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HomeMy WebLinkAbout2021-cv-2063-CNS-MEH - City Of Fort Collins V. Open International, Et Al. - 098 - Order On Mot QuashIN 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 QUASH Magistrate Judge Michael E. Hegarty. Before the Court is Plaintiff City of Fort Collins’s (“Plaintiff” or the “City”) Motion to Quash Defendants’ Subpoena on Vanir Construction Management, Inc. and for Protective Order (the “Motion” or “Motion to Quash”). ECF 45. The Motion is fully briefed. For the following reasons, the Motion is denied without prejudice. BACKGROUND This case arises out of a contractual dispute between the City and Defendants Open International, LLC and Open Investments, LLC (collectively, “Open”).1 See generally ECF 6.2 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. Case 1:21-cv-02063-CNS-MEH Document 98 Filed 08/16/22 USDC Colorado Page 1 of 19 2 Specifically, in 2018, the City and 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. “During the pendency of” the Project, the City retained consultants—Andrew Amato and Michelle Frey— from Vanir Construction Management, Inc. (“Vanir”) “as Project Managers for the City.” ECF 45 at 2. The City asserts that these consultants “were solely dedicated to work for the City as the primary manager of the project,” actively “represented the City’s interests,” were involved in confidential communications, and performed acts on behalf of the City “that other City employees could not perform.” Id. 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. Relevant here, in Defendants’ First Request of Discovery Requests, Open requested that Plaintiff produce “all documents concerning Vanir Construction’s role with the Project, including the files, memoranda, reports, emails, and other documents of Andrew Amato and Michelle Frey related to the Project, as well as other documents concerning Vanir Construction’s assessment of and participation in the Project.” ECF 45-2 at 15. The City objected to the request to the extent it sought information subject to the attorney-client or work product privilege, but “produce[d] non-privileged, responsive documents from the relevant timeframe to the extent they [were] within the City’s possession, custody, or control after a reasonable search.” Id. at 15-16. The City represents that the Parties continued to confer about Case 1:21-cv-02063-CNS-MEH Document 98 Filed 08/16/22 USDC Colorado Page 2 of 19 3 the subject documents and that Open “agreed to hold off on any privilege dispute related to Vanir until the parties produced privilege logs.”3 ECF 45 at 3. According to Plaintiff, Open then “issued a Subpoena to Vanir . . . identifying at least seven requests to Vanir that duplicate the request made to the City, including information subject to the attorney-client privilege and the work product doctrine.” Id. at 4. The City represents that it “offered to review Vanir’s production for privileged material prior to production to Open,” but that Open declined this offer. Id. Accordingly, the City filed the instant Motion to Quash. In its Response to the Motion to Quash, Open argues that neither the attorney-client privilege nor the work-product doctrine apply to protect the requested documents from disclosure. ECF 54 at 5-12. After Open replied, see ECF 67, the court ordered the City to submit a privilege log covering the documents at issue in the instant dispute. See ECF 73. The City submitted a privilege log (the “Vanir Privilege Log”) pursuant to the court’s order. See ECF 81. 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 3 The Court notes that the Parties agreed to not produce privilege logs until they were done with disclosures. Case 1:21-cv-02063-CNS-MEH Document 98 Filed 08/16/22 USDC Colorado Page 3 of 19 4 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. In addition, Rule 26(b)(2) governs limitations on the extent of discovery. Under this Rule, the court, “[o]n motion or on its own, . . . must limit the frequency or extent of discovery otherwise allowed” if it determines that “the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive.” Fed. R. Civ. P. 26(b)(2)(C)(i). “This rule incorporates the Rule 26(b)(1) proportionality standard, which the court should always consider in resolving discovery disputes.” Atl. Specialty Ins. Co. v. Midwest Crane Repair, LLC, No. 20-4013-JAR-ADM, 