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CASE NO. SACV 17-00118 AG (DFMx)
DFT. SUGARMAN’S MOTION TO COMPEL
PRODUCTION OF IMPROPERLY WITHELD
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LATHAM & WATKINS LLP
Manuel A. Abascal (Bar No. 171301)
manny.abascal@lw.com
Brian T. Glennon (Bar No. 211012)
brian.glennon@lw.com
Kristen M. Tuey (Bar No. 252565)
kristen.tuey@lw.com
355 South Grand Avenue, Suite 100
Los Angeles, CA 90071-1560
Tel: (213) 485-1234
Fax: (213) 891-8763
LATHAM & WATKINS LLP
Michele D. Johnson (Bar No. 198298)
michele.johnson@lw.com
Andrew R. Gray (Bar No. 254594)
andrew.gray@lw.com
650 Town Center Drive, 20th Floor
Costa Mesa, CA 92626-1925
Tel: (714) 540-1235
Fax: (714) 755-8290
Attorneys for Defendant
Steven A. Sugarman
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
IN RE BANC OF CALIFORNIA
SECURITIES LITIGATION
CASE NO. SACV 17-00118 AG (DFMx)
consolidated with
SACV 17-00138 AG (DFMx)
DEFENDANT STEVEN A. SUGARMAN’S
NOTICE OF MOTION AND MOTION TO
COMPEL BANC OF CALIFORNIA AND
CERTAIN NON-PARTIES TO PRODUCE
IMPROPERLY WITHHELD
DOCUMENTS AND PRODUCE
AMENDED PRIVILEGE LOGS THAT
COMPLY WITH THE FEDERAL RULES
OF CIVIL PROCEDURE
Judge: Honorable Douglas F. McCormick
Date: February 8, 2019
Time: 10:00 a.m.
Place: Courtroom 6B
This Document Relates to:
ALL ACTIONS
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CASE NO. SACV 17-00118 AG (DFMx)
DFT. SUGARMAN’S MOTION TO COMPEL
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TO ALL PARTIES AND THEIR COUNSEL OF RECORD:
PLEASE TAKE NOTICE that on February 8, 2019, at 10:00 a.m. or as soon
thereafter as the matter may be heard, in the Courtroom of the Honorable Douglas
F. McCormick, Courtroom 6B, United States District Court for the Central District
of California, located at 411 West Fourth Street, Santa Ana, California, Defendant
Steven A. Sugarman will and hereby does move for an Order compelling Banc of
California and Certain Non-Parties to produce improperly withheld documents and
produce amended privilege logs that comply with the Federal Rules of Civil
Procedure.
This Motion is made following the conference of counsel required by Local
Rule 37-1, which took place on January 18, 2019, and is based on this Notice of
Motion and Motion, the Declaration of Joseph DeLeon in support and exhibits
thereto, and any other materials the Court may consider prior to its decision on this
Motion.
Dated: January 22, 2019 LATHAM & WATKINS LLP
By: /s/ Manuel A. Abascal
Manuel A. Abascal
Attorneys for Defendant Steven A.
