City of Roseville Employees' Ret. Sys. v. Apple Inc.
| Docket Number | 19-cv-02033-YGR (JCS) |
| Decision Date | 03 August 2022 |
| Parties | CITY OF ROSEVILLE EMPLOYEES' RETIREMENT SYSTEM, Plaintiff, v. APPLE INC., et al., Defendants. |
| Court | U.S. District Court — Northern District of California |
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO COMPEL
Re: Dkt. No. 227
Plaintiff brings a Motion to Compel Production of Documents as Privileged (“Motion”), asserting that Defendants have failed to justify their assertion of attorney-client privilege as to five categories of documents listed in their privilege logs. A hearing on the Motion was held on April 15 2022 and after additional meet-and-confer efforts that reduced the number of documents in dispute from 451 to 232, the parties submitted supplemental briefs. They also lodged the documents that remained in dispute with the Court and the undersigned has reviewed in camera a sample of those documents. A second hearing was held on July 29, 2022. The Court sets forth below rulings on certain legal issues that bear on the dispute, and its rulings on certain sample documents that the Court has reviewed. Using this guidance, Apple is ordered to review the remaining documents in dispute, produce all documents that are not privileged under the guidance issued today, produce the supplemental declarations permitted below, and then meet and confer with Plaintiff in an effort to resolve any remaining disputes.
In this case, Plaintiff brings securities claims against Defendants Apple, Inc. (“Apple”), its CEO, Tim Cook, and CFO Luca Maestri based on allegedly fraudulent and misleading statements Cook and Maestri made on November 1, 2018 describing Apple's performance in China with respect to the sale of iPhones. See Revised Consolidated Class Action Complaint for Violation of the Federal Securities laws (Dkt. 114) (“Complaint”) ¶¶ 54-56. The Complaint alleges that shortly after these statements were made, on November 5, 2018, the Nikkei Asian Review published an article (“the Nikkei article”) reporting that Apple was cutting production of iPhones, contradicting these earlier statements about strong demand for iPhones in China. Id. ¶ 68.
Then, Plaintiff alleges, on January 2, 2019, “after the close of trading, Apple disclosed the true condition of its business, including the impact of deteriorating economic conditions in China, among its largest growth markets, and demand for the iPhone.” Id. ¶ 33. This preannouncement was made in the form of a “Letter from Tim Cook to Apple Investors” (“Investor Letter”) and informed investors that “revenue for 1Q19 was expected to be $84 billion, far below the guidance range of $89 to $93 billion [Apple] had announced on November 1, 2018.” Id. ¶ 34. This shortfall was attributed, in part, to an unanticipated “economic deceleration, particularly in Greater China[,]” where iPhone sales had been “poor” in 2018. Id. ¶¶ 34-35.
On April 16, 2021, the undersigned ordered the parties to agree on search terms in connection with Plaintiff's First Set of Requests for Production of Documents and for Defendants to complete production of all responsive non-privileged documents found through this search process by July 15, 2021. Dkt. 158. In part due to disputes about which custodians should be included in the search, Defendants' production of documents continued well beyond the July 15 deadline. According to Plaintiff, while Apple had produced approximately 317,000 documents by that deadline, it produced another 192,241 documents between September 23, 2021 and October 25, 2021 and 90,042 additional documents between January 14, 2022 and February 21, 2022. See Dkt. 228 at ECF p. 5. Defendants admit that by the July 15, 2021 deadline, they had produced just a little over half of the documents that ultimately were produced. Opposition at 2 (citing Winawer Decl., ¶ 2). Under the Court's Case Management Order, the deadline for “substantial completion of document discovery” was January 14, 2022. Dkt. 128, On November 24, 2021, Defendants produced an initial privilege log, in PDF format, for documents withheld or redacted from this production. Black Decl. ¶ 4. They produced the same privilege log in Excel format on December 21, 2021. Id. According to Plaintiff's counsel, these privilege logs did not list attachments to withheld documents. Id. Plaintiff's counsel met and conferred with Defendants' counsel by telephone on December 21, 2021 and objected to “the conclusory nature and lack of detail supporting Defendants' privilege assertions.” Id. ¶ 5. This was followed on January 19, 2022 by a letter from Plaintiff's counsel with an itemized list of objections to the latest privilege log and, two days later, another telephone meet-and-confer between counsel. Id. ¶ 6.