2020 WL 5118067, at *5 (D. Kan. Aug. 31, 2020). The Advisory Committee Notes to the 2015 Amendments make clear that the party seeking discovery does not bear the burden of addressing all proportionality considerations. Advisory Comm. Notes to Fed. R. Civ. P. 26(b)(1). “When the discovery sought appears relevant, the party resisting the discovery has the burden to establish the lack of relevancy by demonstrating that the requested discovery (1) does not come within the scope of relevance as defined under Fed. R. Civ. P. 26(b)(1), or (2) is of such marginal relevance that the potential harm occasioned by discovery would outweigh the ordinary presumption in favor of broad disclosure.” Simpson v. Univ. of Colo., 220 F.R.D. 354, 350 (D. Colo. 2004) (citations omitted). Conversely, “when a request for discovery is overly broad on its face or when relevancy is not readily apparent, the party seeking the discovery has the burden to show the relevancy of the request.” Cunningham v. Standard Fire Ins. Co., No. 07-cv-02538-REB-KLM, 2008 WL 2668301, at *1 (D. Colo. July 1, 2008). The Case 1:21-cv-02063-CNS-MEH Document 98 Filed 08/16/22 USDC Colorado Page 4 of 19 5 court may also consider the fact that the discovery sought is directed at a nonparty, and in such case, the ordinary burden imposed under Rule 26 is generally greater. Echostar Commc’ns Corp. v. News Corp., 180 F.R.D. 391, 394 (D. Colo. 1998). II. Rule 45 A subpoena served on a third party pursuant to Rule 45 of the Federal Rules of Civil Procedure is considered discovery within the meaning of the Federal Rules. Rice v. United States, 164 F.R.D. 556, 556-57 (N.D. Okla. 1995). Accordingly, a Rule 45 subpoena must satisfy the same standards that govern discovery between the parties, i.e., to be enforceable, it must seek information that is relevant to a party’s claims or defenses and that is proportional to the needs of the case. Fed. R. Civ. P. 26(b)(1). On a timely motion, the court must quash or modify a subpoena that, inter alia: (1) fails to allow a reasonable time to comply; (2) requires the disclosure of privileged or other protected matter, if no exception or waiver applies; (3) subjects a person to undue burden; or (4) requires the disclosure of a trade secret or other confidential research, development, or commercial information. Fed. R. Civ. P. 45(d)(3)(A), (d)(3)(B). “As a general rule, a party has no standing to quash a subpoena served on a third party, except as to claims of privilege or upon a showing that a privacy interest is implicated.” Mona Vie, Inc. v. Amway Corp., No. 08-cv-02464-WDM-WLM, 2009 WL 524938, at *3 (D. Colo. Mar. 2, 2009) (citing Windsor v. Martindale, 175 F.R.D. 665, 668 (D. Colo. 1997)). The party seeking to quash a subpoena bears the burden of demonstrating that the documents requested are privileged. Crocs, Inc. v. Effervescent, Inc., No. 06-cv-00605-PAB-KMT, 2016 WL 9584443, at *2 (D. Colo. Dec. 12, 2016). ANALYSIS Case 1:21-cv-02063-CNS-MEH Document 98 Filed 08/16/22 USDC Colorado Page 5 of 19 6 Plaintiff seeks to quash the Subpoena served on Vanir, arguing that the Subpoena seeks documents protected by the attorney-client privilege and the work-product doctrine. ECF 45 at 6- 10.4 Specifically, the City asserts that the Subpoena seeks documents containing communications between City attorneys and Vanir employees, and because Vanir employees are the functional equivalent of City employees in the context of the Project, the documents are protected by the attorney-client privilege. Id. at 6. Moreover, the City maintains that the Subpoena requests documents prepared in anticipation of litigation, thus invoking the application of the work-product doctrine. Id. at 9. In response, Open counters that the City has failed to meet its burden of establishing that either privilege applies. ECF 54 at 5-12. The Court addresses the Parties’ arguments below. I. Work-Product Doctrine 4 The City also asserts a one-sentence argument that the requested documents “are also subject to the deliberative process privilege. ” See ECF 45 at 8; see also ECF 81 (asserting the deliberative- process privilege for 31 documents listed in the Vanir Privilege Log), the City offers no argument aside from the one sentence stated in its Motion to Quash. Undeveloped arguments lacking in legal analysis or supporting authority are deemed waived. LNV Corp. v. Hook, No. 