Sugarman
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TABLE OF CONTENTS
I. INTRODUCTION .......................................................................................... 1
II. FACTUAL AND PROCEDURAL BACKGROUND ................................... 2
A. August 29, 30, and September 3, 2018 Privilege Logs ....................... 2
B. October 2 and October 31, 2018 Privilege Logs ................................. 3
C. November 19, 2018 Privilege Log ....................................................... 3
III. ARGUMENT ................................................................................................. 3
A. The Producing Parties Incorrectly Claim Privilege Over
Communications that Were Not, and Could Never be,
Privileged ............................................................................................. 3
B. The Producing Parties have Improperly Withheld
Documents Over Which Any Applicable Privileges Have
Been Waived ........................................................................................ 5
1. Banc Has Waived Privilege as to the Winston &
Strawn Investigation. ................................................................. 5
2. Banc Has Waived Privilege Over the Question of
Who Hired Sanford Michelman, Who Directed His
Legal Work On Behalf of Banc, and Reports of
Misconduct to Him. ................................................................... 6
3. Banc Has Waived Privilege Regarding the
Potential Defamation Suit Against Seeking Alpha. .................. 8
4. Banc Has Waived Privilege as to the Concerns that
Mr. Sugarman Raised at a December 2016
Meeting with Board Members. .................................................. 9
C. Documents Withheld Pursuant to the Bank Secrecy Act
Should be Produced ........................................................................... 10
D. Many of the Privilege Log Entries are Insufficient to
Establish a Proper Claim of Privilege ................................................ 11
1. Several of MoFo’s Privilege Assertions in its
November 19, 2018 Privilege Log and Jones Day’s
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Assertions in its October 2 and October 31, 2018
Privilege Logs Are Unsupported Without Evidence
of a Common Interest Agreement. .......................................... 11
2. Many of the Producing Parties’ Privilege Log
Entries Are Incomplete Under the Federal Rules
and Ninth Circuit Law. ............................................................ 13
IV. CONCLUSION ............................................................................................ 15
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TABLE OF AUTHORITIES
Page(s)
CASES
Bd. of Trustees of Leland Stanford Junior Univ. v. Roche Molecular
Sys., Inc.,
237 F.R.D. 618 (N.D. Cal. 2006) ....................................................................... 10
Cotton v. PrivateBank & Tr. Co.,
235 F. Supp. 2d 809 (N.D. Ill. 2002)............................................................ 10, 11
Flatworld Interactives v. Apple Inc.,
No. C1201956JSWEDL, 2013 WL 11319071 (N.D. Cal. Dec. 24,
2013) ................................................................................................................. 7, 8
Fox v. California Sierra Fin. Servs.,
120 F.R.D. 520 (N.D. Cal. 1988) ......................................................................... 4
Franco-Gonzalez v. Holder,
No. CV 10-2211-DMG-DTBX, 2013 WL 8116823 (C.D. Cal. May
3, 2013) ............................................................................................................... 14
Garcia v. Progressive Choice Ins.
Co., No. 11-CV-466-BEN NLS, 2012 WL 3113172 (S.D. Cal. July
30, 2012) ............................................................................................................... 8
N. Pacifica, LLC v. City of Pacifica,
274 F. Supp. 2d 1118 (N.D. Cal. 2003) ............................................................... 4
ODS Techs., L.P. v. Magna Entm’t Corp.,
No. CV 07-32-65-DDP (RCX), 2008 WL 11340376 (C.D. Cal.
Oct. 31, 2008) ..................................................................................................... 15
In re Pacific Pictures Corp.,
679 F.3d 1121 (9th Cir. 2012) .............................................................................. 5
Safety Syringes, Inc. v. Plastef Investissements,
No. CV072307FMCPLAX, 2009 WL 10672569 (C.D. Cal. July 2,
2009) ................................................................................................................... 15
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SEC & Exch. Comm’n v. Coldicutt,
No. 217CV03888CASAFM, 2017 WL 2485383 (C.D. Cal. June 8,
2017) ................................................................................................................... 13
Starsight Telecast, Inc. v. Gemstar Dev. Corp.,
158 F.R.D. 650 (N.D. Cal. 1994) ......................................................................... 9
Union Bank of California v. Superior Court,
130 Cal. App. 4th 378 (2005) ............................................................................. 11
United States v. Al-Shawaf,
No. EDCV161539ODWSPX, 2017 WL 5997440 (C.D. Cal. Sept.
5, 2017) ................................................................................................................. 4
In re Worlds of Wonder Sec. Litig.,
147 F.R.D. 208 (N.D. Cal. 1992) ......................................................................... 5
RULES
Fed. R. Civ. P. 26(b)(5)(A)(ii) ................................................................................. 13
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I. INTRODUCTION
Defendant Steven Sugarman seeks an order requiring Defendant Banc of
California, Inc. (“Banc”) and non-parties Sanford Michelman, Jonah Schnel, and
Robert Sznewajs (together with Banc, the “Producing Parties”) to produce
improperly withheld documents that are not privileged, or where privilege has been
waived, and produce amended privilege logs that comply with the Federal Rules of
Civil Procedure. All of the privilege logs at issue were produced by Morrison &
Foerster (“MoFo”), counsel for Banc and Banc’s directors (including Schnel and
Sznewajs), except for two privilege logs that were produced by Jones Day during a
period in which that firm represented Schnel and Sznewajs.
