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HomeMy WebLinkAbout2021-cv-2063-CNS-MEH - City Of Fort Collins V. Open International, Et Al. - 079a - Exhibit 1Exhibit 1 Case 1:21-cv-02063-DDD-NYW Document 79-1 Filed 07/06/22 USDC Colorado Page 1 of 12 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No.: 21-cv-02063-DDD-NYW CITY OF FORT COLLINS, Plaintiff/Counterclaim Defendant, v. OPEN INTERNATIONAL, LLC Defendant/Counterclaim Plaintiff, and OPEN INVESTMENTS, LLC, Defendant. PLAINTIFF CITY OF FORT COLLINS’S REPLY IN SUPPORT OF MOTION TO QUASH DEFENDANTS’ SUBPOENA ON VANIR CONSTRUCTION MANAGEMENT, INC. AND FOR PROTECTIVE ORDER [DKT. 45] INTRODUCTION The City is working cooperatively to produce all relevant, non-privileged Vanir-related documents in its possession or Vanir’s. All the City seeks—and has ever sought—is the chance to review the documents Vanir is producing and log any which are privileged. But Open only offered the City an incomplete privilege review of Vanir documents, suggesting the City rely on clawing back privileged documents. Open’s approach invites the production of privileged documents and must be denied. The City is not walling off or delaying discovery. The City is producing documents involving Vanir in its possession without delay. Open’s counsel repeatedly agreed to hold off on privilege disputes concerning Vanir-related documents in the City’s possession until the Parties Case 1:21-cv-02063-DDD-NYW Document 79-1 Filed 07/06/22 USDC Colorado Page 2 of 12 2 produced full privilege logs and identified the basis for withholding specific documents. See 4/27/22 Email, Ex. E (“we agree with you that it will make more sense to assess those [Vanir] privilege invocations in the context of a privilege log”); 5/12/22 Email, Ex. F (“On . . . Vanir, we’ve still got disagreements, but Open agrees to hold those in abeyance for now.”) (emphasis added). To date, the City has reviewed well over 95,000 documents and produced 42,871 documents (210,687 pages), including over 9,000 Vanir-related documents. Working through the significant document review process, conferring and proceeding in the most efficient manner to maintain privilege protections are not an effort to delay.1 Despite there being no evidence of obstruction, improper privilege claims, or lack of relevant Vanir-related documents in the City’s possession, Open has chosen to circumvent the party discovery process and invade the privilege by going directly to Vanir and refusing to allow the City to make a fulsome privilege review. While Open is entitled to seek third-party discovery, it does not make sense for Open to acknowledge that the City is entitled to log privileged Vanir documents in its possession but argue against the same for privileged documents in Vanir’s possession, especially when the requests to the City and Vanir seek overlapping responsive documents. Open recognizes that Vanir likely has privileged documents and previously agreed that the City should first be able to review some documents in Vanir’s possession for attorney- client privilege. See Opp. [Dkt. 54] at 2. The point of disagreement was the City’s insistence it review all documents being produced by Vanir, since privileged documents are not all “to/from” legal personnel. Because of that single point, Open claims obstruction and delay. Had Open 1 Open has not raised any discovery dispute (or arguments of “delay”) concerning the City’s responses to the request for Vanir documents. Case 1:21-cv-02063-DDD-NYW Document 79-1 Filed 07/06/22 USDC Colorado Page 3 of 12 3 agreed to permit the City’s privilege review of documents in Vanir’s possession when conferral began well over a month ago, the City could have completed that review by this point. Rather than allowing a fulsome review, Open’s counsel would have Vanir produce all documents and then put it on the City to “claw-back” privileged documents despite its separate agreement with the City concerning its documents. See id.; 5/24/22 Emails, Ex. G (regarding Open’s communication to Vanir that it would like Vanir to produce documents and let the City claw back the privileged documents). Forcing the City to claw-back documents when it can simply proceed with a privilege log first will only drive up fees, create inefficiencies, and cause actual delay. Upon claw-back, the Parties will need to go through a privilege log process anyway, except Open would have had a chance to review the privileged documents first. Permitting the City to complete its production and produce its privilege log before proceeding on privilege disputes concerning Vanir may even obviate the need for Vanir’s production because the subpoena