Omnibus order in condominium association insurance coverage dispute, June 2010

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seeks declaratory relief pursuant to state or federal law.¶

8. The Clerk is directed to send a copy of this Amended Order to the Clerk of the Judicial Panel on Multidistrict Litigation.

9. The Final Judgment previously issued in the Aurelius Action, see Case No.: 10-CV-20236, [DE 53] (S.D. Fla. May 28, 2010), is hereby VACATED.

EL-AD RESIDENCES AT MIRAMAR CONDOMINIUM ASSOCIATION, INC., a Florida not-for-profit corporation, Plaintiff,¶

MT. HAWLEY INSURANCE COMPANY, a foreign corporation, and Westchester Surplus Lines Insurance Company, a foreign corporation, Defendants.¶

Case No. 09-60723-CIV.¶

United States District Court,¶

S.D. Florida.¶

June 2, 2010.¶

Background: Condominium association brought action against insurers, stemming from coverage dispute over hurricane damage. Association’s former attorneys moved to intervene and for ancillary proceeding.¶

Holdings: The District Court, Chris McAiley, United States Magistrate Judge, held that:¶

(1) intervention as of right was warranted, and¶

(2) ancillary proceeding to sanction former co-counsel was not warranted.¶

Motions granted in part and denied in part.¶

1. Federal Civil Procedure ⇌ 331¶

Condominium association’s former attorneys had right to intervene in association’s present action against insurers, stemming from coverage dispute over hurricane damage, for limited purpose of protecting privileged communications; disclosure of attorneys’ privileged communications with former co-counsel would have harmed attorneys in ongoing litigation.¶

Fed.Rules Civ.Proc.Rule 24(a), 28 U.S.C.App.(2006 Ed.).¶

2. Federal Courts ⇌ 21¶

Ancillary proceeding to sanction former attorneys’ former co-counsel was not warranted in action brought by condominium association against insurers, stemming from coverage dispute over hurricane damage, since court already had all necessary claims before it to resolve sanctioning issue, and had ability to manage its proceedings, vindicate its authority, and effectuate its decrees without extending its jurisdiction.¶

Keith Jeffrey Lambdin, Katzman Garfinkel Rosenbaum, John David Mallah, Maitland, FL, for Plaintiff.¶

Bradley Ryan Weiss, Benson Mucci & Associates LLP, Thomas E. Tookey, Coral Springs, FL, Brian E. Sims, Michael D. Prough, William C. Morison, Morison Holden Derewetzky & Prough LLP, Walnut Creek, CA, Cortland C. Putbrese, Morison Holden Derewetzky & Prough, LLP, Richmond, VA, Daniel Howard Coultoff, Latham, Shuker, Barker, Eden & Beaudine,¶

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LLP, Orlando, FL, Scott Michael Janowitz, William S. Berk, Melissa M. Sims, Berk Merchant & Sims PLC, Coral Gables, FL, for Defendants.¶

OMNIBUS ORDER¶

CHRIS McALILEY, United States Magistrate Judge.¶

Pending before the Court are the following related motions: (1) Request for Judicial Inquiry [DE 103]; (2) Motion for Protective Order [DE 122]; (3) Motion to Intervene [DE 125]; (4) Motion to Convene Ancillary Proceedings [DE 130]; and (5) Motion for Hearing on Motion to Convene Ancillary Proceedings [DE 132].¹ The Honorable Adalberto Jordan has referred the motions to me for resolution, and for the reasons stated below the Motion to Intervene is granted, and the other motions are denied.¶

I. BACKGROUND¶

This and a related case arise from an insurance dispute over damage allegedly caused by Hurricane Wilma to two condominium complexes. The Plaintiff in this case, El-Ad Residences at Miramar Condominium Association (“Residences”), retained the law firm of Katzman Garfinkel Rosenbaum LLP (“KGR”) to represent it in its claim against its primary property casualty insurer, Mt. Hawley Insurance Company (“Mt. Hawley”) and its excess insurer, Westchester Surplus Lines Insurance Company (“Westchester”) (collectively, “Defendants”). The other condominium complex, El-Ad Enclave at Miramar¶

Condominium Association (“Enclave”), also retained KGR to bring suit against Mt. Hawley and a different excess insurer, General Star Indemnity Company.$^2$ In March of this year, while this litigation was on-going, the law firm of KGR broke up, with some of its attorneys, led by Daniel S. Rosenbaum, forming the firm Rosenbaum Mollengarden Janssen & Sircusa (“RMJS”), and others, principally Alan Garfinkel and Leigh Katzman, forming Katzman Garfinkel & Berger (“KGB”). The break-up of KGR has been acrimonious and has led to litigation between the former law partners. The motions now before this Court arise, in large measure, from heated disputes between Rosenbaum on the one hand, and Garfinkel and Katzman on the other.¶

Immediately following the breakup of KGR, Rosenbaum’s law firm, RMJS, entered appearances on behalf of both Residences and Enclave. Thereafter, on April 8, 2010, RMJS filed a Request for Judicial Inquiry in this, the Residences case, that can be summarized as follows. Before the formation of KGR, Garfinkel had a law firm called the Garfinkel Trial Group (“GTG”), which hired a consulting firm, Hunter R Contracting LLC (“Hunter R”) and TSSA Storm Safe Inc. (“TSSA”), to perform insurance estimates. Kenneth Romain was a member of Hunter R. After several years of this consulting relationship, GTG terminated Hunter R and TSSA, which led to litigation between them over monies owed. These disputes spilled over into a number of ongoing law-¶

1. Defendant, Westchester Surplus Lines Insurance Company, filed a Motion for Extension of Time to Respond to Motion to Convene Ancillary Proceedings [DE 146]. Because the Court denies the Motion to Convene Ancillary Proceedings is denied, Westchester’s Motion is moot.

