Opinion
CASE NO. 19-CR-80181-RUIZ/REINHART
2020-12-23
UNITED STATES, Plaintiffs, v. Minal PATEL, Defendant.
Timothy P. Loper, US Department of Justice, Miramar, FL, A. Lee Bentley, III, Lauren Goldberg Raines, Bradley Arant Boult Cummings LLP, Tampa, FL, James V. Hayes, John Kosmidis, Kathryn C. Furtado, United States Department of Justice, Washington, DC, Jerrob Duffy, United States Attorney's Office, Peter A. Laserna, Southern District of Florida, Miami, FL, Richard O.I. Brown, United States Attorney's Office, Fort Lauderdale, FL, for Plaintiff. Robyn Lynn Sztyndor, Robyn Lynn Sztyndor, P.A., Coral Gables, FL, Jared Edward Dwyer, Greenberg Traurig, P.A., Miami, FL, Michael Salnick, West Palm Beach, FL, Steven H. Sadow, Pro Hac Vice, Steven H. Sadow PC, Atlanta, GA, for Defendant.
Timothy P. Loper, US Department of Justice, Miramar, FL, A. Lee Bentley, III, Lauren Goldberg Raines, Bradley Arant Boult Cummings LLP, Tampa, FL, James V. Hayes, John Kosmidis, Kathryn C. Furtado, United States Department of Justice, Washington, DC, Jerrob Duffy, United States Attorney's Office, Peter A. Laserna, Southern District of Florida, Miami, FL, Richard O.I. Brown, United States Attorney's Office, Fort Lauderdale, FL, for Plaintiff.
Robyn Lynn Sztyndor, Robyn Lynn Sztyndor, P.A., Coral Gables, FL, Jared Edward Dwyer, Greenberg Traurig, P.A., Miami, FL, Michael Salnick, West Palm Beach, FL, Steven H. Sadow, Pro Hac Vice, Steven H. Sadow PC, Atlanta, GA, for Defendant.
ORDER ON DEFENDANT'S CLAIM OF ATTORNEY CLIENT AND COMMON INTEREST PRIVILEGE [ECF No. 92]
BRUCE E. REINHART, UNITED STATES MAGISTRATE JUDGE
Before the Court is the Defendant's Claim of Attorney Client and Common Interest Privilege. ECF No. 92. This matter was referred to me by the Honorable Rodolfo A. Ruiz, II. I conducted an evidentiary hearing on November 10 and December 4, 2020. I have considered the evidence introduced at that hearing, the relevant pleadings, and the parties’ arguments. I am fully advised and this matter is ripe for decision. For the reasons stated below, Defendant Minal Patel's request to claw back a June 11, 2019, compliance letter is DENIED.
I. Procedural Background
On or about September 24, 2019, the defendant Minal Patel was indicted in the United States District Court for the Southern District of Florida for healthcare fraud and violations of the Anti-Kickback Statute. ECF No. 1.
On or about June 8, 2020, the Court entered an Order governing the disclosure of discovery material that has been, or is potentially, subject to claims of privilege by Defendant Patel and/or third parties (hereinafter the "Discovery Protocol Order"). ECF No. 53.
On or about September 1, 2020, the United States, through its Filter Team, filed a Motion for Authorization to Disclose Materials, namely calls and text messages involving government witness Chris Miano, and ostensible third-party privilege holders John "Bucky" Houser and Lance Tinsley. ECF No. 73.
On or about September 8, 2020, Mr. Houser and Mr. Tinsley filed a joint Response in Opposition to the United States’ Motion for Authorization to Disclose Materials arguing that the calls and text messages are protected by the attorney-client privilege through a common interest agreement that was formed during a meeting at Greenberg Traurig in Ft. Lauderdale on March 1, 2019. ECF No. 80 at 7.
On or about September 10, 2020, the Government filed a Reply to Privilege Holders Houser and Tinsley's Response in which it disputed Mr. Houser and Mr. Tinsley's claims of privilege. ECF No. 84. On or about September 28, 2020, Mr. Houser and Mr. Tinsley filed a Supplemental Memorandum addressing whether third-party privilege holder can receive the remedy of precluding further disclosure of that material in the case against Mr. Patel. ECF No. 102. On or about October 9, 2020, the Government filed a Response to Houser and Tinsley's Supplemental Memorandum. ECF No. 124.
Mr. Houser and Mr. Tinsley have since withdrawn their objections to the Filter Team disclosing the alleged-privileged information to the Prosecution Team. See ECF No. 168. Thus, those objections will not be addressed further in the present order.
On or about September 25, 2020, Mr. Patel filed a Claim of Attorney Client and Common Interest Privilege regarding a compliance letter written and disseminated by attorney Robyn Sztyndor entitled "Use of Telemedicine with CGX and PGX Testing for Medicare Patients" ("compliance letter") that was turned over to the Prosecution Team. ECF No. 92. Mr. Patel's written motion argues that he received the compliance letter under a common interest privilege with Sean Quilter, a client of Ms. Sztyndor's. Id. at 2–3. Mr. Patel's motion requests an order to claw back and sequester the compliance letter and a hearing to establish any taint. Id. at 5.
