Bekins Storage Co., Matter of

• Decision Date: 01 March 1983
• Citation: 118 Misc.2d 173,460 N.Y.S.2d 684
• Parties: In the Matter of a Motion to Quash a Grand Jury Subpoena for Documents in the Custody of the BEKINS STORAGE CO.
• Court: New York Supreme Court

Page 684

460 N.Y.S.2d 684

118 Misc.2d 173

In the Matter of a Motion to Quash a Grand Jury Subpoena for Documents in the Custody of the BEKINS STORAGE CO.

Supreme Court, Trial Term New York County, Part 50.

March 1, 1983.

Shea & Gould, New York City (Adam B. Gilbert, New York City, of counsel), for petitioner A.

Andrew M. Lawler, New York City, for petitioner B.

Robert M. Morgenthau, Dist. Atty., New York County (Brian Rosner, William Garfinkel, Asst. Dist. Attys., of counsel), for Grand Jury.

HAROLD J. ROTHWAX, Justice:

A New York County Grand Jury, investigating allegations of fraud in the making of multimillion dollar loans by officers of a major New York bank, has subpoenaed numerous documents in the files of a law firm, stored on the premises of Bekins Record Storage, Inc. Petitioners are two former clients of the law firm. They have moved to quash the subpoena on grounds that the documents sought are privileged from disclosure as attorney's work product (CPLR 3101[c]; CPL 240.10, subd. 2); as confidential attorney-client communications (CPLR 4503[a] ); and/or as personal incriminatory papers protected by the privilege against self-incrimination (U.S. Const.Amdt. V). The attorneys are also represented in these proceedings and assert the work product privilege on their own behalf (CPLR 3101[c] ). The District Attorney, representing the Grand Jury in this matter, does not dispute that the petitioners (who will be referred to as A and B in this opinion so as to protect the confidentiality of the Grand Jury proceeding) individually established a legitimate client-attorney relationship with the law firm. There is an issue as to joint representation which will be addressed in due course.

The court has inspected 43 files containing numerous documents as to which Petitioner A claims one or more privileges, and 17 files as to which Petitioner B has made similar claims. The burden of establishing that the documents are privileged is on the petitioners. (Koump v. Smith, 25 N.Y.2d 287, 294, 303 N.Y.S.2d 858, 250 N.E.2d 857 [1969].)

Attorney's Work Product

The petitioners assert that many of the subpoenaed documents are the work product of the attorneys and as such are absolutely exempt from Grand Jury subpoena. In particular, the work product exemption is asserted in regard to handwritten notes and drafts of documents such as partnership agreements, made by the attorneys. Petitioners rely primarily upon federal precedent to support the application of the work product exemption in the Grand Jury context. (See, e.g., In re Grand Jury Investigation, 599 F.2d 1224 [CA 5, 1979].)

The work product exemption in New York is codified in the civil (CPLR 3101[c] ) and criminal (CPL 240.10, subds. 2, 3) discovery statutes. The exemption applies, in context, to demands for discovery by opposing counsel in the course of litigation. (See, Siegel, 11th Annual Report of the Judicial Conference [1966] p. 152.) The exemption in this state has been limited by statute (CPL 240.10, subd. 2) and judicial construction "to those materials which are uniquely the product of a lawyer's learning and professional skill, such as materials which reflect his legal research, analysis, conclusions, legal theory or strategy" (Hoffman v. Ro-San Manor, 73 A.D.2d 207, 211, 425 N.Y.S.2d 207 [1st Dept., 1980] ).

Petitioners' argument raises two questions: 1) whether the attorneys' work product doctrine applies to Grand Jury proceedings in New York; and 2) whether documents such as drafts of contracts and notes in preparation of such draft documents are work product within the statute.

As previously noted, the work product exemption has been applied to federal Grand Jury proceedings. (In re Grand Jury Investigation, supra, 559 F.2d 1224; see, Upjohn Co. v. United States, 449 U.S. 383, 401, 101 S.Ct. 677, 688, 66 L.Ed.2d 584 [1980] [cases collected therein].) However, the federal definition of "work product" is significantly broader than the state definition. Federal Rule of Civil Procedure 26(b)(3) exempts as "work product" any document "prepared in anticipation of litigation or for trial" by a party's "representative", not limited to his attorney. (Upjohn Co. v. United States, supra at p. 398, 101 S.Ct. at 687.) The federal rule exempts such material from disclosure to an opposing party unless it is shown to be necessary to the opponent's case and otherwise unavailable. The federal work product rule in this broad sense is similar to New York's conditional exemption from discovery of material "prepared for litigation". (CPLR 3101[d] ). This litigation material exemption specifically has been held not to bar disclosure pursuant to a legitimate Grand Jury subpoena. ( In re, Grand Jury Proceedings, [Doe], 56 N.Y.2d 348, 354, 452 N.Y.S.2d 361, 437 N.E.2d 1118 [1982]; cf. Matter of Hynes v. Lerner, 44 N.Y.2d 329, 333, 405 N.Y.S.2d 649, 376 N.E.2d 1294 [1978].) The Court of Appeals (56 N.Y.2d 348, 354, 452 N.Y.S.2d 361, 437 N.E.2d 1118) found that the legislative purpose in making the litigation material exemption conditional was to permit access to such material for a compelling purpose, such as a Grand Jury investigation.

