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Cohen v. Trump

United States District Court, S.D. California

July 31, 2015

ART COHEN, Plaintiff,
v.
DONALD J. TRUMP, Defendant.

ORDER RULING ON JOINT STATEMENT FOR DETERMINATION OF DISCOVERY DISPUTES

WILLIAM V. GALLO, Magistrate Judge.

I. BACKGROUND

On July 8, 2015, counsel for all parties notified the Court of three discovery disputes. On July 9, 2015, counsel notified the Court of a fourth discovery dispute. On July 10, 2015, at 8:00 a.m., the Court held a telephonic Discovery Conference with counsel for all parties. Ms. Rachel Jensen, Mr. Daniel Pfefferbaum, Ms. Maureen Mueller, and Ms. Amber Eck participated on behalf of Plaintiff Art Cohen ("Plaintiff"), and Ms. Nancy Stagg and Mr. Benjamin Morris participated on behalf of Defendant Donald J. Trump ("Defendant").

On July 15, 2015, the Court issued an Order Following Discovery Conference. (Doc. No. 106.) In its Order, the Court resolved two disputes and ordered the parties to file a Joint Statement for the remaining two disputes involving Defendant's privilege log entries and Defendant's contributions to and from Trump University, LLC ("TU"). Id . On July 16, 2015, the parties lodged a Joint Statement for Determination of Discovery Disputes, along with numerous exhibits.

II. PRIVILEGE LOG ENTRIES

A. PLAINTIFF'S ARGUMENT

1. DEPOSITION TESTIMONY CONTRADICTS DEFENDANT'S ARGUMENTS

Plaintiff seeks documents that correspond to privilege log entries related to Mr. Jason Greenblatt, General Counsel of Trump Organization ("Trump Org"), and Mr. Allen Weisselberg, Chief Financial Officer ("CFO") of Trump Org. On June 2, 2015, Plaintiff filed a Motion to Compel, among other discovery, emails that Defendant withheld from 2011 concerning TU's name (the "2011 Emails"). (Doc. No. 86.) Mr. Greenblatt was included on every withheld email, and Mr. Weisselberg was included on most of the withheld emails. Also included on many of the 2011 Emails was Mr. George Sorial, Executive Vice President ("EVP") and Counsel for Trump Org. Other withheld emails were between Mr. Greenblatt and Mr. Bradley Cox, Mr. Greenblatt's "former assistant/paralegal/legal development associate" on the transactional (not litigation) side.

During a June 5, 2015, Discovery Hearing before this Court on Plaintiff's Motion to Compel, Defendant made representations about the roles of Mr. Greenblatt and Mr. Weisselberg in the email communications from both 2005 (the "2005 Emails") and the 2011 Emails. On June 9, 2015, the Court denied Plaintiff's Motion to Compel production of the 2011 Emails.[1] (Doc. No. 93.)

On June 24 and June 30, 2015, Plaintiff deposed Mr. Weisselberg and Mr. Greenblatt, respectively. Plaintiff contends that both witnesses flatly contradicted Defendant's statements by confirming that they played no role in providing, receiving, or facilitating any legal advice related to this issue. Plaintiff now argues that these individuals, whom Defendant claimed were integral in the rendering of legal advice, played no part. Plaintiff asserts that, given Mr. Greenblatt's actual testimony that he was not involved in any investigation, his presence on every 2011 Email waives the privilege, and there is an overlapping waiver for the 2011 Emails copied to Mr. Weisselberg.

Plaintiff contends that Defendant bears the burden of establishing the attorney-client privilege by a preponderance of evidence. Plaintiff asserts that the Supreme Court has rejected a "control group" test based on one's position in favor of a case-by-case analysis that hinges on whether "[t]he communications concerned matters within the scope of the employees' corporate duties, and the employees themselves were sufficiently aware that they were being questioned in order that the corporation could obtain legal advice." Upjohn Co. v. U.S., 449 U.S. 383, 394-95 (1981). Plaintiff cites U.S. ex rel. Parikh v. Premera Blue Cross, 2006 WL 3733783, at *9 (W.D. Wash. Dec. 15, 2006), which stated, "Upjohn plainly suggests that in order for the privilege to apply, an employee must be aware that the communication to counsel is being made to enable the corporation to obtain legal advice."

2. MR. SORIAL'S DECLARATION SHOULD BE DISREGARDED

Along with the instant Joint Statement, Defendant submitted a declaration from Mr. Sorial. Plaintiff argues that Mr. Sorial's declaration contradicts his deposition testimony, and therefore, his declaration should be disregarded. See Van Asdale v. Int'l Game Tech., 577 F.3d 989, 998 (9th Cir. 2009) ("[A] party cannot create an issue of fact by an affidavit contradicting his prior deposition testimony.").

On January 18, 2013, Mr. Sorial was deposed in the Makaeff case. Plaintiff claims that Mr. Sorial testified that his involvement in the New York Attorney General ("NYAG") subpoena to Trump Org was limited to retaining outside counsel, providing the subpoena to counsel, and turning the matter over to be handled externally.

In his Declaration, dated July 14, 2015, Mr. Sorial stated that in May of 2011, after Trump Org and TU received a subpoena from the NYAG's Office, and after the Makaeff case was filed, he, along with Mr. Alan Garten, EVP and General Counsel of Trump Org, spearheaded an internal investigation relating to the prior operations of TU in order to provide legal advice to Trump Org and TU on how to respond to the subpoena. Mr. Sorial stated that in the process of that investigation, he and others working at his direction and at the direction of Mr. Garten, sent email communications to corporate representatives of Trump Org to facilitate the investigation and to obtain information necessary to render legal advice. Those corporate representatives included Mr. Greenblatt and Mr. Weisselberg.