Several other persons and entities adopted Mr. Patel's motion, but subsequently withdrew their joinder in light of the Court's orders under Fed. R. Evid. 502(d). ECF Nos. 128, 130, 131, 168, 172, 173.
On or about October 9, 2020, the Government filed a Response to the Defendant's Claim of Attorney Client and Common Interest Privilege. ECF No. 122. In its Response, the Government argues that no common interest privilege involving Mr. Patel exists that would protect the compliance letter, and even if there was a valid common interest agreement in place, the Defendant cannot establish that the protections afforded by a common interest agreement extend to the compliance letter. Id. at 3–7.
On or about November 4, 2020, the Government filed an Ex Parte Motion for In Camera Inspection of Material to Determine the Applicability of the Attorney Client Privilege and the Crime-Fraud Exception as to Minal Patel. ECF No. 138. Because I conclude that the compliance letter was not privileged when the Government obtained it, I need not address whether the crime-fraud exception applies.
On November 10 and December 4, 2020, I held an evidentiary hearing on Mr. Patel's Privilege Claims, as well as the Third-Party Privilege Claims. ECF Nos. 147, 166.
II. Burden Of Proof
It is well established that "the party invoking the attorney-client privilege has the burden of proving that an attorney-client relationship existed and that the particular communications were confidential." United States v. Schaltenbrand , 930 F.2d 1554, 1562 (11th Cir. 1991) ; MapleWood Partners, L.P. v. Indian Harbor Ins. Co. , 295 F.R.D. 550, 583 (S.D. Fla. 2013) (J. Hoeveler); Ralls v. United States , 52 F.3d 223, 225 (9th Cir. 1995) ("A party asserting the attorney-client privilege has the burden of establishing the relationship and the privileged nature of the communication.") (emphasis added). The same burden applies to a party asserting a common interest privilege. Del Monte Int'l GMBH v. Ticofrut, S.A., No. 16-CV-23894, 2017 WL 1709784, at *1 (S.D. Fla. May 2, 2017) (J. Goodman) ("The burden of establishing the common interest privilege is on the party asserting it."). The party asserting the privilege also has the duty to prove that once the privilege was established, it was never subsequently waived. United States v. Noriega , 917 F.2d 1543, 1550 (11th Cir. 1990) (citing United States v. Kelly , 569 F.2d 928, 938 (5th Cir. 1978) ); see also United States v. Bay State Ambulance & Hospital , 874 F.2d 20, 28 (1st Cir. 1989). Determining whether the purported privilege exists is a fact-specific inquiry. Firefighters’ Ret. Sys. v. Citco Grp. Ltd. , Case No. CIV-13-373-SDD-EWD, 2018 WL 305604, at *5 (M.D. La. Jan. 5, 2018) (citing United States v. Robinson , 121 F.3d 971, 974 (5th Cir. 1997) ).
Here, Mr. Patel has asserted the privilege under the theory that various joint defense agreements or common interest privileges existed that protect the communications at issue from government disclosure. Thus, Mr. Patel carries the burden of establishing not only the existence of the privilege, but that the communications fall within the scope of the privilege, and that the privilege was not subsequently waived.
These terms are used by courts interchangeably. United States v. Hsia , 81 F. Supp. 2d 7, 16 (D.D.C. 2000).
In light of the fact that this Court finds that no valid common interest privilege was formed that extends to the compliance letter, I need not address the issue of waiver.
III. Attorney-Client Privilege And Its Application To Common Interest Agreements
a. The Attorney-Client Privilege in General
The attorney-client privilege is the oldest of the common-law privileges. See Upjohn Co. v. United States , 449 U.S. 383, 389, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981). The purpose of the attorney-client privilege "is to encourage full and frank communication between attorneys and their clients...." In re Teleglobe Commc'ns Corp. , 493 F.3d 345, 360 (3d Cir. 2007) (citing Upjohn Co. , 449 U.S. at 389, 101 S.Ct. 677 ). "The attorney-client privilege exists to protect confidential communications between client and lawyer made for the purpose of securing legal advice." In re Grand Jury Matter No. 91-01386, 969 F.2d 995, 997 (11th Cir. 1992), quoting In re Slaughter 694 F.2d 1258, 1260 (11th Cir. 1982).
In order to claim privilege over a particular communication, the proponent of the privilege must prove that the communication meets the following criteria: it must be (1) a communication (2) made between privileged persons (3) in confidence (4) for the purpose of obtaining or providing legal assistance for the client." Restatement (Third) of the Law Governing Lawyers § 68 (2000). See also MapleWood Partners , 295 F.R.D. at 582–583. " ‘Privileged persons’ include the client, the attorney(s), and any of their agents that help facilitate attorney-client communications or the legal representation." In re Teleglobe , 493 F.3d at 359 (quoting Restatement (Third) of the Law Governing Lawyers § 70 (2000) ). In other words, in order for the attorney-client privilege to protect the communication from disclosure, "it must have been made in confidence and for the purpose of securing or conveying legal advice." See In re Keeper of Records (Grand Jury Subpoena Addressed to XYZ Corp.) , 348 F.3d 16, 23 (1st Cir. 2003) ; see also In re Grand Jury Matter No. 91-01386 , 969 F.2d at 997 ("[T]he argument that any communication between an attorney and client is protected by the privilege is overbroad.") (emphasis in original).
