Hempel v. Cydan Dev., Inc.

ADDISON HEMPEL, et al., Plaintiffs, v. CYDAN DEVELOPMENT, INC., et al., Defendants.

Case No. PX-18-3404

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

August 24, 2020

MEMORANDUM OPINION AND ORDER

Pending before the Court is the motion to compel ("Motion") (see ECF Nos. 114 & 125 at 11-13) filed by Defendants Cydan Development, Inc, et al.¹ Having considered the submissions of the parties (ECF Nos. 114, 125, 140 & 145), the Court finds that a hearing is unnecessary. See Loc. R. 105.6. For the following reasons, the Motion will be granted in part and denied in part.

I. Background

By letter order dated June 2, 2020, the Court directed the parties to file additional briefing regarding Defendants' argument that Plaintiffs were improperly withholding communications between Plaintiffs and third parties on the basis of the common interest privilege. (ECF No. 139.) Because the matter is now fully briefed, the Court must decide whether the communications withheld by Plaintiffs are discoverable.

Plaintiffs are withholding 79 communications on the basis of the attorney-client privilege, the work product protection, and the common interest privilege. All of the communications at issue in the Motion are between Plaintiffs and third parties. Some of the communications also includePlaintiffs' attorneys.² Plaintiffs contend that the documents they withheld as work product were all created in anticipation of litigation, that their disclosure to non-adversarial third parties does not waive the protection, and that the common interest privilege applies. With regard to the documents withheld on the basis of the attorney-client privilege, Plaintiffs argue that the disclosure of these documents to third parties did not waive the privilege because the common interest privilege applies.

Defendants disagree. They argue that Plaintiffs cannot prove that any of the documents identified as work product were prepared in anticipation of litigation. Defendants note that none of the documents were created at the direction of an attorney, that many of the documents predate the commencement of this lawsuit by more than one year, and that Plaintiffs' description of the documents indicates that they were made in connection with the investigation of facts and not because of anticipated litigation.³ (ECF No. 145 at 6.) Defendants also argue that the common interest privilege does not shield the withheld documents from disclosure because it does not apply to the communications at issue.

II. Analysis

The Court must decide four issues to resolve Defendants' Motion: (1) whether Plaintiffs are properly withholding protected work product; (2) whether Plaintiffs waived the work product protection when they disclosed the documents to third parties; (3) whether Plaintiffs' work product is nonetheless discoverable because of Defendants' substantial need for it; and (4) whether thecommon interest privilege applies to prevent a finding of waiver for any documents disclosed to third parties.

A. Work Product Doctrine

The work product doctrine is meant to "protect the effectiveness of a lawyer's trial preparations by immunizing such materials from discovery." Handgards, Inc. v. Johnson & Johnson, 413 F. Supp. 926, 929 (N.D. Cal. 1976) (citing Hickman v. Taylor, 329 U.S. 495, 67 (1947)). The work product doctrine is partially codified in Rule 26(b)(3) of the Federal Rules of Civil Procedure:

Ordinarily, a party may not discover documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent). But, subject to Rule 26(b)(4), those materials may be discovered if:

(i) they are otherwise discoverable under Rule 26(b)(1); and

(ii) the party shows that it has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means.

Fed. R. Civ. P. 26(b)(3).

"For a document to be created 'in anticipation of litigation' it must be prepared because of the prospect of litigation when the preparer faces an actual claim following an actual event or series of events that reasonably could result in litigation." Neuberger Berman Real Estate Income Fund, Inc. v. Lola Brown Tr. No. 1B, 230 F.R.D. 398, 418 (D. Md. 2005) (quoting National Union Fire Ins. Co. v. Murray Sheet Metal Co., 967 F.2d 980, 984 (4th Cir. 1992)). The party seeking protection under the work product doctrine has the burden to show that it applies. Sandberg v. Va. Bankshares, Inc., 979 F.2d 332, 355 (4th Cir. 1992).