14-cv-00955- RM-KHR, 2018 WL 10245906, at *2 (D. Colo. June 21, 2018); see also Bronson v. Swensen, 500 F.3d 1099, 1104 (10th Cir. 2007) (noting that a court may decline to consider arguments inadequately presented); Est. of Papadakos v. Norton, 663 F. App’x 651, 657 n.4 (10th Cir. 2016) (a “single sentence” is insufficient to adequately brief an issue). Accordingly, by failing to adequately brief the issue, the City has waived any argument that the deliberative-process privilege protects the subject documents. The Court does not address this argument further. In addition, the City argues that the Subpoena should be quashed because the Subpoena would result in an undue burden on Vanir. ECF 45 at 10-12. “Objections unrelated to a claim of privilege or privacy interests are not proper bases upon which a party may quash a subpoena.” Dallas Buyers Club, LLC v. John Does 1-20, No. 14-cv-02481-WYD-MEH, 2014 WL 5326460, at *2 (D. Colo. Oct. 17, 2014). “Thus, even where a party has standing to quash a subpoena based on privilege or a personal right, he or she lacks standing to object on the basis of undue burden.” Id. If Vanir believed that the Subpoena requests would amount to an undue burden, it could have filed a motion to quash, yet it did not do so. Because the City does not have standing to raise this argument, the Court declines to substantively address it. Case 1:21-cv-02063-CNS-MEH Document 98 Filed 08/16/22 USDC Colorado Page 6 of 19 7 The Court addresses the City’s second argument first—that the Subpoena seeks documents protected by the work-product privilege. See ECF 45 at 9. “[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). “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). 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.” Id. at 173 (quoting 8 Charles Alan Wright et al., Federal Practice & Procedure § 2024). Plaintiff argues that Vanir’s “work was at the direction and supervision of the City’s counsel, including Cyril Vidergar, regarding the City’s risk factors under the project and potential Case 1:21-cv-02063-CNS-MEH Document 98 Filed 08/16/22 USDC Colorado Page 7 of 19 8 legal claims,” and for this reason, the work-product privilege applies to protect certain documents from disclosure. ECF 45 at 9. However, the applicable test is not whether the documents were prepared at the direction of counsel, but whether the documents were prepared in anticipation of litigation. Fed. R. Civ. P. 26(b)(3)(A). While the fact that documents were created at the direction of counsel may demonstrate that those documents were prepared in anticipation of litigation, see Est. of Taylor v. Fanuc Am. Corp., No. 20-1351-KHV-GEB, 2022 WL 2791168, at *5 (D. Kan. July 15, 2022), the Court is not persuaded that a directive from counsel, alone, establishes the underlying purpose of the subject documents. Moreover, Plaintiff’s assertion that Vanir’s work concerned “the City’s risk factors under the project and potential legal claims” is insufficiently specific and fails to demonstrate that the subject documents were prepared in anticipation of litigation. To demonstrate that documents are protected under the work-product doctrine, the party asserting the privilege must demonstrate that “the document was prepared or obtained in contemplation of specific litigation”; “[t]o make this showing, [the party] must generally show that litigation was ‘commenced, threatened or contemplated’ at the time the relevant documents and communications were made.” Veroblue Farms USA, Inc. v. Wulf, No. 1:21-mc-00016-CMA, 2021 WL 1979047, at *3 (D. Colo. May 18, 2021) (quoting Weitzman v. Blazing Pedals, Inc., 151 F.R.D. 125, 126 (D. Colo. 1993) and Reiss v. Brit. Gen. Ins. Co., 9 F.R.D. 610, 611 (S.D.N.Y. 1949)). Thus, the fact that Vanir prepared documents concerning litigation risk factors or legal claims generally is insufficient to make the requisite showing. Moreover, the City cites no evidence supporting its assertion that the subject documents were prepared in anticipation of litigation. See ECF 43 at 9-10; Martin, 150 F.R.D. at 172-73. Having presented no basis for its invocation of the privilege, the Court concludes that the City has failed to meet its burden of demonstrating the application of the work-product doctrine. See Case 1:21-cv-02063-CNS-MEH Document 98 Filed 08/16/22 USDC Colorado Page 8 of 19 9 McCall v. Skyland