HomeMy WebLinkAbout2021-cv-2063-CNS-MEH - City Of Fort Collins V. Open International, Et Al. - 097 - Order On Mot CompelIN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 21-cv-02063-CNS-MEH
CITY OF FORT COLLINS,
Plaintiff/Counterclaim Defendant,
v.
OPEN INTERNATIONAL, LLC
Defendant/Counterclaim Plaintiff,
and
OPEN INVESTMENTS, LLC,
Defendant.
ORDER ON MOTION TO COMPEL
Magistrate Judge Michael E. Hegarty.
Before the Court is Defendants Open International, LLC and Open Investments, LLC’s
(collectively, “Open”)1 Motion to Compel Production of TMG Documents (the “Motion” or
“Motion to Compel”). ECF 43. The Motion is fully briefed. For the following reasons, the Motion
is granted in part and denied in part.
BACKGROUND
This case arises out of a contractual dispute between Plaintiff City of Fort Collins
(“Plaintiff” or the “City”) and Open. See generally ECF 6.2 Specifically, in 2018, the City and
1 Although there are two named Defendants, the Parties routinely refer to Defendants as one entity.
See, e.g., ECF 43; ECF 58. The Court does the same here.
2 The Court draws these background facts from the allegations in the Complaint, the Parties’
briefing, and attached exhibits where necessary to provide context to the present dispute.
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Open entered into a Master Professional Services Agreement and Software License Agreement
governing the implementation of a billing system for both existing utilities and a new broadband
service (the “Project”). Id. at ¶¶ 18-19, 30. The implementation did not proceed as expected, see,
e.g., id. at ¶¶ 45-46, 49, 53, and in the early months of 2021, the Parties attempted to resolve their
disputes. See, e.g., id. at ¶ 58. In May 2021, the City and Open “engaged in detailed
communications trying to resolve the[] disputed issues and move forward cooperatively.” Id. at
¶¶ 56-58. In addition, the City hired a third-party consultant, TMG Consulting (“TMG”) to assess
the status of the Project.3 ECF 43 at 4; ECF 58-1 at ¶¶ 6-7. TMG was to work with both the City
and Open to complete a detailed analysis of the Project and suggest next steps. ECF 43 at 5. TMG
completed its assessment and concluded that “continued collaboration [between the Parties] would
provide the City the quickest and most efficient solution for its CIS implementation needs.” Id. at
6.
Open asserts that “[i]nstead, a few weeks later, the City terminated the [P]roject” and filed
this lawsuit. Id. at 6. Plaintiff initiated this civil action on July 2, 2021, raising claims of fraudulent
inducement, breach of contract, breach of the covenant of good faith and fair dealing, and a
declaratory judgment. See generally ECF 6. Originally filed in the District Court for Larimer
County, Colorado, id., this case was removed to federal court on July 30, 2021, ECF 1, and the
Parties have since engaged in discovery. The City represents that it has “retained TMG as a non-
testifying, consulting expert in this lawsuit.” ECF 58 at 2.
In Defendants’ First Request of Discovery Requests, Open requested that Plaintiff produce
“all documents concerning TMG Consulting’s role with the Project, including the files,
3 The Parties disagree as to the exact purpose or nature of the City’s retention of TMG, which is
discussed in more detail below.
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memoranda, reports, emails, and other documents of Aaron McClure and Greg Galluzzi related to
the Project, as well as other documents concerning TMG Consulting’s assessment of and
participation in the Project.” ECF 43-10 at 14. The City objected to this request on the basis that
it sought documents protected by the attorney client privilege or work product doctrine. Id. at 15.
The City informed Open that it would withhold documents “related to TMG’s work at the direction
and supervision of the City’s counsel, documents protected by the attorney-client and work product
privileges, and documents related to TMG’s retention as a consulting, non-testifying expert.” Id.
The Parties agree that the City’s response was not accompanied by a privilege log. See,
e.g., ECF 43 at 12; ECF 58 at 2. The City represents that due to the volume of the Parties’ expected
productions, “the Parties agreed to produce their respective privilege logs after productions were
completed.” ECF 58 at 3.4 On March 24, 2022, Open moved to compel the production of
“documents and other information in [the City’s] possession that relate to TMG’s assessment of
the [P]roject between January and April 2021,” and additionally seek “a categorical ruling that the
documents and information related to TMG’s assessment and report, which address a critical
period for the project, are not privileged.” ECF 43 at 2, 8. Plaintiff opposes the Motion, arguing
first that the Motion is premature, and second, that the requested documents are protected by the
work-product doctrine, the deliberative-process privilege, and the attorney-client privilege. ECF
58 at 6-11. After Open replied, see ECF 63, the court ordered the City to submit a privilege log
covering the documents at issue in the instant dispute, as well as any engagement letters it has with
TMG. See ECF 73. The City submitted the requested documents to chambers and filed its
4 In its Response to the Motion to Compel, filed June 14, 2022, Plaintiff represented that the Parties
expected to substantially complete their productions that week. ECF 58 at 3.
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privilege logs on the docket. See ECF 82; ECF 83.5 In addition, both Parties have supplemented
the record with additional evidence they assert is relevant to the Motion to Compel. ECF 76; ECF
80. The Court considers the Parties’ arguments below.
LEGAL STANDARDS
I. Rule 26(b)
Rule 26(b)(1) of the Federal Rules of Civil Procedure defines the scope of permissible
discovery. Fed. R. Civ. P. 26(b)(1). The Rule permits discovery regarding any nonprivileged
matter that is relevant to any party’s claim or defense and proportional to the needs of the case.
