United States v. Nelson ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 UNITED STATES OF AMERICA, Case No.: 19-CV-1087-CAB-WVG 12 Plaintiff, ORDER ON DISCOVERY DISPUTE 13 v. FOLLOWING SUPPLEMENTAL BRIEFING 14 LARRY NELSON, et al, 15 Defendant. 16 17 I. INTRODUCTION 18 On July 6, 2020, the Parties timely notified this Court’s Chambers of a discovery 19 dispute regarding whether the common interest doctrine applies to subpoenas for 20 deposition seeking documents and information from and the deposition testimony of 21 unrepresented allegedly aggrieved tenants (“aggrieved tenants”). On that same day, this 22 Court issued an Order Setting Briefing Schedule, directing the Parties to file concurrent 23 briefing on the common interest doctrine issue no later than 5:00 p.m. on July 7, 2020. 24 (Doc. No. 33.) The Government was timely in filing its supplemental briefing. (Doc. No. 25 34.) Defendant was not. (Doc. No. 35.) Consequently, on July 8, 2020, the Court struck 26 Defendant’s briefing from the record for its untimeliness and non-compliance with the 27 Court’s July 7, 2020 Order. (Doc. No. 36.) Having reviewed and considered the 28 Government’s supplemental briefing and relevant legal authority, the Court hereby 1 GRANTS the Government’s request for entry of a protective order barring Defendant’s 2 requests for documents, information, and deposition testimony from the aggrieved tenants 3 as it relates to their communications and dealings with the Government which implicate 4 their common interest in this litigation. 5 II. DISCUSSION 6 Before addressing whether the common interest doctrine applies here, a survey of 7 the relevant legal authority is in order. As a foundational matter, attorney-client 8 communications “made in the presence of, or shared with, third-parties destroys the 9 confidentiality of the communications and the privilege protection that is dependent upon 10 that confidentiality.” Regents of University of California v. Affymetrix, Inc., 326 F.R.D. 11 275, 278–280 (S.D. Cal. Aug. 6, 2018) (citing Nidec Corp. v. Victor Co. of Japan, 249 12 F.R.D. 575, 578 (N.D. Cal. July 5, 2007)). Exceptions to this rule are construed narrowly 13 to avoid “creating an entirely new privilege.” In re Pac. Pictures Corp., 679 F.3d 1121, 14 1128 (9th Cir. 2012). In relevant part, however, the common interest doctrine serves as an 15 exception to the general rule that disclosure of privileged communications waives such 16 privilege. Id. (citing Nidec Corp., supra, 249 F.R.D. at 578). The common interest doctrine 17 applies when “(1) the communication is made by separate parties in the course of a matter 18 of common interest; (2) the communication is designed to further that effort; and (3) the 19 privilege has not been waived.” U.S. v. Bergonzi, 216 F.R.D. 487, 495 (N.D. Cal. Aug. 5, 20 2003) (citing In re Mortgage Realty Trust, 212 B.R. 649, 653 (Bankr. C.D. Cal. Sept. 16, 21 1997)); see also In re Bevill, Bresler & Schulman Asset Management Corp., 805 F.2d 120, 22 126 (3d Cir. 1986); Griffith v. Davis, 161 F.R.D. 687, 692 (C.D. Cal. June 9, 1995). 23 Importantly, the mere existence of a “shared desire to see the same outcome in a 24 legal matter” falls short of a legally sufficient common interest. In re Pac. Pictures Corp., 25 supra, 679 F.3d at 1129. “Instead, the parties must make the communication in pursuit of 26 a joint strategy in accordance with some form of agreement—whether written or 27 unwritten.” Id.; see also U.S. ex rel. Burroughs v. DeNardi Corp., 167 F.R.D. 680, 685 28 (S.D. Cal. Feb. 20, 1996). To that end, an agreement to set up a common defense strategy 1 “may be implied from conduct and situation, such as attorneys exchanging confidential 2 communications from clients who are or potentially may be codefendants or have common 3 interests in litigation;” a joint prosecution or defense agreement is not required to establish 4 a common interest. United States v. Gonzalez, 669 F.3d 974, 979 (9th Cir. 2012) (quoting 5 Continental Oil Co., 330 F.2d at 350)). Additionally, the communications at issue must be 6 “designed to further that legal effort.” Id. (quoting Bergonzi, supra, 216 F.R.D. at 495); In 7 re Mortgage Realty Trust, supra, 212 B.R. at 653. Notably, “the privilege does not require 8 a complete unity of interests among the participants, and it may apply where the parties' 9 interests are adverse in substantial respects.” Bergonzi, supra, 216 F.R.D. at 495 (citing In 10 re Grand Jury Subpoena Duces Tecum, 406 F.Supp. 381, 392 (S.D.N.Y.1975)). 11 The Court finds that the common interest doctrine applies to the aggrieved tenants’ 12 ongoing communications with the Government in furtherance of their shared objective to 13 obtain relief from Defendant under the Fair Housing Act (“FHA” or “Act”), 14 notwithstanding the absence of an attorney-client relationship between the aggrieved 15 tenants and the Government. As a foundational matter, the Government properly observes 16 the FHA deputizes the Attorney General of the United States to seek enforcement of the 17 Act’s provisions against discriminatory housing practices. In particular, Section 18 3614(d)(1)(B) of the Act charges the Government with identifying potentially aggrieved 19 tenants and initiating legal proceedings on their behalf for purposes of furthering the FHA’s 20 statutory intent. The Government has done so here, and it is on at least 13 aggrieved 21 tenants’ behalves that the Government seeks relief for Defendant’s alleged violations of 22 the FHA. To advance its objectives, the Government has engaged in communications with 23 the aggrieved tenants relating to the claims at issue in this litigation and which necessarily 24 implicate the common interest privilege. (Doc. No. 34-1, 3: 19-23.) The Government 25 admits that it “does not have an attorney-client relationship with the aggrieved persons, but 26 ‘the Government’s interests in large measure coincide with those of aggrieved parties.’” 