The privilege is "not absolute. Because it ‘serves to obscure the truth, ... it should be construed as narrowly as is possible consistent with its purpose.’ " Noriega , 917 F.2d at 1551. See also United States v. Nixon , 418 U.S. 683, 710, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974) ("[w]hatever their origins, these exceptions to the demand for every man's evidence are not lightly created nor expansively construed, for they are in derogation of the search for truth.") (footnote omitted); Fisher v. United States , 425 U.S. 391, 403, 96 S.Ct. 1569, 48 L.Ed.2d 39 (1976) ("Yet the privilege is not all-inclusive and is, as a matter of law, construed narrowly so as not to exceed the means necessary to support the policy which it promotes.").
b. The Common Interest Privilege
The common interest privilege, although often referred to as a privilege, is not an independent privilege, but an exception to the general rule that a voluntary disclosure of privileged material to a third party waives the attorney-client privilege. Visual Scene, Inc. v. Pilkington Brothers, PLC. , 508 So. 2d 437, 440 (Fla. 3d DCA 1987). Parties with shared legal interests can enter into a common interest privilege agreement in order to exchange privileged information and "adequately prepare their cases without losing the protection afforded by the privilege." Id. For example, as the Court noted in Visual Scene ,
As Magistrate Judge Goodman has stated, although Visual Scene is a 3rd DCA case, "both state and federal courts have relied upon it by citing it with approval." Companhia Energetica Potgiuar v. Caterpillar Inc., et al., No. 14-CV-24277, 2015 WL 13779201, at *3 (S.D. Fla. Nov. 5, 2015) citing In re United Mine Workers of America Emp. Benefit Plans Litig. , 159 F.R.D. 307, 314 (D.D.C. 1994) ; Young v. Achenbauch , 136 So. 3d 575, 582 (Fla. 2014).
"[w]here one party in such a relationship makes a statement to the attorney for another party to the relationship, for the limited purpose of the ‘pooled information’ situation, the attorney for one becomes the attorney for the other ... Thus the confidentiality enjoyed by a client with his own attorney is extended to the communications with any attorney representing another in the group."
Id. citing United States v. McPartlin , 595 F.2d 1321 (7th Cir. 1979) (emphasis added).
The burden of establishing the common interest privilege is on the party asserting it. Del Monte Int'l GMBH , 2017 WL 1709784, at *1 (J. Goodman). A written executed agreement is not required to establish that a common interest privilege existed. Guarantee Ins. Co. v. Heffernan Ins. Brokers, Inc. , 300 F.R.D. 590, 596 (S.D. Fla. 2014) (J. Goodman). However, the parties asserting the existence of a common interest privilege must show that (1) there was a common legal interest among them, (2) the parties are represented by separate lawyers and, (3) the parties (with their lawyers) agreed to exchange information concerning the matter of common interest. In re Teleglobe , 493 F.3d at 366. Regarding the first element of a common interest privilege, the parties to the common interest agreement must have a common legal interest, rather than solely a common commercial or business interest, Breslow v. Am. Sec. Ins. Co. , No. 14-62834, 2016 WL 698124, at *9 (S.D. Fla. Feb. 19, 2016) (J. Goodman), and that legal interest must be substantially similar. See Robert Bosch LLC v. Pylon Mfg. Corp. , 263 F.R.D. 142, 146 (D. Del. 2009), quoting In re Teleglobe , 493 F.3d at 365 (emphasis added).
The mere existence of a common interest privilege does not assume that all communications among all parties in the common interest agreement fall within the privilege. In order for a communication to fall within the protections of the common interest privilege, it must be shared with the attorney of the member of the common interest agreement. See Id. at 364. The Third Circuit specifically noted in Teleglobe that "[t]he requirement that the clients’ separate attorneys share information (and not the clients themselves) derives from the community-of-interest privilege's roots in the old joint-defense privilege, which ... was developed to allow attorneys to coordinate their clients’ criminal defense strategies." Id. at 364–365 (emphasis in original). Federal Courts generally do not "extend the application of the joint defense privilege to conversations among the defendants themselves even in the absence of any attorney during the course of those conversations." United States v. Gotti , 771 F. Supp. 535, 545 (E.D.N.Y. 1991) ; see also Wellin v. Wellin , 211 F. Supp. 3d 793, 813–814 (D.S.C. 2016) (citing Walsh v. Northrop Grumman Corp. , 165 F.R.D. 16, 18 (E.D.N.Y. 1996) and holding that the common interest doctrine does not extend to communications that do not involve at least one of the clients’ attorneys).