Scores of documents are being improperly withheld and must be produced
for the following reasons:
• A number of the privilege claims are unsupportable because the
communications involved third parties who were not within the
bounds of any applicable privilege, and/or legal advice was not the
predominant purpose of the communications, which is necessary for
the privilege to attach.
• Certain documents are not privileged because they involve topics over
which any applicable protection has been waived, namely (1) the
Winston & Strawn investigation, (2) the question of who hired and
directed Sanford Michelman, (3) a potential defamation suit against
Seeking Alpha, and (4) concerns that Mr. Sugarman raised at a
December 2016 meeting with members of Banc’s Board of Directors.
• Other documents have been withheld based upon the Producing
Parties’ misplaced and unsupported assertion of the Bank Secrecy
Act.
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• Finally, and in any event, many of the privilege log entries are
incomplete and insufficient under the Federal Rules and established
Ninth Circuit law.
For these reasons, the Court should grant this Motion, order the Producing
Parties to produce unprivileged documents, and order MoFo and Jones Day to
supplement the hundreds of insufficient entries on their privilege logs.
II. FACTUAL AND PROCEDURAL BACKGROUND
As the Court is aware, MoFo and Jones Day have produced several privilege
logs in response to Mr. Sugarman’s requests for production and third party
subpoenas, and Plaintiff’s requests for production. As described in detail below,
each of these logs contains entries which demonstrate that certain documents are
not privileged, and other entries that are insufficiently detailed to make any
determination about the Producing Parties’ assertions of privilege.
A. August 29, 30, and September 3, 2018 Privilege Logs
On August 29, 2018, MoFo provided Mr. Sugarman with a “Michelman
Production Privilege Log” (Exhibit 1)1 with 233 privilege assertions in response to
the subpoena that Mr. Sugarman served on Michelman & Robinson on July 17,
2018. On August 30, 2018, MoFo provided “Banc of California’s Privilege Log to
Plaintiffs’ Requests” (Exhibit 2) with 810 privilege assertions in response to
Plaintiff’s requests for production of documents dated March 16, 2018 and June 1,
2018. On September 3, 2018, MoFo provided another “Banc of California’s
Privilege Log to Sugarman’s Requests” (Exhibit 3) with 1,683 privilege assertions
in response to Mr. Sugarman’s requests for production dated March 19, 2018,
April 9, 2018, and June 18, 2018.
In response to the August 29, August 30, and September 3, 2018 privilege
logs, Mr. Sugarman sent a letter to MoFo on November 13, 2018 describing in
1 All references to “Exhibit” are to the exhibits to the concurrently filed
Declaration of Joseph L. De Leon.
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detail the multiple issues with respect to each of the logs and requested that both
parties meet and confer about all three logs (Exhibit 4). On November 26, 2018,
Mr. Sugarman’s counsel met and conferred with MoFo regarding the August 29,
August 30, and September 3, 2018 privilege logs. On December 5, 2018, MoFo
sent a letter to the Court stating its position regarding these three privilege logs
(Exhibit 5).
B. October 2 and October 31, 2018 Privilege Logs
On October 2, 2018, Jones Day provided Mr. Sugarman with “Non-Party
Robert Sznewajs’s Privilege Log” (Exhibit 6) with 10 privilege entries in response
to Mr. Sugarman’s third party subpoena on Robert Sznewajs dated March 19,
2018. On October 31, 2018, Jones Day provided Mr. Sugarman with “Non-Party
Jonah Schnel’s Privilege Log” (Exhibit 7) with 72 privilege entries in response to
Mr. Sugarman’s third party subpoena on Jonah Schnel dated March 19, 2018. In
response to the October 2 and October 31 logs, Mr. Sugarman sent a letter to Jones
Day describing in detail the issues that both logs presented and requesting that the
parties meet and confer about the two logs (Exhibit 8).