3. COURT SHOULD FIND A WAIVER AS TO MR. SORIAL

Plaintiff contends that the Court should find a waiver of the privilege as to Mr. Sorial because Defendant has used Mr. Sorial's statements about this same subject as a sword in opposing Makaeff class certification. To support this argument, Plaintiff cites one excerpt from Mr. Sorial's declaration in Makaeff, in which he stated, "Trump University LLC (TU') began operations in approximately 2005, ... [NYSED] subsequently requested that TU no longer use University' in its name based on a [NY] statute restricting the use of University' to certain institutions and businesses. TU agreed to change its name, and the company continued its operations..." (Joint Statement at 15, n.11, citing Makaeff Doc. No. 138-1, Ex. 52, ΒΆ3.) Plaintiff argues that Defendant elected to use Mr. Sorial to provide a self-serving summary of events concerning the use of "university, " and therefore Defendant has waived any privileges as to information that Mr. Sorial received on this same topic.

4. IN CAMERA REVIEW AND REQUEST TO DEPOSE MR. SORIAL

Plaintiff notes that, although not necessary, the Court may conduct an in camera review of the 2011 Emails to assess Defendant's assertion of privilege. Further, Plaintiff asks that if the Court's determination of the issue relies on Mr. Sorial's declaration, Plaintiff be granted leave to depose Mr. Sorial.

B. DEFENDANT'S ARGUMENT

Defendant asserts that the 2011 Emails are protected by the attorney-client privilege, as this Court held in its June 9, 2015 Order. See Doc. No. 93. The 2011 Emails are privileged communications between an attorney and proper corporate client representatives during an in-house investigation and there is no basis to compel their production. Plaintiff's untimely attempt to obtain production of the 2011 Emails is without merit and should be rejected.

1. REQUEST IS UNTIMELY AND PROCEDURALLY IMPROPER

a. UNTIMELY

Defendant argues that Plaintiff has brought this dispute to the Court in an untimely manner. This Court's Chambers Rules require that a party notify the Court of a discovery dispute within 30 days of the date upon which the event giving rise to the dispute occurred. This dispute arose on May 18, 2015, when Defendant asserted the attorney-client privilege as to the 2011 Emails in its privilege log. Plaintiff waited until July 8, 2015, more than 30 days later, to bring this dispute to the Court's attention.

Plaintiff argues that the dispute arose during the June 24 and 30, 2015 depositions of Mr. Weisselberg and Mr. Greenblatt, and therefore it was timely brought. However, Defendant counters that this argument is without merit because Plaintiff's counsel learned years ago in the Makaeff case that Mr. Weisselberg and Mr. Greenblatt were parties to privileged communications concerning TU's formation and location of operation. Despite years of notice, Plaintiff waited until just days before the July 2, 2015 discovery cutoff to depose these individuals.

b. NO NEW EVIDENCE FOR MOTION FOR RECONSIDERATION

Plaintiff's request for the 2011 Emails also fails because the Court has already ruled on this request. In its June 9, 2015 Order, the Court denied Plaintiff's request for compelled production of the 2011 Emails due to Plaintiff's counsel's failure to meet and confer, and also based on the merits of the dispute. (Doc. No. 93 at 28-29.) After denial by this Court, Plaintiff's only procedural options were to file an objection to this Court's ruling under Federal Rule of Civil Procedure ("Rule") 72(a) by June 26, 2015, or file an application for reconsideration pursuant to Rule 60 by July 9, 2015. Plaintiff failed to take either of the procedural options available.

Plaintiff argues that, even if the Court were to consider Plaintiff's request as a timely motion for reconsideration of its Order, it is still fatally defective. A movant seeking reconsideration on the basis of newly discovered evidence must establish that the newly discovered evidence could not have been discovered with due diligence. See Daul v. PPM Energy, Inc., 2010 WL 3945001 (D. Ore. Oct. 6, 2010). Additionally, the new evidence must be materially different than that previously presented to the Court. Aniel v. GMAC Mortg., LLC, 2012 WL 5389706 (N.D. Cal. Nov. 2, 2012). Here, the deposition testimony of Mr. Weisselberg and Mr. Greenblatt does not constitute sufficient "new" evidence because the testimony has been available to Plaintiff for years, had he decided to take these depositions earlier. Further, the information has no material bearing on the Court's ruling.

2. THE 2011 EMAILS ARE PROTECTED BY THE ATTORNEY - CLIENT PRIVILEGE

Defendant argues that Plaintiff seeks discovery of information well within the protection of the attorney-client privilege. The 2011 Emails pertain to an investigation led by Mr. Sorial and Mr. Garten, both attorneys for Trump Org, commenced for the purpose of responding to a subpoena received by Trump Org and TU in 2011 from the NYAG. In the 2011 Emails, Mr. Sorial and Mr. Garten sought and received information about TU's formation, status, and dissolution, or plans thereof. Communi-cations in the course of such investigations are well within the attorney-client privilege. Upjohn, 449 U.S. at 390-91 ("The first step in the resolution of any legal problem is ascertaining the factual background and sifting through the facts with an eye to the legally relevant.").

Both Mr. Weisselberg and Mr. Greenblatt fall squarely within Upjohn's principles for determining representatives of a corporate client. The inclusion of these individuals on the 2011 Emails was necessary for Mr. Sorial to effectively represent Trump Org in the NYAG subpoena matter. Upjohn, 449 U.S. at 389, 391. Due to the investigation of TU by the NYAG and the allegations asserted by the Makaeff plaintiffs, Mr. Sorial sought primary and reliable evidence related to the past operations of TU. Further, both Mr. Weisselberg and Mr. Greenblatt were aware that the 2011 Emails, seeking information concerning TU shortly after receiving the NYAG subpoena, were intended for the purpose of obtaining information for legal ...


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