiffs with a supplemental log containing thirteen
entries, reflecting documents that PJI inadvertently produced
and sought to claw back on privilege grounds (the
"Claw-Back Privilege Log"). (Docket No. 244-11).
withheld multiple documents related to Motus, a third-party
consultant that provided services to PJI. At a status
conference on October 4, 2017, the Court ordered the parties
to submit briefing on the present discovery issues and
ordered PJI to submit, for in camera review, all
Motus-related documents that PJI was withholding on privilege
grounds. PJI has represented that its Privilege Log contains
eighty entries that involve communications with Motus or
attachments concerning Motus data. (See Docket No. 254). PJI
submitted the documents reflected in those eighty entries to
the Court for in camera review. In addition, PJI submitted
documents reflected in the thirteen entries on PJFs Claw-Back
Privilege Log. In total, PJI submitted documents
reflected in ninety-three log entries to the Court for in
also submitted declarations signed by Billy Higdon (Docket
No. 253-1), Caroline Oyler (Docket No. 253-2) and Rodney
Harrison (Docket No. 253-3) addressing, among other things,
the role performed by Motus. On August 19, 2009, PJI was sued
in a nationwide class action captioned Perrin v. Papa
John's Int'l, Inc., No. 09 Civ. 01335 (E.D. Mo.
2015) (the "Perrin Litigation"). PJI's outside
counsel in the Perrin Litigation, Ogletree Deakins, retained
Motus to act as an expert. In January 2016, the court granted
final settlement approval in the Perrin Litigation. Separate
from Motus's role as an expert in the Perrin Litigation,
PJI retained Motus to assist it in connection with an
analysis of alternative approaches to reimbursement of
delivery driver vehicle expenses. Motus continued to provide
services to PJI after conclusion of the Perrin Litigation.
October 30, 2017, the Court heard oral argument regarding
following is a summary of the applicable legal standards
regarding relevance, the attorney-client privilege and the
general, the Federal Rules of Civil Procedure permit parties
to "obtain discovery \ regarding any nonprivileged
matter that is relevant to any party's claim or defense
and proportional to the needs of the case." Fed.R.Civ.P.
26(b)(1). Information within this scope of discovery need not
be admissible in evidence to be discoverable. Id.
"Although not unlimited, relevance, for the purpose of
discovery, is an extremely broad concept." Greater
New York Taxi Ass'n v. City of New York, No. 13 Civ.
3089 (VSB) (JCF), 2017 WL 4012051, at *2 (S.D.N.Y. Sept. 11,
2017) (quoting Am. Fed'n of Musicians of the United
States & Canada v. Sony Music Entm X Inc., No.
15-CV-05249 (GBD) (BCM), 2016 WL 2609307, at *3 (S.D.N.Y.
Apr. 29, 2016)). "'Relevance' under Rule 26
'has been construed broadly to encompass any matter that
bears on, or that reasonably could lead to other matter that
could bear on any issue that is or may be in the
case.'" Scott v. Chipotle Mexican Grill,
Inc., 67 F.Supp.3d 607, 618 (S.D.N.Y. 2014) (quoting
Crosby v. City of New York, 269 F.R.D. 267, 282
as here, a case includes federal and state law claims and the
evidence sought is relevant to both, 'the asserted
privileges are governed by the principles of federal
law.'" Fresh Del Monte Produce, Inc. v. Del
Monte Foods, Inc., No. 13 Civ. 8997(JPO)(GWG), 2015 WL
3450045, at *2 (S.D.N.Y. May 28, 2015) (quoting von Bulow
v. von Bulow, 811 F.2d 136, 141 (2d Cir. 1987)).
Accordingly, the Court applies federal law to decide the
issues raised by this motion.
attorney-client privilege protects confidential
communications between client and counsel made for the
purpose of obtaining or providing legal assistance."
In re Cty. of Erie, 473 F.3d 413, 418 (2d Cir.
2007). "A party invoking the attorney-client privilege
must show (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." Id. at 419. "The party asserting
the privilege ... bears the burden of establishing its
essential elements." United States v. Mejia,
655 F.3d 126, 132 (2d Cir. 2011).
privilege's underlying purpose has long been 'to
encourage full and frank communication between attorneys and
their clients and thereby promote broader public interests in
the observance of law and administration of
justice.'" Id. (quoting Upjohn Co. v.
United States, 449 U.S. 383, 389 (1981)). In order to
balance the protection of confidentiality with the competing
value of public disclosure, however, courts apply the
privilege "only where necessary to achieve its
purpose" and "construe the privilege narrowly
because it renders relevant information undiscoverable."
Mejia, 655 F.3d at 132 (quoting In re Cty. of
Erie, 473 F.3d at 418).
attorney-client privilege protects only legal advice, not
economic, business, or policy advice." Fox News
Network, LLC v. U.S. Dep't of Treasury, 911
F.Supp.2d 261, 271 (S.D.N.Y. 2012); see also Schaeffler
v. United States, 806 F.3d 34, 40 (2d Cir. 2015)
("Communications that are made for purposes of
evaluating the commercial wisdom of various options as well
as in getting or giving legal advice are not
protected."). The test for deciding whether a
communication that contains both legal and non-legal advice
is privileged is "whether the predominant purpose of the
communication is to render or solicit legal advice."