C. November 19, 2018 Privilege Log
On November 19, 2018, MoFo provided Mr. Sugarman with “Jonah
Schnel’s Privilege Log” (Exhibit 9) with 1,546 privilege entries in response to Mr.
Sugarman’s third party subpoena on Jonah Schnel dated March 19, 2018. On
December 5, 2018, Mr. Sugarman sent a letter to MoFo describing numerous
challenges to the November 19, 2018 privilege log (Exhibit 10).
III. ARGUMENT
A. The Producing Parties Incorrectly Claim Privilege Over
Communications that Were Not, and Could Never be, Privileged
As a preliminary matter, the Producing Parties repeatedly (and incorrectly)
assert privilege over communications for which legal advice was not the
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predominant purpose. The following entries in Banc’s September 3, 2018
privilege log include communications where legal advice was not the predominant
purpose of the communication: Nos. 91 (“Email concerning financial
transactions”), 92 (“Document provided for review of financial transactions”), 576
(“Email concerning Special Committee expenses”), and 680 (“Document provided
in connection with review of director independence”). Furthermore, the following
privilege log entries in Banc’s September 3, 2018 log have no attorneys present on
the underlying communication, and the entries do not set forth any justification
why they are privileged: Nos. 91-92 (from John Madden to Nathan Smith copying
Jim Fraser), 203 (from Jim McKinney to John-Paul Motley), 212 (from Francisco
A. Turner to John-Paul Motley), 215 (from Jim McKinney to John-Paul Motley),
614 (from Cynthia Abercrombie to Jonah Schnel), and 1473-75 (communications
between Henry Fields, Ian Campbell, Robert Sznewajs, Halle Benett, and Jeff
Karish).
It is a matter of black-letter law that in order for a communication to be
privileged, legal advice must be the predominant purpose of the communication.
See N. Pacifica, LLC v. City of Pacifica, 274 F. Supp. 2d 1118, 1127 (N.D. Cal.
2003) (“Legal advice must predominate for the communication to be protected and
… when the legal advice is merely incidental to business advice, the privilege does
not apply.”); see also, e.g., Fox v. California Sierra Fin. Servs., 120 F.R.D. 520,
532 (N.D. Cal. 1988) (finding an objection on the grounds of the attorney-client
privilege to be improper because the discussion primarily related to business
matters rather than confidential communication for the purpose of seeking legal
advice). Furthermore, communications that do not involve an attorney typically
are not privileged. See United States v. Al-Shawaf, No. EDCV161539ODWSPX,
2017 WL 5997440, at *6 (C.D. Cal. Sept. 5, 2017) (“The attorney-client privilege,
of course, requires that there be an attorney to whom the information is given and
from whom advice is sought”); see e.g., id. (finding that the attorney-client
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privilege did not protect communications that did not involve an attorney or an
agent for an attorney). The documents identified and described above, on their
face, do not meet these requirements and must be produced.
B. The Producing Parties have Improperly Withheld Documents
Over Which Any Applicable Privileges Have Been Waived
1. Banc Has Waived Privilege as to the Winston & Strawn
Investigation.
Banc concedes, as it must, that communications with Winston & Strawn
relating to its internal investigation and the October 18, 2016 press release
regarding that investigation are no longer privileged. See Dkt. No. 112 at 25 (“The
Company chose, in cooperating with an SEC investigation, to voluntarily waive its
attorney-client privilege over … information related to the Winston & Strawn
investigation referenced in the October 18, 2016 press release.”); see also Dkt. No.
288 at 4 (“In furtherance of Banc of California’s cooperation with the SEC’s
investigation, Banc will not object to or seek to prevent Mr. Sugarman from
testifying about … his communications with attorneys at Winston & Strawn or in-
house counsel regarding the Winston & Strawn investigation referenced in the
October 16, 2018 press release[.]”). As such, the following documents should be
produced:
• August 29, 2018 privilege log: Nos. MR 823 and MR 825-27
(David Aronoff from Winston & Strawn).