2. The “Enclave case” is filed with this Court as Case No. 09-60726-CIV-JORDAN/MCALILEY.

3. The motion is fully titled Request for Judicial Inquiry into Perjury, and Potential Subornation of Perjury and Witness Tampering. [DE 103].

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suits filed in state and federal courts, between condominium associations represented by GTG and or the consultants, and the various insurers they had sued. Romain was deposed in a number of those lawsuits and testified that Garfinkel, GTG and the consultants had engaged in a scheme to generate falsely high insurance claims, that Garfinkel had received kickbacks from the consultants, and that Garfinkel, through others, had an improper ownership interest in Hunter R. At a March 30, 2010 deposition taken in several cases, including this case and the Enclave case, Romain recanted these claims of wrongdoing. RMJS asserts that Romain’s conflicting sworn testimony demonstrates that Romain has committed perjury, either at his earlier depositions, or at the March 30th deposition, and in its Request RMJS asks this Court to conduct an inquiry into this perjury as well as possible fraud and unethical conduct by Romain, Garfinkel, and possibly others.¶

Several days after RMJS filed the Request for Judicial Inquiry, Residences again changed counsel: Garfinkel’s and Katzman’s new firm, KGB, filed a notice of appearance on Residence’s behalf, and Rosenbaum’s firm, RMJS, withdrew as counsel. RMJS continues to represent Enclave, in Case No. 09-60726-CIV-JORDAN.¶

The Motion for Judicial Inquiry was filed a few days before a discovery conference I had scheduled for April 16, 2010. I took the opportunity, at the start of that hearing, to ask Rosenbaum to answer some questions I had about his Request¶

for Judicial Inquiry, which he did.⁴ Rosenbaum basically restated what is summarized above, and was more clear about his concern that his former partners may have paid Romain to change his testimony.⁵ Rosenbaum also disclosed that he had brought his concerns to the U.S. Attorneys Office. As for the inquiry he wants this Court to undertake, Rosenbaum suggested that the Court hold hearings and take testimony from everyone involved: the various attorneys and consultants and possibly the Plaintiffs themselves. He believes that a fraud has been worked upon this and many courts and that this Court should look beyond the issues in this case and inquire into improper conduct in similar cases filed in other divisions of this Court and in various state courts. In the end, Rosenbaum would have this Court determine whether Garfinkel and Katzman and the consultants engaged in improper conduct before this or other courts, although he was not clear what remedies this Court might order. Having heard from Rosenbaum, I asked the other parties to file written responses to the Request, and offer their opinions whether a judicial inquiry is appropriate and necessary.¶

The Defendants in both the Residences and Enclave case filed a memorandum in support of this Court convening a broad judicial inquiry. [DE 121]. In that document Defendants provide considerable detail about evidence collected, in a number of cases, of an unethical relationship between Garfinkel and Hunter R and Ro-¶

4. The transcript of that discovery conference has been filed at DE 119.

5. Rosenbaum included the following information he gave the Court. At a time when difficulties had arisen between Rosenbaum and his partners Garfinkel and Katzman, and they were discussing disassociating from one another, Katzman allegedly said: “You don’t

have to worry about Ken Romain if this is an issue because we can pay him off and he will recant his testimony,’ and at that point maybe there is 18, 20 people in the room and I said, ‘That’s outrageous. There would be no way that you could ever do that or that we could ever permit that.’ [DE 119, pp. 14-15].¶

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main, which Defendants maintain is directly relevant to their defense that the insurance policies have been voided by Plaintiffs’ fraud. Defendants acknowledge that there are procedural mechanisms in place that allow this Court to address these issues in this case as needed, but nevertheless argue that a broad inquiry that cuts across case lines is warranted, because Garfinkel and others have “created a fraud upon the judicial process” throughout this District. [DE 121, p. 12]. Defendants identify twelve witnesses who should testify, and ask the Court to subpoena years worth of bank and accounting records from Garfinkel and a list of people associated with him.¶

Residences, by that time represented by Garfinkel’s and Katzman’s new law firm, filed a response in opposition to the Request. [DE 127]. It argues that it would be improper for this Court to take on an investigative role and suggests that a broad judicial inquiry would open “an evidentiary Pandora’s box.” [DE 127, p. 9]. Notably, they assert that “[n]othing has transpired before this Court that would implicate any inherent authority the Court might have to punish or order further action taken with respect to misconduct it observes.” [Id., p. 7]. It urges that the issues raised by the Request, and at the April 16 hearing, can be addressed as needed in the normal course of this litigation.¶

Shortly after the April 16 hearing, Residences filed a Motion for Protective Order Enjoining Daniel Rosenbaum from Further Violating Attorney–Client Privilege to Advance His Own Interests. [DE 122]. While the Motion is filed in the name of Residences, it mostly sets forth a series of accusations that are personal to Garfinkel. The Motion recounts the disputes between¶

