Summary
standing for the proposition that "a party cannot, through its own allegations of fraud or bad faith waive its adversary's privilege"
Summary of this case from Lugosch v. CongelOpinion
01 Civ. 1012 (JSM)
February 25, 2003
OPINION AND ORDER
Plaintiff Oxyn Telecommunications, Inc. has moved to compel production of documents withheld by defendants on the basis of Onse's attorney-client and work product privileges. Plaintiff argues that Onse waived its privileges with respect to the documents at issue by either (1) disclosing them to third parties, (2) selectively disclosing them to Plaintiff in extrajudicial communications, or (3) placing the subject matter of the communications reflected in those documents "in issue" in this litigation.
Factual Background
On November 10, 2000, Oxyn and Onse entered into an Agreement, pursuant to which Onse, a Korean telecommunications company, agreed to invest $15 million in Oxyn, a New York corporation, in return for which Onse would receive shares in Oxyn and the parties would enter into a traffic trading relationship. Pursuant to this Agreement, Onse was required to deposit $4 million into an account specified by Oxyn on or before December 10, 2000. The remaining $11 million was to be paid subsequently into the same Oxyn account, within 15 months of the date of the Agreement, after the negotiation and finalization of a "formal agreement," which would, among other things, state the percentage ownership of Oxyn that Onse would acquire in return for its investment.
Later in November 2000, Onse's President, Sang-Hyon Chang, informed Oxyn's President, Jason Oh, that he had learned that Onse could not make an investment in Oxyn without the approval of Onse's Board of Directors, and asked to amend the Agreement to reflect this requirement. He suggested that employees of Hyundai Telecom, which is based in Englewood, New Jersey, and specifically Mr. Charles Kim, act as Onse's representative to negotiate the amendment of the Agreement. Accordingly, on November 29, 2000, Mr. Chang signed a statement, drafted by Oxyn, in which he delegated Mr. Kim to meet with Oxyn on Onse's behalf and "review our transaction in order to advise us as to how to best proceed towards finalizing this transaction." In its Complaint, Oxyn alleges that after November 22, 2000, Onse had, in fact, determined that it did not wish to perform its obligations under the Agreement and that, accordingly, its request for an amendment actually was the first step in a plan to withdraw from its commitments to Oxyn.
Subsequently, on December 6, 2000, Onse filed an application to transfer $4 million to Oxyn's account, but was informed by Seoul Bank that under Korean law it could not remit funds for foreign investment without specific information about the number of shares and percentage of total equity that Onse would acquire in the transaction. Later on that same date, Mr. Chang of Onse informed Mr. Oh of Oxyn that it would be impossible to transfer to Oxyn the $4 million due under the Agreement without first providing the information required by the Korean authorities. Mr. Chang suggested that he send a group of representatives of Onse to New York to further negotiate the specifics of the transaction. Because Mr. Oh apparently believed that Onse was actually attempting to withdraw from the Agreement, and that the Korean law issue was another excuse, he faxed a letter to Onse immediately after the December 10 deadline for transferring the $4 million payment passed, in which he threatened to sue Onse for breach of contract and seek a minimum of $200 million in damages.
Subsequent to receiving that letter on December 11, 2000, Mr. Chang consulted Korean counsel. In addition, he asked Dr. Michael Yang, President of Hyundai Telecom, who he had known for many years, to recommend New York counsel to represent Onse in its dealings with Oxyn, and to meet with and advise the three Onse employees that he was sending to New York to meet with Oxyn. Therefore, when the Onse representatives arrived in New York on December 16, Mr. Kim picked them up from the airport and drove them to a meeting at the Hyundai Telecom offices in Englewood, New Jersey, where Dr. Yang introduced them to Michael Yi, an attorney who had represented Hyundai in the past, and who Onse subsequently retained in connection with its dispute with Oxyn. Both the December 16 meeting and a subsequent meeting on December 20 were attended by Mr. Yi, the three Onse representatives, Dr. Yang and Mr. Kim. Defendants state that Dr. Yang and Mr. Kim were present to translate (Korean-English), as necessary, to make the Onse employees more comfortable with Mr. Yi, and to make sure that the communications between the Onse employees and Mr. Yi were fully effective in light of their differing cultural and legal perspectives, as well as the difficulties that might be involved in understanding the technical language (in both Korean and English) and practices of the telecommunications industry, with which Mr. Yi had little prior experience.