• August 30, 2018 privilege log: Nos. 110-12 (Gayle I. Jenkins
from Winston & Strawn).
• November 19, 2018 privilege log: Nos. 10, 15, 1024, and
1334 (David Aronoff).
By waiving privilege to the SEC, privilege has been waived as to this civil
litigation as well. See In re Pacific Pictures Corp., 679 F.3d 1121, 1124, 1131 (9th
Cir. 2012) (a party waives attorney-client privilege by voluntarily disclosing
privileged documents to the federal government); In re Worlds of Wonder Sec.
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No. C1201956JSWEDL, 2013 WL 11319071, at *2 (N.D. Cal. Dec. 24, 2013)
(“Disclosure of the content of privileged communications constitutes a waiver of
the privilege as to all other communications on the same subject matter”); see, e.g.,
id. (finding that because plaintiff produced privileged communications regarding
the valuation of the patent-in-suit, defendant waived attorney-client privilege as to
all privileged communications regarding the valuation of the patent-in-suit);
Garcia v. Progressive Choice Ins. Co., No. 11-CV-466-BEN NLS, 2012 WL
3113172, at *7 (S.D. Cal. July 30, 2012) (holding that because contemporaneous e-
mails between the same people on the same topic had been disclosed, defendant
expressly waived attorney-client privilege with communications of the same
subject matter). Accordingly, because Banc has waived privilege on this subject,
the documents identified above also must be produced.
In addition, Banc has claimed that Mr. Michelman acted in an adverse
capacity to the Banc. In fact, Mr. Sugarman has reason to believe Mr. Michelman
received reports from whistleblowers regarding director misconduct and then was
terminated. Such reports would not be privileged in the first place because the
caller is not seeking legal advice from Mr. Michelman and Mr. Michelman was not
giving legal advice by recording the whistleblower’s communication. Second,
Banc has waived any privilege by concluding that Michelman did not represent
Banc. Mr. Sugarman believes the memo that includes the whistleblower reports
can be found at MR 980-1009. For the reasons set forth above, this document is
not privileged and must be produced.
3. Banc Has Waived Privilege Regarding the Potential
Defamation Suit Against Seeking Alpha.
Many of MoFo’s privilege assertions relate to a potential defamation suit
against Seeking Alpha, a subject matter over which Banc has expressly waived
privilege. Specifically, the following documents in the August 30, 2018 privilege
log relate to the issue of bringing a defamation suit against Seeking Alpha: Nos.
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. Id.
Id. Banc has selectively produced some communications
around this time, but has refused to produce others. See, e.g., id.
Banc’s selective
invocation of the privilege constitutes a waiver as to all correspondence involving
this subject matter. See Bd. of Trustees of Leland Stanford Junior Univ. v. Roche
Molecular Sys., Inc., 237 F.R.D. 618, 625 (N.D. Cal. 2006) (“The scope of a
waiver of attorney-client privilege extends the privilege to all communications on
the same subject matter”). Accordingly, the documents relating to this topic must
also be produced.
C. Documents Withheld Pursuant to the Bank Secrecy Act Should be
Produced
MoFo’s invocation of the Bank Secrecy Act as a basis for privilege is
misplaced. Specifically, the following documents have been improperly withheld
under the auspices of the Bank Secrecy Act:
• August 30, 2018 privilege log: Nos. 19-25 (“Email concerning
suspicious activity reports”), 110-12, 230-31, 241-42, 247-53,
317, 318 (“Documents reflecting suspicious activity reports”),
320, and 337-38.
• November 19, 2018 privilege log: Nos. 74 (“Email reflecting
meetings with federal regulators (OCC/FRB)”), 94, 242, 365,
386, 418, 614, 738, 791, 822, 898, 905, 963, 1075, 1259, 1292,
1298, 1320, 1352, 1427, and 1453.