In re Cty. of Erie, 473 F.3d at 420.
"Fundamentally, legal advice involves the interpretation
and application of legal principles to guide future conduct
or to assess past conduct. It requires a lawyer to rely on
legal education and experience to inform judgment."
Id. at 419 (citation omitted); see also Colton
v. United States, 306 F.2d 633, 638 (2d Cir. 1962)
("Attorneys frequently give to their clients business or
other advice which, at least insofar as it can be separated
from their essentially professional legal services, gives
rise to no privilege whatever.").
of the attorney-client privilege to the corporate context
poses 'special problems.'" Complex Sys.,
Inc. v. ABN AMRO Bank NV., 279 F.R.D. 140, 150 (S.D.N.Y.
2011) (quoting Commodity Futures Trading Comm'n v.
Weintraub, 471 U.S. 343, 348 (1985)). "In-house
counsel often fulfill the dual role of legal advisor and
business consultant." MSF Holding, Ltd. v.
Fiduciary Tr. Co. Int'l, No. 03 Civ. 1818PKLJCF,
2005 WL 3338510, at *1 (S.D.N.Y. Dec. 7, 2005) (holding that
e-mails from in-house counsel constituted business advice
because counsel "never alluded to a legal principle in
the documents nor engaged in legal analysis"). "The
court therefore must proceed cautiously, recognizing that the
application of the privilege 'risks creating an
intolerably large zone of sanctuary since many corporations
continuously consult attorneys.'" Ovesen v.
Mitsubishi Heavy Indus, of Am. Inc., No. 04 Civ.
2849(JGK)(FM), 2009 WL 195853, at *3 (S.D.N.Y. Jan. 23, 2009)
(quoting First Chicago Int'l v. United Exch.
Co., 125 F.R.D. 55, 57 (S.D.N.Y. 1989)). "In cases
involving corporations and in-house counsel, courts have
maintained a stricter standard for determining whether to
protect confidential information through the attorney-client
privilege." Bank Brussells Lambert v.
Credit Lyonnais (Suisse), S.A., 220 F.Supp.2d 283, 286
(S.D.N.Y. 2002); see also Assured Guar. Mun. Corp. v. UBS
Real Estate Sec. Inc., No. 12 Civ. 1579(HB)(JCF), 2013
WL 1195545, at *9 (S.D.N.Y. Mar. 25, 2013)
("[Communications between businesspeople and in-house
counsel are not automatically shielded from
discovery."). "Communications that principally
involve the performance of non-legal functions by an attorney
are not protected." Complex Sys., 279 F.R.D. at
150. "Moreover, even if a business decision can be
viewed as both business and legal evaluations, the business
aspects of the decision are not protected simply because
legal considerations are also involved." Id.
(internal quotation marks omitted).
as a general matter the attorney-client privilege applies
only to communications between lawyers and their clients, the
Second Circuit has held that under certain circumstances
"the privilege for communication with attorneys can
extend to shield communications to others when the purpose of
the communication is to assist the attorney in rendering
advice to the client." Mejia, 655 F.3d at 132
(quoting United States v. Adlman
("Adlmani"), 68 F.3d 1495, 1499 (2d Cir.
1995)). For example, the Second Circuit has extended the
application of the privilege to communications by an
attorney's client to an accountant hired by the attorney
to assist the attorney in understanding the client's
financial information. United States v. Kovel, 296
F.2d 918, 922 (2d Cir. 1961). "Nevertheless, the
extension has always been a cabined one, and '[t]o that
end, the privilege protects communications between a client
and an attorney, not communications that prove important to
an attorney's legal advice to a client.'"
Mejia, 655 F.3d at 132 (quoting United States v.
Ackert, 169 F.3d 136, 139 (2d Cir. 1999)).
Second Circuit has clarified that the Kovel decision
"recognized that the inclusion of a third party in
attorney-client communications does not destroy the privilege
if the purpose of the third party's participation is to
improve the comprehension of the communications between
attorney and client." Ackert, 169 F.3d at
139-40. "On the other hand, where an attorney seeks out
a third party in order to obtain information that his client
does not have, the third party's role is 'not as a
translator or interpreter of client communications, [and] the
principle of Kovel does not shield his discussions with [the
attorney].'" Montesa v. Schwartz, No. 12
Civ. 6057 (CS)(JCM), 2016 WL 3476431, at *5 (S.D.N.Y. June
20, 2016) (alterations in original) (quoting Ackert,
169 F.3d at 139-40); see also Merck Eprova AG v. Gnosis
S.p.A., No. 07 Civ. 5898(RJS)(JCF), 2010 WL 3835149, at
*2 (S.D.N.Y. Sept. 24, 2010) ...