In addition, Mr. Yi's partner, Mr. Tuan, was present at the December 20 meeting.
Onse formally retained Mr. Yi on December 22, 2000. Mr. Chang then asked Mr. Yi to treat Dr. Yang as an intermediary and send copies of various documents, including drafts of correspondence with Oxyn, to him at Hyundai Telecom. Mr. Chang also sent Dr. Yang copies of certain litigation-related communications between Onse and Mr. Yi.
Attempts to resolve the dispute between Oxyn and Onse were unavailing, and Oxyn filed the Complaint in this action on February 8, 2001.
Waiver by Disclosure to Third Parties
Plaintiffs seek to compel production of documents and testimony regarding the December 16 and 20 meetings between Michael Yi and the three Onse representatives. They argue that Onse has waived any attorney-client or work product privilege that otherwise might apply to those communications and documents because the communications were made in the presence of third parties — Dr. Yang and Mr. Kim of Hyundai. In response, Onse argues that Dr. Yang and Mr. Kim were present during the December 16 and 20 meetings in order to enhance the effectiveness of Onse's representatives' communications with counsel.
In general, the attorney-client privilege is waived when a protected communication is disclosed to a third party. In re: von Bulow, 828 F.2d 94, 101 (2d Cir. 1987); People v. Borcsok, 107 A.D.2d 42, 44, 485 N.Y.S.2d 766, 768 (2d Dep't), app. denied, 65 N.Y.2d 692, 491 N.Y.S.2d 1032 (1985). However, where a third party is present during attorney-client communications, as either the party's or the attorney's agent, in order to facilitate the effective rendition of legal services, the protection of the privilege remains intact. United States v. Kovel, 296 F.2d 918, 922 (2d Cir. 1961). As the Second Circuit stated in United States v. Ackert, 169 F.3d 136, 139 (2d Cir. 1999), "[Kovel] recognized that the inclusion of a third party in attorney-client communications does not destroy the privilege if the purpose of the third party's participation is to improve the comprehension of the communications between attorney and client." Thus, the presence of an interpreter when attorney and client speak different languages does not waive the privilege. Nor does the presence of an accountant who plays a role analogous to an interpreter in helping the attorney to understand financial information. Id. See also Hendrick v. Avis Rent A Car System, Inc., 944 F. Supp. 187, 189 (W.D.N.Y. 1996) (holding that communications with, and in the presence of physically incapacitated plaintiff's parents remained privileged); Stroh v. General Motors Corp., 213 A.D.2d 267, 268, 623 N.Y.S.2d 873, 874-75(1stDep't 1995) ("Communications made to counsel through one serving as an agent of the client to facilitate communication, generally will be privileged."); Mileski v. Locker, 14 Misc.2d 252, 255-56, 178 N.Y.S.2d 911, 915-16 (Sup.Ct. New York County 1958) ("communications to any person whose intervention is necessary to secure and facilitate the communication between an attorney and client are privileged, [such] as communications through an interpreter, a messenger or any other intermediary."). Cf. Calvin Klein Trademark Trust v. Wachner, 198 F.R.D. 53, 55 (S.D.N.Y. 2000) (holding that disclosure of communications to a public relations firm hired by the law firm did waive the privilege when the purpose of the disclosure was to help the attorney to assess probable public reaction to the litigation, "as opposed to enabling counsel to understand aspects of the client's own communications that could not otherwise be appreciated in the rendering of legal advice."(citing United States v. Ackert, 169 F.3d 136, 139 (2d Cir. 1999)).