6. Many of the assertions in that response have been repeated in other pleadings they have

GTG and its former consultants Hunter R and Romain, characterizes Romain’s accusations against Garfinkel as false, and claims the defendant insurers have unfairly seized upon these allegations to try to defeat the plaintiffs’ legitimate claims and have engaged in a campaign to smear Garfinkel’s reputation. The Motion calls Rosenbaum a liar [DE 122, p. 17] and makes a series of disparaging accusations against him about matters that bear on the personal dispute between the former law partners, starting with Rosenbaum’s “financial misconduct” when he allegedly diverted $700,000 from the KGR bank account into a personal account. Within that context, the Motion charges that Rosenbaum filed the Request for Judicial Inquiry, and spoke in support of that Request at the April 16th hearing, not for any legitimate purpose, but only to gain an advantage in his on-going dispute with Garfinkel and Katzman over the division of their fees and clients.¶

According to the Motion, Rosenbaum served as counsel not only for Residences, but was also counsel to Garfinkel and was part of a Joint Defense Team (“JDT”) comprised of an unnamed list of “persons sued and/or affected by” the claims brought by Hunter R, Romain, and TSSA. [DE 122, p. 7]. The Motion charges that in the Request for Judicial Inquiry and at the April 16th hearing, Rosenbaum disclosed privileged information gained as part of those representations, and did so without his clients’ authorizations. The Motion also accuses Rosenbaum of giving the Court this information in a manner adverse to his former client Residences.¶

Resting on these accusations, the Motion asks this Court to use its inherent authority to enter a “protective order” that¶

filed, and which are summarized elsewhere in this Order.¶

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enjoins Rosenbaum from further disclosures of privileged communications. Remarkably, it goes much further and asks this Court to enjoin Rosenbaum from “appearing in any case or taking any action adverse to Alan Garfinkel or any of his former clients in any case where the allegations of Ken Romain are, directly or indirectly, at issue.” [DE 122, pp. 17–18]. Such broad injunctive relief—on its face—is excessive, as it surely would bar Rosenbaum from participating in the judicial dissolution proceedings with his former partners.¶

The Defendant insurance companies filed oppositions to the Motion for Protective Order. [See DE 129, 133]. In those papers the Defendants point out, inter alia, that Rosenbaum is neither a party to this lawsuit, nor an attorney of record, that discovery is closed and, in any event, no discovery is pending involving Rosenberg. Although styled a motion for protective order, Defendants rightfully point out that it is better understood as a motion for injunctive relief against someone who is not a party to this lawsuit. Defendants also raise a number of good arguments that question whether information Rosenbaum disclosed was in fact protected by privilege. They also specifically deny that Rosenbaum has given them “any information pertaining to his representation of [Plaintiffs] or other former or current clients.” [DE 133, p. 3].¶

Perhaps recognizing the procedural flaws inherent in Residences’ Motion for Protective Order, a few days after they filed that Motion, Garfinkel and Katzman filed their Motion to Intervene to Ensure Preservation of Privilege. [DE 125]. They ask to intervene in this case, individually, to protect their personal interests, including what they claim were privileged communications with Rosenbaum. They¶

add that Rosenbaum has cross-noticed Garfinkel’s deposition in this and another case, and predict he will use the deposition to “gain leverage in the partnership dissolution and to harass Garfinkel.” [DE 125, p. 2].¶

A few days later, Garfinkel and Katzman filed yet another motion: Motion to Convene Sealed Ancillary Proceedings for Injunctive Relief, Sanctions, and Potential Attorney Disqualification [DE 130]. They repeat their accusations about Rosenbaum, and again charge that in the Request for Judicial Inquiry, and at the April 16th hearing, he disclosed privileged information, and made statements adverse to his former client Residences in violation of Florida Bar Rule of Professionalism 4-1.6, 4-1.9(b)-(c), and they again ask this Court to invoke its inherent power to discipline Rosenbaum. What’s new is the way in which Garfinkel and Katzman ask the Court to accomplish this: they would have this Court convene an ancillary proceeding that would be conducted entirely under seal, the sole focus of which would be Rosenbaum’s alleged misconduct, that would adjudicate whether Rosenbaum violated the Florida Bar Rules of Professional Conduct, and in the process they would have the Court bar Rosenbaum from filing a response to the Motion. In the end, Garfinkel would have this Court discipline Rosenbaum for breach of his ethical obligations, enjoin him from further misconduct, and disqualify defense counsel from representing their clients in this case, because they have received (unidentified) information protected by the attorney-client privilege and work product doctrine.¶

II. ANALYSIS¶

A. Motion to Intervene¶

[1] Both Garfinkel and Katzman assert their right, pursuant to Rule 24(a), F.R.¶

7. They request a hearing on that Motion.

[DE 132].¶

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Civ. P., to intervene in this action “for the limited purpose of protecting the various privileges, and to respond to the personal attacks made upon them individually by Rosenbaum.” [DE 125, p. 2]. Garfinkel and Katzman will be permitted to intervene for the former purpose, but not the latter.¶

According to the Motion to Intervene, Rosenbaum served as counsel for Garfinkel “in the matter which Romain filed against Garfinkel[,]” and their communications in this respect were protected by the attorney client privilege. Id. The Motion further asserts that Rosenbaum, as part of the Joint Defense Team represented his former law firm, KGR, and by association its partner, Katzman, and that disclosure of their privileged communications would harm Garfinkel and Katzman in on-going litigation. [DE 125, p. 3].$^8$¶

Rule 24(a) reads as follows:¶

(a) Intervention as of Right. Upon timely application anyone shall be permitted to intervene in an action:¶

