HomeMy WebLinkAbout2021-cv-2063-CNS-MEH - City Of Fort Collins V. Open International, Et Al. - 199 - Mot For Order To Adopt Special Master's Recommendation
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 2021-cv-02063-CNS-MEH
CITY OF FORT COLLINS,
Plaintiff and Counter-Defendant,
vs.
OPEN INTERNATIONAL, LLC,
Defendant and Counterclaimant,
and
OPEN INVESTMENTS, LLC,
Defendant.
OPEN’S MOTION TO ADOPT THE SPECIAL MASTER’S RECOMMENDATIONS
(DKTS. 195, 196) AND FOR FEES, COSTS, AND FURTHER RELATED RELIEF
After Defendants and Counterclaimant Open International, LLC and Open Investments,
LLC (together, “Open”) challenged roughly 300 privilege designations made by Plaintiff City of
Fort Collins (the “City”), the Court-appointed Special Master concluded that only seven
privilege designations were proper—i.e., over 95% of the City’s designations were improper.
Open now respectfully moves the Court (i) to adopt the Special Master’s recommendations (the
“Recommendations,” Dkts. 195 and 196); (ii) to award Open its fees and costs in litigating the
privilege disputes that the Recommendations resolved; and (iii) to order the City to produce for
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in camera review by the Special Master the remaining documents in the City’s privilege logs that
were not covered by the Special Master’s prior review.1
BACKGROUND
On May 24, 2022, Open moved to compel the City to produce documents concerning the
City’s third-party consultant, TMG, and over which the City had asserted attorney-client
privilege and work-product protection. See Dkt. 43. On May 27, the City filed a motion to
quash and for a protective order as to Open’s third-party subpoena to another City contractor,
Vanir, based on attorney-client and work-product protection. See Dkt. 45. The Court thereafter
ordered the City to provide the Court with a privilege log for all putatively privileged TMG
documents and, citing the City’s assertion that Vanir’s documents would duplicate the City’s
own Vanir-related documents, a privilege log for all putatively privileged Vanir documents in the
City’s possession. See Dkt. 73. The City produced a log of 699 TMG documents and 149 Vanir
documents. Dkts. 82 (City’s Vanir log), 83 (City’s TMG log).
Based on the dueling motions and the City’s privilege logs, the Court entered two orders
on August 18, 2022. The order addressing Open’s motion to compel TMG documents held that
the City had provided inadequate information for the Court to determine whether the attorney-
client privilege applied, Dkt. 97 at 21, and that the work-product doctrine, while potentially
applicable, was waived as to fact work product related to TMG’s assessment of the project, id. at
11, 15. The Court cautioned the City to “be mindful of the directives in [its] order and [to] only
1 D.C.COLO.LCivR 7.1 Certification. Open conferred with the City about this motion by
email on February 27 and March 6, 2023, and by telephonic conference on March 2. The City
opposes the motion because it believes it is premature and because it believes the Special Master
should have reviewed and ruled on deliberative-process privilege assertions.
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withhold those documents that truly constitute opinion work product—containing an attorney’s
mental impressions, theories, or opinions”—and charged the parties to engage in a “robust meet
and confer” process before returning with remaining disputes. Id. at 15.
The order addressing the City’s motion as to Vanir documents held that work-product
protection did not apply to Vanir-related documents, Dkt. 98 at 9, and that, “by failing to
adequately brief the issue, the City ha[d] waived any argument that the deliberative-process
privilege protects the subject documents,” id. at 6 n.4. As for attorney-client privilege, the Court
held the privilege could apply to communications with Vanir, but the Court could not ascertain
whether the privilege did apply without reviewing the documents. Id. at 16. The Court
cautioned the City about certain logged documents that did not appear to be privileged and
directed the parties to “meaningfully meet and confer about Plaintiff’s assertion of attorney-
client privilege over each document.” Id. at 16-18.
The parties met and conferred multiple times from August through early November 2022.
The City produced some previously withheld documents that it determined were not privileged,
along with updated privilege logs, but it maintained privilege over the vast majority of
previously logged documents. The parties also agreed that Vanir could produce documents to
Open that did not have an attorney as sender or recipient and produce only to the City documents
sent to or from attorneys, which the City could produce to Open or log. The City then asserted
privilege over 71 documents produced by Vanir, including by clawing back dozens of documents
that Vanir had produced to Open. See Dkt. 114-1. The City also produced its own general
privilege log—i.e., for documents not specifically related to TMG or Vanir. See Dkt. 114-4.