Defendants have presented a reasonable explanation as to how Dr. Yang and Mr. Kim's presence in the meetings between Onse's representatives and Mr. Yi was intended to and did maximize the effectiveness of their attorney-client communications. Plaintiff argues that at least some of the Onse representatives spoke English, that Mr. Yi spoke Korean, and that, in any event, an unrelated interpreter could have been hired if translation was necessary. In so contending, plaintiff fails to recognize that a lawyer and a client have a right to use an interpreter in order to increase their comfort, as well as their confidence that they are, in fact, fully understanding all that each of them intends to communicate to the other, even if they might have been able to get by without that translation. Moreover, the testimony is clear that Dr. Yang, who had lived in the United States for 40 years, had experience in litigation in the United States, and had extensive experience in the telecommunications industry in both the United States and Korea, played a role in the meetings that went a great deal further in facilitating attorney-client communications than simply translating verbatim. He summarized and explained the nuances of what the Onse representatives and Mr. Yi said to each other, asking questions and engaging in substantial give and take until he was satisfied that each party fully understood the other. Thus, Dr. Yang's presence eased the introduction to Mr. Yi, who the Onse employees had never met before, and his understanding of the two countries' different legal systems and business cultures, and of the telecommunications industry, clearly "assist[ed] the attorney or client in some way in carrying out their respective functions as the provider and recipient of legal advice or other legal services." Village of Kiryas Joel Local Development Corp. v. Insurance Co. of North America, No. 90 Civ. 4970, 1992 U.S. Dist. LEXIS 405, *8 (S.D.N.Y. Jan. 15, 1992). See also Nat'l Educ. Training Group, Inc. v. SkillSoft Corp., M8-85(WP), 1999 U.S. Dist. LEXIS 8680, *12-13 (S.D.N.Y. June 10, 1999). Similarly, the presence of Mr. Kim at the meetings could reasonably have been intended and expected to enhance communications between Onse and Mr. Yi. The fact that Mr. Kim did not, in fact, take an active role in the meetings is irrelevant. Id. at *10. Moreover, given the long-term business and personal relationship between Mr. Chang and Dr. Yang, Dr. Yang's agreement to serve as Onse's intermediary to find and communicate with counsel regarding its dispute with Oxyn, and Onse's earlier delegation of Mr. Kim to negotiate with Oxyn on its behalf, Onse had a reasonable expectation of confidentiality in spite of Dr. Yang and Mr. Kim's presence in the meeting with Mr. Yi. In Village of Kiryas Joel, 1992 U.S. Dist. LEXIS 405, at *10, the Court stated:
Clearly, a defendant in this Court, who speaks some English, but is not confident that he or she has a full grasp of the language, is entitled to the services of an interpreter.
[I]t is of little consequence that Chamlin Spitzer and Avner were not hired as adjuster and broker, or even that they played only a small or passive role at the meeting. They were not strangers to the matter, their presence at the meeting has a reasonable explanation and there was good reason for [plaintiff's representative] to have an expectation under the circumstances, that they would not disclose the substance of the discussions. Since [plaintiff's representative] had an expectation of confidentiality and since there was a reasonable basis for that expectation, the governing standard, as articulated in Osario [ 75 N.Y.2d 80, 84, 550 N.Y.S.2d 612, 614-15 (1989)], is satisfied.
Therefore, Onse's attorney-client privilege was not destroyed by the presence of Dr. Yang and Mr. Kim at the meetings between the Onse representatives and Mr. Yi.
The same is true of Dr. Yang's receipt of documents containing communications between Onse and Mr. Yi after Mr. Yi was retained to represent Onse in its dispute and subsequent litigation with Oxyn. Throughout that time, Dr. Yang was acting as Onse's agent, or intermediary, to clarify and enhance the effectiveness of communications between attorney and client. This is true even when Dr. Yang and Mr. Chang discussed attorney-client communications between Onse and Mr. Yi on their own, without reporting directly back to Mr. Yi.
This is true because of the unique circumstances of this case: involving a foreign client that was not familiar with the legal procedures and legal and business culture of the United States. Because of those circumstances, it would be reasonable for Onse to look to a friend who had knowledge of both cultures for a fuller explanation of its attorney's communications. See Benedict v. Amaducci, No. 92 Civ. 5239, 1995 U.S. Dist. LEXIS 573, *2-3 (S.D.N.Y. Jan. 18, 1995) (While "communications between mere friends are not privileged in general, . . . communications between plaintiffs and Mr. McDonald, involving financial or other information, if made for the purpose of assisting Mr. McDonald either in retaining suitable attorneys for plaintiffs or in consulting with such attorneys with respect to this litigation, were made for the purpose of obtaining legal advice from a lawyer."). If, however, Dr. Yang gave Mr. Chang independent advice that was not directly related to the legal communications and attorney-client relationship between Onse and Mr. Yi, that advice is not protected by either the attorney-client or the work product privilege.