In addition to showing that the communications included at least one attorney, privileged communications are also limited to those prepared in furtherance of the parties’ established common legal interest. Bay State Ambulance & Hosp. Rental Serv. , 874 F.2d at 28. See also United States v. Schwimmer , 892 F.2d 237, 243–244 (2d Cir. 1989) ("where a joint defense effort or strategy has been decided upon and undertaken by the parties and their respective counsel ... only those communications made in the course of an ongoing common enterprise and intended to further the enterprise are protected."); see also Minebea Co. v. Papst , 228 F.R.D. 13, 16 (D.D.C. 2005) (finding that even with a joint defense agreement in place, "the party seeking to claim privilege still must demonstrate that the specific communications at issue were designed to facilitate a common legal interest; a business or commercial interest will not suffice").
IV. Findings of Fact
Mr. Patel seeks to claw back from the Government Prosecution Team a compliance letter written by Ms. Sztyndor (Patel Ex. 10.1.1–10.1.6). The undisputed evidence at the hearing established that the Government got the compliance letter from Rhett Bunce, who got it from Mark Allen, who got it from Keith Morton. Hr'g Tr. 22:24–23:6, Dec. 4, 2020 (See ECF No. 177). Mr. Morton is an owner of Geneticare along with Wesley Wingfield; Geneticare was represented by Ms. Sztyndor starting on May 2, 2019. Hr'g Tr. 40:8–10, Nov. 10, 2020 (See ECF No. 176). See also Patel Ex. 1.1.1–1.1.2, ¶ 6 and 1.2.1–1.2.2, ¶ 5. In his written motion, Mr. Patel took the position that he held a privilege over the compliance letter via a common interest privilege that was formed between Mr. Patel and Mr. Quilter arising from conversations that took place in July 2019. ECF No. 92 at ¶ 10–12.
Despite the fact that the joint defense agreement under which Mr. Patel received the compliance letter is separate from the joint defense agreement from which the Government ultimately obtained a copy, the Government is not objecting to Mr. Patel's ability to raise this issue and to request claw back of the compliance letter. Hr'g Tr. 141:18–25, Dec. 4, 2020.
At the hearing on November 10, Ms. Sztyndor testified that her client, Mr. Morton, sent the letter to Mr. Allen on June 17, 2020 for the purpose of legal advice and joint compliance discussions. Hr'g Tr. 27:14–23; 28:12–14, Nov. 10, 2020; see also Patel Ex. 1.1.6. At that time, Mr. Allen worked for Performance Labs and had a separate distribution company called Archer. Hr'g Tr. 64: 15–23, Dec. 4, 2020. Ms. Sztyndor testified that before signing any contracts with Performance Labs, Mr. Morton/Geneticare wanted to confirm that Performance Labs would agree to work within the parameters set forth in the compliance letter. Hr'g Tr. 27:19–23. She testified that at the time the letter was sent, she did not represent Mr. Allen. Hr'g Tr. 28:24–29:2, Nov. 10, 2020. When asked if anyone represented Mr. Allen at that time, Ms. Sztyndor testified, "I don't think so, because he didn't have any attorneys on the call that were his attorneys." Hr'g Tr. 152:5–6, Nov. 10, 2020. Mr. Allen also credibly testified that he was not represented by Ms. Sztyndor or anyone else when he received the compliance letter. Hr'g Tr. 71:11–12; 81:17–19; 89:4–8, Dec. 4, 2020.
After Mr. Patel rested his case-in-chief on November 10, the Government produced a number of rebuttal exhibits including an amended Declaration from Special Agent Monique Butler (Gov. Ex. 8A), emails between Mr. Allen and Mr. Morton from June 2017 as well as emails between Mr. Allen and Ms. Sztyndor from July and November 2019 (Gov. Ex. 12), and text messages between Mr. Allen and Mr. Morton from June and July 2019 (Gov. Ex. 24). In one of those text messages Mr. Allen asks Mr. Morton for permission to forward the compliance letter to another distributor and Mr. Morton replies, "Sure." Gov. Ex. 24 at 1–2.
After the Government rested its case-in-chief on December 4, Mr. Patel re-called Ms. Sztyndor, who testified that after reviewing Government's Exhibit 9 (not introduced into evidence at the hearing), her recollection was refreshed that Mr. Allen was represented by counsel in June 2019. She attempted to find documents to determine whether or not Mr. Allen was in fact represented by counsel during June 2019. Hr'g Tr. 97:11–18, Dec. 4, 2020. In doing so, she found email correspondence with Victoria Nemerson, who she testified was counsel for Mr. Allen. Id. at 98:18–21. Ms. Sztyndor went on to testify that Ms. Nemerson was corporate counsel for Alpha and all of the labs owned by Khalid Satary (the "Satary Labs"), one of which is Performance Labs. Id. at 103:14–19.
