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Daniel Keating v. Thomas Mccahill

June 28, 2012


The opinion of the court was delivered by: Gene E.K. Pratter, J.


Plaintiff Daniel Keating has objected to Defendants Equisoft, Inc., Thomas McCahill, and Luis Romero's (collectively, "Equisoft") assertion of attorney-client privilege and work product protection over certain documents in the Defendants' privilege log. The parties have submitted twenty-five (25) documents -- twenty-four (24) produced with redactions and one (1) withheld in full -- to the Court for an in camera review to determine whether the communications at issue are shielded from disclosure by the attorney-client privilege and/or the work product doctrine.

For the reasons that follow, the Court finds that the twenty-four (24) redacted documents may remain redacted as presented to the Court, but Equisoft shall produce the one (1) unproduced document in redacted form as more fully set forth below.


Mr. Keating, a management consultant in the software industry, alleges that in late November 2009, his consulting business, the Keating Consulting Group, Inc., entered into a three month consulting services contract with Equisoft, Inc. Compl. ¶¶ 8-9. The consulting services contract was terminable at-will by either party with 30 days written notice. Id. ¶ 9. Mr. Keating also entered into a Non-Solicitation Agreement, a Confidentiality Agreement, and an Intellectual Property Agreement with Equisoft, Inc. Id. ¶ 10.

Approximately halfway through the term of the consulting agreement, Mr. Keating was offered and accepted a position with Capgemini Financial Services USA, Inc. ("Capgemini"), and entered an employment agreement with Capgemini on January 14, 2010. Id. ¶ 13. The next day, Mr. Keating traveled to Equisoft's Pennsylvania offices to give Mr. McCahill, Equisoft, Inc.'s Life Insurance Division President, the required 30 days notice pursuant to the contract.*fn2 Id.

¶ 14. On January 21, 2010, Mr. Keating began working for Capgemini. Id. ¶ 16.

In the immediate wake of Mr. Keating giving his notice, Mr. McCahill and certain members of Equisoft's senior management convened to address the issues posed by Mr. Keating's resignation. These individuals included the Equisoft CEO Mr. Romero, Equisoft Vice President and COO Steeve Michaud, and then-Equisoft General Manager for Philadelphia Operations William O'Donnell. Ex. C ¶ 3. Equisoft hired Bernard Synnott, a Canadian attorney to advise senior management on issues relating to Mr. Keating's resignation. Ex. B ¶¶ 4-6. Mr. Michaud was responsible for communicating with Mr. Synnott on behalf of Equisoft, and "relayed questions, information, comments, and advice from Mr. Synnott to [senior management], and "conveyed questions, information and comments from [the senior management] to Mr. Synnott." Ex. E ¶¶ 5-6.

From January 18, 2010 to February 8, 2010, Messrs. Michaud, O'Donnell, and Romero activity assisted Mr. Synnott in formulating strategy and drafting a demand letter to effectuate that strategy. Ex. C ¶ 7; Ex. D ¶ 7; Ex. E ¶ 7. On February 8, 2010, Mr. Synnott sent the final version of this demand letter to Mr. Keating and Capgemini representatives threatening litigation if Mr. Keating continued to work for Capgemini. Compl. ¶ 18. Three weeks after he began his new job, on February 16, 2010, Mr. Keating was terminated by Capgemini. Id. ¶ 22.

In September 2010, Mr. Synnott received a letter from Mr. Keating's attorney, Heather Sussman, Esq., threatening to commence litigation if Equisoft did not comply with various demands. Ex. B ¶ 7. For the remainder of September 2010, Messrs. Michaud, O'Donnell, and Romero assisted Mr. Synnott in evaluating Ms. Sussman's demand letter and drafting a response, which was sent on September 24, 2010. Ex. B ¶ 8; Ex. C ¶ 9; Ex. D ¶ 9; Ex. E ¶ 9.

On January 25, 2011, Mr. Keating filed this lawsuit, asserting that his termination from Capgemini was the result of Equisoft's unlawful actions. He claims tortious interference with his contractual relationship with Capgemini and his prospective economic advantage, defamation via slander and libel, intentional infliction of emotional distress, and prima facie tort.*fn3

After Mr. Keating served his initial document requests, the Defendants provided Mr. Keating with a privilege log. On October 17, 2011, one week after Equisoft provided Mr. Keating with their privilege log, Mr. Keating filed a motion to compel requesting that Equisoft produce every document on its privilege log not already produced because (1) Mr. Synnott, a foreign attorney, is not "a member of the bar of a court" as, Mr. Keating claims, is necessary for the attorney-client privilege to apply, (2) the attorney-client privilege cannot apply where the challenged communications do not include a lawyer as a sender or a recipient, and (3) the work product doctrine cannot apply where the documents at issue were not prepared by an attorney or his representative.