(2) When the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties.¶

The law in this Circuit, and others, is clear, that this Court must allow intervention by a client “in the first instance … as soon as the [attorney-client] privilege issued is raised.” In re Grand Jury Matter (ABC Corp.), 735 F.2d 1330, 1331 (11th Cir.1984), (quoting In re Grand Jury Proceedings (Freeman), 708 F.2d 1571, 1575 (11th Cir.1983)); see also In re Grand Jury Subpoena (Newparent, Inc.), 274 F.3d 563, 570¶

8. The Motion does not specifically identify

(1st Cir.2001) (“Colorable claims of attorney-client and work product privilege [are] … a textbook example of an entitlement to intervention as of right.”); United States v. AT & T Co., 642 F.2d 1285, 1292 (D.C.Cir.1980); Sackman v. Liggett Group, Inc., 167 F.R.D. 6, 20–21 (E.D.N.Y. 1996).¶

In allowing intervention, this Court notes that Garfinkel and Katzman have not demonstrated that Rosenbaum in fact served as their lawyer, or that he has or will disclose any of their privileged communications. While they have complained mightily that Rosenbaum has already made unauthorized disclosures, Garfinkel and Katzman have not identified for this Court which of Rosenbaum’s statements in the Request for Judicial Inquiry, or at the April 16 hearing, they claim are privileged. Moreover, Katzman’s assertion of privilege is particularly attenuated: he claims that Rosenbaum, as part of the JDT, represented their former law firm, and that as a partner in the firm Katzman personally claims a privilege as to his statements to Rosenbaum. Further, to the extent Katzman contends that the statement Rosenbaum attributed to him, and repeated at the April 16 hearing (“You don’t have to worry about Ken Romain if this is an issue because we can pay him off and he will recant his testimony”) was a privileged communication, it would appear to fall squarely within the crime-fraud exception to that privilege. In this and other circuits, Garfinkel and Katzman need not set forth this proof before they intervene. See In re Grand Jury Proceedings (Freeman), 708 F.2d at 1575 (intervention should have been allowed “once the claim of attorney-client privilege … surfaced.”); In re Grand Jury Matter (ABC Corp.), 735 F.2d at 1331 (the extent of the attorney-client privilege, and the possibility of unautho-¶

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rized disclosure must be addressed after intervention); United States p. AT & T Co., 642 F.2d at 1291 (“determination of the merits of [the] claim [of privilege] is not appropriate at this threshold stage … we must accept a party’s well-pleaded allegations as valid.”)¶

Upon intervention, Garfinkel and Katzman will have to meet their burden to establish that they were in fact represented by Rosenbaum, and that they had privileged communications in the course of that attorney-client relationship that have been, or are at risk of, unauthorized disclosure.¶

Rule 24(a) permits intervention only “upon timely application.” As already noted, Rosenbaum no long represents Plaintiff in this action and he, of course, is not a party. The Court will have to hear from him however, as it considers Garfinkel’s and Katzman’s claims of privilege. The Court will therefore entertain a concise motion by Rosenbaum, pursuant to Rule 24(a) to intervene in this proceeding, for the same limited purpose of participating in this Court’s consideration of Garfinkel’s and Katzman’s claims of privilege.¶

As for Garfinkel’s and Katzman’s request to intervene to “respond to the personal attacks made upon them individually¶

9. In this diversity action, claims of privilege are governed by Florida law. F.R. Evd. 501. The burden of establishing that communications were protected from disclosure by the attorney-client privilege falls upon the party asserting the privilege. Southern Bell Tel. & Tel. Co. Deason, 632 So.2d 1377, 1383 (Fla.1994); Cone Culverhouse, 687 So.2d 888, 892 (Fla. 2d DCA 1997) (“The privilege will not apply unless the party asserting it proves that the communications at issue come within its confines.”); Wal–Mart Stores, Inc. Weeks, 696 So.2d 855, 856 (Fla. 2d DCA 1997) (same rule applies to work product doctrine). In meeting this burden, each element of the privilege must be affirmatively demonstrated, and the party claiming privilege must provide the court with evidence that demonstrates the existence of the privilege, which often is accomplished by affidavit.

by Rosenbaum,” they may not do so. [DE 125, p. 2]. As one court has noted, to intervene “the interest must be a legal interest as distinguished from interests of a general or indefinite character.” United States v. AT & T Co., 642 F.2d at 1292 (citations and quotation marks omitted).$^{10}$ This Court does not need to provide Garfinkel and Katzman a forum to respond to Rosenbaum’s “personal attacks.” In the numerous pleadings they have filed since Rosenbaum’s Request for Judicial Inquiry, Garfinkel and Katzman have already repeatedly answered Rosenbaum’s assertions and have done so in a vitriolic manner. Rosenbaum no longer represents Residences, thus he no longer has a voice in this lawsuit to make additional claims about his former law partners. There are other forums in which the former law partners can air their grievances against one another: they are already embroiled in judicial dissolution proceedings, and if complaints have not already been filed with the Florida Bar, they are likely to be.$^{11}$ Rule 24(a) does not require intervention by Garfinkel and Katzman to protect themselves from Rosenbaum’s complaints against them.¶

See CSX Transp., Inc. Admiral Ins. Co., 1995 WL 855421 at *1-2, 1995 U.S. Dist. LEXIS 22359 at *4-5 (M.D.Fla. July 20, 1995). In Florida, corporate claims of privilege are subject to a heightened level of scrutiny, and the Florida Supreme Court has established five criteria to establish a corporate claim of attorney-client privilege. Deason, id., at 1383.¶

10. While the Second Circuit has recognized that injury to reputation is one that might be served by Rule 24(a), the parties have not cited any similar authority in this Circuit, and this Court is aware of none.