1. Work Product Protection

Plaintiffs contend that 52 documents on its privilege log are protected from disclosure by the work product doctrine. Plaintiffs' argument is as follows:

Here Plaintiffs have withheld communications with Drs. Hastings and Liu that related to the Hempels' efforts with their attorneys to develop the facts supporting their case and determine their legal theories. See, e.g., Ex. A at HEMPEL000110034 (April 4, 2017 E-Mail from C. Hempel to C. Hastings, et al.); HEMPEL000110072-80 (September 8, 2016 E-Mail from C. Hempel to S. Hrynkow, et al.). The Hempels involved Dr. Hastings (and Rita Hao, legal counsel for Dr. Hastings) in those efforts because of her knowledge, expertise, and status as a percipient witness. Because these communications related to litigation strategies and fact gathering (and many of which involved the Hempels' prior counsel at Mayer Brown), and because the Hempels understood that their communications with Drs. Hastings and Liu were made in anticipation of litigation and would be maintained in confidence, mere inclusion of Drs. Hastings and Liu in these communications did not waive any protection from disclosure. Hempel. Decl. ¶ 2.

(ECF No. 140 at 6-7.)

To support their argument, Plaintiffs have produced a privilege log (ECF No. 140-2). The privilege log contains the following descriptive categories: "Bates Range, Email Sent Date, Email From, Email To, Email CC, Subject Matter, Attachments, and Reason Withheld." In addition, Plaintiffs have submitted the Declaration of Hugh Hempel ("Mr. Hempel") (ECF No. 140-1). In the Declaration, Mr. Hempel provides the following explanation as to why the documents are protected work product:

2. Upon learning of the misconduct alleged in the Amended Complaint, my wife, Christine Hempel, and I retained Mayer Brown LLP in 2016 as counsel and began an investigation of the underlying facts to determine our legal rights. As part of the investigation and collection of evidence, my wife and I frequently consulted Dr. Hastings in communications we believed, given Dr. Hastings's status as our daughters' long-time treating physician, would be maintained in confidence. We did so because Dr. Hastings was a percipient witness to our efforts to develop a treatment for [Niemann-Pick Disease (Type C) ("NPC")] and because Dr. Hastings collaborated with us, including acting as the treating physician for our daughters, and as the physician sponsor for the submission of our NPC protocols to the Food and Drug Administration. Dr. Hastings was crucial to our effort to develop the facts underlying our claims in this litigation.

3. Also as part of our investigation and collection of evidence, my wife and I consulted with Dr. Benny Liu for many of the same reasons that we consulted with Dr. Hastings. Dr. Liu is a pioneer is cyclodextrin research, and he assisted my wife and I in understanding the facts underlying our legal rights. Like Dr. Hastings, we believed that our communications with Dr. Liu were in confidence.

(Id. at 1-2.)

Finally, Plaintiffs submitted a copy of the withheld documents to the Court for in camera review. Although it was not necessary for the Court to conduct such a review to decide the Motion, the Court performed the review anyway.⁴ Having reviewed Plaintiffs' written arguments, the privilege log, Mr. Hempel's Declaration, and the withheld documents themselves, the Courtconcludes that the work product protection does not apply to a majority of the documents. The Court will begin, however, with a discussion of the few documents that are protected work product.

a. The Timelines are Protected Work Product

The work product protection applies only to the following documents:

HEMPEL000109804-HEMPEL000109827

HEMPEL000109829-HEMPEL000109852

HEMPEL000109890-HEMPEL000109922

HEMPEL000110012-HEMPEL000110031

HEMPEL000110094-HEMPEL000110113

Each of these documents (the "timelines") is some version of a timeline that Mr. Hempel and his wife, Christine Hempel ("Mrs. Hempel"), prepared because of anticipated litigation. Plaintiffs describe the subject matter of these documents in their privilege log as a "factual overview" of certain matters relevant to this litigation.⁵ This description is vague but it is consistent with Mr. Hempel's Declaration, which describes Plaintiffs' efforts since 2016 to "develop the facts underlying [the] claims in this litigation." (ECF No. 140-1 at 1-2.)

Plaintiffs have not submitted much else to substantiate their work product claim for these documents. But little context is necessary to understand the relation of the timelines to the litigation in this case. See Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Murray Sheet Metal Co., 967 F.2d 980, 985 (4th Cir. 1992) (noting that a court should consider "the documents or their circumstances" to determine whether the work product protection applies). In the Court's experience, it is common for parties to prepare timelines of important facts and dates in order to prepare for litigation. Such timelines serve as an organizing tool for the parties and their counsel,at least in the early stages of planning for litigation. The timelines here were obviously prepared by Mr. and Mrs. Hempel in anticipation of litigation. As such, they were properly withheld as protected work product.

Defendants argue that several factors suggest that the documents...