Since the filing of that motion -- which was mooted by Order of the Court -- the parties have reduced the universe of documents in dispute from 253 to 25. Twenty-four (24) of these disputed documents have been produced in redacted form, and one document has been withheld in its entirety. These 25 documents have been submitted to the Court for an in camera review to determine whether the attorney-client privilege and/or the work product doctrine shields them from disclosure. Along with the documents submitted for judicial review, Equisoft submitted affidavits from Mr. Synnott (Ex. B), Mr. Romero (Ex. C), Mr. O'Donnell (Ex. D), and Mr. Michaud (Ex. E) in support of its assertion of privilege and work product protection.


A. Attorney-Client Privilege

Federal courts sitting in diversity, as in this case, apply the law of the host state to determine privilege. Fed. R. Evid. 501; United Coal Co. v. Powell Constr. Co., 839 F.2d 958, 965 (3d Cir. 1988). Thus, Pennsylvania law governs the privilege issues in this case. In order for the attorney-client privilege to apply in Pennsylvania, the following conditions must be met: "(1) the asserted holder of the privilege is or sought to become a client; (2) the person to whom the communication was made is a member of the bar of a court, or his subordinate; (3) the communication relates to a fact of which the attorney was informed by his client, without the presence of strangers, for the purpose of securing either an opinion of law, legal services or assistance in a legal matter, and not for the purposes of committing a crime or tort; and (4) the privilege has been claimed and is not waived by the client." Carbis Walker, LLP v. Hill, Barth & King LLC, 930 A.2d 573, 579 (Pa. Super. Ct. 2007) (citing 42 Pa. C. S. § 5928); see also Gillard v. AIG Ins. Co., 15 A.3d 44, 59 (Pa. 2011) ("[I]n Pennsylvania, the attorney-client privilege operates in a two-way fashion to protect confidential client-to-attorney or attorney-to-client communications made for the purpose of obtaining or providing professional legal advice."). Here, only the second and third elements are in dispute.

The Pennsylvania rule that the lawyer must be "a member of the bar of a court . . ." does not limit the privilege to members of the Pennsylvania bar. Rather, "the privilege applies to communications to a person whom the client reasonably believes to be a lawyer. Thus, a lawyer admitted to practice in another jurisdiction or a lawyer admitted to practice in a foreign nation is a lawyer for the purposes of the privilege." Rest. 3d Law Governing Lawyers § 72 (comment (e)).

The attorney-client privilege protects the communications themselves, not the underlying facts. Upjohn Co. v. United States, 449 U.S. 383, 385 (1981). The privilege may cover documents that "while not involving employees assisting counsel, still reflect confidential communications between client and counsel or subordinates of counsel for the purposes of either (1) providing legal services or (2) providing information to counsel to secure legal services. SmithKline Beecham Corp. v. Apotex Corp., 232 F.R.D. 467, 477 (E.D. Pa. 2005). The privilege applies to both corporations and natural persons. Kramer v. Raymond Corp., No. 90-5026, 1992 WL 122856, at *1 (E.D. Pa. May 29, 1992). The "scope of an individual's employment is . . . highly relevant to the question of maintenance of confidentiality," and "the privilege is waived if the communications are disclosed to employees who did not need access to them." SmithKline, 232 F.R.D. at 476.

However, "[a] document need not be authored or addressed to an attorney in order to be properly withheld on attorney-client privilege grounds." Id. (citation omitted). Where a corporate client is involved, "privileged communications may be shared by non-attorney employees in order to relay information requested by attorneys." SEPTA v. CaremarkPCS Health, L.P., 254 F.R.D. 253, 254 (E.D. Pa. 2008) (quoting SmithKline, 232 F.R.D. at 477). "[D]ocuments subject to the privilege may be transmitted between non-attorneys so that the corporation may be properly informed of legal advice and act appropriately." SEPTA, 254 F.R.D. at 258-59. "[D]rafts of documents prepared by counsel or circulated to counsel for comments on legal issues are considered privileged if they were prepared or circulated for the purpose of giving or obtaining legal advice and contain information or comments not included in the final version." Id. at 258 (quoting Andritz Sprout-Bauer, Inc. v. Beazer East, Inc., 174 F.R.D. 609, 633 (M.D. Pa. 1997)).