11. For that matter, evidence of criminal fraud, witness tampering or bribery, is best referred to law enforcement authorities.

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B. Motion for Ancillary Proceeding¶

[2] Garfinkel and Katzman have also asked this Court to convene an extraordinary ancillary proceeding: it would be held under seal, its sole purpose would be to sanction Rosenbaum for his alleged unauthorized disclosures of his clients’ privileged information in his Request for Judicial Action and at the April 16 hearing, enjoin Rosenbaum from future similar conduct, determine whether Rosenbaum violated Florida Bar Rules of Professional Conduct 4-1.6, 4-1.9(b)–(c), and to disqualify Defendants’ counsel because Rosenbaum has given them Garfinkel’s and Katzman’s privileged information. Remarkably, they suggest Rosenbaum should have a limited opportunity to defend himself in such an action (“Rosenbaum should be ordered not to disclose any information or file any response, unless permitted by Court order.”) [DE 130, p. 2].¶

The Supreme Court, in Kokkonen Guardian Life Insur. Co. of Amer., 511 U.S. 375, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994), wrote the following about ancillary jurisdiction.¶

Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute, which is not to be expanded by judicial decree. It is to be presumed that a cause lies outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party asserting jurisdiction.¶

12. While the Court can make in camera review of possible privileged materials, it will not engage in wholesale closed dockets. Proceedings may be sealed only upon a showing of exceptional circumstances, and harm to reputation is not sufficient to overcome the strong presumption in favor of public access to the courts. Brown . Advantage Engineer-

The doctrine of ancillary jurisdiction … recognizes federal courts’ jurisdiction over some matters (otherwise beyond their competence) that are incidental to other matters properly before them.¶

Generally speaking, we have asserted ancillary jurisdiction … for two separate, though sometimes related purposes: (1) to permit disposition by a single court of claims that are, in varying respects and degrees, factually interdependent, and (2) to enable a court to function successfully, that is, to manage its proceedings, vindicate its authority, and effectuate its decrees.¶

Id. at 377–380, 114 S.Ct. 1673 (citations omitted). Garfinkel and Katzman have not carried their burden to demonstrate that their proposed ancillary proceeding would satisfy either purpose. As for the first purpose, this Court clearly has all claims before it necessary to resolve this matter. As for the second purpose, this Court can “manage its proceedings, vindicate its authority, and effectuate its decrees” without extending its jurisdiction. Specifically, it can: (1) resolve any disputes about privileges and issue appropriate orders; (2) if it needs to pass on ethics breaches by counsel, it has the power to do so; $^{13}$ and (3) it can, and will, use its authority to insist that counsel conduct themselves with a degree of restraint and professionalism that has been lacking in many of the pleadings now before this Court. In sum, this¶

ing, Inc., 960 F.2d 1013, 1016 (11th Cir.¶

1992); Wilson . American Motors Corp., 759¶

F.2d 1568 (11th Cir.1985).¶

13. The Florida Bar is uniquely suited to address compliance with its Rules of Professional Conduct and, at this juncture, this Court defers to the Florida Bar to do just that.

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Court will not expand its jurisdiction to engage in an investigation of Rosenbaum.$^{14}$¶

C. Motion for Protective Order¶

Residences’ Motion for Protective Order is also denied. Residences has not provided this Court with information to support its claim that Rosenbaum has disclosed its confidential attorney-client communications. The Motion can only be understood as Garfinkel’s and Katzman’s personal complaints about Rosenbaum, and to the extent they ask this Court to enjoin Rosenbaum, a non-party, from prospective violations of the attorney-client privilege, that motion is denied.¹⁵ The Court will address Garfinkel’s and Katzman’s claims of privilege consistent with its ruling on the Motion to Intervene.¶

D. Request for Judicial Action¶

Rosenbaum, and the Defendant insurers, would both like this Court to step beyond the four corners of this lawsuit and investigate various possibilities of fraud upon this and other Courts. The proposed areas of inquiry include: (1) Romain’s apparent perjury, either at the March 30 deposition, or earlier depositions; (2) whether Garfinkel or Katzman improperly persuaded Romain to recant his sworn accusations against them; (3) whether Garfinkel, Katzman or their consultants engaged in fraud by helping their clients to submit false insurance claims. This alleged misconduct is serious, and this Order should not be misconstrued to suggest otherwise.¶

This Court nevertheless declines to engage in a free-ranging inquiry into matters¶

pending before other courts, as those courts are best suited to manage their own proceedings. Allegations of inflated insurance claims, kickbacks and improper business relationships between lawyers and consultants have been raised in the course of similar litigation before other courts, where they have been addressed in the context of those proceedings without having to embark on a sweeping investigation. The only new information here is Romain’s March 30 deposition testimony in which he recanted his earlier accusations of misconduct by Garfinkel and others, and Rosenbaum’s disclosure, at the April 16 hearing, of Katzman’s alleged suggestion that Romain could be paid to recant that testimony. These developments, without doubt, are extraordinary. They do not require this Court, however, to broadly investigate matters before other courts and issue rulings that may limit how other courts deal with this evidence, if at all, in the cases before them.¶

As for this case, this Court can address evidence of fraud, perjury and other misconduct as necessary to resolve the issues here. For example, whether Residences submitted inflated damage claims is relevant to Defendants’ defense that the policy is void. Exactly what evidence bears on this defense and may be submitted to a jury, can be decided with pre-trial motions and at trial. As already noted, to the extent misconduct exceeds the bounds of this litigation there are other forums and authorities to address them.¶

The point is that this Court has procedural mechanisms in place that allow it to¶

14. If the Court felt that such an inquiry were appropriate, it would not limit the inquiry to Rosenbaum’s alleged transgressions, but would include within its scope the serious allegations of misconduct by Garfinkel and Katzman.