Grain, LLC, No. 08-cv-01128-PAB-BNB, 2009 WL 1203304, at *8 (D. Colo. Apr. 29, 2009) (granting motion to compel over privilege assertions where there was “no evidence that the documents over which the defendants assert work product immunity . . . were created . . . in anticipation of litigation or for trial”); see also Metro Wastewater, 142 F.R.D. at 477 (noting that plaintiff bears the burden of establishing that documents are protected by the work-product doctrine). Even setting aside the lack of showing by the City, the Court notes that some of the documents over which the City appears to assert the work-product privilege were created before— according to the City’s counsel in a declaration made under penalty of perjury—the City began anticipating litigation. See, e.g., ECF 81 at 1, PRIV000723;5 id. at 6, PRIV000846 (asserting work-product privilege over a “[m]emorandum regarding evaluation of Open’s software platform and integration” created on August 18, 2020); see also ECF 58-1 at ¶ 5. The Court concludes that the City has not met its burden of demonstrating that the work- product privilege applies to the documents identified as protected by that doctrine in the Vanir Privilege Log. Accordingly, the Court will not quash any portion of the Subpoena on the basis of this privilege, and the Motion to Quash is denied insofar as it seeks to quash the Subpoena on the basis of the work-product doctrine. II. Attorney-Client Privilege In the alternative, the City argues that the Subpoena should be quashed because it seeks documents protected by the attorney-client privilege. ECF 45 at 6. According to the City, “Vanir individuals are the functional equivalent of the City’s employees,”—specifically, Dr. Michelle 5 The Vanir Privilege Log does not provide a specific privilege basis for this document, but instead states only that it is an “[a]ttachment to privileged parent.” See ECF 81 at 1. Assuming that it was an attachment to the most immediately preceding email listed, which asserts attorney-client privilege, the deliberative-process privilege, and the work-product privilege, the Court assumes that Plaintiff asserts, at least in part, the work-product privilege over this document. Case 1:21-cv-02063-CNS-MEH Document 98 Filed 08/16/22 USDC Colorado Page 9 of 19 10 Frey and Andrew Amato, see id. at 2—and thus, the privilege attaches to communications between City employees and these individuals. Id. at 6. Because the court’s jurisdiction arises under 28 U.S.C. § 1332, 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). Case 1:21-cv-02063-CNS-MEH Document 98 Filed 08/16/22 USDC Colorado Page 10 of 19 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 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 Case 1:21-cv-02063-CNS-MEH Document 98 Filed 08/16/22 USDC Colorado Page 11 of 19 12 specific need to know its contents. Id.6 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. Plaintiff argues that Vanir began working with the City in December 2019 to provide management support for the Project. ECF 45 at 7. According to Plaintiff, “Vanir individuals”— specifically, Mr. Amato and Dr. Frey—made up “the substantial portion” of the City’s project- management team. Id. Plaintiff asserts that Dr. Frey and Mr. Amato “worked intimately and continuously with the City on matters critical to the project and the City’s investigation, including assessing and allocating proper resources to support the project, administering the City’s contract with Defendants for project and production support, reporting to the City, and representing the City initiatives.” Id. Finally, the City represents that these Vanir employees communicated confidentially with City employees and attorneys and “assisted in the rendering of legal advice to the City’s counsel concerning the Project.” Id.7 6 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. 