HomeMy WebLinkAbout2021-cv-2063-CNS-MEH - City Of Fort Collins V. Open International, Et Al. - 196 - Special Master Recommendation Re Pl's Mot Quash
IN 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.
________________________________________________________________________
SPECIAL MASTER RECOMMENDATION ON PLAINTIFF’S
MOTION TO QUASH (DOCUMENT NO. 45)
________________________________________________________________________
Plaintiff, the City of Fort Collins, has filed a Motion to Quash Defendants’
Subpoena to Vanir Construction Management, Inc., and for a Protective Order.
Briefly, this case arises out of a contractual dispute between the City and
Defendants Open International, LLC, and Open Investments, LLC, (Open). 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”). 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.” The
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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.”
The City filed suit on July 2, 2021, and raised various fraud and contractual
claims. In discovery, Open requested that the City 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.
The City objected on attorney-client or work product privilege. Open then subpoenaed
Vanir, duplicating the discovery request. The City moved to Quash, arguing that the
documents are protected by attorney-client privilege and the work-product doctrine.
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. Moreover, the City
maintains that the Subpoena requests documents prepared in anticipation of litigation,
thus invoking the application of the work-product doctrine.
Work Product Doctrine
The City 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 legal claims. However, Magistrate Judge Hegarty found that the fact
that Vanir prepared documents concerning litigation risk factors or legal claims generally
is insufficient to make the necessary requisite showing. Rather, the City was required to
demonstrate that the subject documents were prepared or obtained in contemplation of
this specific litigation and it failed to do so.
Accordingly, the Magistrate Judge concluded that the City had not met its burden
demonstrating the work-product privilege applied to the documents.
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Attorney-Client Privilege
Arguing that the Vanir individuals, and specifically Michelle Frey and Andrew
Amato, are the functional equivalent of City employees, the City asserts an attorney-
client privilege. As fully discussed in Magistrate Judge Hegarty’s Order, whether or not a
government entity’s independent contractor may be deemed the equivalent of an
employee for purposes of the attorney-client privilege has been discussed in the Colorado
Supreme Court case Alliance Construction Solutions v. Colorado Department of
Corrections. 54 P.3d 861 (Colo. 2002). In that case, the Supreme Court articulated a
four-part test to determine whether a government entity’s independent contractor may be
deemed the equivalent of an employee for the purposes of the attorney-client privilege.
Specifically, the Supreme Court held that a court should look 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.
Magistrate Judge Hegarty concluded that the City had established that Vanir, and
specifically Dr. Frey and Mr. Amato, had a “significant relationship” with the City and
the Project. He determined, however, that he could not determine whether the remaining
Alliance Construction factors were demonstrated and was skeptical about whether
documents which merely demonstrated a gathering of facts would be protected by the
attorney-client privilege. He was additionally skeptical that communication concerning
legal advice “to be sought,” would fall within the ambit of the attorney-client privilege.
Present Status
According to the Joint Status Report, (Document 115-3, filed Nov. 28, 2022), of
the original 149 documents originally designated as privileged, the City now asserts the
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privilege with respect to 28 documents. The assertions of privilege fall into three
categories:
a. documents withheld on the basis of work-product or deliberative-process privilege1;
b. documents withheld under attorney-client privilege as well as deliberative-process
and/or work-product protection2;
c. documents withheld based on attorney-client privilege3.
In addition, the City seeks protection for 36 documents that Vanir produced to
both Open and the City, but which nonetheless the City seeks to have protected. The City
is principally invoking the deliberative-process privilege with respect to these documents.
4 In its August 16, 2022 Order, (Doc. 98) Magistrate Judge Hegarty found in FN 4 that
the City, by failing to adequately brief the issue of the deliberative-process privilege,
waived any argument that the deliberative-process privilege protected these documents.
To the extent the City is now asking that that ruling be reconsidered, it is outside the
referral to the Special Master and should specifically be address to Magistrate Judge
Hegarty. Accordingly, the Special Master will not address these documents.
1 18 documents withheld under the basis of only work-product protection or deliberative-process privilege that Open
believes the Court ordered do not apply (see Dkt. 98 at 19 n.11):
i. PRIV000706, -718, -734, -739, -810, -811, -817, -818, -820, -822, - 828, -829, -830, -831, -834, -842, -843;
CFC_122305 at 307-3093.