In an effort to establish that Ms. Nemerson was representing Mr. Allen in June 2019 and that a common interest privilege was established between Geneticare and Alpha/Satary Labs (and Performance Labs/Mr. Allen as a downstream partner of the Satary labs). Ms. Sztyndor testified about Patel Exhibit 15, which comprised four categories of documents: (1) emails and calendar invites from May 2019 (Patel Ex. 15.2–.3), (2) unsworn texts and emails from March 2020 among Ms. Sztyndor, Ms. Nemerson, and Ms. Nemerson's lawyer John Azzarello (Patel Ex. 15.4–.5), (3) unsworn texts and emails written between November 10 and December 4, 2020 (Patel Ex. 15.1 and 15.6), and (4) sworn affidavits from Mr. Morton and Mr. Wingfield dated November 30, 2020 (Patel Ex. 15.7–.8). I admitted Patel Exhibit 15 into evidence over the Government's objection , but reserved any finding as to the weight that should be given to this evidence. I now turn to the weight to be afforded to these exhibits.
The Government objected to exhibits 15.1–.8 on the grounds of relevance, unreliable hearsay, and lack of foundation.
Regarding the first category of documents produced in Patel Exhibit 15, this Court finds they are not probative of the issue before me because the emails and calendar invitations from May 2019 make no mention of Performance Labs or Mr. Allen and therefore do not imply that there was a common interest privilege between Geneticare and Mr. Allen established in late June 2019. Patel Ex. 15.2–.3. I make this finding even after considering the documents together with Ms. Sztyndor's testimony and other evidence offered by Mr. Patel.
Patel Exhibits 15.4 and 15.5, are not given any weight because they are unsworn and self-serving hearsay created after Ms. Sztyndor and Ms. Nemerson became aware of the indictment against Mr. Patel. Ms. Nemerson was not called as a witness at the hearing. To the extent these exhibits are offered to show the existence of a common interest privilege, her unsworn statements are hearsay. Although hearsay was admissible at the evidentiary hearing under Federal Rule of Evidence 104(a), these out-of-court statements were not subject to cross-examination; particularly given the circumstances and timing under which they were made – after Mr. Patel's indictment – I find them unreliable and give them no weight.
The communications contained in Patel Exhibits 15.1 and 15.6 are not given any weight. Those emails and text messages were generated and collected after Ms. Sztyndor testified at the November 10th hearing, and at a time when all involved parties had a self-interest in asserting that a common interest privilege existed in June 2019 and that Mr. Allen fell under it. Moreover, like Patel Exhibits 15.4 and 15.5, these emails and text messages are unsworn and were not subject to cross-examination.
With regard to Patel Exhibits 15.7 and 15.8, the sworn affidavits from Mr. Morton and Mr. Wingfield are not given any weight. Although they are sworn, they are self-serving hearsay created after the fact, and neither Mr. Morton nor Mr. Wingfield was called as a witness and subjected to cross examination.
Mr. Patel called Mr. Allen as a rebuttal witness. Mr. Allen testified that he was not a part of any common interest privilege with Geneticare. Hr'g Tr. 88:14–19; 91:1–9, Dec. 4, 2020. Mr. Allen testified that one day after receiving the compliance letter from Mr. Morton, he sent a text message to Mr. Morton asking if it was ok to share the compliance letter with a distributor. Hr'g Tr. 85:13–24, Dec. 4, 2020. Mr. Morton responded via text message stating, "Sure." Id. ; see also Gov. Ex. 24 at 2. Mr. Allen also testified that he was under the impression that the compliance letter was sent to him because Ms. Sztyndor's goal was to sell her compliance platform and she wanted Mr. Allen to distribute the letter to his contacts in the field who were using telemedicine. Hr'g Tr. 88:7-11; 90:2–22; 92:20–24, Dec. 4, 2020. He testified that he sent the letter to two or three individuals, one of whom was Mr. Bunce. Id. at 80:1–22; 86:4–17. Finally, Mr. Allen testified that he was not represented by Ms. Nemerson, Ms. Sztyndor, or any other attorney at the time he was sent the compliance letter (Id. at 71:11–12; 81:17–19; 89:4–8) or at the time he sent it to Mr. Bunce. Id. at 91:10–12. Having had the opportunity to observe Mr. Allen during his testimony, and to consider his testimony in conjunction with the other evidence admitted at the hearing, I find Mr. Allen's testimony to be credible. V. Ms. Sztyndor's Compliance Letter is Not Privileged Under Either of Mr. Patel's Theories of Joint Defense
At the November 10 hearing, Mr. Patel argued, and Ms. Sztyndor testified (Hr'g Tr. 70:3–8, Nov. 10, 2020), that the common interest privilege was formed directly with Mr. Allen in June 2019. In support of that conclusion, Mr. Patel introduced Ms. Sztyndor's notes of her calls with Mr. Allen, which indicate "CIP" next to the June 18 column of notes. Patel Ex. 1.6.1; Hr'g Tr. 28:6–14, Nov. 10, 2020. In the entirety of Mr. Patel's case-in-chief, there was no mention of Alpha, Satary Labs, or Ms. Nemerson. There was also no mention of a common interest privilege being formed any earlier than June 18, 2019.