Id. Relevant evidence is “evidence having any tendency to make the existence of any fact that is
of consequence to the determination of the action more or less probable than it would be without
the evidence.” Fed. R. Evid. 401. Moreover, in considering whether the discovery sought is
proportional, the court weighs the importance of the discovery to the issues at stake in the action,
the amount in controversy, the parties’ relative access to relevant information, the parties’
resources, the importance of discovery in resolving the issues, and whether the burden or expense
of the proposed discovery outweighs its likely benefit. Id.
II. Rule 37
Pursuant to Rule 37(a)(1), a party may move for a court order compelling discovery. See
Fed. R. Civ. P. 37(a)(3)(A). “The administration of the rule[] lies necessarily within the province
of the trial court with power to fashion such orders [as] may be deemed proper to vouchsafe full
5 On July 15, 2022, Open filed “Open’s Response to City’s Notices Regarding Privilege Logs and
Notice of Supplemental Submission of Sortable/Filterable Logs,” ECF 86, wherein Open briefly
responds to the privilege logs submitted by Plaintiff and also acknowledges that it sent a Microsoft
Excel version of each privilege log to then-Magistrate Judge Wang’s chambers via email.
Plaintiff’s counsel was copied on the email to chambers.
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discovery for the just, speedy and inexpensive determination of the lawsuit.” Robison v.
Transamerica Ins. Co., 368 F.2d 37, 39 (10th Cir. 1966).
In addition, where a party asserts that certain documents are protected from disclosure on
the basis of privilege, a court may order an in camera review of the documents to resolve the
privilege issue. FDIC v. United Pacific Ins. Co., 152 F.3d 1266, 1276 n.6 (10th Cir. 1998). Before
ordering an in camera review, “there must first be [a] sufficient evidentiary showing which creates
a legitimate issue as to the application of the privilege asserted,” and “[a] broad, sweeping assertion
that all documents alleged to be privileged should be reviewed in camera is insufficient to justify
the review.” Ressler v. United States, No. 10-cv-03050-REB-BNB, 2012 WL 3231002, at *2 (D.
Colo. Aug. 6, 2012) (quotation omitted). Rather, the party requesting an in camera review must
“identify each specific document at issue and provide arguments about each document to persuade
the court” that review is necessary. Id. (quoting Calder v. Blitz U.S.A., Inc., No. 2:07-cv-387-TC-
PMW, 2010 WL 924261 at *1 (D. Utah Mar. 11, 2010)). The decision to review documents in
camera is within the discretion of the trial court. Cantu Servs., Inc. v. Worley, No. CIV-12-129-
R, 2021 WL 2323721, at *5 (W.D. Okla. June 7, 2021).
ANALYSIS
As discussed above, Rule 26 of the Federal Rules of Civil Procedure provides that a party
may discover any nonprivileged matter relevant to the party’s claim or defense, so long as it is
proportional to the needs of the case. Fed. R. Civ. P. 26(b)(1); Larson v. Larson, 687 F. App’x
695, 707 (10th Cir. 2017) (unpublished). Open seeks a court order compelling the production of
the requested TMG assessment documents and a ruling that such documents are categorically not
privileged. ECF 43. Open argues that (1) litigation was not the reason for TMG’s work, so the
work-product doctrine does not apply, id. at 9; (2) the attorney-client privilege is inapplicable
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because TMG was independent of the City, id. at 10; and (3) in any event, TMG collaborated with
and reported to Open, so any assertions of attorney-client privilege or the work product privilege
have been waived by the City, id. at 12.
The City disagrees. First, it maintains that the Motion to Compel is premature, as neither
Party has completed its production of documents and no privilege logs have been produced. ECF
58 at 6.6 In the alternative, it argues that TMG was retained in January 2021 in anticipation of
litigation and that the documents requested by Open are protected by the work-product doctrine
and the deliberative process privilege. Id. at 7-8. The City further contends that in performing its
consulting work, TMG acted as the functional equivalent of a City employee, rendering the
requested documents protected by the attorney-client privilege. Id. at 10. Finally, it asserts that
Open bears the burden of establishing a waiver of these privileges, and it has failed to do so. Id.
at 12. The Court addresses the Parties’ arguments below.
I. Work-Product Doctrine
“[T]he work product privilege is governed, even in diversity cases, by a uniform federal
standard embodied in Fed. R. Civ. P. 26(b)(3).” Frontier Refining, Inc. v. Gorman-Rupp Co., Inc.,
136 F.3d 695, 702 n.10 (10th Cir. 1998) (citation and quotation omitted). The work-product
doctrine protects “documents and tangible things that are prepared in anticipation of litigation or
for trial.” Fed. R. Civ. P. 26(b)(3)(A). Specifically, it “shelters the mental processes of the
attorney, providing a privileged area within which [the attorney] can analyze and prepare [the]
client’s case.” United States v. Nobles, 422 U.S. 225, 238 (1975).
6 Because the City has since submitted a privilege log pursuant to court order, the Court does not
address this argument.