27 (Doc. No. 34, 1:24-28.) 28 To that end, Defendant’s subpoenas, as issued to the aggrieved tenants are broad in 1 scope and seek, in part, all documents the aggrieved tenants sent to and received from the 2 Government and that “concern, relat[e] to, or hav[e] as their subject, Larry Nelson.” (Id., 3 2:16-22.) The Government and Plaintiff-Intervenor Sylena Sanders (“Sanders”) objected 4 to such discovery requests and the subpoenas for deposition encompassing such requests, 5 on common interest doctrine grounds, amongst others. Defendant disputes the validity of 6 his opponents’ objections as to the common interest doctrine and largely argues that the 7 absence of an attorney-client relationship precludes the assertion of such objection. Not so. 8 As noted, a common interest in the outcome of this litigation may be derived from party 9 conduct rather than by memorializing a joint prosecution or defense agreement. 10 Indeed, an agreement to exchange information in furtherance of a common interest 11 may be implied through the aggrieved tenants and the Government’s exchange of 12 confidential communications spurred by both parties’ shared interest in prosecuting the 13 FHA claims against Defendant. United States v. Henke, 222 F.3d 633, 637 (9th Cir. 2000); 14 Gonzalez, supra, 669 F.3d at 979; see also Continental Oil Co., supra, 330 F.2d at 350. 15 Here, it would be nearly inconceivable that the aggrieved tenants’ interests in this litigation 16 contradict or otherwise fail to align with the Government’s interest in seeking remedies on 17 the tenants’ behalves pursuant to the FHA. The aggrieved tenants’ agreement to cooperate 18 with the Government, maintain open lines of communications with the Government, and 19 provide and receive information from the Government relating to the Government’s FHA 20 claims against Defendant demonstrates an unequivocal synchronicity in the aggrieved 21 tenants and the Government’s common interest in this litigation. 22 The Court’s conclusion on this matter aligns with other federal courts’ 23 determinations in instances where aggrieved individuals agreed to cooperate with the 24 Government, where the Government sought relief under federal statutes on the aggrieved 25 individuals’ behalves. United States v. Gumbaytay, 276 F.R.D. 671, 676 (M.D. Ala. Jan 26 19, 2011) (“the common interest rule protects communications between a governmental 27 agency and persons on whose behalf the governmental agency brings suit, where counsel 28 for the government has filed suit to enforce the rights of aggrieved persons under the Fair 1 Housing Act”); EEOC v. Chemtech International Corp., 1995 WL 608333 (S.D. Tex. May 2 18, 1995) (“because the EEOC and the private citizen have many identical interests, the 3 attorney-client privilege is essentially a joint prosecution privilege that extends to 4 communications between a party and the attorney for a co-litigant”); EEOC v. DiMare 5 Ruskin, Inc., 2012 WL 12067868 (M.D. Fla. Feb. 15, 2012) (“[The common interest 6 doctrine] protects communications between an individual, or the individual's attorney, and 7 an attorney representing a person or entity that shares a common interest with the individual 8 regarding a legal matter of common interest”); see also National Labor Relations Bd. v. 9 Jackson Hospital Corp., 257 F.R.D. 302, 311 (D.D.C. 2009) (“The de facto attorney-client 10 privilege applies in situations where there is no actual attorney-client relationship, but one 11 entity is acting like the other entity's attorney”). 12 III. CONCLUSION 13 Given the above, the Court GRANTS the Government’s request to limit the scope 14 of the aggrieved tenants’ deposition testimony and related disclosure of documents and 15 information that implicate the tenants and the Government’s common interest. 16 Accordingly, in deposition, Defendant may seek to ascertain from the aggrieved tenants 17 the who, what, when, where, why, how, and the like as it relates to the aggrieved tenants’ 18 dealings with Defendant directly and any other matters that do not implicate the aggrieved 19 tenants’ confidential communications and relationship with counsel for the Government. 20 In this spirit, Defendant’s lines of inquiry, in the context of deposition testimony and/or 21 written discovery, shall not extend to confidential communications between the 22 Government and the aggrieved tenants in furtherance of their common interest in this 23 litigation. Accordingly, the Court enters this protective order limiting the scope of 24 Defendant’s subpoenas for deposition as issued to the unrepresented aggrieved tenants and 25 / / / 26 / / / 27 / / / 28 / / / 1 related requests for production of documents. 2 IT IS SO ORDERED. 3 || Dated: July 10, 2020 LM SS 5 Hon. William V. Gallo 6 United States Magistrate Judge 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28