15. The Court strongly rejects the request that this Court enjoin Rosenbaum from “appearing in any case or taking any action adverse to Alan Garfinkel or any of his former clients in any case where allegations of Ken Romain are, directly or indirectly at issue,” as a misuse of its power. [See DE 122, pp. 17-18].

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consider these issues, as necessary to bring this case to a just conclusion. Given those mechanisms, this Court will not exercise its discretion to make an extraordinary and unnecessary use of its power.¶

III. CONCLUSION¶

For the foregoing reasons, it is hereby ORDERED that:¶

1. Residences’ Request for Judicial Inquiry [DE 103] is DENIED.

2. The Defendants’ Joint Statement Requesting a Broad Judicial Inquiry [DE 121] is DENIED.

3. Residences’ Motion for Protective Order [DE 122] is DENIED.

4. Garfinkel’s and Katzman’s Motion to Intervene [DE 125] is GRANTED.

5. Garfinkel’s and Katzman’s Motion to Convene A Sealed and Limited Ancillary Proceeding [DE 130] is DENIED.

6. Garfinkel’s and Katzman’s Motion for Hearing [DE 132] is DENIED.

7. Westchester’s Motion for Extension of Time to Respond [DE 146] is DENIED as moot.

Donna Katz MAPLES, Plaintiff,¶

UHS OF GEORGIA, INC., UHS of Georgia Holdings, Inc., and UHS of Peachford, L.P., doing business as Peachford BHS of Atlanta, Defendants.¶

Civil Action No. 1:09-CV-01964-WEJ.¶

United States District Court,¶

N.D. Georgia,¶

Atlanta Division.¶

May 3, 2010.¶

ing employer eliminated her part-time nurse position in violation of Age Discrimination in Employment Act (ADEA). Employer moved for summary judgment.¶

Background: Former employee brought action against her former employer, alleg-¶

Holdings: The District Court, Walter E. Johnson, United States Magistrate Judge, held that:¶

(1) employee failed to establish prima facie case of disparate treatment, and¶

(2) employee failed to demonstrate pretext.¶

Motion granted.¶

1. Civil Rights ⇌ 1210¶

To establish a disparate-treatment claim under the ADEA, an employee must prove that age was the but-for cause of the employer’s adverse decision. Age Discrimination in Employment Act of 1967, § 4(a)(1), 29 U.S.C.A. § 623(a)(1).¶

2. Civil Rights ⇌ 1572¶

The ADEA does not permit a separate recovery of compensatory damages for pain and suffering or emotional distress. Age Discrimination in Employment Act of 1967, § 2 et seq., 29 U.S.C.A. § 621 et seq.¶

3. Civil Rights ⇌ 1539¶

Where there is no direct or statistical evidence of age discrimination, the court applies the burden-shifting framework established in McDonnell Douglas to evaluate an ADEA claim based upon circumstantial evidence. Age Discrimination in Employment Act of 1967, § 4(a)(1), 29 U.S.C.A. § 623(a)(1).¶

4. Civil Rights ⇌ 1539¶

Under the McDonnell Douglas burden-shifting framework, if an employee is¶

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previous order, courts are restrained by a careful statutory analysis for each item of a bill of costs. While United States Kolesar is helpful in deciding whether the costs of a stenographic transcript should be awarded under 28 U.S.C. § 1920(2), it is not applicable to the decision whether photocopying expense is reimbursable under 28 U.S.C. § 1920(4). The following statement is a clear explanation of the necessity required for copies under subsection (4):¶

Photocopying charges attributable to discovery and the court’s copies of pleadings, motions, and memoranda are “reasonable necessary for use in the case” and can be awarded. Extra copies of filed papers and correspondence, and copies of cases, however, are not necessary but are for the convenience of the attorneys and therefore not taxable.¶

Independence Tube Corp. Copperweld Corp., 543 F.Supp. 706, 722 (N.D.Ill.1982).¶

B. Disallowance of Reimbursement for Costs of Depositions Not Adequately Identified as Necessary for Motion for Summary Judgment¶

[8] In the previous order, this court awarded the costs of two depositions which were tendered into evidence at the trial. The court’s allowance of the costs of those two depositions does not mean, as suggested in the defendant’s motion for reconsideration, that this court would not award the costs of depositions used in supporting a successful motion for summary judgment. Such an award is appropriate when the attorneys can point to the use of the depositions with some particularity. Considering, however, the strong policy of the American system against the shifting of litigation expenses, a general statement by the attorneys that the parties and the court relied on five depositions for an order granting summary judgment is not sufficient; the party seeking reimbursement must show how the depositions were necessary for the court’s disposition of the motion. This court’s ruling, therefore, was consistent with Jeffries. Georgia Residential Finance Authority, 90 F.R.D. 62¶