seeks such similar documents to the request propounded to the City. No matter what, the City should be permitted to protect its privilege by having the opportunity to review and log privileged documents in Vanir’s possession. The Court should grant the City’s Motion to Quash because allowing it to proceed as-is risks producing the City’s privileged documents to Open. ARGUMENT A. Open’s Arguments Regarding Privilege are Premature. Open’s arguments that no privilege can apply to Vanir’s documents are premature. The City has not claimed that all Vanir documents are privileged and has produced a significant set. Any dispute about privilege should be done on a document-by-document basis following a privilege log. See Menapace v. Alaska Nat'l Ins. Co., 2020 U.S. Dist. LEXIS 191695, at *33 (D. Case 1:21-cv-02063-DDD-NYW Document 79-1 Filed 07/06/22 USDC Colorado Page 4 of 12 4 Colo. Oct. 15, 2020) (courts required to “consider privilege issues on a document-by-document basis”); Alcon v. Spicer, 113 P.3d 735, 742 (Colo. 2005) (privilege claims should be evaluated by review of privilege log); see also NYW Civ. Practice Standard 37.1. This is why the City proposed that it review and log Vanir’s documents—so that it could specifically identify which documents were subject to what privilege. Open agreed that the City is entitled to perform a privilege review and log privileged Vanir- related documents in the City’s possession and further initially agreed that the City could review documents in Vanir’s possession hitting on the name of a City attorney. The City should be permitted to perform a complete privilege review of responsive documents in Vanir’s possession. This Court should quash the subpoena and decline to make any categorical ruling as to the lack of any privilege until a log is produced and the Parties sufficiently confer on the same. B. Vanir Individuals were the Functional Equivalents of City Employees and the Attorney-Client Privilege Applies. Two specific Vanir employees, Michelle Frey and Andrew Amato, meet the functional equivalent test because they worked continuously and closely with the City’s principals on matters crucial to the City’s position in litigation, possess information possessed by a select few individuals at the City, the information was treated as confidential, and the subject matter of the communication was within the scope of duties provided to them. See A.H. v. Evenflo Co., 2012 U.S. Dist. LEXIS 76100, at *9-10, 13 (D. Colo. May 31, 2012). The City has offered sufficient detailed facts to show that the two specific Vanir employees meet the functional equivalent test: they worked intimately and continuously with the City to manage the project, Mr. Amato received a City email address, they communicated confidentially with City employees, executives, and attorneys, and were responsible for identifying project risks Case 1:21-cv-02063-DDD-NYW Document 79-1 Filed 07/06/22 USDC Colorado Page 5 of 12 5 and assessments. See Mot. [Dkt. 45] at 7.2 Even Open’s own Counterclaims allege that Dr. Frey was the City’s project manager—a position previously and subsequently held by other City employees (even attributing Dr. Frey’s departure as “absent leadership by the City”) and that was alleged to be the contractual obligation of the City and was to have decision-making authority for the City. Countercls. [Dkt. 13], ¶¶75, 83, 87-88, 141, 59. Moreover, Open concedes that Vanir individuals received City email addresses but simply asserts that they “principally utilized Vanir email addresses” (Opp. at 3). Vanir individuals did indeed use the City email address. See Example emails, Ex. H. Dr. Frey also worked at the City offices, in the same room with City employees, on a daily basis when on-site, and spent the majority of her weekly hours as the Project Manager for the City. Decl. of M. Frey, ¶¶3-4. Export-Import Bank of the United States v. Asia Pulp & Paper Co. relied on by Open is inapposite; that consultant never worked at the defendant’s offices and other evidence contradicted the picture that the consultant was integrated. 232 F.R.D. 103, 113 (S.D.N.Y. 2005). Additionally, Open’s reference to the “840” hours is based on a budget. Most importantly, Vanir individuals communicated with the City’s attorneys for the provision of legal advice. If requested, the City can offer—for in-camera review (ahead of a privilege log)— examples of emails with Vanir individuals and the City and/or the City’s attorneys regarding legal advice to support that Vanir is likely to also have, in its possession, similar privileged documents. Notably, after arguing in a separate motion [Dkt. 44] that the language of an agreement with TMG is all that is necessary for this Court to categorically rule that there is absolutely no privilege applicable to any documents between TMG and the City, Open now argues that the Project Management Plan (the “Plan”) between the City and Vanir is “not enough” (Opp. at 7).3 2 None of the cases cited by Open provide that an affidavit is required for a factual showing. 