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Among more than 1,000 documents over which the City continued to assert privilege
after the parties’ conferrals, hundreds were not sent to or from an attorney and did not have log
descriptions that included attorney mental impressions, theories, or opinions. Attempting to
prioritize documents for in camera review, Open challenged roughly 300 such attorney-less
documents, comprising about 210 of the City’s TMG documents, 30 of its Vanir documents, and
35 of its general-log documents, as well as about 45 Vanir-produced documents over which the
City claimed privilege. See Dkt. 114.
The Court appointed Justice Nancy E. Rice to serve as Special Master to review “all
allegedly privileged documents and, as to each, make a recommendation (with supporting
reasoning) on whether such documents, or any of them, are privileged.” Dkt. 167 at 1-2. After
her review, the Special Master recommended:
• Only six out of the roughly 210 challenged TMG documents are privileged. See
Dkt. 195.
• Only one out of the roughly 75 challenged Vanir documents (including both
Vanir’s and the City’s Vanir documents) is privileged. See Dkt. 196.
The Special Master declined to review Vanir-related documents that the City sought to withhold
under the deliberative-process privilege. She explained that the Court “found in FN4 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,” so if “the City is
now asking that the ruling be reconsidered, it is outside the referral to the Special Master and
should specifically be address[ed] to” the Court. Dkt. 196 at 4 (citing Dkt. 98 at 6 n.4); see also
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Dkt. 196 at 4 n.1 (addressing the City’s own Vanir-related documents over which the City
asserted deliberative-process privilege).2
The Special Master did not address the 35 documents Open challenged in the City’s
general privilege log. Compare Dkt. 114 at 5 (final two bullets challenging 35 documents in
general log), and Dkt. 114-4 (City general log with Open’s challenges highlighted), with Dkts.
195 & 196 (addressing only TMG- and Vanir-related documents).
ARGUMENT
Even after the Court ordered the City to carefully reassess its privilege and work-product
assertions, Dkt. 97 at 15; Dkt. 98 at 16-18, the City continued to improperly withhold hundreds
of documents the Special Master concluded are not privileged. In the Special Master’s review,
less than 5% of the City’s privilege assertions were found to be legitimate.
The Court should adopt the Special Master’s Recommendations so that Open may begin
to process the hundreds of documents the City improperly withheld. The Court also should order
the City to reimburse the fees and expenses Open incurred to obtain those documents, which
entailed more than nine months of motion practice, supplemental briefs, extensive conferrals,
multiple hearings with the Court, and the Special Master review. Furthermore, because the City
2 The parties have disputed the City’s waiver of deliberative-process privilege. At a November
17, 2022 hearing, Open argued that the Court had found waiver of deliberative-process privilege
as to all Vanir-related documents, Dkt. 198 at 9:3-24, 10:18-24, but then proposed a compromise
by which the privilege would be deemed waived for the Vanir production, while the Court could
review deliberative-process assertions for the City’s documents, id. at 12:9-13:5. Ultimately, the
Court directed the parties to brief the issue of waiver. Id. at 16:22-17:14. Open briefed its
position that deliberative-process privilege was waived as to all Vanir-related documents, Dkt.
114 at 2-3, and the City briefed its contrary position, Dkt. 115 at 1-3. The Court did not modify
its waiver ruling before appointing the Special Master to resolve privilege disputes.
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has shown itself to be an unreliable arbiter of privilege and work-product protection, the Court
should refer the remainder of the City’s withheld documents to the Special Master for in camera
review at the City’s expense, including the 35 documents Open previously challenged but that
the Special Master did not address.
I. THE COURT SHOULD ADOPT THE SPECIAL MASTER’S
RECOMMENDATIONS.
The Court should adopt the Special Master’s recommendations in full so that Open may
receive the subject documents and proceed with discovery that has been delayed by the City’s
unjustified privilege assertions. During conferral about its own objections to the
Recommendations, the City did not assert any objection to the Special Master’s reasoned,
document-by-document determinations. Rather, the City objected only to the Special Master’s
conclusion that the Court had already determined that deliberative-process privilege assertions
were waived and therefore not subject to review by the Special Master.