This Court assumes "CIP" stands for "common interest privilege."
Ms. Sztyndor's testimony at the December 4 hearing and Patel Exhibits 15.2 and 15.3, however, indicate that Mr. Patel is now operating under a different theory: that a common interest privilege was formed between Geneticare and Alpha/Satary Labs in May of 2019, and that Mr. Allen was included in that common interest privilege as a down-stream partner of Satary Labs.
For the following reasons, under either theory, I find that Mr. Patel has not met his burden of showing that the compliance letter fell within any privilege when Mr. Allen received it.
1. Theory 1: Common Interest Privilege between Geneticare and Mr. Allen
Mr. Patel failed to meet his burden of proving the existence of a valid common interest privilege directly between Geneticare and Mr. Allen in June 2019. A preponderance of the evidence does not establish that Mr. Allen was represented by legal counsel at that time. Furthermore, even if a valid common interest privilege existed at some point between Geneticare and Mr. Allen, this Court finds that the compliance letter is not privileged under that common interest privilege because (1) the undisputed evidence is that the letter was sent without attorney involvement, (2) the evidence shows that any common interest privilege was formed, if at all, after the letter was sent, and (3) the letter was not sent in furtherance of a joint legal interest between Geneticare and Mr. Allen.
a. Mark Allen was not represented by counsel and therefore could not enter a valid common interest privilege with Geneticare
The Third Circuit addressed in Teleglobe that the common interest "privilege only applies when clients are represented by separate counsel." In re Teleglobe , 493 F.3d at 365. Similarly, the Fourth Circuit has held that no common interest existed between two parties who "failed to establish [they] were represented by separate legal counsel engaged in a joint strategy." United States v. Okun , 281 Fed. App'x 228, 231–32 (4th Cir. 2008). Many district courts have also followed this logic and held that no common interest privilege exists absent a showing that the parties to the common interest privilege were represented by separate legal counsel. See, e.g., Cavallaro v. United States , 153 F. Supp. 2d 52, 61 (D. Mass. 2001), aff'd, 284 F.3d 236 (1st Cir. 2002) ("Under the strict confines of the common-interest doctrine, the lack of representation for the remaining parties vitiates any claim to privilege."); Libbey Glass Inc. v. Oneida Ltd. , 197 F.R.D. 342, 348 (N.D. Ohio 1999) (refusing to extend common interest privilege when "only one participant used the services of counsel"); Walsh , 165 F.R.D. at 18 ("The [joint defense privilege] doctrine is limited to situations where multiple parties are represented by separate counsel but share a common interest about a legal matter."). Finally, the Restatement (Third) of the Law Governing Lawyers also addresses this requirement stating: "[a] person who is not represented by a lawyer and who is not himself or herself a lawyer cannot participate in a common-interest arrangement within this Section." Restatement (Third) of the Law Governing Lawyers § 76 (2000) (cmt. d).
In Jackson v. BellSouth Telecommunications , the 11th Circuit spoke to the test used to determine whether a lawyer-client relationship exists in the absence of a formal retainer stating that the test " ‘is a subjective one and hinges upon the client's belief that he is consulting a lawyer in that capacity and his manifested intention is to seek professional legal advice.’ However, ‘[t]his subjective belief must ... be a reasonable one.’ " 372 F.3d 1250, 1281 (11th Cir. 2004) (quoting Bartholomew v. Bartholomew , 611 So.2d 85, 86 (Fla. 2d DCA 1992)) (quoting Green v. Montgomery County, Ala. , 784 F. Supp. 841, 845–46 (M.D. Ala. 1992) ).
Here, Mr. Patel did not offer any credible evidence that Ms. Nemerson represented Mr. Allen in June 2019 with respect to his interactions with Geneticare and Ms. Sztyndor. There was no evidence of a formal written retainer or evidence of paid legal fees. Relying on the test outlined in Jackson , this Court must discern Mr. Allen's subjective belief. Mr. Allen credibly testified that he was not represented by Ms. Nemerson or any other legal counsel in his dealings with Geneticare. Hr'g Tr. 71:11–12; 81:17–19; 89:4–8, Dec. 4, 2020. Thus, this Court finds Mr. Allen's testimony that he did not believe he was represented by Ms. Nemerson to be credible and reasonable. In light of this conclusion and the fact that Mr. Patel offers no evidence that Mr. Allen was represented by anyone other than Ms. Nemerson in her capacity as corporate counsel for Alpha, this Court finds that no valid common interest privilege was formed between Geneticare and Mr. Allen because Mr. Allen was not represented by his own legal counsel.
b. The compliance letter was sent to Mr. Allen before a common interest privilege was established between Geneticare and Mr. Allen.