3 Horton did not hold that the agreement is never “enough.” The determination must be made case-by-case. A.H., 2012 U.S. Dist. LEXIS, at *10. Case 1:21-cv-02063-DDD-NYW Document 79-1 Filed 07/06/22 USDC Colorado Page 6 of 12 6 Contrary to Open’s assertion that the Plan “refers and treats the Vanir team as distinct from the City” (id.), the Plan expressly lists “Michelle Frey,” “Andrew Amato,” and “Mike Zagoriski” of Vanir as “Team Member[s]” for the “City of Fort Collins,” separately and apart from the team members for Open. Ex. D [Dkt. 45-4] at CFC_012916-17. The Plan repeatedly makes clear that “[p]roject management for the City is provided by the Vanir team.” Id. at CFC_012910-12. The Services Agreement attached by Open further provides that Vanir had the key role Ex. 1 [Dkt. 54-1] at 8-9. With respect to Open’s argument that the Services Agreement represents Vanir as an “independent service provider” and not an employee of the City, that is the entire point of the functional equivalent analysis. The City does not claim that Vanir was actually employed by the City but that Vanir was the “functional equivalent” of a City employee. The doctrine exists to extend the privilege to those hired as “independent” consultants when treated as the equivalent of employees. See, e.g., A.H., 2012 U.S. Dist. LEXIS, at *10 (“As with corporate consultants, application of the privilege to communications with an independent contractor is determined on a case-by-case basis.”); In re Bieter Co., 16 F.3d 929, 933-34 (8th Cir. 1994) (independent contractor 4 Open’s attachment of an internal email among Open representatives in Spanish [Dkt. 54-2] does not evidence that Vanir “faulted” the City or was not a functional equivalent. Case 1:21-cv-02063-DDD-NYW Document 79-1 Filed 07/06/22 USDC Colorado Page 7 of 12 7 was functional equivalent of employee, despite contract stating he was not, where he was retained to provide “advice and guidance regarding commercial and retail development” and was viewed by third parties as party’s representative); All. Constr. Sols., Inc. v. Dep't of Corr., 54 P.3d 861, 870-71 (Colo. 2002) (extending privilege to independent contractor who served as project manager, had an office and access to government staff, represented the government at meetings, and was the “eyes and ears” of project, including providing government’s counsel factual information to obtain legal advice). Open lastly argues that the City did not establish that Vanir was engaged to work with the City’s attorneys and assist in providing legal advice related to the litigation—insinuating that litigation must have been at play. So long as the other functional equivalent test requirements are met, the privilege applies to communications made for the purpose of securing legal advice; it is not solely for situations where the consultant was hired to work with the company’s attorneys to provide legal advice related to ongoing litigation. But, the law preserves the privilege when there has been “a continuous and close working relationship between [Vanir] and [the City’s] principals on matters crucial to the [City’s] position in litigation”, not that there be actual litigation at that time. A.H., 2012 U.S. Dist. LEXIS 76100, at *9-10. The January 2020 Services Agreement expressly required that (Ex. 1 [Dkt. 54-1] at 8 (emphasis added)), thus calling for the requisite relationship “on matters crucial to” the City’s position in this litigation.5 Moreover, Open seeks production of documents even well after the City anticipated litigation, by requiring the date range of “August 1, 2019 to 5 The contractors in Am. Ins. Co. v. Pine Terrace Homeowners Ass'n, who did not have a significant relationship to the transaction that was the subject of the entity’s need for legal services, are distinguishable. 