Mr. Sugarman recognizes that under the Bank Secrecy Act, an actual
Suspicious Activity Report (“SAR”) and information revealing the existence of a
SAR are confidential and should not be produced. See Cotton v. PrivateBank &
Tr. Co., 235 F. Supp. 2d 809, 815 (N.D. Ill. 2002) (finding that documents
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CASE NO. SACV 17-00118 AG (DFMx)
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PRODUCTION OF IMPROPERLY WITHELD
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representing drafts of SARs or other work product or privileged communication
that relate to the SAR itself are not to be produced because they would disclose
whether a SAR has been prepared or filed). However, documents underlying a
SAR, or discussions surrounding a potential SAR, without confirming the
existence of a SAR are not confidential and should be produced. See id. (finding
that factual documents which give rise to suspicious conduct are to be produced
because they are business records made in the ordinary course of business); Union
Bank of California v. Superior Court, 130 Cal. App. 4th 378, 391 (2005)
(“[T]ransactional and account documents such as wire transfers, checks, and
deposit slips are the types of documents generated in the ordinary course of
business that are subject to discovery . . . [s]uch documents would be prepared
regardless of whether a financial institution had an obligation to report suspicious
activity to the federal government.”).
Based on the privilege logs (for instance, “[e]mail concerning suspicious
activity reports” and “[d]ocuments reflecting suspicious activity reports”), Mr.
Sugarman cannot determine whether these documents are SARs or confirm the
existence of SARs. If these documents are SARs or confirm the existence of
SARs, MoFo should provide additional information in the logs identified above to
allow Mr. Sugarman to assess Banc’s assertion of privilege. On the other hand, if
these documents are not SARs or do not confirm the existence of SARs, Banc is
required to produce these documents.
D. Many of the Privilege Log Entries are Insufficient to Establish a
Proper Claim of Privilege
1. Several of MoFo’s Privilege Assertions in its November 19,
2018 Privilege Log and Jones Day’s Assertions in its October 2
and October 31, 2018 Privilege Logs Are Unsupported Without
Evidence of a Common Interest Agreement.
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Several of the documents logged in MoFo’s November 19, 2018 privilege
log and Jones Day’s October 2 and October 31, 2018 privilege logs cannot be
privileged absent a common interest agreement. These documents are identified in
the privilege logs as follows:
• October 2, 2018 privilege log: Nos. REV0021258-59,
REV0021261, and REV0021281.
• October 31, 2018 privilege log: Nos. REV0093611, REV0093768,
and REV0094144.
• November 19, 2018 privilege log: Nos. 35, 39, 42-43, 46-59,
61-63, 66-68, 70-81, 84, 86-107, 109-116, 120-121, 123-129,
132-133, 135-137, 141-147, 149-154, 156-159, 163-166, 174-
178, 180 -188, 192-195, 199-200, 204, 207-209, 211, 213-214,
216-225, 230, 232, 234-236, 239, 242-243, 246-247, 250, 253-
256, 260, 262-268, 269, 270-271, 274-279, 281, 283, 285-287,
289, 291-293, 298-299, 301-306, 308, 310-313, 316-319, 321-
323, 325-328, 333-338, 340-343, 345-346, 348-355, 360-364,
366, 368, 371-374, 376-377, 379, 381, 383, 385, 387, 389-405,
408, 410-412, 414-416, 418-419, 421-422, 425, 428-429, 432,
434-436, 439-440, 442-447, 449-454, 456-457, 459-463, 466,
468-469, 471-482, 486, 488-494, 496-503, 507-512, 514, 517-
520, 522, 527, 529, 533, 535-539, 541-543, 546-547, 549-550,
553-560, 562-566, 569-570, 572-575, 577, 581-582, 584-585,