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“The burden of establishing that documents qualify as work product is upon the party
seeking to prevent their disclosure.” Metro Wastewater Reclamation Dist. v. Cont’l Cas. Co., 142
F.R.D. 471, 477 (D. Colo. 1992). The party asserting work-product privilege must demonstrate
that the documents at issue were prepared in anticipation of litigation by or for the party or by or
for the party’s representative. Wellinger Fam. Tr. 1998 v. Hartford Life & Acc. Ins. Co., No. 11-
cv-02568-CMA-BNB, 2013 WL 2444714, at *1 (D. Colo. June 5, 2013). “Such a showing may
be made by affidavit, deposition testimony, answers to interrogatories, and the like.” Martin v.
Monfort, Inc., 150 F.R.D. 172, 172-73 (D. Colo. 1993).
“[B]ecause litigation is an ever-present possibility in American life, it is more often the
case than not that events are documented with the general possibility of litigation in mind,” and
“the mere fact that litigation does eventually ensue does not, by itself, cloak materials with work
product immunity.” Wellinger Fam. Tr., 2013 WL 2444714, at *2 (quoting Wikel v. Wal-Mart
Stores, Inc., 197 F.R.D. 493, 495 (N.D. Okla. 2000)). On the other hand, “[c]ase law broadly
defines the parameters of the ‘anticipation of litigation’ element,” and “[a]pplication of the work
product doctrine does not turn on whether litigation actually ensued.” S.E.C. v. Nacchio, No. 05-
cv-00480-MSK-CBS, 2007 WL 219966, at *6 (D. Colo. Jan. 25, 2007). Thus, the determination
of whether a document was prepared in anticipation of litigation turns on whether, “in light of the
nature of the document and the factual situation in the particular case, the document can fairly be
said to have been prepared or obtained because of the prospect of litigation.” Martin, 150 F.R.D.
at 173 (quoting 8 Charles Alan Wright et al., Federal Practice & Procedure § 2024).
A. Whether the City Hired TMG in Anticipation of Litigation
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Open argues that litigation “was not the but-for cause nor the driving force behind TMG’s
assessment and report” and thus does not fall under the work-product protection. ECF 43 at 9.7
In so arguing, Open relies on an engagement agreement 8 between the City and TMG, which Open
asserts “never mentions or intimates pending disputes, let alone legal action to resolve them.” Id.
Rather, Open argues that the City’s purpose in retaining TMG was to review and assess the project,
provide observations, and provide recommendations. Id. at 9-10. In response, the City asserts that
it “anticipated litigation with Open prior to retaining TMG in January 2021.” ECF 58 at 8. The
City has submitted a declaration from Cyril Vidergar, a City attorney, wherein Mr. Vidergar states
that by “late 2020, [he] became involved in the issues building between the Parties and the City
began anticipating litigation against Open.” ECF 58-1 at ¶ 5. Mr. Vidergar states that the City
“retained TMG in anticipation of litigation.” Id. at ¶ 8; see also id. at ¶ 6 (Mr. Vidergar stating
that he was “involved in the City’s retention of TMG to assess the project in anticipation of
litigation”). He further asserts that the City retained TMG to “determine how deep Open’s failures
7 Open relies on L-3 Communications Corp. v. Jaxon Engineering & Maintenance, Inc., No. 10-
cv-02868-MSK-KMT, 2014 WL 3732943 (D. Colo. July 29, 2014) for the proposition that for the
work-product doctrine to apply, litigation must have been the “but for” cause of the documents’
creation. See ECF 43 at 9; ECF 63 at 2-3. The Court respectfully disagrees that this high standard
guides the Court here. In L-3 Communications, the court was specifically discussing documents
created in the ordinary course of business: “Documents prepared in the ordinary course of business,
however, are not protected as work product unless the proponent of the protection demonstrates
that the documents would not have been created ‘but for’ the prospect of litigation.” L-3
Commc’ns Corp., 2014 WL 3732943, at *5. In other words, documents that are routinely prepared
in the ordinary course of business will not be deemed to have been prepared in “anticipation of
litigation” unless they were specifically prepared for litigation. But case law is clear that litigation
need not be imminent or certain in order for the work-product doctrine to apply. See Menapace v.
Alaska Nat’l Ins. Co., No. 20-cv-00053-REB-STV, 2020 WL 6119962, at *13 (D. Colo. Oct. 15,
2020). Thus, where a party argues that the documents are not prepared in the ordinary course of
business, as here, the Court declines to conclude that the party must demonstrate but-for causation.
8 Open does not cite to an engagement agreement or expressly identify the agreement upon which
they rely. See ECF 43 at 9-10. Accordingly, the Court cannot meaningfully ascertain the basis of
Open’s argument.
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were and whether there was a path forward for the Parties.” Id. at ¶ 6. According to Mr. Videgar,
the City and TMG “had meetings throughout the process” to establish legal claims that were
eventually raised by the City in this action, but does not indicate when these meetings occurred.
Id. at ¶ 7.