(N.D.Ga.1981), and reconsideration is unnecessary.¶

In summary, the defendant’s motion for reconsideration is hereby DENIED, and the court hereby ALLOWS $137.25 for photocopying expense under 28 U.S.C. § 1920(4). This court’s review of the bill of costs is now complete and the items, as allowed in this order and the previous order, may now be included in the judgment.¶

Claire NELSON, Plaintiff,¶

Samuel N. GREENSPOON, and Eaton,¶

Van Winkle and Greenspoon, a¶

partnership, Defendants.¶

No. 83 Civ. 7952 (SWK).¶

United States District Court,¶

S.D. New York.¶

Sept. 11, 1984.¶

An action was filed involving a dispute between a corporation’s former president and her attorney. The corporation sought to intervene to preserve its claims to a purported attorney-client privilege surrounding documents generated by the attorney. The District Court, Kram, J., held that: (1) the corporation could intervene, and (2) the corporation failed to carry its burden of showing that the documents were privileged.¶

Motion to intervene granted and motion for suppression and return of documents denied.¶

1. Federal Civil Procedure ⇌ 321¶

Corporation’s motion seeking return of allegedly privileged documents in its former president’s possession and suppression of those documents already produced in¶

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NELSON . GREENSPOON¶

Cite as 103 F.R.D. 118 (1984)¶

litigation could be treated as motion to intervene, even though moving papers did not explicitly seek leave to intervene. Fed. Rules. Civ.Proc.Rules 24, 24(a, c), 28 U.S. C.A.¶

2. Federal Civil Procedure ⇌ 335¶

Although corporation which sought to intervene in order to protect allegedly privileged documents did not meet with formalities required by intervention rule, that did not preclude granting intervention in that denial of motion would exalt form over substance. Fed.Rules Civ.Proc.Rules 24, 24(a, c), 28 U.S.C.A.¶

3. Federal Courts ⇌ 23¶

If corporation’s intervention to preserve its claims to purported attorney-client privilege surrounding various documents involved in litigation was as of right, district court could hear case irrespective of corporation’s citizenship under doctrine of ancillary jurisdiction. Fed.Rules Civ.Proc. Rules 24, 24(a, c), 28 U.S.C.A.¶

4. Federal Civil Procedure ⇐=335¶

Corporation could intervene in action between corporation’s former president and her attorney concerning attorney’s representation of president in order to assert its claim of attorney-client privilege surrounding documents generated by attorney, who also represented corporation, where attorney was not actively protecting that privilege. Fed.Rules Civ.Proc.Rule 24(a), (a)(2), 28 U.S.C.A.; Fed.Rules Evid.Rule 501, 28 U.S.C.A.; N.Y.McKinney’s CPLR 4503.¶

5. Witnesses ⇔198(1)¶

Existence of attorney-client privilege is based upon policy of encouraging openness and full disclosure between client and his or her attorney. N.Y.McKinney’s CPLR 4503.¶

6. Witnesses ⇔198(1)¶

In order to minimize intrusion of attorney-client privilege upon ascertainment of truth, scope of privilege must be, and is, confined to narrowest possible ambit which will still achieve purpose of full disclosure between client and his or her attorney. N.Y.McKinney’s CPLR 4503.¶

7. Witnesses ⇌ 222¶

Burden of establishing existence of attorney-client privilege is upon party claiming privilege. N.Y.McKinney’s CPLR 4508.¶

8. Witnesses ⇔ 204(2)¶

Former president of corporation, which claimed that corporate documents were protected by attorney-client privilege, was properly in possession of those documents where documents discussed former president’s personal matters. N.Y.McKinney’s CPLR 4503.¶

9. Witnesses ⟨⟩=205¶

Corporate documents which involved communications to or from third parties, which contained information obtained from third parties or which referred to on-going communications with third party were not confidential and, therefore, were not protected by corporation’s attorney-client privilege. N.Y.McKinney’s CPLR 4503.¶

10. Witnesses ⇔ 204(2)¶

Corporation could not use its claim of attorney-client privilege with respect to documents to regain possession of purportedly privileged documents in possession of corporation’s former president. N.Y. McKinney’s CPLR 4503.¶

Morris Pottish, New York City, for plaintiff.¶

Olnick, Boxer, Blumberg, Lane & Troy by Andrew N. Krinsky, New York City, for defendant Samuel N. Greenspoon.¶

Richenthal, Abrams & Moss by Arthur Richenthal, New York City, for proposed intervenor Hosiery Corp. of America.¶

MEMORANDUM OPINION AND ORDER¶

KRAM, District Judge.¶

The above-captioned action is before this Court in an unusual posture: a corporation, Hosiery Corporation of America (“HCA”), seeks to intervene in this dispute between its erstwhile president, Claire Nelson, and¶

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her attorney, Samuel N. Greenspoon, concerning Greenspoon’s representation of Nelson, in order to preserve its claims to a purported attorney-client privilege surrounding various documents generated by Greenspoon, also HCA’s attorney, copies of which were sent to Nelson during her tenure with HCA and remain in her possession to date. HCA seeks an order directing Nelson to turn over all of the documents, and any copies thereof, and prohibiting her from producing or disseminating those documents in any way. For the reasons stated below, HCA is granted leave to intervene, but its motion to restrain plaintiff and replevy the documents is denied.¶

—BACKGROUND—¶

HCA is a closely-held Delaware corporation with its principal place of business in Pennsylvania. HCA is primarily engaged in selling hosiery through the mails.¶

