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Ellis v. J.P. Morgan Chase & Co.

United States District Court, N.D. California

April 1, 2014

DIANA ELLIS, et al., Plaintiffs,
J.P. MORGAN CHASE & CO., et al., Defendants.


JOSEPH C. SPERO, Magistrate Judge.


In this putative class action, Plaintiffs Diana Ellis, James Schillinger, and Ronald Lazar ("Plaintiffs") request the production of a letter that Defendants JPMorgan Chase & Co. and JPMorgan Chase Bank, N.A. ("Chase") sent to Chase's vendors ("Vendors") on December 18, 2013. The Vendors are not parties to this action. This discovery dispute was initially presented to the judge presiding in this case, Judge Gonzalez Rogers, in a joint letter brief dated January 14, 2014. See Dkt. No. 69, ¶ IV. Judge Gonzalez Rogers subsequently referred the matter to a magistrate judge. See Dkt. No. 74, ¶ 6. Having been referred the matter, this Court ordered additional briefing. See Dkt. No. 75. Plaintiffs filed an opening brief, which serves as a Motion to Compel. See Dkt. No. 76 ("Mot."). Chase filed an Opposition and Plaintiffs filed a Reply. See Dkt. Nos. 79 ("Opp'n"), 81 ("Reply"). With leave of the Court, Plaintiffs also filed a Sur-Reply. See Dkt. Nos. 83, 84 ("Sur-Reply"). For the reasons set out below, the Court DENIES Plaintiffs' Motion to Compel.


The underlying case challenges Chase's alleged practices of charging borrowers marked-up and unnecessary fees for certain default-related services. See generally Compl. These default-related services - such as property inspections, broker price opinions, title searches, and winterizing - are performed at Chase's request by various third-party vendors, including the Vendors involved in this discovery dispute. See, e.g., id. ¶ 3. Plaintiffs allege that Chase's practices are prohibited under its loan agreements with borrowers, and that these practices date back to at least 2001. See, e.g., id. ¶ 42; Mot. at 2. Although no third-party vendors are named as defendants, Plaintiffs have alleged that these vendors are part of an "enterprise" under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(c) ("RICO"). See, e.g., id. ¶ 106. Upon Chase's motion to dismiss, Judge Gonzalez Rogers dismissed the RICO claims with leave to amend "if future discovery in this action reveals a factual basis for a RICO claim." See Dkt. No. 31 at 34, 38.

In early December 2013, Plaintiffs sent Chase twenty-six subpoenas directed to Vendors who performed default-related services for Chase. See Decl. of Andrew Cvitanovic in Supp. of Mot. ¶ 2 ("Cvitanovic Decl."); Decl. of Jee Young You in Supp. of Opp'n ¶ 2 ("You Decl."). The subpoenas requested production by early January 2014. You Decl. ¶ 2. Chase's counsel, Jee Young You, declares that in the days immediately following Chase's distribution of the subpoenas, she began to receive calls from Vendors about whether Chase would be taking any action in response to the subpoenas. Id.

On December 13, 2013, Chase requested an in-person meet and confer with Plaintiffs to discuss Chase's objections to the subpoenas. Id. ¶ 4. The parties met and conferred on December 17, 2013, but they failed to resolve their disputes and decided to raise these disputes with the court in a joint letter brief, which would include Chase's motion for protective order. Id. ¶ 5. However, the parties agreed that some categories were not in dispute, and they decided to send a joint letter to the Vendors that would inform them of these undisputed categories ("Joint Letter to Vendors"). Id. ¶ 6; Decl. of Mark Pifko in Supp. of Mot. ¶ 4 ("Pifko Decl."). The Joint Letter to Vendors would also defer production of documents responsive to the subpoena categories still in dispute until the court ruled on the joint letter brief. You Decl. ¶ 6; Pifko Decl. ¶ 4. The Plaintiffs prepared the Joint Letter to Vendors, which was sent on January 3, 2014. See Cvitanovic Decl. ¶ 3, Ex. 2.

Meanwhile, on December 18, 2013, Chase sent a separate letter to Vendors ("12/18 Letter"). You Decl. ¶ 10. Chase explains that the purposes of the 12/18 Letter were:

(1) to provide the current status of Chase's efforts to work with Plaintiffs to limit the scope of the Subpoenas, including informing Vendors that a letter would be forthcoming from Plaintiffs regarding an agreement to defer production of certain materials until after a ruling by the Court on Chase's motion for protective order; (2) to remind the Vendors of their contractual obligations arising under the servicing agreements for the production of sensitive NPPI [nonpublic personal information] borrower information to third parties; and (3) to request that the Vendors enter into a written joint defense agreement in light of the shared interests between the parties with regard to the litigation.

Id. Chase asserts that the 12/18 Letter is attorney work product prepared for the purposes of the instant litigation, and that it was intended to be confidential. Id. ¶ 11. Chase also asserts that it sent the 12/18 Letter in order to further the common interests of Chase and the Vendors in sharing legal advice about the litigation. Id. The 12/18 Letter is marked "JOINT DEFENSE COMMUNICATION: JOINT DEFENSE PRIVILEGE APPLIES." Id. Chase asserts that the 12/18 Letter was not sent with the intent of obstructing the lawful production of documents in response to the subpoenas. Id. As a result of the 12/18 Letter and subsequent telephone conversations, Chase maintains that it has a joint defense agreement ("JDA") with sixteen Vendors. Id. ¶ 13.

Plaintiffs were not aware of the 12/18 Letter while it was being drafted, and only learned about it for the first time after it was sent to Vendors. Pifko Decl. ¶ 6. Plaintiffs learned about the 12/18 Letter based on "conversations with numerous [V]endor representatives who had received both [Plaintiffs'] subpoena and the [12/18 Letter] and enclosed [JDA] from Chase's counsel." Cvitanovic Decl. ¶ 4. Plaintiffs assert that if they had known about Chase's plan to send out the 12/18 Letter, they would not have sent out the Joint Letter to Vendors. Pifko Decl. ¶ 6. Plaintiffs assert that by sending out the 12/18 Letter, Chase was "campaigning" Vendors to enter into JDAs, and Chase "induced at least some of the vendors to change their minds to now object and refuse to produce documents until the Court ruled on Chase's motion for protective order." Cvitanovic Decl. ¶ 6. Plaintiffs allege that Chase thus "violated the purpose behind the [Joint Letter to Vendors]." Id.

On January 6, 2014, Plaintiffs demanded that Chase produce the 12/18 Letter. You Decl. Ex. C. at 5. Chase refused, citing the joint defense privilege, also known as the common interest privilege. Id. ¶ 14. Chase also suggested that the parties meet and confer before raising the issue in a joint letter brief to the Court. Id. At that point, the joint letter brief, including Chase's motion for protective order, had not yet been filed by the parties. See id. Plaintiffs refused to meet and confer, asserting that such a meeting was not necessary because the existing draft joint letter brief encompassed issues related to the subpoenas broadly. Id. ¶ 14, Ex. C at 1.

On January 14, 2014, the parties submitted a joint letter brief to Judge Gonzalez Rogers that included the instant issue of the 12/18 Letter, and the issue was subsequently referred to this Court. Dkt. Nos. 69, 74. Pursuant to the Court's order, Chase submitted a copy ...

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