In addition, it is clear that at all times after December 11, 2000, Onse had a realistic anticipation of litigation with Oxyn, and the documents sent to, and discussed with Dr. Yang by Mr. Chang and Mr. Yi were prepared "with an eye toward litigation." Hickman v. Taylor, 329 U.S. 495, 511, 67 S.Ct. 385, 393-94 (1947). Consequently, these documents also are protected from discovery as work product pursuant to Fed.R.Civ.P. Rule 26(b)(3). Unlike the attorney-client privilege, disclosure to third parties of materials prepared in anticipation of litigation waives the work product privilege only if that disclosure is to an opposing party or materially increases the likelihood that the materials will come into the hands of an adversary. United States v. Adlman, 134 F.3d 1194, 1199-1200 (2d Cir. 1998) (Work product may be shown to others "simply because there [is] some good reason to show it" without necessarily destroying the work product status of the document.); In re: Copper Market Antitrust Litigation, 200 F.R.D. 213, 221 (S.D.N.Y. 2001); ECDC Environmental, L.C. v. New York Marine and General Ins. Co., No. 96 Civ. 6033, 1998 WL 614478, *4 (S.D.N.Y. June 4, 1998). Therefore, disclosure to Dr. Yang of documents prepared by Onse or Mr. Yi in the period after December 22, 2000, does not defeat the work product privilege, provided those documents were, in fact, prepared in anticipation of litigation, and "would not have been prepared in substantially similar form but for the prospect of litigation." United States v. Adlman, 134 F.3d at 1195. This is true regardless of whether the documents were prepared by an attorney or even at the direction of an attorney. In re: Copper Market Litigation, 200 F.R.D. at 221. Waiver by Extrajudicial Disclosures Plaintiff also contends that Onse waived its attorney-client privilege with respect to all documents relating to certain issues in this litigation. Specifically, Oxyn points to (1) Mr. Chang's telephone call to Mr. Oh on November 23, 2000, in which he stated that Onse's counsel had advised him that the Oxyn-Onse transaction had to be approved by the Onse Board of Directors, and asked to amend the Agreement to so require; (2) the letter dated December 15, 2000, from Onse's Korean counsel to Mr. Oh, stating that it was legally impossible to transfer the $4 million payment to Oxyn before reaching agreement as to the number and type of shares that Onse would receive in return and the percentage of equity they would represent in Oxyn; (3) the December letter from Mr. Chang to Mr. Oh, attaching a memo from Korean counsel, stating that none of Oxyn's proposals to amend the Agreement would solve the legal difficulties with the Agreement; (4) Mr. Yi's letter to Oxyn's counsel, dated January 5, 2001, stating that the Agreement was merely a letter of intent or memorandum of understanding; and (5) the February 2, 2001 letter from Mr. Chang to Mr. Oh stating that Onse's U.S. counsel had advised that they should perform due diligence before making an investment in Oxyn.
Of course, the work product privilege attaches only if "the motivation for creating [the] document [was] the litigation." SR International Business Insurance Co. Ltd. v. World Trade Center Properties LLC, No. 01 Civ. 9291, 2002 WL 1455346, *3 (S.D.N.Y. July 3, 2002) (quoting In re: Grand Jury Proceedings, No. M-11-189, 2001 U.S. Dist. LEXIS 15646, *49-50 (S.D.N.Y. Oct. 3, 2001)).
Obviously, the attorney-client and work product privileges are waived with respect to the documents that were sent to Oxyn, and the otherwise privileged advice that was disclosed to Oxyn, and those documents and statements may be used by Oxyn in this litigation. However, this waiver does not extend to other documents that may contain similar (or different) advice on the same subjects, unless Onse attempts to use those documents or that advice affirmatively in this litigation. As the Second Circuit explained in In re: Von Bulow, 828 F.2d 94, 101-02 (2d Cir. 1987), the fairness doctrine, which aims to prevent prejudice to a party and a distortion of the judicial process when a privilege holder selectively discloses otherwise privileged information during litigation, simply does not apply to extrajudicial disclosures. There, the Court stated:
[W]here, as here, disclosures of privileged information are made extrajudicially and without prejudice to the opposing party, there exists no reason in logic or equity to broaden the waiver beyond those matters actually revealed. Matters actually disclosed in public lose their privileged status because they obviously are no longer confidential. The cat is let out of the bag, so to speak. But related matters not so disclosed remain confidential. Although it is true that disclosures in the public arena may be "one-sided" or "misleading," so long as such disclosures are and remain extrajudicial, there is no legal prejudice that warrants a broad court-imposed subject matter waiver. The reason is that disclosures made in public rather than in court — even if selective — create no risk of legal prejudice until put at issue in the litigation by the privilege-holder.828 F.2d at 103. See also In re Kidder Peabody Securities Litigation, 168 F.R.D. 459, 469 (S.D.N.Y.) ("the publication waived the privilege only with respect to the particular communications or portions of communications actually disclosed.").