Mr. Patel has failed to prove that the privilege extends to the compliance letter because the compliance letter was sent before a common interest privilege could have been established between Geneticare and Mr. Allen. It is imperative that the common interest privilege be established prior to the sending of materials that are intended to be privileged pursuant to that common interest privilege. Guarantee Ins. Co. , 300 F.R.D. at 597 (J. Goodman) (citing Visual Scene, Inc. , 508 So.2d at 441, in finding that although a joint defense agreement can be oral, there must still exist an actual, before-the-exchange agreement) (emphasis added); see also Specht v. NCL (Bahamas) LTD., et al. , Case No. 18-21671-CIV, at *5 (Nov. 21, 2018) (J. Goodman) (rejecting Defendant's claim of a joint defense agreement because they failed to provide sufficient evidence to meet its burden of proving that there was an oral joint defense agreement between Defendant and their co-defendant before co-defendant sent the reports at issue to Defendant).
A complete review of the exhibits and full hearing record reveals that a common interest privilege was not established between Geneticare and Mr. Allen prior to June 17, 2019. Ms. Sztyndor did not testify when the conversation occurred that established the common interest privilege and this court does not have a written agreement to reference. Furthermore, the initial affidavits from Mr. Morton and Mr. Wingfield only offer vague reference to "vet[ting] any potential channel partners through common interest privileged telephone calls and communications ..." but there is no reference to the dates those common interest privileges were established. Patel Exs. 1.1.1–1.1.2, ¶ 6 and 1.2.1–1.2.2, ¶ 6. It can be assumed that it was sometime after May 2, 2019, when Geneticare hired Ms. Sztyndor's law firm to represent them (Id. at ¶ 5). However, there is no evidence before me to suggest that Ms. Sztyndor even spoke to Mr. Allen before the call on June 18, 2019. Therefore, at best, the first conversation with Mr. Allen about forming a common interest privilege with Geneticare was on June 18, 2020. This conclusion is also supported by Ms. Sztyndor's handwritten call notes in which the letters "CIP" appear next to the June 18 column of notes. Patel Ex. 1.6.1
It is undisputed that Mr. Allen received the compliance letter from Mr. Morton via email on June 17, 2019 at 2:19PM. Patel Ex. 1.1.6. Since Mr. Allen received the letter on June 17, 2019, and the earliest date the common interest privilege could have been established with Mr. Allen was June 18, 2019, Mr. Patel has failed to show that the compliance letter was given to Mr. Allen during the existence of a valid common interest privilege. For this independent reason, I find that no privilege attached to the letter when Mr. Allen received it.
c. The compliance letter was sent by Mr. Morton to Mr. Allen, without Ms. Sztyndor's involvement
Even if Mr. Patel had established the existence of a valid common interest privilege, and further had established that the agreement was formed before the compliance letter was sent to Mr. Allen, the compliance letter was not privileged when given to Mr. Allen because no lawyer was involved in the communication that shared the document. As stated above, in order for a communication to fall within the protections of the common interest privilege, the communication in question must be shared with the attorney of the member of the common interest privilege. In re Teleglobe , 493 F.3d at 364. Federal Courts generally do not "extend the application of the joint defense privilege to conversations among the defendants themselves even in the absence of any attorney during the course of those conversations." United States v. Gotti , 771 F. Supp. 535, 545 (E.D.N.Y. 1991) ; see also Wellin , 211 F. Supp. 3d at 813–814 (citing Walsh , 165 F.R.D. at 18 and holding that the common interest doctrine does not extend to communications that do not involve at least one of the clients’ attorneys). Mr. Morton emailed the letter directly to Mr. Allen. Patel Ex. 1.1.6. Mr. Wingfield is "CC'ed" on the email, but Ms. Sztyndor is nowhere to be found in this communication. Therefore, the compliance letter was not privileged when received by Mr. Allen.
d. The compliance letter was not sent in furtherance of a common legal interest between Geneticare and Mr. Allen
Alternatively, the compliance letter was not privileged when given to Mr. Allen because Mr. Patel has not met his burden of showing that it was sent in furtherance of a common legal interest rather than a common business interest. As established above, the parties asserting the existence of a valid common interest privilege must show that there was a common interest among them, In re Teleglobe , 493 F.3d at 366, and that common interest must be legal in nature, rather than solely a common commercial or business interest, Breslow , 2016 WL 698124, at *9 (J. Goodman). Determining whether the purported common interest exists is a fact-specific inquiry. Firefighters’ Ret. Sys. , 2018 WL 305604, at *5.
Mr. Allen's testimony was that he understood his agreement with Geneticare to be that Geneticare would share the compliance letter with him in hopes that he would share it with his industry contacts. Hr'g Tr. 88:7–11; 90:2–22; 92:20–24, Dec. 4, 2020. I find this testimony credible, especially in light of the fact that there is evidence that the day after receiving the letter, Mr. Allen was given the go-ahead by Mr. Morton to forward the letter to another distributor. Gov. Ex. 24 at 2. Mr. Patel has not offered sufficient credible evidence to refute Mr. Allen or to establish the contrary scenario that Geneticare agreed to send the letter to Mr. Allen for the purpose of ensuring Performance Labs was acting in compliance with the law. In finding Mr. Allen's testimony credible, and bearing in mind that it is Mr. Patel's burden to prove that there was a joint legal interest, this Court finds that the facts established at the hearing not only fail to support Mr. Patel's contention that there was a common legal interest and this communication was made for that purpose, but instead establishes that Mr. Allen and Geneticare had, at best, a common business interest in that Mr. Allen was going to distribute the compliance letter to help Ms. Sztyndor.
