FDIC v. Nash

• Court: District Court, D. New Hampshire
• Decided: February 23, 1999
• Docket: CV-97-187-JD
• Status: Published

Opinion

FDIC v. Nash CV-97-187-JD 02/23/99 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Federal Deposit Insurance Corp.

v. Civil No. 97-187-JD

Gerald 0. Nash and William P. Korsak

O R D E R

The FDIC moves for reconsideration (document no. 55) of the

court's order (document no. 54) resolving the FDIC's assertion of

privilege with respect to certain documents withheld from

discovery. In a prior order, dated September 25, 1998, the court

ruled that the FDIC had underestimated the effect of its

inadvertent disclosure to defendants of information otherwise

protected by the attorney-client privilege and ordered the FDIC

to disclose communications on the subjects that had been

disclosed. With respect to the work product privilege, the court

ruled that the parties had not provided sufficient information

for a reasoned application of the privilege to the withheld

documents, although the FDIC had not waived the privilege through

disclosures to RECOLL employees. The court ordered the FDIC to

file an amended privilege log with a supporting memorandum or

release all withheld documents.

In response, the FDIC filed an amended privilege log, in camera, and a "memorandum" that described in short paragraphs ten

items being withheld for privilege and briefly stated the grounds

for the privileges asserted. The FDIC provided no legal analysis

or discussion with citations to authority to explain the

application of the privileges asserted in its "memorandum." Cf.

LR 7.1(a)(2) (describing memoranda contents). Based on the

FDIC's minimal filing, the court ruled that six items were

properly withheld, one item (#79) could not be analyzed because

the FDIC had not provided a copy of the document, and three items

(#32 and #54, which are the same document, and # 107) were not

protected by the privileges asserted by the FDIC.

The documents to be released are a letter from an attorney

to an account officer at RECOLL Management Corporation pertaining

to issues relevant to the present litigation and RECOLL voucher

payment forms pertaining to legal fees. The court ruled that

while RECOLL might assert privileges as to the withheld

documents, the FDIC had not demonstrated that it also was

entitled to assert privileges as to those documents and had

failed to show that any applicable privileges had not been

waived.

The FDIC now moves for reconsideration arguing that because

the court previously held that it had not waived the work product

privilege by disclosing privileged information to RECOLL

2 employees, it was entitled to assert the work product privilege

as to RECOLL work product documents. The FDIC also apparently

believes its right to assert attorney-client privilege with

respect to RECOLL documents should have been inferred from the

court's determination that the FDIC had not waived the work

product privilege by disclosures to employees of RECOLL. In the

same order, however, the court noted the different analysis

necessary to determine waiver for each privilege. Order, Sept.

25, 1998 at 8. Further, contrary to the FDIC's assumption, the

guestion of its right to assert either privilege on its own

behalf or on behalf of RECOLL for RECOLL documents was neither

raised nor resolved in that order.

The FDIC now asserts for the first time that the common

interest doctrine under the federal common law of attorney-client

privilege controls the privilege issue in this case. The FDIC

argues it is therefore entitled to assert the attorney-client or

work product privileges "with respect to employees and/or

attorneys engaged by RECOLL."

The FDIC relies on the common interest doctrine as

articulated in In re Regents of University of California, 101

F.3d 1386 (Fed. Cir. 1996) where, in a patent case, the

University argued that the attorneys of a company holding an

option and license for a University patent also represented the

3 University for purposes of asserting the privilege. Id. at 1389.

In that case, the court explained that the existence of the

privilege depended on "whether the attorney was acting in a

professional relationship to the person asserting the privilege,"

meaning whether the person asserting the privilege believed he

was consulting a lawyer with the manifest intention to seek

professional legal advice. Id. at 1390. In a somewhat different

context, the First Circuit held that MIT and its audit agency did

not have a relationship based on a sufficiently common interest

to prevent waiver of the privilege with respect to information

disclosed to the agency. United States v. Massachusetts

Institute of Technology, 129 F.3d 681, 685-86 (1st Cir. 1997).

RECOLL is not a party to this suit, has not sought to be a

party or to assert any privilege on its own behalf in this suit,

and the FDIC has filed nothing from RECOLL or any of its

employees in support of its motion for reconsideration.

Therefore, no new evidence is offered to warrant reconsideration.

In addition, the FDIC provides only minimal information about the

relationship between itself and RECOLL apparently trying to

achieve a common interest for purposes of asserting privilege

while avoiding specifics that might impair its defense to the

contract between RECOLL and the defendants in this case. By way

of explanation, the FDIC says:

4 FDIC and RECOLL were engaged in a common endeavor to collect moneys owed to FDIC from the defendants in this case. In furtherance of this common purpose, FDIC engaged RECOLL and RECOLL engaged employees, including attorneys. Clearly there is a community of interest between FDIC and RECOLL.1

The FDIC's brief description is missing the essential elements of

an attorney-client relationship. The statement does not show

that the FDIC had a relationship with the attorney contacted by

RECOLL or that the FDIC sought legal advice from the attorney in

guestion. The FDIC does not say that RECOLL was authorized to

seek legal advice on its behalf, nor does it say that the FDIC

sought the particular legal advice pertinent to the letter.

The FDIC's eleventh-hour argument fails to carry its burden

to show that the documents are privileged. See Massachusetts

Inst. of Tech., 129 F.3d at 684. Accordingly, the FDIC's motion

for reconsideration (document no. 55) is denied.

SO ORDERED.

Joseph A. DiClerico, Jr. District Judge

February 23, 1999

cc: Steven A. Solomon, Esguire Frank M. Cadigan Jr., Esguire Daniel W. Sklar, Esguire

1The FDIC does not support its description with evidence, such as an affidavit.