The extrajudicial disclosures to which Oxyn points do not implicate the legal prejudice which the fairness doctrine is intended to prevent. In fact, to hold that a waiver results from disclosure of statements like those at issue here, including those articulating a potential litigating position in the course of pre-litigation discussions of a dispute, would gravely impede potential litigants' attempts to avoid litigation by convincing their adversaries of the correctness of their views. This is not a result that would be in the best interests of either the judicial system or of society generally.
Waiver by Placing Subject Matter "In Issue" in this Litigation
On the other hand, pursuant to the fairness doctrine, selective disclosure in a litigation of privileged information that is favorable to a party's litigating position, while withholding unfavorable communications, results in a waiver of the privilege with respect to related privileged materials. The privilege holder is not entitled to use the privilege as both a shield and a sword. United States v. Bilzerian, 926 F.2d 1285, 1292 (2d Cir.), cert. denied, 502 U.S. 813 (1991). See also In re: Steinhardt Partners, L.P., 9 F.3d 230, 235 (2d Cir. 1993) ("[S]elective assertion of privilege should not be merely another brush on an attorney's palette, utilized and manipulated to gain tactical or strategic advantage."); In re: Von Bulow, 828 F.2d at 101-03.
In addition, "a privilege may be impliedly waived where a party makes assertions in the litigation or asserts a claim that in fairness requires examination of protected communications." United States v. Bilzerian, 926 F.2d at 1292. As the Court stated in Hearn v. Rhay, 68 F.R.D. 574 (E.D.Wash. 1975), the case from which much of the selective disclosure law in the Second Circuit derives:
[I]n each instance [in which the privilege was found to have been waived], the party asserting the privilege placed information protected by it in issue through some affirmative act for his own benefit, and to allow the privilege to protect against disclosure of such information would have been manifestly unfair to the opposing party. The factors common to each exception may be summarized as follows: (1) assertion of the privilege was a result of some affirmative act, such as filing suit, by the asserting party; (2) through this affirmative act, the asserting party put the protected information at issue by making it relevant to the case; and (3) application of the privilege would have denied the opposing party access to information vital to his defense.68 F.R.D. at 581.
Thus, if the privilege holder puts privileged communications in issue by virtue of his claims or defenses in the action, then a broader subject matter waiver is effected. For example, if a defendant asserts his reliance on advice of counsel, or asserts good faith in either a claim or a defense, the basis for that reliance, and the state of his knowledge, including legal advice from counsel, will be subject to disclosure. United States v. Bilzerian, 926 F.2d at 1292; Tribune Co. v. Purcigliotti, No. 93 Civ. 7222, 1997 U.S. Dist. LEXIS 228, *25 (S.D.N.Y. Jan. 10, 1997); In re: Kidder Peabody Securities Litigation, 168 F.R.D. at 469.
In this action, Oxyn has accused Onse of bad faith and fraud. Oxyn then argues that in denying these allegations, Onse has placed its good faith and reliance on advice of counsel in issue. However, an examination of Onse's Answer to the Second Amended Complaint and Counterclaims reveals that while Onse did deny allegations of bad faith and fraud, and did, in turn, allege fraud and misrepresentation on Oxyn's part, it did not affirmatively claim either good faith or reliance on advice of counsel as a defense. Therefore, Oxyn's argument is unavailing.
