Kirsch v. Brightstar Corp.

68 F. Supp. 3d 846, 2014 U.S. Dist. LEXIS 128927, 2014 WL 4560978
District Court, N.D. Illinois·Decided September 11, 2014·No. No. 12 C 6966·Published·Cited by 5 cases

Opinion

MEMORANDUM OPINION AND ORDER

RUBÉN CASTILLO, Chief Judge United States District Court

Lawrence S. Kirsch, as Shareholders’ Representative of Lawrence S. Kirsch, Charles W. Kriete, Michael J. Chase, and George Puszka (collectively “Shareholders”), brings this diversity action against Brightstar Corporation (“Brightstar”) alleging common law breach of contract. (R. 1, Compl.) On June 25, 2014, Shareholders moved to compel Brightstar to produce certain withheld and redacted documents. (R. 72, Pl.’s Mot. Compel.) Shareholders argued, inter alia, that Brightstar improperly redacted certain documents based on attorney-client privilege and relevance. (Id. at 4-5, 7-8; R. 72-1, Ex. E at 10-12.) After a motion hearing on July 18, 2014, this Court granted in part and denied in part Shareholders’ motion to compel. (R. 86, Min.Entry.) The Court directed Brightstar to submit the unredacted documents to Chambers for an in camera review. (R. 87, Jul. 18, 2014 Tr. at 37:15-38:04.) Brightstar complied on August 8, 2014, producing the contested documents to the Court in both redacted and unredacted forms. (R. 91, Def.’s Not. Submission Docs.) Brightstar also provided the Court with three charts that highlight the documents Shareholders contest: Exhibit A lists the documents that were redacted on the basis of privilege and were shared only with in-house and/or outside counsel; Exhibit B lists the documents that were redacted on the basis of privilege and were shared with Tech Data and/or TDMobility; and Exhibit C lists the documents that were redacted on the basis of relevance. (R. 91-1, Ex. A at-2-4; R. 91-1, Ex. B at 6; R. 91-1, Ex. C at 8.) Shareholders submitted to the Court the redacted documents, Brightstar’s privilege log, and an updated chart listing the contested documents and the basis of Shareholders’ objections.1 The Court con[851] fines its in camera review to the documents the parties identified as contested.

LEGAL STANDARD

Federal Rule of Evidence 501 provides, in relevant part, that “in a civil case, state law governs privilege regarding a claim or defense for which state law supplies the rule of decision.” Fed. R. Evid. 501. Because this Court has jurisdiction over this case based on diversity of citizenship, and Shareholders’ breach of contract claim is subject to Florida law, the issue of attorney-client privilege is governed by Florida law. See Kirsch v. Brightstar Corp., 968 F.Supp.2d 931, 937 (N.D.Ill.2013). Under Florida law, the attorney-client privilege is codified in section 90.502 of the Florida Statutes, which provides, in relevant part, that:

(1)(e) A communication between lawyer and client is “confidential” if it is not intended to be disclosed to third persons other than:
1. Those to whom disclosure is in furtherance of the rendition of legal services to the client.
2. Those reasonably necessary for the transmission of the communication.
(2) A client has a privilege to refuse to disclose, and to prevent any other person from disclosing, the contents of confidential communications when such other person learned of the communications because they were made in the rendition of legal services to the client.

Fla. Stat. § 90.502(1)(c), (2); see also Genovese v. Provident Life & Accident Ins. Co., 74 So.3d 1064, 1067 (Fla.2011).

“The purpose of the attorney-client privilege is to encourage clients to make full disclosure to their attorneys.” Genovese, 74 So.3d at 1067 (quoting Fisher v. United States, 425 U.S. 391, 403, 96 S.Ct. 1569, 48 L.Ed.2d 39 (1976)) (internal alteration omitted); see also Hagans v. Gatorland Kubota, LLC/Sentry Ins., 45 So.3d 73, 76 (Fla.Dist.Ct.App.2010) (“The attorney-client privilege exists to protect not only the giving of professional advice, but also the giving of information to the lawyer to enable him to render sound and informed advice.” (citing Upjohn Co. v. United States, 449 U.S. 383, 390, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981))). In light of this goal, not all communications between the attorney and the client are privileged; “[b]ecause application of the attorney-client privilege obstructs the truth-seeking process, it must be narrowly construed.” MapleWood Partners, L.P. v. Indian Harbor Ins. Co., 295 F.R.D. 550, 583 (S.D.Fla.2013) (applying Florida law on the issue of privilege). The privilege protects “only those disclosures necessary to obtain informed legal advice.” Genovese, 74 So.3d at 1067 (quoting Fisher, 425 U.S. at 403, 96 S.Ct. 1569). The burden to establish the privilege rests on the party invoking it. Fla. Sheriffs’ Self-Ins. Fund v. Escambia Cnty., 585 So.2d 461, 463 (Fla.Dist.Ct.App.1991).

DISCUSSION

The Court assumes familiarity with the facts of this case as outlined in its September 4, 2013 Memorandum Opinion and Order denying Brightstar’s motion to dismiss the complaint. See Kirsch, 968 F.Supp.2d at 933-35. On August 31, 2010, Brightstar purchased all of the stock of OTBT, Inc. (“OTBT”) from Shareholders pursuant to the Stock Purchase Agreement (“SPA”). (R. 1, Compl. ¶¶ 2, 19.) The purchase price was set at $1 million plus debt obligations and payment of an additional performance-based amount (the “Earn-Out”). (Id. ¶¶2, 20.) The dispute in this suit revolves primarily around the calculation of the Earn-Out, which is linked to certain revenue and the EBITDA. (Id. ¶ 21.) The Court now resolves the redacted docu[852] ments in the three categories Brightstar identified.

1. Documents redacted on the basis of attorney-client privilege that were not distributed beyond Brightstar and its outside counsel

Brightstar’s Exhibit A lists 28 documents that it redacted as privileged.2 (R. 91-1, Ex. A. at 2-4.) These 28 documents were not distributed beyond Brightstar and its outside counsel. (Id.) Brightstar contends that “these documents are no longer in dispute, as they were not shared with third parties.” (R. 91, Def.’s Not. Submission Docs, at 1.) Shareholders continue to object, however, to 22'of these documents.3 (Updated Ex. E.)

Free access — add to your briefcase to read the full text and ask questions with AI

Kirsch v. Brightstar Corp., 68 F. Supp. 3d 846, 2014 U.S. Dist. LEXIS 128927, 2014 WL 4560978 (N.D. Ill. 2014).

68 F. Supp. 3d 846 (Kirsch v. Brightstar Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related