7 In addition, in its Reply, the City asserts that it has “offered sufficient detailed facts to show that the two specific Vanir employees meet the functional equivalent test.” ECF 67 at 4-5. In support, the City attaches a number of exhibits that were not submitted with its Motion, including a declaration of Dr. Frey in which she details the amount of time she dedicated working for the City. See ECF 67-1. But the City did not raise these arguments or submit these supporting documents in its Motion, and there is no indication that such exhibits were not available to the City at the time it filed its Motion. For this reason, the Court will not consider this evidence in ruling on the Motion. See Stump v. Gates, 211 F.3d 527, 533 (10th Cir. 2000) (explaining that court “does not ordinarily review issues raised for the first time in a reply brief” because it “robs the [other side] of the opportunity to demonstrate that the record does not support [the party's] factual assertions and to present an analysis of the pertinent legal precedent that may compel a contrary result”); Case 1:21-cv-02063-CNS-MEH Document 98 Filed 08/16/22 USDC Colorado Page 12 of 19 13 In addition, the City has submitted a copy of the “Project Management Plan for the City of Fort Collins Oasis Project,” which sets forth Vanir’s role within the Project. See ECF 45-4. The Project Management Plan states that in December 2019, Vanir was retained to provide project management support, and prior to this time, “[t]he City had not had any such support provided to them through the project at this point.” ECF 45-4 at 4. It further lists specific deliverables that Vanir was to provide the City, including (1) creating, maintaining, and supporting a project management dashboard; (2) assessing and allocation resources to support the Project; (3) administering the City’s contract with Open; (4) reporting to management teams involved in the Project; (5) facilitating project activities, operations, and deliverables; and (6) representing the Project in support of other City initiatives. Id. at 4-5. While a close call, the Court concludes that the City has established that Vanir had a “significant relationship” with the City and the Project and thus has met its burden to satisfy the first prong of the Alliance Construction test. See All. Const., 54 P.3d at 862-63. Vanir filled a project-management role that did not exist prior to its retention—in other words, Dr. Frey and Mr. Amato undertook a key role in the Project. The Project Management Plan reflects that these individuals had decision-making authority and management authority over key aspects of Project management and represented the Project in other City contexts. ECF 45-4 at 4-5. Moreover, Dr. Frey and Mr. Amato reported to City management, see id. at 5, and were also “[s]upport[ed] by City employees, id. at 6, which suggests integration within the City’s Project structure.8 The Court United States v. Harrell, 642 F.3d 907, 918 (10th Cir. 2011) (“[A]rguments raised for the first time in a reply brief are generally deemed waived.”). 8 Open argues that the Project Management Plan is alone insufficient to “provide a plausible basis for privilege that would necessitate the time-intensive process of producing and challenging a privilege log.” ECF 54 at 7. The Court respectfully disagrees that the number of documents to be produced or challenged or the resources required to do so is relevant to the Court’s analysis. In Case 1:21-cv-02063-CNS-MEH Document 98 Filed 08/16/22 USDC Colorado Page 13 of 19 14 finds that the City has met its burden of establishing a significant relationship between itself and these Vanir employees. See Ryskamp ex rel. Boulder Growth & Income Fund v. Looney, No. 10- cv-00842-WJM-KLM, 2011 WL 3861437, at *5 (D. Colo. Sept. 1, 2011) (finding a significant relationship where outside managers were “very closely involved with the management and investment decisions” of a fund, had communicated with the fund’s counsel, and were “involved in decisions which [were] the subject of [the] litigation”); see also All. Constr., 54 P.3d at 870 (finding a significant relationship where independent contractor—the project manager for the project at issue in the underlying litigation—educated the defendant’s counsel on conditions of the project site, provided the defendant’s counsel with factual information, represented the defendant at meetings, among other things).9 Contrary to Open’s argument, see ECF 54 at 7-8, the fact that certain documents treated Vanir as a distinct entity from the City does not change this Court’s analysis. The Colorado Supreme Court has specifically answered the subject question—whether the attorney-client privilege applies to “ persons who, though not formally employed by the governmental entity, have any event, the Court is respectfully unpersuaded by Open’s argument, finding that this Project Management Plan sufficiently demonstrates Vanir’s connection to the Project. 