A party cannot, through its own allegations of fraud or bad faith, waive its adversary's privilege. As the Court stated in Chase Manhattan Bank N.A. v. Drysdale Secs. Corp., 587 F. Supp. 57 (S.D.N.Y. 1984),
"it cannot be possible for [a defendant] to justify breaching [the plaintiff's] privilege by reason of its own pleading of an affirmative defense. That would give an adversary who is a skillful pleader the ability to render the privilege a nullity."587 F. Supp. at 59.
Similarly, in Standard Chartered Bank PLC v. Ayala Int'l Holdings (U.S.) Inc., 111 F.R.D. 76 (S.D.N.Y. 1986), a case in which the defendant had asserted counterclaims of fraud, thereby putting in issue its own knowledge and its reasonable reliance on plaintiff's representations, the Court stated,
[G]iven that the counterclaims would most likely be viewed as compulsory, the "voluntariness" of asserting the counterclaims is questionable. To hold tht a waiver has been effected in such circumstances could give plaintiffs who are skillful at pleading their own claims the ability to force defendants to choose between voiding the privilege or never bringing a valid claim.111 F.R.D. at 81 n. 2. See also Bovis Lend Lease, LMB, Inc. v. Seasons Contracting Corp., No. 00 Civ. 9212, 2002 U.S. Dist. LEXIS 23322, *53 (S.D.N.Y. Dec. 5, 2002) ("Generally, where a party does not itself place in issue the matter as to which the privileged communications are relevant, the privilege is not waived."); Tribune Co. v. Purcigliotti, 1997 U.S. Dist LEXIS 228, at *30-33 ("[T]he client in a fraud or similar action may be required to disclose its thoughts and knowledge, whether or not those were acquired in whole or in part from conversations with its attorneys. It is not required to disclose what was said between client and counsel.").
Likewise, Onse's claims that Oxyn had unclean hands, engaged in misrepresentations, and "failed to negotiate in good faith to finalize a formal agreement between the parties," does not effect a waiver of Oxyn's attorney-client privilege with respect to these issues, absent affirmative claims on Oxyn's part that would, in fairness, require disclosure of its communications with its attorneys.
Finally, a finding of a subject matter waiver must be predicated upon a showing that prejudice will result in the absence of disclosure. Bovis Lend Lease, LMB, Inc. v. Seasons Contracting Corp., No. 00 Civ. 9212, 2002 U.S. Dist. LEXIS 23322, *41 (S.D.N.Y. December 4, 2002); Tribune Co. v. Purcigliotti, No. 93 Civ. 7222, 1997 U.S. Dist. LEXIS 228, *29 (S.D.N.Y. January 10, 1997) ("The `at issue' standard . . . requires a showing of critical relevance or vital need.); Bank Brussels Lambert v. Credit Lyonnais (Suisse), Nos. 93 Civ. 6876, 1995 U.S. Dist. LEXIS 14808 (S.D.N.Y. Oct. 11, 1995) ("Because unfairness to the party seeking disclosure plays a central role in determination of the scope of the subject matter waiver, that party must demonstrate the specific prejudice it would suffer in the absence of the waiver.").
An examination of the allegations of Oxyn's Second Amended Complaint does not support the required finding of need. Oxyn's basic cause of action is for breach of contract. Neither the allegations of misrepresentations by Onse's representatives during their attempts to convince Oxyn to amend or alter the Agreement (which did not, in fact, induce Oxyn to sign an amendment to the Agreement), nor the causes of action for breach of the implied covenant of good faith and fair dealing or of the duty to negotiate in good faith change the basic nature of the cause of action. Oxyn's other causes of action allege breach of the Non-Disclosure Agreement between Oxyn and Onse; interference with contractual relations; and fraud in affirming Onse's intent to perform under the Agreement when, on November 16, 2000, it asked Oxyn to terminate its business relationship with Dacom, when, in fact, it allegedly had no intent of actually performing. None of these causes of action raise issues of reliance or state of mind that would create a compelling need for disclosure of attorney-client communications that occurred subsequent to November 22, 2000. See Standard Chartered Bank PLC v. Ayala Int'l Holdings (U.S.) Inc., 111 F.R.D. at 81.
Accordingly, Onse has not effected a broad waiver of either its attorney-client privilege or its work product privilege with respect to the issues discussed between Oxyn and either Onse's employees or its attorneys prior to the filing of this action in February 2001. However, to the extent that Onse asserts its privilege concerning the advice it received from counsel, it will be precluded at trial from introducing evidence concerning that advice.