According to Plaintiff, on February 3, 2022, Defendants produced a new privilege log which “added a field for email subjects, a field that was absent from prior versions of the privilege log.” Id. ¶ 7. The February 3, 2022 privilege log also listed attachments to withheld documents, for the first time. Id.
The parties met and conferred again on February 14, 2022. Id. ¶ 9. Although the parties were able to resolve their dispute as to two of Plaintiff's objections, many disputes remained and the parties agreed to file a joint discovery letter as to those. Id. Defendants produced an updated privilege log on February 23, 2022. Id. ¶ 11. The parties filed the joint discovery letter (“Joint Discovery Letter”) the next day. Dkt. 227. After reviewing the parties' Joint Discovery Letter, the undersigned requested full briefing of the parties' dispute.
In the Motion, Plaintiff contends Defendants have improperly asserted attorney-client privilege as to the following five categories of documents: 1) documents related to the Investor Letter that Defendants claim are privileged because they were created at the behest of Apple inhouse counsel (Black Decl., Ex. 1); 2) two documents related to the Nikkei article about supplier cuts that Defendants redacted, first asserting the redactions were of material concerning “contract issues” and subsequently claiming the redacted material reflected “legal advice from in-house counsel David Tom regarding response to” the Nikkei article (Black Decl., Ex. 2); 3) emails that were received by groups whose individual members have not been identified (Black Decl., Ex. 3); 4) seven unsent documents in files of Tim Cook, Tejas Gala and Adam Talbot, who are not lawyers, as to which Defendants claim privilege on the basis that they contain legal advice from unidentified in-house counsel (Black Decl., Ex. 4); 5) 209 email attachments as to which Plaintiff claims the assertion of privilege is either facially improper based on the description provided or do not contain a sufficient description to determine if the document is privileged. (Black Decl., Exs. 5a & 5b).
Defendants opposed the Motion as to all five categories of documents and offered declarations in support of their privilege assertions by Apple Discovery Manager Robin Goldberg and Apple in-house counsel Sam Whittington. Dkt. 233.
At the April 15, 2022 motion hearing, the Court found that the declarations supplied by Defendants in support of their assertion of attorney-client privilege were insufficient. It ordered Defendants to provide to Plaintiff “for each withheld document listed in the exhibits attached to Plaintiff's motion: 1) if not already produced, a redacted version of the document that redacts out any advice that was sought or given primarily for a legal purpose; and 2) a declaration by the attorney whose advice was sought or given establishing that the redacted material was primarily for a legal purpose.” Dkt. 238. The Court further ordered that “[w]ith respect to attached documents, the declaration should establish that disclosure of the redacted material will necessarily reveal an attorney's legal advice or a request for legal advice or is otherwise privileged.” Id. The Court also set a schedule for additional meet and confer efforts and supplemental briefing as to any remaining disputes following those efforts. Id.
On May 13, 2022, Defendants supplied the following additional declarations in support of their claims of privilege: 1) Declaration of Katherine Adams Regarding Documents Withheld as Privileged (Black Supp. Decl., Ex. 9 (Adams Decl.)); 2) Declaration of David Tom Regarding Documents Withheld as Privileged (Black Supp. Decl., Ex. 17 (Tom Decl.); and 3) Declaration of Sam Whittington Regarding Documents Withheld as Privileged (Black Supp. Decl., Ex. 18 (Second Whittington Decl.). Black Supp. Decl. ¶ 2. The parties met and conferred and Defendants supplied supplemental declarations by Whittington and Adams on June 15, 2022. See Black Supp. Decl., Exs. 10 (Adams Supp. Decl.) & 19 (Whittington Supp. Decl.). As a result of their posthearing meet and confer efforts, the parties reduced the number of documents in dispute from 451 documents to 232. Black Supp. Decl. ¶ 15. They have now filed supplemental briefs addressing their remaining disputes. See Dkt. 246-3, 248.
“Issues concerning application of the attorney-client privilege in the adjudication of federal law are governed by federal common law.” United States v. Ruehle, 583 F.3d 600, 608 (9th Cir. 2009) (citations and internal quotations omitted). The party asserting the privilege has the burden of establishing the privileged nature of the communication. Id. “Because it impedes full and free...
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