In addition to adopting the Special Master’s Recommendations, the Court should affirm
its prior ruling that, “by failing to adequately brief the issue, the City has waived any argument
that the deliberative-process privilege protects the subject documents.” Dkt. 98 at 6 n.4. That
determination is further supported by the City’s failure to raise deliberative-process privilege in
its responses and objections to Open’s discovery requests that preceded the motions to compel
and to quash. See Pham v. Hartford Fire Ins., 193 F.R.D. 659, 662 (D. Colo. 2000) (Boland,
M.J.) (untimely objections to requests are waived, including as to privilege); see also Witt v. GC
Servs. Ltd., 307 F.R.D. 554, 569 (D. Colo. 2014) (Shaffer, M.J.) (objections asserted for the first
time in response to motion to compel are waived). The City’s failure to submit a Vaughn index,
which requires more detail than a standard privilege log, see Al-Turki v. Brauchler, 2015 Colo.
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Dist. LEXIS 919, at *10 (Arapahoe Dist. Ct. Mar. 4, 2015) (requiring specification of
document’s role in particular deliberations and sworn affidavit as to harm posed by disclosure),
further supports the Court’s prior waiver ruling.
The Court should adopt the Special Master’s Recommendations, affirm its ruling that
deliberative-process privilege is waived, and order the City to produce all documents that have
been found not to be covered by privilege.
II. THE CITY MUST REIMBURSE THE EXPENSES OPEN PAID TO PIERCE THE
CITY’S IMPROPER PRIVILEGE AND WORK-PRODUCT ASSERTIONS.
Open also is entitled to recover the fees it wasted litigating the City’s unfounded privilege
assertions. If a motion to compel “is granted . . . the court must, after giving an opportunity to be
heard, require the party . . . whose conduct necessitated the motion, the party or attorney advising
that conduct, or both to pay the movant’s reasonable expenses incurred in making the motion,
including attorney’s fees,” unless the opposition was “substantially justified” or “other
circumstances make an award of expenses unjust.” Fed. R. Civ. P. 37(a)(5)(A). Here, although
the Court initially granted Open’s motion to compel in part and denied it in part without
prejudice, the motion to compel culminated in the Special Master’s recommendation that all but
seven of the roughly 210 challenged documents should be produced. Open prevailed on its
motion to compel, and the City’s position was not substantially justified, so Open is entitled to
recover all its related fees. Fed. R. Civ. P. 37(a)(5)(A); see also Fed. R. Civ. P. 37(a)(5)(C);
Lang v. Intrado, Inc., 2007 U.S. Dist. LEXIS 86689, at *12-13 (D. Colo. Nov. 13, 2007)
(Hegarty, M.J.) (granting in part motion to compel and awarding all briefing costs to moving
party because majority of nonmoving party’s arguments were not substantially justified);
Pandeosingh v. Am. Med. Response, Inc., 2014 U.S. Dist. LEXIS 154397, at *7-8 (D. Colo. Oct.
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30, 2014) (Tafoya, M.J.) (granting in part motion to compel documents withheld on basis of
privilege but awarding all costs for bringing the motion to the moving party because of the
nonmovant’s “unreasonable and intractable position”).
Likewise, the Special Master identified just one privileged Vanir-related document in her
review of the documents related to the City’s motion to quash and for a protective order. Having
lost its motion, the City must pay Open’s expenses. See Kirzhner v. David Silverstein, 2011 U.S.
Dist. LEXIS 40467, at *23 (D. Colo. Apr. 5, 2011) (Boland, M.J.) (“[I]f a motion for protective
order is denied, Rule 37(a)(5)(b) provides for the award of attorneys fees to the party resisting
the motion.”); see also Williams v. Nex-Tech Wireless, 2016 U.S. Dist. LEXIS 201972, at *14
(D. Kan. June 23, 2016) (awarding fees party incurred in opposing motion to quash and for
protective order because motion was not substantially justified).
Separate from the fee-shifting provisions in Rule 37, Open is entitled to recover its share
of the Special Master’s fee invoice. Under Rule 53(g)(3), the Court may “allocate payment [of
the Master’s fees] among the parties after considering the nature and amount of the controversy,
the parties’ means, and the extent to which any party is more responsible than other parties for
the reference to a master.” Where, as here, it becomes clear after the review that one party’s
conduct necessitated the hiring of the Master, courts shift the fees to that party. See ORP
Surgical, LLP v. Howmedica Osteonics Corp., 2022 U.S. Dist. LEXIS 236692, at *41 (D. Colo.