9 Open emphatically argues that the City must make a “detailed factual showing” that the non- employee is the functional equivalent of a City employee. See ECF 54 at 2, 6, 7. The Court notes, however, that the line of cases establishing such a requirement apply federal common law to determine privilege, not Colorado law, see Horton, 204 F.R.D. at 672; Energy Capital Corp. v. United States, 45 Fed. Cl. 481, 492 (Fed. Cl. 2000), and Open has cited no case law establishing that Colorado courts require this undefined showing. Moreover, Open does not establish what it believes the “detailed factual showing” threshold to be, instead only arguing that the City has not met it. Other courts in this District have found a “significant relationship” under Alliance Construction between a non-employee and the client based on a showing less stringent than what Open advocates for here. See Bonanno v. Quizno’s Franchise Co., LLC, No. 06-cv-02358-WYD- KLM, 2008 WL 1801173, at *4 (D. Colo. Apr. 18, 2008) (finding a significant relationship based on the defendant’s representation that the non-employees were “agents of [the defendant] and act as salespeople for [the defendant]” and “were directly involved in the sale of franchises” for the defendant). Case 1:21-cv-02063-CNS-MEH Document 98 Filed 08/16/22 USDC Colorado Page 14 of 19 15 the kind of significant relationship with the entity that makes it appropriate to consider them functional employees for the purposes of the privilege”—in the affirmative. All. Constr., 54 P.3d at 867 (emphasis added). Indeed, the cases applying the attorney-client privilege to non-employees or outside contractors plainly acknowledge that even if the outside party is separate from the client, the outside party can still have a sufficiently significant relationship with the client to meet the first prong of the Alliance Construction test. See, e.g., id. at 870 (finding that a contractor, who was employed by another entity, nevertheless had significant relationship with the defendant despite the fact that the contract between her employer and the defendant “[made] clear that [the contractor’s employer] is not an agent or employee of the [defendant]”); Bonanno, 2008 WL 1801173, at *4 (finding non-employee independent contractors had significant relationship with defendant). And finally, to the extent that Open argues that the City’s privilege assertion must fail “because the City did not (and cannot) establish that Vanir was engaged to work with the City’s attorneys and to assist them in providing legal advice related to this litigation,” ECF 54 at 8, Open is mistaken. There is no requirement that in order for the attorney-client privilege to apply to communications with a third-party consultant, the third-party must have been retained for purposes of “assist[ing]” attorneys in providing legal advice related to this litigation. In American Insurance Co. v. Pine Terrace Homeowners Association, the case upon which Open relies in making this argument, see id., the court concluded that communications between the defendant and a law firm that was hired for the purposes of litigation “presumptively [fell] within the attorney-client privilege.” See Pine Terrace, No. 20-cv-00654-DDD-KMT, 2021 WL 2036541, at *2 (D. Colo. May 21, 2021). The court then distinguished between the law firm and other outside contractors, concluding that the other outside parties, whose relationships with the defendant were “forged for Case 1:21-cv-02063-CNS-MEH Document 98 Filed 08/16/22 USDC Colorado Page 15 of 19 16 the purpose of repairing the Pine Terrace HOA property, not to litigate the insurance claim.” Id. at *4. But Pine Terrace did not hold that the purpose for retaining an outside contractor must be based in litigation for the attorney-client privilege to attach, and such a holding would also render unprotected many communications between attorneys and outside contractors with long-standing, significant relationships to third-party contractors. However, because the Court cannot view the subject communications, the Court is presently unable to determine whether the remaining Alliance Construction factors demonstrate that the attorney-client privilege applies to those communications. Moreover, upon a review of the Vanir Privilege