587, 589-592, 594, 596-598, 600-603, 605-608, 612, 617-625,
627-628, 630-633, 659-641, 643-646, 648-658, 660, 662-664,
666, 668-670, 672-673, 676-683, 685, 689-697, 699-701, 703,
706-718, 720-723, 726-736, 738-740, 742-757, 759, 762-763,
765-768, 771-774, 777 -779, 781, 786-788, 790-791, 795-809,
811-815, 817- 820, 822-824, 831-835, 837-839, 842-844, 846,
849-851, 853-864, 866, 868-869, 871-874, 876, 878-880, 882-
885, 891-892, 894-901, 903-905, 907, 909-911, 913, 915-927,
929-934, 936-942, 944, 947, 949-952, 955-958, 960, 962-968,
970-978, 980-982, 984, 987-9011, 1014-1016, 1020, 1023,
1025-1028, 1031-1033, 1036-1037, 1040-1043, 1046-1048,
1050-1052, 1054-1055, 1057-1060, 1064-1078, 1080, 1082-
1084, 1086-1088, 1090-1093, 1095, 1097-1099, 1101-1114,
1116-1119, 1121-1122, 1124-1128, 1131-1141, 1145-1147-
1148, 1150, 1153-1158, 1160-1164, 1166-1167, 1169-1171,
1173, 1175-1177, 1180-1184, 1186-1188, 1190-1203, 1206,
1208, 1210, 1212, 1214-1215, 1219-1221, 1224-1225, 1227,
1229-1247, 1249-1254, 1256, 1258-1262, 1264-1266, 1268-
1273, 1275-1280, 1282-1294, 1297-1302, 1304, 1308-1315,
1319-1320, 1323-1324, 1326-1330, 1335-1343, 1345-1346,
1348, 1350-1352, 1354-1355, 1360-1361, 1364-1366, 1368,
1370-1371, 1373, 1375-1388, 1390-1396, 1398-1400, 1402-
1403, 1405-1409, 1414, 1416-1418, 1420, 1422-1428, 1430-
1431, 1433, 1435-1438, 1440-1442, 1444, 1447-1454, 1456,
1458, 1460, 1462-1465, 1505-1506, 1509, 1511-1518, 1520-
1521, 1523-1525, 1527-1528, 1531-1534, 1536-1537, 1540,
and 1542-1546.
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CASE NO. SACV 17-00118 AG (DFMx)
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In the October 2, October 31, and November 19, 2018 privilege logs, MoFo
and Jones Day claim privilege over communications between Mr. Schnel and his
individual counsel, Ms. McKown. But these privilege logs also contain emails
between Mr. Schnel and Mr. Sznewajs. Mr. Sugarman cannot determine from
these privilege logs why communications that include both Mr. Schnel and Mr.
Sznewajs are privileged. Absent a common interest agreement between Mr.
Schnel and Mr. Sznewajs, the attorney-client privilege would be waived. See
Bittaker, F.3d at 719. Therefore, unless Banc (or these third parties) promptly
produce evidence of a common interest agreement, these documents should also be
produced.
2. Many of the Producing Parties’ Privilege Log Entries Are
Incomplete Under the Federal Rules and Ninth Circuit Law.
As a general matter, many of the Producing Parties’ privilege log entries are
incomplete under the Federal Rules and Ninth Circuit Law. “When a party
withholds information otherwise discoverable by claiming that the information is
privileged or subject to protection as trial-preparation material, the party must: (i)
expressly make the claim; and (ii) describe the nature of the documents,
communications, or tangible things not produced or disclosed—and do so in a
manner that, without revealing information itself privileged or protected, will
enable other parties to assess the claim.” Fed. R. Civ. P. 26(b)(5)(A)(ii); see also
Sec. & Exch. Comm’n v. Coldicutt, No. 217CV03888CASAFM, 2017 WL
2485383, at *1 (C.D. Cal. June 8, 2017) (finding that “the requisite detail for
inclusion in a privilege log consists of [1] a description of responsive material
withheld, [2] the identity and position of its author, [3] the date it was written, [4]
the identity and position of all addressees and recipients, [5] the material’s present
location, [6] and specific reasons for its being withheld, including the privilege
invoked and grounds thereof”). Here, the Producing Parties’ privilege logs fall far
short of these requirements for three reasons.