Upon review of the Parties’ arguments, the agreements submitted by the City for in camera
review, some of which are filed on the public docket, see, e.g., ECF 58-5; ECF 58-7, and the
declaration of Mr. Vidergar, the Court concludes that the City has met its burden of establishing
that TMG was engaged in January 2021 in anticipation of litigation with Open. The January 2021
Statement of Work for TMG’s assessment of the Project, which is docketed at ECF 58-7, states
that TMG was retained to “provide observations and recommendations regarding several factors
resulting in an assessment of Project Health, System Readiness for Go-live, and recommendations
to ensure the success of the . . . [P]roject” and that TMG, based on its analysis, would “provide[]
a decision model with various outcomes.” ECF 58-7 at 6, 9. While the agreements do not expressly
mention litigation, this is not dispositive of the court’s inquiry, as “the work product doctrine is
not confined to situations in which litigation is certain.” Collardey v. All. for Sustainable Energy,
LLC, 406 F. Supp. 3d 977, 982 (D. Colo. 2019). In Collardey, the court rejected an argument that
the work-product doctrine did not apply because the documents supporting the opposing party’s
invocation of the doctrine “did not make any mention of a ‘specific legal action’ or ‘actual legal
claim.’” Id. Concluding that the documents and circumstances of the case were adequate “to
support a finding that [the party invoking the privilege] had reasonable grounds to anticipate
litigation,” the court concluded that the Magistrate Judge had not erred in holding that the
documents were created in anticipation of litigation. Id. at 982-83.
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Moreover, while Open contends that similar language demonstrates that TMG’s work was
“performed in the ordinary course of business and without litigation as its ‘driving force,’” ECF
63 at 3, the Court respectfully disagrees. A goal of correcting course and ensuring the ultimate
success of the Project, on one hand, and anticipating potential litigation arising out of the Project
on the other, are not mutually exclusive and can exist simultaneously. It is not unusual or
questionable if the City retained TMG, while anticipating that litigation may arise from the then-
tumultuous Project, to hire a third-party consultant to determine the “health and status” of the
Project or whether the Project was “headed for success,” ECF 58-7 at 6, a determination which
would certainly factor into the City’s decision about initiating litigation. See Nacchio, 2007 WL
219966, at *7 (finding that the work-product doctrine applied where the record demonstrated that
the party seeking to apply the privilege had “initiated an investigation that reflected a subjective
belief that litigation . . . was a real possibility”). Moreover, the City has submitted a letter from
the City to TMG dated March 15, 2021 in which the City notified TMG that it considered the
Project deliverables identified in the Statement of Work, ECF 58-7 at 11, to be confidential
information, and instructing TMG that because “there is a potential for future litigation between
the City and Open concerning this work, the Project Deliverables should be treated as Confidential
Information based on the City’s attorney work-product privilege.” Thus, this letter makes clear
that the City was anticipating litigation as early as March 2021. “The fact that litigation may still
be a contingency at the time the document is prepared has not been held to render the privilege
inapplicable, if the prospect of litigation is identifiable because of claims that have already arisen.”
In re Lernout & Hauspie Sec. Litig., 222 F.R.D. 29, 35 (D. Mass. 2004) (quotation omitted).
Moreover, the Court notes that a City attorney has declared, under the penalties of perjury,
that the City retained TMG in anticipation of litigation. ECF 58-1 at ¶¶ 5-8. The Court takes these
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averments as true. See Selsor v. Kaiser, 81 F.3d 1492, 1501 (10th Cir. 1996) (observing that as
officers of the court, statements of attorneys to the court are virtually made under oath). And
finally, in his deposition, the City’s Chief Financial Officer indicated that the Project’s general
manager first suggested hiring TMG, but that the decision to hire TMG was made by the City’s
“legal counsel, [the] City manager,” the CFO, and others. ECF 80-1 at 34:13-24; 38:6-19. Based
on this evidence, the Court concludes that the City has met its burden of establishing that it hired
TMG in anticipation of litigation.
The Court is presently unable to conclude, however, which documents listed in the
privilege log are appropriately covered by the work-product doctrine. Although the Court has
concluded that Plaintiff met its burden of establishing that it hired TMG in anticipation of
litigation, it does not automatically follow that every document related to TMG’s work, or every
email in which a TMG official was involved, falls within the work-product protection. See Chopra
v. Townsend, No. 07-cv-02447-MSK-MEH, 2008 WL 5428006, at *3 (D. Colo. Dec. 30, 2008)
(“[T]he work-product doctrine is neither absolute nor comprehensive as to all communications
between an attorney and his or her client.”). Indeed, the purpose of the work-product doctrine is
to protect an attorney’s “mental impressions, conclusions, opinions, or legal theories.” Fed. R.
Civ. P. 26(b)(3)(A). The TMG Privilege Log is 32 pages long and consists of 699 entries, the
majority of which assert the work-product privilege. See ECF 32. It is not in the interest of judicial
economy or efficiency to parse through the TMG Privilege Log and make a ruling as to each
document for which the privilege is asserted; nor could the Court meaningfully undertake such a
review, given the lack of specific description of the documents set forth in the privilege logs. See
generally ECF 83. Nevertheless, due to the Court’s below conclusion concerning a waiver of the
privilege, the Court need not undertake such an extensive review of these hundreds of documents.