Log, the Court is generally skeptical that all of the communications for which the privilege is asserted would be protected by the attorney-client privilege. By the Court’s count, it appears that twenty of the documents listed in the Vanir Privilege Log that are purportedly protected by the attorney-client privilege are either (a) communications not directly involving attorneys or (b) not communications at all.10 Some of the documents describe, for example, a “[m]emorandum reflecting information gathered or prepared at the direction of counsel regarding system operations and recommendations.” See ECF 81, PRIV000741. The Court is respectfully not persuaded that such a document would be protected by the attorney-client privilege. While documents that reflect or relay advice from attorneys may be protected, see, e.g., Markley v. U.S. Bank Nat’l Ass’n, No. 19-cv-01130-RM-NYW, 2020 WL 12602882, at *5 (D. Colo. Dec. 29, 2020); ACE USA v. Union Pac. R. Co., No. CIV.A. 09-2194 KHV, 2011 WL 2199820, at *6 (D. 10 Specifically, the documents with the following Privilege IDs do not appear to be communications, but rather, memoranda or other documents: PRIV000711, PRIV000741, PRIV000745, PRIV000781, and PRIV000802. And the following documents appear to be communications not directly involving attorneys: PRIV000717, PRIV000719, PRIV000750, PRIV000757, PRIV000764, PRIV000776, PRIV000777, PRIV000784, PRIV000803, PRIV000821, PRIV000824, PRIV000833, PRIV000836, PRIV000840, and PRIV000845. See ECF 81. Case 1:21-cv-02063-CNS-MEH Document 98 Filed 08/16/22 USDC Colorado Page 16 of 19 17 Kan. June 6, 2011), the Court could locate no authority demonstrating that a gathering of facts, even if directed by legal counsel, would be protected by the attorney-client privilege. Cf. Gordon v. Boyles, 9 P.3d 1106, 1123 (Colo. 2000) (“[T]he privilege protects only the communications to the attorney; it does not protect any underlying and otherwise unprivileged facts that are incorporated into a client’s communication to his attorney.”); High Point SARL v. Sprint Nextel Corp., No. CIV.A. 09-2269-CM, 2012 WL 234024, at *16 (D. Kan. Jan. 25, 2012), on reconsideration in part, 2012 WL 1580634 (D. Kan. May 4, 2012) (finding that a “[c]onfidential draft referring to information gathered at the request of counsel for the purpose of providing legal advice regarding potential patent assignment” was not a protected communication). Nor is the Court convinced that communications concerning legal advice “to be sought,” see, e.g., ECF 81 at 1, PRIV000711, PRIV000717, would be protected by attorney-client privilege. See ACE USA, 2011 WL 2199820, at *4 (messages discussing legal advice to be sought, but not actually seeking legal advice, were not protected); Gordon, 9 P.3d at 1124 (“[F]actual information revealed to an attorney does not become privilege[d] merely because it has been revealed to counsel.”). The City offers no argument explaining why these documents are covered under the attorney-client privilege. Furthermore, the Court simply does not have 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.”). Case 1:21-cv-02063-CNS-MEH Document 98 Filed 08/16/22 USDC Colorado Page 17 of 19 18 Accordingly, the Court will deny the Motion to Quash without prejudice, only with respect to the 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 also 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 additional deadlines for any additional hearings or submissions. CONCLUSION For the reasons set forth herein, IT IS ORDERED that: Case 1:21-cv-02063-CNS-MEH Document 98 Filed 08/16/22 USDC Colorado Page 18 of 19 19 (1) Plaintiff City of Fort Collins’s Motion to Quash Defendants’ Subpoena on Vanir Construction Management, Inc. and for Protective Order [filed May 27, 2022; ECF 45] is denied without prejudice 11 as set forth in this Order; (2) On or before September 14, 2022, Plaintiff shall submit an updated privilege log to Defendant; (3) 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; (4) 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 11 The Court’s ruling without prejudice applies only to its determinations as to the attorney-client privilege. Insofar as Plaintiff seeks to quash the Subpoena on the basis of work-product or deliberative-process privilege, the Motion is denied. Case 1:21-cv-02063-CNS-MEH Document 98 Filed 08/16/22 USDC Colorado Page 19 of 19