Resolution Trust Corp. v. Diamond, 91 Civ. 1361 (RLC)

CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
Citation773 F. Supp. 597
Docket NumberNo. 91 Civ. 1361 (RLC),91 Civ. 1683 (RLC).,91 Civ. 1361 (RLC)
PartiesRESOLUTION TRUST CORPORATION, as Receiver of Nassau Savings and Loan Association, F.A., Plaintiff, v. Selma DIAMOND, Ira Kaufman, Jerome Lederer, Peggy Lehman, Susan Solomon Pattullo, Lloyd Ribner, as Executor of the Estate of Muriel Ribner, Deceased, Horace Solomon, Lillian Solomon, Denise Tucker, Angelo Aponte, Commissioner of the Division of Housing and Community Renewal of the State of New York, and Robert Abrams, Attorney General of the State of New York, Defendants. Robert ABRAMS, Attorney General of the State of New York, and New York State Division of Housing and Community Renewal, Plaintiffs, v. RESOLUTION TRUST CORPORATION, Nassau Savings and Loan Association, F.A., Jerome Maron, and Anthony T.S. Conrad, Defendants.
Decision Date03 September 1991

COPYRIGHT MATERIAL OMITTED

Nixon, Hargrave, Devans & Doyle, New York City, for Resolution Trust Corp., Jerome Maron and Anthony T.S. Conrad; Frank H. Penski, of counsel.

Robert Abrams, Atty. Gen. of State of N.Y., New York City, pro se and for New York State Div. of Housing and Community Renewal; Frederick K. Mehlman and Karen Smith, Asst. Attys. Gen., of counsel.

Wien, Malkin & Bettex, New York City, for Selma Diamond, Ira Kaufman, Jerome Lederer, Peggy Lehman, Horace Solomon, Lillian Solomon and Denise Tucker; Robert Machleder, of counsel.

Buchwald & Kaufman, New York City, for Susan Solomon Pattullo; Don D. Buchwald, of counsel.

Behar & Greer, New York City, for Lloyd Ribner, executor; Leon I. Behar, of counsel.

OPINION

ROBERT L. CARTER, District Judge.

In a previous opinion, Resolution Trust Corp. v. Diamond, 137 F.R.D. 634 (S.D.N.Y.1991) (Carter, J.) hereinafter RTC, with which familiarity is assumed, the court ruled, among other things, that the Resolution Trust Corporation (the "RTC") had failed to sustain its initial burden of showing that the 92 documents it withheld from the Attorney General (the "A.G.") were covered under the attorney-client privilege, the deliberative-process privilege and/or the work-product rule. Nonetheless, in the interest of fairness, the court granted the RTC leave to reassert its claims of privilege.

The RTC has since provided more detailed information about each of the documents in question, has renumbered its index of withheld documents, and has added a few additional documents to the index, bringing the total number of documents withheld to 98. See Declaration of Jose P. Ceppi, July 17, 1991, app. (Revised Index of Privileged Documents); Letter of Frank Penski, Esq. to Frederick K. Mehlman, Esq., July 30, 1991, enclosure (addenda to Revised Index). The A.G. has decided not to contest the RTC's claim of attorney-client privilege, or has otherwise decided not to press its demand for production, with respect to 37 of these (nos. 8, 13, 18, 20-22, 24, 27, 29, 30-35, 37, 39, 41, 43, 46-47, 49, 58, 64, 66-67, 71, 78, 80, 82, 85, 88, 90-93 & 95).1See Affirmation of Frederick K. Mehlman, July 24, 1991, app. (Attorney General's Objections to RTC Privilege Claims). In addition, subject to the proviso that the RTC does not waive any privilege that it could otherwise assert, the RTC has agreed to produce two documents (nos. 38 & 63), as well as portions of three other documents (attached prior budget in item no. 11, attached listings of taxpayer costs and of institutions in item no. 31, and attachments in item no. 46), the latter two of which overlap with those documents that the A.G. is not challenging. All in all, questions of privilege with respect to 59 documents remain for the court's resolution.

I. Attorney-Client Privilege

The RTC has invoked the attorney-client privilege with respect to all of the 59 documents now in dispute, except for items 10-11, 14, 16-17, 38, 50, 52, 60, 62-63 and 94.2 As the court has previously noted, the holder of the privilege must show that it made the communication in confidence to an attorney (or the attorney's subordinate) primarily for the purpose of obtaining legal services and not for the purpose of committing a crime or a tort. RTC, supra, 137 F.R.D. at 642 (quoting Colton v. United States, 306 F.2d 633, 637 (2d Cir.1962)). The privilege also extends to communications from counsel to client for the purpose of giving legal advice. Upjohn Co. v. United States, 449 U.S. 383, 390, 101 S.Ct. 677, 685, 66 L.Ed.2d 584 (1981); Gould Inc. v. Mitsui Mining & Smelting Co., 825 F.2d 676, 679 (2d Cir. 1987). "Since the privilege has the effect of withholding relevant information from the factfinder, it applies only where necessary to achieve its purpose. Accordingly it protects only those disclosures — necessary to obtain informed legal advice — which might not have been made without the privilege." Fisher v. United States, 425 U.S. 391, 403, 96 S.Ct. 1569, 1577, 48 L.Ed.2d 39 (1976) (citations omitted).