2 b. Six documents withheld under attorney-client privilege (along with deliberative-process and/or work-product
protection), but not sent to or from a lawyer, citing “attachment(s) reflecting information gathered or prepared at the
direction of counsel regarding Oasis risk management issues and recommendations, as well as evaluation of
contractual terms under MPSA and negotiations prepared in anticipation of litigation”:
i. PRIV000719, -720 -784, -785, -803, -804.
3 c. Four emails withheld under attorney-client privilege, but not sent to or from a lawyer, citing “attachment(s)
forwarding & commenting upon legal advice sought from [City Attorney’s Office] regarding Oasis risk management
issues and recommendations”:
i. PRIV000750, -776, -777, -833.
4 36 documents withheld under the basis of only deliberative-process privilege that Open believes the Court ordered
does not apply (see Dkt. 98 at 19 n.11):
i. VANIR000003, -0004, -0042, -0043, -0133, -0134, -0136, -0137, -0151, -0152, -0884, -0885, -0897, -0898, -
0924, -0925, -0940, -0941, -1075, -1081, -1087, -3151, -4987, -4993, -4999, -5005, -5012, -5019, -5026, -5218, -
5224, -5230, -5236, -5243, -5250, -5257.
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CATEGORY A: Work -Product or Deliberative Process Privilege
#0000706 This document from VANIR is a draft report with comments added from
Kevin Wilkins, chief information officer of Fort Collins. It deals with the status of the
OASIS project and provides a risk and recommendation analysis. It is factually based and
not protected by work-product.
This document is also being withheld under deliberative privilege. The Special
Master is not considering that privilege as noted above.
#0000718 This document is a Functional Requirements Matrix: Review and Decision
Process. It is graphic and factual and not protected by the work-product privilege.
This document is also being withheld under deliberative privilege. The Special
Master will not consider this privilege.
#0000734 This document is a Dec. 18, 2020 document entitled Weekly Management
Report from the Fort Collins Utilities OASIS Program Management. It is factual and not
protected by work-product.
It is also being withheld under deliberative privilege. The Special Master will not
consider this privilege.
#0000739 This email transmits a draft of a memo to be presented to the City Council.
It is not protected by work-produce.
It is also being withheld under deliberative privilege. The Special Master will not
consider this privilege.
#0000810 This document transmits a memo prepared for City Manager Cunniff
related to the issues with OASIS. It sets out next steps in the project. It is factual and not
protected by work-product.
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This document is also being withheld under deliberative privilege. The Special
Master will consider not this privilege.
#0000811 This document is an issue sheet, with recommendations. It deals with
perceived problems with the billing system as well as other issues facing the project. It is
factual and not protected by work product.
It is also being withheld under deliberative privilege. The Special Master will not
consider this privilege.
#0000817 This email chain transmits Vanir’s TMG Recommendations for Review and
Final Report. It is not protected by work -product.
#0000818 This exhibit labeled Vanir Recommendation to Fort Collins for TMG
Review and Final Report, dated March 12, 2021, is a one-page document setting out in
outline form recommendations for future review and fact gathering with respect to the
project. It is not protected by work-product.
#0000820 This email chain transmits TMG’s Recommendation for Review and Final
report. It is essentially the same as #0000817 and is not protected by work-product.
#0000822 This email chain transmits a draft of Vanir’s Recommendations for TMG
Scope and attempts to set up meeting. It is not protected by work-product.
#0000828 This document from VANIR is a draft report with comments added from
Kevin Wilkins, chief information officer of Fort Collins. It deals with the status of the
OASIS project and provides a risk and recommendation analysis. It is factually based and
not protected by work-product.
It is also being withheld under deliberative privilege. The Special Master will not
consider this privilege.
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#0000829 This document is from VANIR and is entitled OASIS Project: Risk
Management Issues and Recommendations. It provides a review of the status of the
OASIS and risk and recommendation analysis. It provides a factual analysis and is not
protected by work-product.
It is also being withheld under deliberative privilege. The Special Master will not
consider this privilege.
#0000830 This document is a draft with comments of a letter from VANIR to various
people in Fort Collins concerning the OASIS project Risk Management Issues and
Recommendations. It provides a review of the status of the OASIS program and is
factually based. It is not protected by work-product.
This document is being withheld under deliberative privilege. The Special Master
will not consider this privilege.