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B. Waiver of the Privilege
The protections provided by the work-product doctrine may be waived. In re Qwest
Commc’ns Int’l Inc., 450 F.3d 1179, 1186 (10th Cir. 2006). A waiver may be express, i.e., a party
may affirmatively consent to disclosure of the information. See, e.g., Grace United Methodist
Church v. City of Cheyenne, 451 F.3d 643, 668 (10th Cir. 2006) (“The work-product privilege may
be waived by the voluntary release of materials otherwise protected by it.”) (citation and quotation
omitted). Waiver may also be implied. Martensen, 301 F.R.D. at 581. The burden of proving
waiver rests upon the party seeking to overcome the privilege. Aull v. Cavalcade Pension Plan,
185 F.R.D. 618, 624 (D. Colo. 1998).
Open asserts that any invocation of the work-product privilege has been waived by the City
because Open received a copy of the final report prepared by TMG and including Open in the
assessment process. ECF 43 at 13. Open maintains that “[t]he City cannot selectively waive
privilege over the assessment and final report and assert privilege over parts of the process and
materials that went into the report.” Id. In response, Plaintiff argues that it does not claim any
privilege over the actual report that Open received from TMG, such that Open’s argument is
without merit. ECF 58 at 12-13. In addition, Plaintiff asserts that Open has not demonstrated that
any information or documents for which Plaintiff is asserting a privilege have been disclosed to
Open. Id. at 13.9 Open does not respond to this argument in its Reply. See ECF 63.
9 Plaintiff also argues that “Open has not even attempted to meet its burden of showing that it ‘has
substantial need for the materials to prepare its case and cannot, without undue hardship, obtain
their substantial equivalent by other means.’” ECF 58 at 13 (quoting Fed. R. Civ. P.
26(b)(3)(A)(ii)). This standard applies where a court concludes that the work-product doctrine
applies, but nevertheless concludes that disclosure is warranted. Plaintiff has cited no authority
demonstrating that this standard also applies to demonstrating waiver of the privilege. See
generally id. Accordingly, the Court does not address this argument.
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Insofar as Plaintiff asserts that Open’s argument must fail because it has “not shown that
any information and documents over which the City asserts the work product immunity over was
included and disclosed to Open,” ECF 58 at 13, the Court is respectfully not persuaded by this
argument. It is unclear how Open could reasonably demonstrate that the documents for which
Plaintiff has asserted a privilege, and thus has not disclosed, contain the same information in
documents that were disclosed to Open.
“Once documents are voluntarily provided to an adversary, the qualified work product
immunity is lost as to those items.” Gottlieb v. Wiles, 143 F.R.D. 241, 250 (D. Colo. 1992); see
also United States v. Ary, 518 F.3d 775, 783 (10th Cir. 2008) (“Courts will imply waiver when a
party claiming the protection has voluntarily disclosed work product to a party not covered by the
work-product doctrine.”).10 “The law is unclear, however, as to whether the submission of a work
product document to an adverse party also waives the work product protection for the underlying
notes and memoranda dealing with the same subject matter.” Gottlieb, 143 F.R.D. at 250. A court
in this District has explained that the subject-matter waiver rule for the work-product doctrine is
limited, as the purposes of the work-product privilege “are not inconsistent with selective
disclosure—even in some circumstances to an adversary.” In re Qwest Commc’ns Int’l, Inc. Sec.
Litig., No. 01-cv-01451-REB-CBS, 2005 WL 7987529, at *3 (D. Colo. Aug. 15, 2005); see also
Chaney v. Indus. Rubber, Inc., No. CIV-05-809-C, 2006 WL 8436321, at *3 (W.D. Okla. Jan. 27,
2006) (“The work product doctrine is based on the need of lawyers to ‘work with a certain degree
10 Plaintiff cites In re Sealed Case, 676 F.2d 793, 802-10 (D.D.C. 1982), for the proposition that
“the work product immunity is not automatically waived by any disclosure.” ECF 58 at 13. But
that case, and the one upon which it relies, concerned disclosure to third parties, not to adversaries.
See In re Sealed Case, 676 F.2d 793, 809 (D.C. Cir. 1982); United States v. Am. Tel. & Tel. Co.,
642 F.2d 1285, 1299 (D.C. Cir. 1980) (“[D]isclosure to a third party does not waive the privilege
unless such disclosure, under the circumstances, is inconsistent with the maintenance of secrecy
from the disclosing party’s adversary.”) (quotation omitted).
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of privacy, free from unnecessary intrusion by opposing parties and their counsel’ and to prevent
interfering with effective advocacy.”). The Qwest Communications court concluded that the
subject-matter waiver rule does not apply to opinion work product, i.e., “pure mental impressions
severable from the underlying data and arguably not subject to subject matter waiver.” Qwest
Commc’ns, 2005 WL 7987529, at *3 (quoting In re Martin Marietta Corp., 856 F.2d 619, 626 (4th
Cir. 1988)). “Fact” work product, however, may be subject to the subject-matter waiver rule. Id.
at *4; see also Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. Intrawest ULC, No. 13-cv-00079-
PAB-KMT, 2015 WL 5047635, at *2 (D. Colo. Aug. 27, 2015) (explaining that fact work product
consists of “materials compiled by the attorney and agents of the attorney which do not contain
the mental impressions, conclusions or opinions of the attorney”).
The Court is persuaded by this analysis. Insofar as Open seeks “notes, drafts,
communications, and other papers related to TMG’s assessment and report to the parties in early
2021” that contain mental impressions, conclusions, or opinions of TMG officials, the submission
of the final report to Open does not operate to waive the work-product privilege with respect to
those documents. See Qwest Commc’ns, 2005 WL 7987529, at *4.11 The Court reaches the
opposite conclusion, however, with respect to any fact work product contained in the final report
or any other documents that Plaintiff voluntarily disclosed to Open. There is no indication in the
record that the final report was submitted to Open inadvertently. See Chaney v. Indus. Rubber,
Inc., No. CIV-05-809-C, 2006 WL 8436321, at *3 (W.D. Okla. Jan. 27, 2006) (finding a waiver
of the work-product privilege where disclosure was made voluntary to the plaintiff, the defendant’s
adversary); Khandji v. Keystone Resorts Mgmt., Inc., 140 F.R.D. 697, 699 (D. Colo. 1992)
11 Of course, TMG mental impressions contained in the final report would not be subject to work-
product privilege, as Plaintiff has disclaimed any assertion of that privilege in this context.