The federal cases which have applied the work product exemption in the Grand Jury context, all rely upon a subcategory of federal work product under Rule 2 (b)(3), which declares, inter alia, the "mental impressions, conclusions, opinions or legal theories of an attorney ... concerning litigation", absolutely privileged. (Upjohn v. United States, supra at p. 401, 101 S.Ct. at 688; see also, People v. Marin, 86 A.D.2d 40, 44, 448 N.Y.S.2d 748 [2d Dept., 1982].) To the extent that the federal rule is limited to materials produced by an attorney (see Zimmerman v. Nassau Hospital, 76 A.D.2d 921, 922, 429 N.Y.S.2d 262 [2d Dept., 1980] ) acting as an attorney, not in a nonlegal, representative, investigative or other capacity (Mogollon v. South African Marine Corp., 88 A.D.2d 586, 587, 449 N.Y.S.2d 791 [2d Dept., 1982] ) it is the substantial equivalent of the New York work product doctrine. (Compare, CPL 240.10, subd. 2.) To that extent, federal cases which apply the work product exemption to Grand Jury proceedings are persuasive precedent. (See, People v. Marin, supra, 86 A.D.2d at pp. 44-46, 448 N.Y.S.2d 748; cf. McKinney's Commentary, CPLR Vol. 7B, § C 3101:26.) Moreover, unlike the litigation material exemption, the State Legislature has declared attorney's work product absolutely immune from disclosure. (See, Hoffman v. Ro-San Manor, supra, 73 A.D.2d at p. 211, 425 N.Y.S.2d 207; cf. In re Grand Jury Proceeding (Doe), supra, 56 N.Y.2d at p. 354, 452 N.Y.S.2d 361, 437 N.E.2d 1118.) The court accordingly holds that the work product exemption (CPL 240.10, subds. 2, 3; CPLR 3101[c] ) applies in State Grand Jury investigations. (See, CPL 190.30, subd. 1; CPL 60.10).

However, the documents as to which petitioners invoke the work product exemption are not covered thereby. The concept of attorney's work product as privileged material arose in Hickman v. Taylor, (329 U.S. 495, 67 S.Ct. 385, 91 L.Ed. 451 [1947] ) in the context of preparation for litigation, or, in other words, pretrial discovery. (Upjohn v. United States, supra 449 U.S. at p. 397, 101 S.Ct. at 686; see McKinney's Commentary, supra § C 3101:28.) Hickman held that an attorney's notes of interviews of witnesses should not be available to opposing counsel in litigation since such disclosure would violate the "general policy against invading the privacy of an attorney's course of preparation". (329 U.S. at p. 511, 67 S.Ct. at 393) (Cf. People v. Consolazio, 40 N.Y.2d 446, 453-454, 387 N.Y.S.2d 62, 354 N.E.2d 801 [1976].) The protected material was defined in Hickman as "written materials obtained or prepared by an adversary's counsel with an eye toward litigation" (329 U.S. at p. 511, 67 S.Ct. at 393). As codified in the federal rules (Fed.Rule Civ.Proc. 2 [b][3] ) work product is limited to materials "prepared in anticipation of litigation or for trial". (See Upjohn Co. v. United States, supra 449 U.S. at p. 398, 101 S.Ct. at 687.) The New York legislative distinction between work product (CPLR 3101[c] ) and material prepared for litigation (CPLR 3101[d] ) did not remove the work product exemption from the litigation context. (Siegel, 11th ... Report of the Judicial Conference, op. cit., p. 152.) The effect of the legislative distinction was to limit the operation of the work product exemption in state proceedings to materials prepared by the lawyer in the course of litigation. (Hoffman v. Ro San Manor, supra, 73 A.D.2d at p. 211, 425 N.Y.S.2d 207; see People v. Allen, 104 Misc.2d 136, 427 N.Y.S.2d 698 [Westchester Co.Ct., 1980]; Zimmerman v. Nassau Hospital, supra, 76 A.D.2d at p. 922, 429 N.Y.S.2d 262.) It may be that the attorney's work product exemption extends to legal matter prepared by an attorney in anticipation of litigation. (People v. Marin, supra, 86 A.D.2d at pp. 43-45, 448 N.Y.S.2d 748; cf. Chemical Bank v. National Union Fire Ins. Co., 70 A.D.2d 837, 838, 418 N.Y.S.2d 23 [1st Dept., 1979]; compare In re Grand Jury Investigation, supra, 559 F.2d at p. 1229) but no reasonable interpretation of the statutes (CPL 240.10, subd. 2; CPLR 3101[c] ) permits the exemption from discovery of documents such as draft contracts routinely prepared with no view toward litigation. (Compare, Kandel v. Tocher, 22 A.D.2d 513, 516, 256 N.Y.S.2d 898 [1st Dept., 1965]; see also, Magna Leasing Inc. v. Staten Island Mall, 76 F.R.D. 559, 563 n. 4 [S.D.N.Y.1977].)

Since none of the subpoenaed documents appears to have been prepared in connection with litigation of any sort, all claims of attorney's work product exemption are denied.

Attorney-Client Privilege

Unlike the work product exemption, the attorney-client privilege does not depend upon the existence or prospect of litigation (Graham v. The People, 63 Barb. 468, 483 [4th Dept., 1872] ), but upon the existence of a...