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First, the August 29, 2018 privilege log does not list the specific claim of
privilege being asserted (i.e., attorney-client privilege, work product, etc.). Indeed,
the log completely omits any detail as to what privilege is being asserted. See
Exhibit 1 (the log includes “Beginning Bates No.,” “Ending Bates No.,”
“Document Type,” “Date,” “From,” “To,” “CC,” and “Log Description”).2
Second, many of the Producing Parties’ descriptions of the supposedly
privileged documents are insufficient to support their assertions of privilege. For
instance, the following entries are examples of descriptions that are insufficient to
support any privilege assertion:
• August 29, 2018 privilege log: MR55 (“Correspondence
regarding insurance”); MR60 (“Correspondence regarding
preservation of records”); MR65 (“Correspondence regarding
attorney communications”); MR78 (“Correspondence regarding
regulatory filing”); MR808 (“Document regarding board
presentations”); and MR980 (“Document regarding legal
representation”).
• August 30, 2018 privilege log: No. 26 (“Email concerning
regulatory filing”); No. 27 (“Spreadsheet providing information
for regulatory filing”); No. 29 (“Draft regulatory filing for
review”); No. 35 (“Email concerning related party
transactions”); No. 203 (“Document concerning regulatory
filing”); No. 217 (“Email concerning financial transaction”);
No. 218 (“Draft agreement regarding financial transaction”);
No. 226 (“Email concerning potential legal action”); No. 227
(“Email providing information regarding regulatory
compliance”); No. 274 (“Draft regulatory filing for review”);
and No. 283 (“Email concerning employment issues”).
• September 3, 2018 privilege log: No. 1 (“Email concerning
employment issues”); and No. 1131 (“Email concerning
employment agreement”).
In providing a description for a privilege log, “the detail offered cannot be so
minimal as to prevent the court from evaluating the privilege claimed . . . [t]hey
must still describe the document with sufficient details so that the other party and
court can assess the claim of privilege. Franco-Gonzalez v. Holder, No. CV 10-
2211-DMG-DTBX, 2013 WL 8116823, at *6 (C.D. Cal. May 3, 2013). In
2 During a meet and confer, MoFo stated that they would produce an
amended privilege log to cure this deficiency. However, to date they have not
produced such an amended log. (De Leon Decl. at ¶ 17.)
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reviewing the Producing Parties’ privilege logs, several of the descriptions are
insufficient to provide Mr. Sugarman and the Court with enough detail to ascertain
what privilege, if any, is being claimed.
Third, the following privilege entries in the August 29, 2018 privilege log do
not contain any indication as to who authored and/or received the document: MR
331-41, MR 442-471, MR 553-57, MR 778-807, MR 809-19. The failure to
include this information renders its claim of privilege insufficient. See, e.g., Safety
Syringes, Inc. v. Plastef Investissements, No. CV072307FMCPLAX, 2009 WL
10672569, at *2 (C.D. Cal. July 2, 2009) (finding privilege log insufficient to the
extent that plaintiffs had not consistently identified the title, position, or employer
of various authors and recipients of withheld documents); ODS Techs., L.P. v.
Magna Entm’t Corp., No. CV 07-32-65-DDP (RCX), 2008 WL 11340376, at *3
(C.D. Cal. Oct. 31, 2008) (finding privilege log insufficient because, among other
things, it did not state the job title of the numerous individuals listed who authored
and/or received the various documents or describe their relationship to defendant).
Therefore, the Court should order MoFo to amend and correct the deficiencies
identified above so that Mr. Sugarman may assess the validity of the privilege
assertions.
IV. CONCLUSION
For the reasons set forth above and in the Motion, Mr. Sugarman
respectfully requests that the Court order the Producing Parties to produce
improperly withheld documents that are not privileged, or where privilege has been
waived, and produce amended privilege logs that comply with the Federal Rules of
Civil Procedure and Ninth Circuit law.
Dated: January 22, 2019 LATHAM & WATKINS LLP
By: /s/ Manuel A. Abascal
Manuel A. Abascal
Attorneys for Defendant
Steven A. Sugarman
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