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(“Because the work product doctrine is intended to protect the integrity of the adversary system, a
voluntary disclosure of information to an adversary constitutes a waiver of the privilege,” even
“despite any agreement between the parties to keep the information confidential.”); cf. Johnson v.
Gmeinder, 191 F.R.D. 638, 645 (D. Kan. 2000) (finding disclosure of fact work product of
testifying expert constituted a waiver of the work-product privilege).
Accordingly, the Court concludes that the City waived any fact work product privilege
asserted over the notes, drafts, or other papers related to TMG’s independent assessment in early
2021, but only insofar as these documents contain the fact work product covering the same subject
matter as the facts contained in the final report or any other documents voluntarily submitted to
Open. The Court will grant the Motion to Compel insofar as it seeks such documents and will
order the City to produce such documents to Open on or before August 29, 2022. Should any of
the documents contain both fact work product and opinion work product, the City shall produce
such documents to Defendant with appropriate redactions and shall also provide Open with an
updated privilege log that identifies, with sufficient detail, the redacted information being
withheld. In so doing, the City shall be mindful of the directives in this Court’s order and shall
only withhold those documents that truly constitute opinion work product—containing an
attorney’s mental impressions, theories, or opinions.
Should the Parties continue to have discovery disputes over Plaintiff’s anticipated
disclosures, the Parties shall engage in a robust meet and confer prior to seeking a discovery
dispute conference with the Court.
II. Attorney-Client Privilege
Next, Open seeks a court order compelling documents which the City asserts is protected
by the attorney-client privilege. Because the court’s jurisdiction arises under 28 U.S.C. § 1332,
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see ECF 1, Colorado substantive law governs the scope and application of the attorney-client
privilege. White v. Am. Airlines, Inc., 915 F.2d 1414, 1424 (10th Cir. 1990) (“In a civil action
based upon a state cause of action, state law controls the determination of privileges.”). “The
attorney-client privilege shields from disclosure communications between an attorney and a client
relating to legal advice.” State Farm Fire & Cas. Co. v. Griggs, 419 P.3d 572, 575 (Colo. 2018).
“The privilege extends only to matters communicated by or to the client in the course of gaining
counsel, advice, or direction with respect to the client’s rights or obligations.” Black v. Sw. Water
Conservation Dist., 74 P.3d 462, 467 (Colo. App. 2003). “The attorney-client privilege applies to
corporations and public entities, as an entity cannot speak directly with a lawyer and instead must
go through its agents.” Affiniti Colo., LLC v. Kissinger & Fellman, P.C., 461 P.3d 606, 614 (Colo.
App. 2019). Colorado has codified the attorney-client privilege in pertinent part as follows:
An attorney shall not be examined without the consent of his client as to any
communication made by the client to him or his advice given thereon in the course
of professional employment.
Colo. Rev. Stat. § 13-90-107(b). The law is clear that the attorney-client privilege inures to the
benefit and protection of the client, and to allow a client to gain counsel, advice, or direction with
respect to the client’s rights and obligations confidentially. See Mt. States Tel. & Tel. Co. v.
DiFede, 780 P.2d 533, 541 (Colo. 1989). The party seeking to invoke the attorney-client privilege
bears the burden of establishing that it attaches. Horton v. United States, 204 F.R.D. 670, 673 (D.
Colo. 2002).
The attorney-client privilege is not absolute; it may be waived either expressly or
impliedly. See Griggs, 419 P.3d at 575 (“[A] client impliedly waives the [attorney-client] privilege
when he or she (1) discloses privileged communications to a third party or (2) asserts a claim or
defense focusing on advice given by the attorney, thereby placing the allegedly privileged
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communications at issue.”). The burden of proving such waiver rests upon the party seeking to
overcome the privilege. DiFede, 780 P.2d at 542.
Open asserts that the attorney-client privilege cannot protect the subject documents from
disclosure because “neither TMG nor its consultants were attorneys, and they were not clients of
the City’s litigation counsel or of the City’s in-house counsel.” ECF 43 at 11. In response, the
City asserts that TMG was the functional equivalent of a City employee and for this reason,
communications between the City and TMG representatives are protected under the attorney-client
privilege. ECF 58 at 10-11.
“While courts often apply the attorney-client privilege to representatives of organizations,
it is sometimes unclear which agents of the organization are clients for the purposes of attorney-
client privilege.” Hedquist v. Patterson, 215 F. Supp. 3d 1237, 1244 (D. Wyo. 2016). Under the
“functional equivalent” test, the attorney-client privilege may be extended “to third parties acting
at the behest of a client or their attorney.” A.H. ex rel. Hadjih v. Evenflo Co., No. 10-cv-02435-
RBJ-KMT, 2012 WL 1957302, at *3 (D. Colo. May 31, 2012). In determining whether a non-
employee is the functional equivalent of an employee, one court in this District has adopted a test
set forth by the Southern District of New York, wherein the court considers (1) “whether the
consultant had primary responsibility for a key corporate job,” (2) “whether there was a continuous
and close working relationship between the consultant and the [City’s] principals on matters
critical to the [City’s] position in litigation,” and (3) “whether the consultant is likely to possess
information possessed by no one else at the [City].” Export-Import Bank v. Asia Pulp & Paper
Co., Ltd., 232 F.R.D. 103, 113 (S.D.N.Y. 2005); see also Evenflo, 2012 WL 1957302, at *3. In
addition, the Colorado Supreme Court has articulated a four-part test to determine whether a
government entity’s independent contractor may be deemed the equivalent of an employee for
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purposes of the attorney-client privilege, which the Court finds analogous here. See All. Const.
