Business Integration Services, Inc. v. AT & T Corp.

251 F.R.D. 121, 2008 U.S. Dist. LEXIS 33952, 2008 WL 1849755
CourtDistrict Court, S.D. New York
DecidedApril 22, 2008
DocketNo. 06 Civ. 1863(JGK)(MHD)
StatusPublished
Cited by4 cases

This text of 251 F.R.D. 121 (Business Integration Services, Inc. v. AT & T Corp.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Business Integration Services, Inc. v. AT & T Corp., 251 F.R.D. 121, 2008 U.S. Dist. LEXIS 33952, 2008 WL 1849755 (S.D.N.Y. 2008).

Opinion

MEMORANDUM & ORDER

MICHAEL H. DOLINGER, United States Magistrate Judge.

The present discovery dispute comes to us on remand from the District Court. By Memorandum Opinion and Order of November 2, 2007, Judge Koeltl vacated the portion of our August 21, 2007 Memorandum and Order that found a waiver of the attorney-client privilege by defendant AT & T Corporation as a consequence of disclosure to plaintiff of a substantial part of the substance of the attorney’s communications by Mr. James Glaekin, an AT & T regional manager. The reason for the vacatur was that Mr. Glaekin’s authority to waive the privilege on behalf of the defendant could not be sufficiently established on the basis of the record. The issue was therefore remanded for the specific purpose of determining Mr. Glacldn’s authority to do so.

Following a telephone conference with the Court on November 27, '2007, both parties submitted memoranda of law and declarations by their lawyers with exhibits. The new information provided on remand consists of a declaration by Mr. Jeffrey Quinn, an Executive Director in the Indirect Sales business unit of AT & T to whom Mr. Glaekin reported (Decl. of Judith A. Archer Ex. A, Nov. 28, 2007) and excerpts of a deposition of Mr. James Glaekin on October 27, 2007. (Aff. of Shawn M. Perry Ex. 5, Nov. 27, 2007).

For the reasons noted below, we find that the disclosures by Mr. Glaekin indeed result in a waiver of the attorney-client privilege, and we order disclosure of certain privileged documents by defendant.

I. The Issue

The undisputed facts that underlie this discovery dispute are — briefly stated and to the extent relevant — that a contractual relationship existed between AT & T and BIS, whereby BIS sold AT & T services to third parties. In 2004, AT & T decided to terminate this contractual relationship. During the relationship, Mr. Glaekin was engaged in day-to-day contact with BIS on behalf of AT & T. Mr. Glaekin also communicated with BIS about concerns AT & T had about the relationship, which concerns were cited by AT & T as a reason to terminate the contract. These concerns were — at least in part — of a legal or regulatory nature.

In the context of his communications with BIS, Mr. Glaekin informed BIS not only that AT & T’s corporate counsel had looked into the matter and what corporate counsel’s conclusions were, but also disclosed (at least part of) the thought process of the attorney. This disclosure, together with several others mentioned in our August 21, 2007 Memorandum and Order at 9, formed the basis for a finding that a waiver of the attorney-client privilege had occurred. Given the context of the disclosure (extra-judicial rather than judicial), we concluded that the waiver was limited in scope and was not a broad subject-matter waiver. (See Mem. and Order at 10, Aug. 21, 2007). As mentioned, the question remains whether Mr. Glaekin had the authorization to effect a waiver of the attorney-client privilege.

The starting point of our analysis of this issue is that the privilege lies with the client, in this case AT & T, and that it is therefore for AT & T to waive this privilege or not. See Upjohn Co. v. United States, 449 U.S. 383, 389-90, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981) (privilege applies to corporations) (citing United States v. Louisville & Nashville R.R. Co., 236 U.S. 318, 336, 35 S.Ct. 363, 59 L.Ed. 598 (1915)); Chirac v. Reinicker, 11 Wheat. 280, 24 U.S. 280, 294, 6 L.Ed. 474 (1826) (privilege “is not that of the attorney, but of the client”); In re von Bulow, 828 F.2d [124]*12494, 100 (2d Cir.1987) (“[P]rivilege belongs solely to the client and may only be waived by him.”). Since AT & T is a corporate entity, the decision to waive or not waive the privilege must be made by the company’s appropriate representatives. As the Supreme Court recognized:

As an inanimate entity, a corporation must act through agents. A corporation cannot speak directly to its lawyers. Similarly, it cannot directly waive the privilege when disclosure is in its best interest. Each of these actions must necessarily be undertaken by individuals empowered to act on behalf of the corporation____
The parties in this case agree that, for solvent corporations, the power to waive the corporate attorney-client privilege rests with the corporation’s management and is normally exercised by its officers and directors.

Commodity Futures Trading Comm’n v. Weintraub, 471 U.S. 343, 348, 105 S.Ct. 1986, 85 L.Ed.2d 372 (1985).

The parties are in agreement that at the relevant time, Mr. Glackin did not occupy a position within AT & T that would normally empower him to decide to waive the company’s attorney-client privilege: he was neither an officer or director of the company, nor a high-level manager. (PL’s Mem. of Law on Remand 2, Def.’s Mem. of Law on Remand in Further Opp’n to Pi’s Mot. to Compel Disclosure 4.) The parties disagree, however, as to whether the circumstances of the case are such that Mr. Glackin’s disclosure of the supposedly privileged information can lead to a waiver of AT & T’s privilege.

II. Waiver Principles

Preliminarily, we note that it is well established that “[t]he burden of establishing the existence of an attorney-client privilege, in all of its elements, rests with the party asserting it.” United States v. Int’l Bhd. of Teamsters, 119 F.3d 210, 214 (2d Cir.1997). “The party claiming the privilege has the burden of showing ‘that the communications between client and attorney were made in confidence and have been maintained in confidence.’” Denney v. Jenkens & Gilchrist, 362 F.Supp.2d 407, 412 (S.D.N.Y.2004) (quoting In re Horowitz, 482 F.2d 72, 81-82 (2d Cir.1973)) (emphasis added in Denney).

In this case, we are faced with the fact that a disclosure of the privileged information has in fact taken place, thus destroying the confidentiality of the attorney-client communication involved. In the context of such a disclosure, “[i]t is ... [the privilege-claiming party]’s burden to show that its privilege was not waived through disclosure to [the opposite party].” Id.

To determine the legal consequences of the disclosure in this ease, we distinguish two scenarios: (1) a voluntary disclosure, that is, a disclosure to which AT & T consented either explicitly or implicitly, and (2) an involuntary disclosure, that is, a disclosure that took place against AT & T’s will.

Voluntary disclosure will generally trigger a waiver of the attorney-client privilege. See In re Steinhardt Partners, L.P., 9 F.3d 230, 234 (2d Cir.1993) (“Once a party allows an adversary to share the otherwise privileged thought processes of counsel, the need for the privilege disappears.”).

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Bluebook (online)
251 F.R.D. 121, 2008 U.S. Dist. LEXIS 33952, 2008 WL 1849755, Counsel Stack Legal Research, https://law.counselstack.com/opinion/business-integration-services-inc-v-at-t-corp-nysd-2008.