The opinion of the court was delivered by: Hon. Leo S. Papas U.S. Magistrate Judge
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION TO COMPEL PRODUCTION OF DOCUMENTS (Doc. #84) ORDER FOR IN CAMERA REVIEW
On November 7, 2008, Plaintiffs filed a Motion to Compel Production of Documents. On November 21, 2008, Defendants filed an Opposition to Plaintiffs' Motion. On November 26, 2008, Plaintiffs filed a Reply to Defendants' Opposition. On December 5, 2008, the Court held a hearing on Plaintiffs' Motion. The Court, having reviewed the Motion, Opposition and Reply papers and having heard oral argument on the Motion, HEREBY GRANTS in part and DENIES in part Plaintiff's Motion and ORDERS an in camera review of many of the disputed documents in issue.
1. Nigro Karlin Documents*fn1
Plaintiffs served on Defendants several Requests for Production of Documents seeking all communications between Defendants and their independent auditor Nigro, Karlin, Segal & Field-stone (hereafter "NK"). Defendants refused to produce any of the requested documents between them and their attorneys and NK, contending that such documents reflect communications that are protected by either the attorney-client privilege or work product doctrine.
Plaintiffs argue that the communications between Defendants, their attorneys and NK are not protected by the attorney-client privilege or work product doctrine.
a. Attorney-Client Privilege
Plaintiffs contend that the NK documents are not protected by the attorney-client privilege because NK is not a client of Defendants' attorneys. Rather, NK is a third party to this action whose only role is that of a percipient witness. Moreover, NK does not work for Defendants' attorneys. In fact, NK confirmed that it is the independent accounting firm engaged by Defendants to perform periodic examinations of signatories to the Commercials Contracts. It performs work for Defendants, not Defendants' attorneys.
Defendants contend that NK, through its employee accountant Brian Meath (hereafter "Meath") has played an integral role as part of their litigation team in this case. Meath has provided information to Defendants' attorneys to facilitate Defendants' attorneys representation of Defendants in this action. Defendants cite U.S. v. Hovel to support their position.
In Hovel, the court stated in pertinent part: ...(T)he presence of an accountant, whether hired by a lawyer or by the client, while the client is relating a complicated tax story to the lawyer or by the client, ought not to destroy the (attorney-client) privilege... the presence of the accountant is necessary, or at least highly useful, for the effective consultation between the client and lawyer which the privilege is designed to permit...
What is vital to the privilege is that the communication be made in confidence for the purpose of seeking legal advice from the lawyer. If what is sought is not legal advice but only accounting service... or if the advice sought is the accountant's rather than the lawyer's, no privilege exists. We recognize this draws what may seem to some a rather arbitrary line between a case where the client communicates first to his own accountant (no privilege as to such communications, even though he later consults his lawyer on the same manner), and others where the client in the first instance retains an accountant as a listening post, or consults the lawyer with his own accountant present... but the distinction has to be made if the privilege is neither to be unduly expanded nor to become a trap.
Hovel, supra at 922-923 (citations omitted)
Here, NK is clearly not a client of Defendants' attorneys nor was it hired by Defendants' attorneys to assist them in giving legal advice to Defendants. Rather, NK was hired by Defendants to perform periodic examinations of signatories to the Commercial Contract, note the base compensation for each and determine, based on pension and health contributions reported by the signatory, what percentage of the base compensation is allotted to TV commercials. Further, NK provided Defendants with business-related advice in that Defendants have used NK's services for several years to audit various signatories. Communications regarding business-related advice, rather than for legal advice, are not protected by the attorney-client privilege. Therefore, the Court concludes that the NK docs are not protected by the attorney-client privilege.
Plaintiffs argue that the NK documents are not protected by the work product doctrine. Defendants do not address the applicability of the work product doctrine to the NK documents.
On January 17, 2003, Defendants announced the audit of Plaintiffs. The audit period was to cover January 1, 1999 to December 31, 2002. Defendants granted Meath the authority to contact Plaintiffs to obtain the necessary records for a complete review of the audit period. Thereafter, Meath engaged in a series of communications with Plaintiffs in which he sought the documentation he needed to perform the audit. Plaintiffs sent Meath some documentation. In late 2003, Meath ...