Sols., Inc. v. Dep’t of Corr., 54 P.3d 861, 862-63 (Colo. 2002). In those circumstances, the court
looks to whether (1) the agent has a significant relationship both to the government entity and to
the transaction that is the subject of the government’s need for legal services; (2) the
communication was made for the purpose of seeking or providing legal assistance; (3) the subject
matter of the communication was within the scope of the duties provided to the entity by the agent;
and (4) the communication was treated as confidential and only disseminated to those with a
specific need to know its contents. Id.12 The party asserting the attorney-client privilege as to
non-employees “must make a detailed factual showing that the non-employee is the functional
equivalent of an employee and that the information sought from the non-employee would be
subject to the attorney-client privilege if [it] were an employee of the party.” Horton, 204 F.R.D.
at 672.
Based on the Court’s review of the TMG Privilege Log, it appears that 68 of the 699 entries
expressly assert attorney-client privilege. See ECF 83. In support of its argument that these
documents are privileged, the City asserts that “TMG’s representatives worked closely and
continuously with City employees, including the City’s executive team and attorneys, on matters
critical to the project and the City’s investigation, including establishing the legal claims and
concerns brought by the City in this action.” ECF 58 at 11. The City attorney states in his
declaration that communications between TMG representatives and City employees, including the
City’s counsel, “were treated as confidential and . . . were made for the purpose of rendering legal
and deliberative assistance to the City concerning the project.” ECF 58-1 at ¶ 7. Open maintains
12 The City suggests that the relevant standard is a combination of the tests set forth in Export-
Import Bank and Alliance Construction but does not explain the basis of this assertion. See ECF
58 at 10-11.
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that the City’s assertions are insufficient to constitute a “detailed factual showing” that TMG
employees functioned as City employees because (1) the City hasn’t identified which particular
TMG employees functioned as City employees; (2) the City has provided no legal support for the
proposition that an entire corporation can be treated as the functional equivalent of a City
employee; and (3) the agreements between TMG and the City demonstrate that TMG was to
remain independent of the City. ECF 63 at 5-6.
Generally speaking, the Court finds that it has sufficient information to conclude that TMG
generally had a significant relationship to the City and to the Project, so as to establish the first
prong of the Alliance Construction test. All. Const., 54 P.3d at 862-63. Indeed, the Court has
already determined that Plaintiff has established that TMG was hired in anticipation of litigation
to assess the status of the Project. However, the Court also agrees with Open that the City has not
made a detailed factual showing that the subject communications were made for the purpose of
seeking or providing legal assistance or that the subject matter of the communications were within
the scope of the duties provided by TMG to the City. See id.
First, the Court agrees with Open that Plaintiff has not established that, as a matter of law,
all TMG employees or representatives identified in the TMG Privilege Log may be rendered the
“functional equivalent” of a City employee by virtue of TMG’s connection to the Project. The
conclusory statement that unidentified “TMG individuals” worked with the City’s counsel closely
and that their communications were “for the purpose of rendering legal . . . assistance,” see ECF
58-1 at ¶ 7; ECF 58 at 2, is insufficient to clearly establish that the documents which the City seeks
to protect from disclosure are subject to the attorney-client privilege. In addition, the TMG
Privilege Log does not expressly identify which senders or recipients of the withheld
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communications are attorneys. See ECF 83.13 As to the email communications that are not plainly
communications to or from an attorney, the City states that these emails reflect, for example,
“information gathered or prepared at the direction of counsel.” ECF 83 at 19, PRIV000426. While
courts have held that the attorney-client privilege may extend to communications made within a
corporation “if those communications are made for the purpose of securing legal advice,” Williams
v. Sprint/United Mgmt. Co., 238 F.R.D. 633, 638 (D. Kan. 2006), “[f]or a communication between
nonattorney employees to be held privileged, it must be ‘apparent that that communication from
one employee to another was for the purpose of the second employee transmitting the information
to counsel for advice’ or the document itself must ‘reflect the requests and directions of counsel.’”
United States v. Badger, No. 2:10-cv-935-RJS-PMW, 2013 WL 3937023, at *3 (D. Utah July 30,
2013) (quoting Adams v. Gateway, Inc., No. 2:02-cv-106-TS, 2003 WL 23787856, at *11 (D. Utah
Dec. 30, 2003)). Here, the Court cannot determine whether such communications clearly have an
underlying purpose of seeking or providing legal advice, as the Court has not been provided with
copies of the subject communications.