#0000831 This document is a letter from NANIR to various people in Fort Collins
concerning the OASIS Project: Risk Management Issues and Recommendations. It
provides a review of the status of the OASIS Project and is factually based. It is not
protected by work-product.
This document is being withheld under deliberative privilege. The Special Master
will not consider this privilege.
#0000834 The document is a memo referencing a review of a Project Ricks and
Recommendation document. It is not protected by work-product. The Special Master will
not consider this privilege.
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#0000842 This document reviews the comments to the Project Risks and
Recommendations document. It is not protected by work- product.
This document is also being withheld under deliberative privilege. The Special
Master will not consider this privilege.
#0000843 This is a transmittal letter for the Risk/Recommendation Analysis. It is not
protected by the work-product privilege.
This document is also being withheld under deliberative privilege. The Special
Master will not consider this privilege.
CATEGORY B Documents withheld under attorney-client privilege, deliberative-
process privilege, and work -product privilege
#0000719 This email chain seeks documentation for the acceptance of OASIS for
Connexion in 2019. The email transmits SharePoint links which cannot be reviewed
specifically, but indicated that “legal” was involved in the responses. Even though this
email chain makes reference to legal, it is only in the context of gathering of facts about
the project, and as such is not protected by the attorney-client. Nor is it protected by
work-product as the email chains seeks factual information only.
This document is also being withheld under deliberative privilege. The Special
Master will not consider this privilege.
#0000720 This document is a City of Fort Collins Memo entitled OASIS Project
Memorandum. It deals with key recommendation in respect to the OASIS system as of
the date of the memo, January 29, 2020. It is factually based and is not protected by
work-product.
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The memo does not reference any involvement of legal counsel or any action
taken at the direction of counsel. To the extent legal counsel may have been involved, it
would be only in the context of gathering of facts about the project and as such is not
protected by the attorney-client.
This document is also being withheld under deliberative privilege. The Special
Master will not consider this privilege.
#0000784 This email chain seeks documentation for the acceptance of OASIS for
Connexion in 2019 and seems to be the same document as #0000719. The email
transmits SharePoint links which cannot be reviewed specifically, but indicates that
“legal” was involved in the responses. Even though this email chain makes reference to
legal, it is only in the context of gathering of facts about the project, and as such is not
protected by the attorney-client. Nor is it protected by work-product as the email chain
seeks factual information only.
This document is also being withheld under deliberative privilege. The Special
Master will not consider this privilege.
#0000803 This email chain transmits and edits budget recommendations. It indicates
that “legal” needs to be included in the distribution. Even though this email chain makes
reference to legal, it is only in the context of gathering of facts about the project and as
such is not protected by the attorney-client. It is also not protected by work-product as it
is factual.
This document is also being withheld under deliberative privilege. The Special
Master will not consider this privilege.
#0000804 This is the document transmitted and discussed in #0000803. It is entitled
OASIS Project: Risk Management Issues and Recommendations, dated January 29, 2020,
and is not protected by the attorney-client or work-product privilege for the reasons
discussed above.
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This document is also being withheld under deliberative privilege. The Special
Master will not consider this privilege.
CATEGORY C Document withheld pursuant to attorney-client privilege only
#0000750 This email chain is the same as #0000803 above except that it has an
additional response. This email chain transmits and edits budget recommendations. It
indicates that “legal” needs to be included in the distribution. Even though this email
chain makes reference to legal, it is only in the context of gathering of facts about the
project and as such is not protected by the attorney-client privilege. It is also not
protected by work-product as it is factual.
#0000776 This email chain is a Webex meeting invitation. The meeting is focused on
reviewing current Oasis status and impacts to broadband with a desire to clarify priorities.
This document is not protected by the attorney-client privilege.
#0000777 This long email chain deals with the OASIS Project Status Update #4.
It references a negotiation strategy and asserts within the document attorney-client
privilege. This document is protected by attorney-work product because it develops
a legal strategy and indicates that the strategy has been developed and will be
managed by a core team that includes “legal.” This email chain is more than a mere
gathering of facts. This email is protected by the attorney-client privilege.
#0000833 This email chain concerns functional requirements: matrix in the Master
Professional Services Agreement. The author of the email calls the email “as awareness
email,” and the email communicates facts. It is factual and not protected by work-
product. It is not protected by attorney-client privilege.
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Dated: February 21, 2023
By the Special Master
Nancy E. Rice
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