Renovate America, Inc. v. Lloyd's Syndicate 1458 ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 RENOVATE AMERICA, INC., CASE NO. 19-CV-1456-GPC(WVG) 11 Plaintiff, ORDER ON DISCOVERY DISPUTE 12 REGARDING DEFENDANT’S 13 v. PRIVILEGE LOG 14 LLOYD’S SYNDICATE 1458; 15 Defendant. 16 17 The Court previously resolved a discovery dispute by ordering Defendant to 18 produce non-privileged documents involving attorney Margolies. (See generally 19 Doc. No. 46.) Defendant proceeded to do so, but withheld certain documents based 20 on privilege and memoralized these documents on a privilege log. Plaintiff originally 21 disputed three of these entries, but later withdrew two of the objections. Plaintiff 22 now requests that the Court view the withheld document in camera to verify it is 23 being properly withheld. However, the Court finds the privilege log is facially 24 sufficient and declines to view the disputed document in camera. 25 26 I. LEGAL STANDARD In United States v. Zolin, the Supreme Court held that a court may conduct an 27 in camera review of privileged materials to determine whether the crime-fraud 28 1 exception applies and established a two-step analysis for determining whether in camera review is appropriate. First, the party seeking in camera review must make 2 a minimal showing that the crime-fraud exception could apply to the privileged 3 materials. United States v. Zolin, 491 U.S. 554, 572 (1989). If this initial hurdle is 4 overcome, then the district court has the discretion to conduct an in camera review. 5 Id. This discretionary decision turns on “the facts and circumstances of the particular 6 case, including, among other things, the volume of materials the district court has 7 been asked to review, the relative importance to the case of the alleged privileged 8 information, and the likelihood that the evidence produced through in camera 9 review, together with other available evidence then before the court, will establish 10 that the crime-fraud exception does apply.” Id. 11 In In re Grand Jury Investigation, the Ninth Circuit held that the two-step 12 Zolin process “applies equally well when a party seeks in camera review to contest 13 assertions of [] privilege.” In re Grand Jury Investigation, 974 F.2d 1068, 1074 (9th 14 Cir. 1992). Thus, “[t]o empower the district court to review the disputed materials 15 in camera, the party opposing the privilege need only show a factual basis sufficient 16 to support a reasonable, good faith belief that in camera inspection may reveal 17 evidence that information in the materials is not privileged. If the party makes such 18 a showing, the decision whether to conduct the review rests within the discretion of 19 20 the district court . . . guided by the factors enumerated in Zolin.” Id. at 1075. 21 II. DISCUSSION 22 The disputed document, identified as UW001869-1870, is a partially redacted 23 two-page email chain involving attorney Margolies and several other individuals 24 who Plaintiff describes as non-attorneys involved in the insurance business. Plaintiff 25 contends the inclusion of these individuals, coupled with the Court’s prior finding 26 that Margolies’s primary function was that of a claim’s adjuster rather than an 27 28 1 attorney, casts suspicion on the claim of privilege. However, the Court finds the privilege log, as amended, is facially sufficient. 2 Federal Rule of Civil Procedure 26 requires the party withholding privilege 3 information to “describe the nature of the documents, communications, or tangible 4 things not produced or disclosed . . . in a manner that, without revealing information 5 itself privileged or protected, will enable other parties to assess the claim.” Fed. R. 6 Civ. P. 26(b)(5). 7 Here, the privilege log initially described the basis for withholding as “[e]mail 8 communications between Underwriters’ outside counsel, Underwriters, and Euclid 9 reflecting legal advice, opinion, and analysis as to coverage litigation.” Defendant 10 later amended the log to state (additions emphasized): “Email communications 11 between Underwriters’ outside counsel, Underwriters, and Euclid reflecting legal 12 advice, opinion, and analysis as to strategy for coverage litigation and resolution 13 strategy.” The Court finds the latter is facially sufficient for several reasons. First, it 14 is a detailed, non-generic statement that is specific to the document. 15 Second, although the Court previously found that Margolies’s primary role 16 was that of a claims adjuster, that does not mean she acted solely as a claims adjuster. 17 Indeed, she also participated in the Early Neutral Evaluation of this case and engaged 18 in settlement discussions. In doing so, she drew upon her legal training and assisted 19 20 in advising Defendant regarding settlement. Thus, it is not beyond reason that 21 although her primary role was that of a claims adjuster, she also at times advised 22 non-attorney business persons about this litigation and that the documents containing 23 those communications would be privileged. Indeed, the Court’s prior Order 24 acknowledged such a possibility and allowed for non-production of privileged 25 26 27 1 Defendant initially claimed only the attorney-client privilege, but amended the privilege log after the discovery conference to also add the work-product doctrine as 28 , Margolies documents. The amended privilege log shows that document UW001869- || 1870 is one such document. 3 Finally, as Defendant acknowledged at the discovery conference, the Court’s 4 ||prior Order compelling the production of the Margolies documents was sternly 5 || worded and placed Defendant on notice that shenanigans would not be tolerated. 6 ||Given this stern warning, it would be shocking if Defendant now improperly || withheld documents. g The foregoing notwithstanding, even if the Court were to find that Plaintiff 9 had met its burden here, the Court would nonetheless decline to exercise its 19 discretion to conduct an in camera review. The Court continues to believe that 11 || attorneys will generally do the right thing and will generally provide them the benefit 12. || of the doubt. There is more reason to do so here given the Court’s prior warning to 13 |}Defendant, which should have inspired heightened caution when withholding 14 || Margolies’s documents given that in camera review, discovery of shenanigans, and 15 |{potential sanctions was a foreseeable possibility. As a result, the Court does not 16 || believe an in camera spot-check is necessary under the circumstances here. 17 III. CONCLUSION 18 The Court finds the privilege log is facially sufficient. Accordingly, the Court 19 |{overrules Plaintiff’s objections to the privilege log with respect to the withheld 29 || document. 91 || ITIS SO ORDERED. 92 ||DATED: October 19, 2020 : UA Hon. William V. Gallo United States Magistrate Judge 25 26 27 28