In re Dayco Corp. Derivative Securities Litigation

102 F.R.D. 468, 1984 U.S. Dist. LEXIS 18759
District Court, S.D. Ohio·Decided March 9, 1984·No. No. C-3-82-184, C-3-82-254, C-3-82-329 and C-3-82-405·Published·Cited by 10 cases

Opinion

DECISION AND ENTRY ON PENDING DISCOVERY MOTIONS AND MOTION FOR CLARIFICATION

RICE, District Judge.

A number of motions are pending in these consolidated cases. Defendants’ motions to disqualify Plaintiff Heist and his attorney are disposed of in a separate decision and entry filed this date. In the instant entry, the Court addresses two pending discovery motions and a motion requesting clarification of this Court’s earlier decision regarding discovery. Familiarity with the Court’s previous decision on discovery motions, 99 F.R.D. 616 (S.D.Ohio1983), is presumed.

I. PLAINTIFFS’ MOTION TO COMPEL PRODUCTION OF CURRY DIARY IS OVERRULED

Plaintiffs have moved (doc. # 64) to compel the production of certain documents compiled by Defendant Jeanette Curry, while in the employ of Dayco. These documents, referred to as the Curry “diary” or “chronology”, were, according to Plaintiffs, compiled between May of 1979 and May of 1982, and concern the transactions between FTC and Dayco which form the basis for a portion of the present lawsuit. The motion was fully briefed, but this Court requested submission of a copy of the diary under seal for an in camera inspection. 99 F.R.D. at 626. Said document has been filed with the Court.

Plaintiffs argue that this document (or set of documents) is simply a business record relevant to this case and properly discoverable. They contend that Mrs. Curry kept the diary between May of 1979 and May of 1981 on her own, and compiled the diary for the following year at the request of Defendant Richard Jacob, Chief Executive Officer of Dayco. Most of this information appears to come from a newspaper account of some aspects of this litigation in the March 27, 1983, issue of the Dayton Daily News, written by reporter Andrew Alexander. Alexander indicates therein that he obtained a copy of the Curry diary, from an unidentified source, and quotes extensively from same. Thus, Plaintiffs conclude, any attorney-client privilege or work-product immunity which might attach to some or all of the diary has been waived. In contrast, Defendants (Dayco and Mrs. Curry) acknowledge that the diary exists, but insist that it is fully covered by the privilege and immunity, that no authorized disclosure was made to Mr. Alexander, that there has been no waiver, and that the document, at this time, should not be discoverable.

In the present state of the record, the Court agrees with Defendants, Affidavits submitted by Ms. Curry and Cyril Moscow, outside counsel to Dayco (docs. # 80 & 106), indicate that the diary was compiled [470]*470by Ms. Curry at Moscow’s direction starting in May of 1981, to chronicle events concerning Dayco and Edith Reich from May of 1979 forward. Moscow also avers that his request to Ms. Curry was part of an investigation of the Dayco/Reich affair, which by December of 1981 was being made in anticipation of litigation. Both Curry and Moscow deny giving or authorizing disclosure of the diary to Mr. Alexander, and Denis Daly, general counsel to Dayco, avers that only senior employees and officers of Dayco, and Dayco’s counsel and accountants have been permitted access to the diary. Exhibit attached to doc. # 79; doc. # 88. Plaintiffs have not offered any challenge to these statements, by way of affidavits or otherwise.

Under these facts, and based on the Court’s in camera review of the document in question, it seems clear that the Curry diary should be considered to fall under both the attorney-corporate client privilege, and work-product immunity (for the latter, at least since December of 1981). See Baxter Travenol Laboratories, Inc. v. LeMay, 89 F.R.D. 410, 413-14 (S.D.Ohio1981) (holding that privilege applies in similar factual circumstances), appeal dismissed mem., 708 F.2d 721 (6th Cir.1983); FTC v. Grolier, Inc., 462 U.S. 19, 103 S.Ct. 2209, 2213-14, 76 L.Ed.2d 387 (1983) (discussing immunity). Absent any indication that Ms. Curry or Dayco officials voluntarily gave the diary to the Dayton Daily News, publication of excerpts of same should not be considered a waiver of the privilege. J. Weinstein & M. Berger, Weinstein’s Evidence, ¶ 503(a)(4)[01] at 503-31 (1982 ed.) (“Communications which were intended to be confidential but are intercepted despite reasonable precautions remain privileged.”) (footnote omitted). See also 99 F.R.D. at 619. But cf. 8 Wigmore on Evidence §§ 2325-26 (McNaughton ed. 1961) (suggesting that in some cases, even unintended disclosures can waive the privilege). Moreover, as this Court observed earlier in the litigation, 99 F.R.D. at 619-20 n. 2, the actions of a client do not necessarily “waive” the immunity. Nor has counsel in this case waived the immunity, given the statements in Daly’s affidavit that only selected personnel have access to the diary. See United States v. A.T. & T, 642 F.2d 1285, 1298-1300 (D.C.Cir.1980).

In addition, Plaintiffs, at this point in time, have not demonstrated the sort of “substantial need” or “undue hardship” which could justify invasion of the immunity. See 99 F.R.D. at 620-21. As Defendants point out, Plaintiffs could depose Ms. Curry or other Dayco executives who could, arguably at least, provide the information found in the diary. Nor have Plaintiffs convinced the Court that they are unable to properly prosecute this case at this time without the diary. Once again, however, the Court notes that it stands ready to reconsider this conclusion should circumstances materially change.

For all of these reasons, Plaintiffs’ motion to compel is overruled.

II. PLAINTIFFS’ MOTION TO COMPEL PRODUCTION OF CERTAIN EXPENSE REPORTS IS SUSTAINED; FURTHER PROCEDURES SET

Earlier in the litigation, Plaintiffs moved (Does. # 62 & 90) to compel production of, inter alia, expense reports of “various employees” of Dayco, as that phrase was used in H 33(a)-(b) of the amended complaint. These employees were accused of misusing corporate expense accounts. In its earlier decision, the Court sustained the motion, subject to the proviso that the reports “need not be produced until the specific employees are named.” 99 F.R.D. at 625. Although the Court mentioned that these employees would or could be named in answers to interrogatories propounded by Defendants, id., the Court did not further discuss how those employees should be “named.”

The parties now cannot agree on that process, and Plaintiffs have moved (doc. # 128) to compel production of the expense reports. It appears that Plaintiffs provided the names of five Dayco employees, through answers to interrogatories and by a letter to defense counsel. Characterizing [471]*471the charges against these employees as “very serious,” Dayco’s Memorandum Contra, doc. # 131, p. 3, defendant now insists that these individuals be named in an amendment to the amended complaint, so the verification requirements of Fed.R. Civ.P. 11 & 23.1 can apply to such allegations. In response, Plaintiffs contend that they have fully complied with this Court’s decision, and that the allegations in the amended complaint are sufficient as they stand.

The Court agrees with Plaintiffs that an amendment to the complaint, as contemplated by Defendant, is unnecessary.

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In re Dayco Corp. Derivative Securities Litigation, 102 F.R.D. 468, 1984 U.S. Dist. LEXIS 18759 (S.D. Ohio 1984).

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