2. Theory 2: Common interest privilege between Geneticare and Alpha (through Ms. Nemerson) in May 2019
At the December 4 hearing, Mr. Patel attempted to prove that a common interest privilege was established between Geneticare and Alpha/Satary Labs sometime in May 2019 (although it is unclear to this Court exactly when it is alleged to have been formed), and that the common interest agreement formed with Alpha/Satary Labs was intended to encompass communications between Geneticare and Performance Labs (as a subsidiary of Satary Labs) and Mr. Allen, who held himself out to be the vice president of sales for Performance Labs. Hr'g Tr. 103:8–9. Even assuming that there was a valid common interest privilege between Geneticare and Alpha/Satary Labs, this Court does not find that the privilege extends to the compliance letter because (1) the letter was not sent in furtherance of a common legal interest between Geneticare and Alpha/Satary Labs, and (2) it was sent without attorney involvement.
a. The compliance letter was not sent in furtherance of a common legal interest between Geneticare and Alpha
Before determining whether the compliance letter was within the scope of the joint legal interest, it is necessary to determine what Mr. Patel has proven the joint legal interest between Geneticare and Satary Labs to be. The Government argues that there is no joint legal interest between Geneticare and Satary Labs because a "common legal interest" requires the parties to have a common adversary. This Court disagrees and finds that the Government too narrowly interprets the common interest doctrine and controlling law. Although it may often be true in the criminal context that the Government is the common adversary, the existence of that common adversary is not required. Schaeffler v. United States , 806 F.3d 34, 42 (2nd Cir. 2015) ("It is true that cases involving criminal prosecutions usually describe the definition of a common defense strategy according to the contours of a particular charging instrument. In the context of civil proceedings, however, these cases emphasized the need of the parties to identify a common legal interest or strategy in obtaining a particular legal goal whether or not litigation is ongoing."). Instead, it is enough that there be potential litigation with a common adversary. United States v. McPartlin , 595 F.2d 1321, 1336 (7th Cir. 1979) (holding that the privilege can apply where different lawyers represent clients who have only "some" interests in common); Breslow , 2016 WL 698124, at *9 (J. Goodman) ("Under the "common interest" exception to waiver, a party may share its work product with another party without waiving the right to assert the privilege when the parties have a shared interest in actual or potential litigation against a common adversary....").
Here, Mr. Patel asserts that Geneticare and Satary Labs shared a common interest in ensuring that their joint business ventures were compliant in hopes of avoiding future litigation with their potential common enemy—the Government. Assuming, without deciding, that this kind of joint interest is sufficient to create a common interest privilege, I find that the compliance letter was not sent to Mr. Allen in furtherance of that common legal interest. Mr. Patel did not put forth enough evidence to prove that the conversation between Geneticare (through Mr. Morton and Mr. Wingfield) and Mr. Allen was in furtherance of Geneticare's common legal interest with Satary Labs. As explained above, this Court found Mr. Allen's testimony credible that the letter was sent to him for the purpose of distributing it to his industry contacts, and not to help Performance Labs (and therefore Satary Labs) with their joint compliance concerns. Mr. Patel's contention that the compliance letter was sent directly to Mr. Allen only as part of a common interest privilege with Satary Labs rings hollow, especially considering the lack of evidence that Mr. Allen was involved in any prior compliance discussions. For all these reasons, Mr. Patel did not prove that the letter was sent to Mr. Allen on June 17, 2019 in furtherance of any common legal interest shared by Geneticare and Alpha/Satary Labs.
b. The letter was still sent between clients without the involvement of a lawyer
Finally, even assuming there was a valid common legal interest between Geneticare and Alpha/Satary Labs and the letter was sent to Mr. Allen in furtherance of that common interest, for the same reasons discussed above, the compliance letter was not privileged when Mr. Allen received it because it was sent without the involvement of a lawyer. In re Generic Pharmaceuticals Pricing Antitrust Litigation , 432 F.Supp.3d 490, 494 (E.D. Pa. 2020) ("To be protected, ‘the communication must be shared with the attorney of the member of the community of interest’ as ‘[s]haring the communication directly with a member of the community may destroy the privilege.’ ")(citing Teleglobe , 493 F.3d at 364 ).
Conclusion
For the reasons outlined above, Mr. Patel has not met his burden of establishing the existence of a valid common interest privilege that would render the compliance letter a privileged communication and require it to be clawed back from the Government.
WHEREFORE, it is ORDERED that Defendant's Motion for Claim of Attorney Client and Common Interest Privilege (ECF No. 92) is DENIED .
DONE and ORDERED this 23rd day of December, 2020, in chambers at West Palm Beach, Florida.