Inadvertent Production of PX 131
The parties vigorously dispute whether Onse has waived the attorney-client privilege with respect to a document that has been marked PX 131 and submitted to the Court for in camera review. The document is a memorandum dated November 23, 2000, from a Korean attorney, Sang Hoon Lee, to Mr. Seok-In Yang at Onse, containing his legal analysis of the validity of the November 10 Agreement. This memorandum clearly is privileged from discovery unless the privilege has been waived either as a result of its production or for some other reason. Inadvertent production will not waive the privilege if reasonable efforts were made to protect the confidentiality of the document. In re: Kidder Peabody Securities Litigation, 168 F.R.D. 459, 474 (S.D.N.Y. 1996) ("Caselaw on inadvertent production makes it clear that the court is to engage in a case-by-case assessment of the circumstances surrounding the asserted error in order to determine whether the production was indeed inadvertent and, if so, whether the producing party exercised sufficient care to justify the conclusion that the release of the document should not constitute a waiver."); Bank Brussels Lambert v. Credit Lyonnais (Suisse) S.A., 160 F.R.D. 437, 443 (S.D.N.Y. 1995). In this case, that standard is met. The document production in this case apparently was voluminous. The document was listed on Onse's privilege log, and once Onse's attorneys learned that it had been mistakenly produced they demanded its immediate return.
The agreement of counsel regarding the treatment of the document, including the procedure for translation and in camera review, cannot affect the status of the document with respect to the privilege. See Kidder, Peabody Co., Inc. v. IAG Int'l Acceptance Group, N.V., No. 94 Civ. 9725, 1997 WL 272405, *5 n. 3 (S.D.N.Y. May 21, 1997) ("Plaintiff's counsel's reliance on an agreement with defendant's counsel (which the latter denies) as to the limitation, even if found to exist, cannot control the application of the law of privilege herein. There is no agreement that was "So Ordered" by the court, nor is this a breach of contract case against defendant's counsel.").
Apparently, plaintiff also contends that the privilege has been waived with respect to the subject matter of this document because of Mr. Chang's statements to Mr. Oh regarding the need to amend the Agreement to require Board approval. As explained above, this extrajudicial disclosure, even if it was, as alleged, a misstatement of Onse's attorney's advice, does not effect a broad waiver of the attorney-client privilege. Nor do Oxyn's allegations that Onse dealt with Oxyn in bad faith subsequent to the signing of the Agreement effect such a waiver. As stated above, those allegations by Oxyn, absent Onse's placing its attorney's advice, and/or its state of mind at the relevant time in issue in this litigation, do not give rise to a waiver of Onse's privilege. Consequently, the attorney-client privilege has not been waived with respect to PX 131, and plaintiffs may not use or disclose that document, or any information that they learned exclusively from that document, in the litigation of this action. It follows that the privilege also has not been waived with respect to documents, like #2 on the Privilege Log (Exhibit 2 to the Declaration of David J. Molton, dated 8/9/02), which reflect internal discussions of the legal advice contained in that document.
None of the foregoing is to say, however, that Onse may withhold relevant facts from production simply because they were either communicated to, or learned from, its attorneys.
The protection of the privilege extends only to communications and not to facts. A fact is one thing and a communication concerning that fact is an entirely different thing. The client cannot be compelled to answer the question, "What did you say or write to the attorney?" but may not refuse to disclose any relevant fact within his knowledge merely because he incorporated a statement of such fact into his communication with his attorney.
Upjohn v. United States, 449 U.S. 383, 395-96, 101 S.Ct. 677, 685-86 (1981). Similarly, the privilege does not protect facts that an attorney obtains from independent sources and then conveys to his client. Tribune Co. v. Purcigliotti, No. 93 Civ. 7222, 1997 U.S. Dist. LEXIS 228, *21 (S.D.N.Y. Jan. 10, 1997); Standard Chartered Bank, PLC v. Ayala Int'l Holdings (U.S.), Inc., 111 F.R.D. 76, 80 (S.D.N.Y. 1986).
Conclusion
For the foregoing reasons, and with the caveats stated above, Oxyn's motion to compel Onse to produce documents and testimony is denied.
SO ORDERED.