Dec. 27, 2022) (Jackson, J.); see also Glover v. Wells Fargo Home Mortg., 629 F. App’x 331,
339 n.7 (3d Cir. 2015) (explaining that Rule 53(g)(3) provides “a means to shift expenses if it is
determined, for example, that one party has taken frivolous or bad faith positions that have
unnecessarily increased the costs associated with proceedings before the Special Master”), cert.
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denied, 578 U.S. 1012 (2016); Southersby Dev. Corp. v. Jefferson Hills, 2011 U.S. Dist. LEXIS
143139, at *7, *10 (W.D. Pa. Dec. 13, 2011) (requiring party to pay “100% of the costs of the
Special Master” where master determined during privilege review that “well over half of the
documents reviewed” were “inappropriately withheld by the [party]” on the basis of privilege);
A.R. Arena Prods. v. Grayling Indus., 2012 U.S. Dist. LEXIS 100165, at *6 (N.D. Ohio Jul. 18,
2012) (reallocating 100% of master’s fees to party “primarily responsible for the involvement of
the special master”).
Because the City asserted privilege over and withheld several hundred documents when
only seven actually were privileged, the Court should order the City to reimburse Open’s
reasonable fees and costs for motion practice, privilege-log review and conferrals, court
hearings, court-ordered supplemental briefing, and the Special Master review necessitated by the
City’s improper privilege assertions.3
III. THE COURT SHOULD REFER THE REMAINING DOCUMENTS THE CITY
HAS WITHHELD FOR IN CAMERA REVIEW BY THE SPECIAL MASTER.
In an effort to limit the Court’s in camera review to a reasonable set of documents, Open
confined its November privilege challenges to roughly one quarter of the full set of the City’s
privilege assertions that seemed least likely to be privileged because they included no attorneys
as senders or recipients. Open had no expectation, however, that all but a handful of those
documents were not actually privileged. Now that the Special Master’s review has revealed that
3 Open understands that the Court’s preferred practice is to address a motion for fees and then, if
the motion is granted, to receive an affidavit setting forth reasonable fees and costs. See Intrado,
2007 U.S. Dist. LEXIS 86689 at *13 (Hegarty, M.J.). Open is prepared to provide an accounting
at the Court’s direction.
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the City’s positions in its privilege log are so widely unsupported, the Court should order the
City to produce the remainder of its documents withheld as privileged for in camera review by
the Special Master, with the City responsible for the costs of that review. See, e.g., In re
Chevron Corp., 2013 U.S. Dist. LEXIS 190020, at *9-10 (D.C.C. Apr. 22, 2013) (summarizing
previous orders requiring respondent “to produce every document listed on his privilege log” for
in camera review after “in camera review of some of the documents . . . cast significant doubt
upon his privilege claims as a whole”); see also Earthworks v. U.S. Dep’t of Interior, 279 F.R.D.
180, 192-93 (D.C.C. 2012) (ordering party that filed deficient privilege log to submit all
purportedly privileged documents for in camera review). That follow-on review should include
the 35 documents from the City’s general privilege log that Open previously challenged but the
Special Master did not review.
CONCLUSION
Open respectfully moves the Court to adopt the Special Master’s Recommendations,
order reimbursement of Open’s fees from litigating the City’s improper privilege assertions, and
appoint the Special Master to review the remainder of the City’s withheld documents.
Dated: March 6, 2023.
Respectfully submitted,
s/ Paul D. Swanson
Paul D. Swanson, pdswanson@hollandhart.com
Anna van de Stouwe, acvandestouwe@hollandhart.com
Alexander D. White, adwhite@hollandhart.com
Holland & Hart LLP
555 17th Street, Suite 3200
Denver, Colorado 80202
Telephone: 303-295-8000
Attorneys for Defendants Open International, LLC and
Open Investments, LLC
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CERTIFICATE OF SERVICE
I hereby certify that on the 6th day of March, 2023, the foregoing was electronically filed
with the Clerk of Court using the Court’s electronic filing system and that a copy of the
foregoing was sent to all counsel of record via same in compliance with the Federal Rules of
Civil Procedure and the Local Rules of this Court.
s/ Paul D. Swanson
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