Finally, the City does not identify each recipient of the communication and their role on
the Project, if any, so as to demonstrate that only those who needed to know of the
communication’s contents were copied on the email. See All. Const. Sols., Inc. v. Dep’t of Corr.,
54 P.3d 861, 862-63 While these individuals may be listed in one of the numerous exhibits attached
13 In its Notice of Supplemental Submission of Sortable/Filterable Logs, Open identifies five
lawyers for the city named in the TMG Privilege Log. See ECF 86 at 1 n.1. The Court has
identified over a dozen email communications listed in the TMG Privilege Log that do not appear
to have been sent by or to an attorney: PRIV000040; PRIV000069; PRIV000080; PRIV000125;
PRIV000137; PRIV000144; PRIV000181; PRIV000186; PRIV000260; PRIV000426;
PRIV000447; PRIV000527; PRIV000528; PRIV000596; PRIV000650; PRIV000659;
PRIV000663; PRIV000669; PRIV000687. See ECF 83.
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to the numerous docket entries in this case, it is not this Court’s duty to comb through the docket
to ascertain the role of TMG or City employees.
Moreover, while the TMG Privilege Log provides some limited detail with respect to some
purportedly protected communications, see, e.g., ECF 83 at 2, PRIV000040 (describing an
“[e]mail chain forwarding & commenting upon legal advice provided by John Duval (CAO)
regarding evaluation of Open’s platform”), it largely provides insufficient detail for the Court to
determine whether the subject communications were made for the purpose of providing or seeking
legal advice and were only disseminated to the individuals who needed to know their contents.
For example, one email for which Plaintiff asserts attorney-client privilege is described as an
“[e]mail chain with attachment(s) containing redacted content facilitating the rendition of legal
advice regarding evaluation of Open’s software platform.” ECF 83 at 2, PRIV000042. While at
least one person copied on the email appears to be an attorney, the City does not specify whether
the sender or direct recipients are attorneys, nor is it clear what an email “facilitating the rendition
of legal advice” entails, or why such an email constitutes “matters communicated by or to the client
in the course of gaining . . . advice[] or direction.” Black, 74 P.3d at 467; cf. Iowa Pac. Holdings,
LLC v. Nat’l R.R. Passenger Corp., No. 09-cv-02977-REB-KLM, 2011 WL 1527599, at *5 (D.
Colo. Apr. 21, 2011) (“[W]here an attorney is merely carbon copied on an email, and there is no
further proof that an attorney was included for the purpose of seeking legal advice, an in camera
inspection is necessary.”).
Accordingly, the Court is without sufficient information to determine whether the attorney-
client privilege applies to the requested documents.14 Furthermore, the Court simply does not have
14 Because the Court cannot determine whether the attorney-client privilege applies, it declines to
address Open’s argument that the privilege has been waived. See ECF 43 at 13.
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the capacity to individually review each of the communications over which the City asserts the
privilege. See Ponca Tribe of Indians of Okla. v. Cont’l Carbon Co., No. CIV-05-445-C, 2008
WL 4372802, at *2 (W.D. Okla. Sept. 18, 2008) (“Although in camera inspection may be
appropriate in certain situations, it is generally not the Court’s responsibility to wade through
reams of documents to determine whether the attorney-client privilege applies.”). Accordingly,
the Court will deny the Motion to Compel without prejudice, only with respect to the City’s
assertion of the attorney-client privilege. On or before September 12, 2022, the City shall provide
to Open a more detailed privilege log that specifies not only the recipients and senders of each
communication, but whether “those individuals are attorneys” as well as “a general description of
the content of the document and whether it solicits legal advice, gives legal advice or contains
notes or comments of counsel reflecting legal advice.” CMC Marine Inc. v. Tokio Marine Am.
Ins. Co., No. CIV-16-957-W, 2017 WL 11144626, at *6 (W.D. Okla. June 29, 2017). In addition,
Plaintiff shall explain how each communication was only sent to those who needed to know of its
contents. The Court strongly advises the City to carefully consider each document over which it
asserts the attorney-client privilege in this matter.
After Plaintiff serves the updated privilege log, the Parties are expected to meaningfully
meet and confer about Plaintiff’s assertion of attorney-client privilege over each document. The
Parties shall then submit a Joint Status Report, on or before September 26, 2022, informing the
Court of the results of their meet and confer and whether any discovery disputes remain. If
discovery disputes remain, the Parties shall inform the Court of the number of remaining disputed
documents. If, after the Parties robustly meet and confer, they still have disagreements over
Plaintiff’s assertion of the attorney-client privilege, the Court will set deadlines for additional
submissions or set any hearings as the Court sees fit.
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CONCLUSION
For the reasons set forth herein, IT IS ORDERED that:
(1) Open’s Motion to Compel Production of TMG Documents [filed May 24, 2022;
ECF 44] is granted in part and denied in part as set forth in this Order;
(2) On or before August 31, 2022, Plaintiff shall produce to Open all documents which
contain factual work product with the same subject matter of the final report;
(3) On or before September 14, 2022, Plaintiff shall submit an updated privilege log
to Defendant;
(4) On or before September 28, 2022, the Parties shall thoroughly meet and confer
about Plaintiff’s assertion of attorney-client privilege over the subject documents
and the Parties shall file a Joint Status Report indicating the results of their meet
and confer, as well as the number of remaining disputed documents, if any;
(5) If, after a robust meet and confer, the Parties have not reached an agreement as to
Plaintiff’s assertion of attorney-client privilege, the Court will set additional
deadlines for submissions or set any hearings as the Court sees fit.
Entered and dated at Denver, Colorado, this 16th day of August, 2022.
BY THE COURT:
_________________________
Michael E. Hegarty
United States Magistrate Judge
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