Because the privilege obstructs the truth-finding process, it should be "applied only where necessary to achieve its purpose." Wachtel v. Health Net, Inc., 482 F.3d 225, 231 (3d Cir. 2007); accord Westinghouse Elec. Corp. v. Republic of Phillipines, 951 F.2d 1414, 1423 (3d Cir. 1991).

And because the privilege promotes the "dissemination of sound legal advice," it applies only where the advice is legal in nature, and not where the lawyer provides non-legal business advice. Wachtel, 482 F.3d at 231. Thus, "[t]he party asserting the privilege bears the burden of proving that it applies to the communications at issue," King Drug Co. of Florence, Inc. v. Cephalon, Inc., No. 06--1797, 2011 WL 2623306, at *4 n.5 (E.D. Pa. July 5, 2011) (citing In re Grand Jury Empaneled Feb. 14, 1978, 603 F.2d 469, 474 (3d Cir. 1979)), and "[Federal] Rule [of Evidence] 501 requires the federal courts, in determining the nature and scope of an evidentiary privilege, to engage in the sort of case-by-case analysis that is central to common-law adjudication." Wachtel, 482 F.3d at 230.

B. Work Product Doctrine

Federal Rule of Civil Procedure 26(b)(3) outlines work product protection in diversity cases. See United Coal, 839 F.2d at 966. In order to come within the qualified immunity from discovery created by Rule 26(b)(3) three tests must be satisfied. The material must be: (1) "documents and tangible things;" (2) "prepared in anticipation of litigation or for trial;" and (3) "by or for another party or by or for that other party's representative." Fed. R. Civ. P. 26(b)(3).

"[W]ork-product immunity protects only documents and tangible things prepared in anticipation of litigation or for trial, such as memoranda, letters, and e-mails." Scherling Corp. v. Mylan Pharma., Inc., No. 09-6383, 2011 WL 3651343, at *7 (D.N.J. Aug. 18, 2011) (citing In re EchoStar Comm. Corp., 448 F.3d 1294, 1300 (Fed. Cir. 2006).

Documents are prepared in anticipation of litigation when "in light of the nature of the document and the factual situation in the particular case, the document can be fairly said to have been prepared or obtained because of the prospect of litigation." In re Grand Jury Proceedings, 604 F.2d 798, 803 (3d Cir. 1979). The preparer's anticipation of litigation must be objectively reasonable. Martin v. Bally's Park Place Hotel & Casino, 983 F.2d 1252, 1260 (3d Cir. 1993). Generally, a reasonable anticipation of litigation requires existence of an identifiable specific claim or impending litigation at the time the materials were prepared. Montgomery Cty. v. MicroVote Corp., 175 F.3d 296, 305 (3d Cir. 1999) (Greenberg, J. concurring).

As Rule 26(b)(3) makes clear, the materials themselves need not be prepared by a lawyer or a lawyer's representative to qualify for work product protection. Fed. R. Civ. P. 26(b)(3) (acknowledging work product protection applies to documents produced "by or for another party"). Rather, "the focus of the rule seems to be on whether the work was done in anticipation of litigation by the person preparing the work." Michele DeStefano Beardslee, Taking the Business Out of Work Product, 79 Fordham L. Rev. 1869, 1907 (2011); see also Fed. R. Civ. P. 26(b)(3), Notes of Advisory Committee on 1970 Amendments ("Subsection (b)(3) reflects the trend of the cases by requiring a special showing, not merely as to materials prepared by an attorney, but also as to materials prepared in anticipation of litigation or preparation for trial by or for a party or any representative acting on his behalf."). Indeed, the fact that the documents sought for discovery do not include legal advice is, "as a matter of law, irrelevant provided . . . they were prepared in anticipation of litigation." In re Ford Motor Co., 110 F.3d 954, 968 (3d Cir. 1997).

A party claiming work product protection bears the initial burden of showing that the materials in question were prepared in anticipation of litigation. Holmes v. Pension Plan of Bethlehem Steel Corp., 213 F.3d 124, 138 (3d Cir. 2000); Cedrone v. Unity Sav. Ass'n, 103 F.R.D. 423, 426 (E.D. Pa. 1984). A party seeking disclosure of documents claimed as work product must demonstrate substantial need for the materials in the preparation of his case and is unable without undue hardship to obtain the substantial equivalent of the materials by other means. See In re Cendant Corp. Sec. Litig., 343 F.3d 658, 663 (3d Cir. 2003) (citing Fed. R. Civ. P. 26(b)(3)); cf. Eoppolo v. Nat'l R.R. Passenger Corp., 108 F.R.D. 292, 294 (E.D. Pa. 1985) ("The work ...

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