2021 U.S. Dist. LEXIS 97203, at *7 (D. Colo. May 21, 2021). Case 1:21-cv-02063-DDD-NYW Document 79-1 Filed 07/06/22 USDC Colorado Page 8 of 12 8 May 1, 2021.” Ex. C [Dkt. 45-3] at 6. Again, the City is available to provide examples of privileged communications for in camera review whereby Dr. Frey and Mr. Amato are included in discussions regarding attorney-client advice pertaining to the City’s negotiations with Open and legal interpretations of the parties’ contracts. This determination is premature because it requires a consideration of not only the above but also consideration of whether “the information sought from the non-employee would be subject to the attorney-client privilege if he were an employee of the party.” Horton v. United States, 204 F.R.D. 670, 672, 674 (D. Colo. 2002) (ordering provision of privilege log describing materials withheld with reasons for asserting the privilege); A.H., 2012 U.S. Dist. LEXIS 76100, at *14 (“[T]he Court finds that there is no principled reason to deny attorney-client protection to communications…that in camera review reveals were primarily or predominantly of a legal character and therefore would be considered privileged . . . if [the individuals at issue] were technically employees of Evenflo.”). Open admits that this is required. Opp. at 6. Such determination cannot be made when the City cannot know what Vanir intends to produce from its possession and has no opportunity to review and log the privileges that would apply to those documents if Vanir were an employee of the City. C. Open’s Arguments that Work Product Protection Cannot Apply are Premature. Open’s argument that the City has not made the necessary showing that the work product doctrine applies to “any document responsive to the subpoena” in Vanir’s possession (Opp. at 11)—i.e. that the City does not know what it does not know—is disingenuous, premature, and only supports the fact that the City should be permitted to review those documents in Vanir’s possession Case 1:21-cv-02063-DDD-NYW Document 79-1 Filed 07/06/22 USDC Colorado Page 9 of 12 9 to make the necessary showing on a privilege log.6 As noted, Vanir was hired in January 2020 to Ex. 1 [Dkt. 54-1] at 8- 9. Moreover, on June 6, 2022, the City noticed a claw-back of memoranda drafted by Dr. Frey on behalf of the City for which the deliberative process privilege—which protects documents or testimony that are deliberative and pre-decisional in nature, even when no attorneys are copied—applies. SEC v. Nacchio, 2009 U.S. Dist. LEXIS 8365, at *9-12, 18-19 (D. Colo. Jan. 29, 2009). This privilege extends to Vanir individuals because they are functional equivalents; the Services Agreement shows that Vanir was retained to provide liability assessment risks, among other items, and make recommendations for the City to consider in making its decisions. Indeed, certain memoranda by Dr. Frey had a stamp expressly noting the privilege (“Pre-decisional deliberative material subject to protection…”). The City must be permitted to conduct its review of Vanir’s documents to maintain these protections. D. The City Seeks a Protective Order to Protect its Privilege. The City’s motion is not based on the undue burden to Vanir; it is to protect the City’s privileges. By adopting the City’s requested process, Open gets all the documents it seeks (from both Vanir and the City) and the City gets to protect its privilege. The City requests that this Court GRANT its Motion. Respectfully submitted this 22nd day of June, 2022. 6 Open misstates the general requirements under the work product doctrine. McCall v. Skyland Grain, Ltd. Liab. Co. pertains to instances where “the investigation of the accident would normally be undertaken.” 2009 U.S. Dist. LEXIS 41034, *17-18 (D. Colo. Apr. 29, 2009). Case 1:21-cv-02063-DDD-NYW Document 79-1 Filed 07/06/22 USDC Colorado Page 10 of 12 10 DORSEY & WHITNEY LLP s/ Andrea Ahn Wechter Case Collard Andrea Ahn Wechter Maral J. Shoaei 1400 Wewatta Street, Suite 400 Denver, Colorado 80202-5549 Telephone: (303) 629-3400 Fax: (303) 629-3450 E-mail: collard.case@dorsey.com E-mail: wechter.andrea@dorsey.com E-mail: shoaei.maral@dorsey.com Attorneys for Plaintiff City of Fort Collins CERTIFICATE OF COMPLIANCE I hereby certify that the foregoing pleading complies with the type-volume limitations set forth in Judge Daniel D. Domenico’s Practice Standard III(A)(1) and contains 2,682 words. s/ Andrea Ahn Wechter Case 1:21-cv-02063-DDD-NYW Document 79-1 Filed 07/06/22 USDC Colorado Page 11 of 12 11 CERTIFICATE OF SERVICE I hereby certify that on June 22, 2022, I caused the foregoing document to be electronically served via CM/ECF system which will send notification of such filing to the following: Alexander D. White Paul D. Swanson Hannah E. Armentrout Anna C. Van de Stouwe HOLLAND & HART LLP 555 17th Street, Suite 3200 Denver, CO 80202 Telephone: (303) 295-8578 adwhite@hollandhart.com pdswanson@hollandhart.com hearmentrout@hollandhart.com acvandestouwe@hollandhart.com Attorneys for Defendants s/ Stacy Starr Dorsey & Whitney LLP Case 1:21-cv-02063-DDD-NYW Document 79-1 Filed 07/06/22 USDC Colorado Page 12 of 12