The court has closely scrutinized RTC's explanations for the documents which it claims are covered under the attorney-client privilege, as well as the A.G.'s specific objections to RTC's assertions of the privilege. Chief among these objections is the A.G.'s argument that many of the documents appear to have been addressed to lawyers in their roles as policy-makers and not as RTC's attorneys (nos. 1, 2, 23, 28, 48, 51, 55-57, 59, 75, 77 & 84), or were simply routed through the offices of RTC's attorneys (nos. 3, 25 & 28), and that, therefore, the attorney-client privilege does not apply. The court recognizes that the attorney-client privilege does not normally protect communications between client and counsel where counsel are acting as regulatory decision-makers rather than as attorney advisors, see Mobil Oil Corp. v. Dep't of Energy, 102 F.R.D. 1, 9-10 (N.D.N.Y.1983), cited in RTC, supra, 137 F.R.D. at 643; Coastal Corp. v. Duncan, 86 F.R.D. 514, 521 (D.Del.1980), and that the privilege does not shield documents merely because they were transferred to or routed through an attorney. Fisher, supra, 425 U.S. at 403-04, 96 S.Ct. at 1577-78; Gould, supra, 825 F.2d at 679-80; Mobil Oil Corp., supra, 102 F.R.D. at 9-10, cited in RTC, supra, 137 F.R.D. at 643.

Citing no legal authority, the A.G. also asserts that documents listed in the index with the notation that there was "legal concurrence" by RTC's counsel (nos. 5, 6 & 44), as well as documents prepared by RTC's attorneys relating to a legislative inquiry rather than to litigation (nos. 65 & 86), do not come within the ambit of the attorney-client privilege. Finally, in numerous instances (nos. 4, 15, 19, 25-26, 36, 40, 50, 68-69, 73, 74, 76-77, 79, 81, 83 & 84), the A.G. seeks production of only those portions that are not covered by the attorney-client privilege.

Upon careful consideration of the RTC's descriptions of these documents, on the one hand, and the various objections raised by the A.G., on the other, the court concludes that the items in the revised index numbered 1-4, 7-8, 22-23, 47-48, 51, 55-59, 64-65, 68-70, 73-75, 81, 83-84, 86-87, 89 and 98, are direct, privileged attorney-client communications or contain privileged attorney-client communications that appear to be so inextricably intertwined with the rest of the text that they cannot be separated. See Hopkins v. United States Dep't of Hous. & Urban Dev., 929 F.2d 81, 85 (2d Cir.1991) (discussing feasibility of redaction).3 These documents comprise the RTC's written requests for legal advice from its counsel (nos. 1-2, 8); legal advice, opinion or strategy memoranda generated by in-house and outside counsel (nos. 3-4, 47, 68, 73-75, 83, 86 & 87); documents prepared based upon the substance of counsel's opinion or advice (nos. 7, 69 & 84), reports of attorney-client communications (nos. 56-59, 64, 70 & 98), and drafts of documents prepared by counsel (nos. 22-23, 48, 51, 55, 65, 81 & 89). Accordingly, these are absolutely privileged.

While privileged attorney-client communications, and/or attorney work-product material, are contained in the items numbered 5-6, 9, 12, 15, 19, 25-26, 28, 36, 40, 42, 44-45, 61, 76-77, 79, 96 and 97, it appears that these documents can be redacted so as both to preserve the privilege and to disclose relevant unprivileged information to the A.G. See Hopkins, supra, 929 F.2d at 85. Therefore, the RTC shall provide these documents to the A.G., but may excise portions that discuss, incorporate or refer to documents that the court has determined are absolutely privileged attorney-client communications (e.g., items numbered 5-6 and 9 should be redacted to exclude reference to item # 4) as well as portions that are identified in the revised index as discussing, incorporating or referring to legal opinions rendered by counsel and/or confidential communications made by RTC to counsel for the purpose of obtaining legal advice. For example, item # 12 should be redacted to exclude references to "legal opinion of RTC counsel as to legal issues ...," item # 15 should exclude "discussion of legal advice received from RTC counsel ...," item # 19 should exclude "referral of legal matters to outside counsel," item # 25 should exclude "discussion of privileged legal opinions of outside counsel as to RTC statutory repudiation ...," item # 26 should exclude "discussion of litigation prospects," etc.

The court has concluded that the remaining documents (nos. 53-54 & 72) are not covered by the attorney-client privilege. The RTC has not made a sufficient showing that they consist of or contain privileged attorney-client communications. The descriptions of these documents show that they were neither written by nor addressed to any RTC attorney, and are inadequate to persuade the court that privileged attorney-client communications are paraphrased in or otherwise incorporated into the main text of the documents. See RTC, supra, 137 F.R.D. at 642-43; Hopkins, supra, 929 F.2d at 85.

II. Attorney Work-Product Rule

Under the Federal Rules of Civil Procedure, the court...

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