Plaintiff Claire Nelson, along with her late husband Jules, had been the sole and joint owners of the outstanding shares of HCA. Claire Nelson also was President, or executive officer in charge of operations, of HCA for several years prior to the end of 1980. On December 2, 1980, Claire and Jules Nelson entered into a separation agreement. On the same date, Claire entered into an agreement with HCA whereby HCA would pay Claire $1,250,000, over the course of ten years, in redemption of her interest in the corporation.¶

Claire was represented in the preparation of these agreements by defendant Greenspoon. Greenspoon is a member of the bar of the State of New York. He had, before and after the preparation of these agreements, represented Claire in personal matters. Additionally, Greenspoon had at times represented Jules in personal matters. He also has been HCA’s general counsel since 1977. Greenspoon was the only attorney involved in the preparation of these agreements.¶

1. HCA is represented here by the attorney who represents Greenspoon in the Surrogate’s Court

In or about March, 1981, Claire Nelson’s employment by HCA was terminated. She has not been affiliated with HCA since that time.¶

In or about December, 1981, Jules Nelson instituted an action against Claire in New York State Supreme Court. The substance and merits of that action are irrelevant for purposes of this motion. Claire counterclaimed in that action to set aside the agreements. On November 19, 1983, Jules Nelson died, slowing the progress of the Supreme Court action. That action is still pending.¶

Jules Nelson’s will was filed for probate in Surrogate’s Court, New York County. Greenspoon and Helen Gioulis (not a party herein) were appointed preliminary executors. The eligibility of Greenspoon for permanent letters testamentary is being contested in Surrogate’s Court.¶

In November, 1983, Claire instituted this action against Greenspoon alleging malpractice and conversion. Discovery in this action had been proceeding apace. Then, in the course of discovery, Claire produced copies of letters written by Greenspoon. Greenspoon maintained that the documents were privileged as between HCA and its attorney, but responded to questions concerning them.¶

HCA¹ then brought on the instant motion by Order to Show Cause dated May 11, 1984. In support of its motion, HCA submitted an affidavit by Arthur Richenthal, dated May 7, 1984 (“Richenthal Aff.”). Attached as exhibits to the affidavit were copies of several documents which Claire Nelson has produced during discovery herein as to which HCA claims an attorney-client privilege applies. By this motion, HCA seeks the return of all privileged documents (and any copies thereof) in Claire’s possession and the suppression of those privileged documents already produced by Nelson in this action.¶

proceeding.¶

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NELSON GREENSPOON Cite as 103 F.R.D. 118 (1984)¶

121¶

—DISCUSSION—¶

[1] Plaintiff raises several procedural arguments in opposition to HCA’s motion which must be dealt with first. Initially, plaintiff claims that HCA is a non-party with no standing to move in this action. Admittedly, HCA’s moving papers do not explicitly seek leave to intervene, but rather indicate that HCA appears “for [a] specific and limited purpose.” Richenthal Aff., § 2. However, on June 7, 1984, HCA addressed a letter to the Court requesting that the Court construe the motion as including a request to intervene. The Court will, therefore, construe this motion as one to intervene.¶

[2] Plaintiff next argues that HCA’s papers are insufficient to support a motion to intervene pursuant to Rule 24 of the Federal Rules of Civil Procedure. Rule 24(c) provides in relevant part, that “[a] person desiring to intervene shall serve a motion to intervene … [which] shall state the grounds therefor and shall be accompanied by a pleading setting forth the claim or defense for which intervention is sought.” HCA has not met the formalities required by Rule 24(c); however, denying its motion on that ground would exalt form over substance. See Belgian American Mercantile Corp. De Groeve-Marcotte & Fils, 433 F.Supp. 1098, 1101 (S.D.N.Y.1977). In Belgian American, as in this case, the movant, a non-party, had acted by Order to Show Cause for some relief and had not specifically styled its request a petition to intervene. In that case, as in this one, the relief sought was clearly spelled out in the Order to Show Cause, albeit not in the form of a pleading. Noting that the “Second Circuit has held that in the face of strong circumstances the formal requirements of Rule 24 need not be insisted on” (citing Kupferman Consolidated Research & Mfg. Corp., 459 F.2d 1072, 1074 n. 1 (2d Cir.1972)), the court held that “non-compliance with the strict requirements of Rule 24(c)” would not preclude intervention¶

2. If these documents relate solely to Greenspoon’s representation of HCA, as HCA contends, this Court is at a loss to understand how they are relevant to, or the subject of, this ac-

and a determination of the intervenor’s motion on the merits. 433 F.Supp. at 1101. This Court feels that that is the proper course to take in this instance as well.¶

[3] Plaintiff also argues that the Court would be divested of subject matter jurisdiction if HCA were permitted to intervene because HCA is not of citizenship diverse from that of plaintiff. If HCA’s intervention is as of right, pursuant to Fed.R.Civ.P. 24(a), then this Court is empowered to hear this case irrespective of HCA’s citizenship under the doctrine of ancillary jurisdiction.¶

See Formulabs, Inc. Hartley Pen Co., 318 F.2d 485 (9th Cir.1963).¶

Rule 24(a) provides, in relevant party, as follows:¶

Upon timely application anyone shall be permitted to intervene in an action:¶

(2) when the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties.¶

[4] HCA seeks to intervene here to assert its purported attorney-client privilege to documents being made a subject of this action. This Court finds that the provisions of Rule 24(a)(2) do apply to this situation: to wit, the client claims an interest, an attorney-client privilege, in documents which are the subject of the action,$^2$ and the existing party, the attorney, is not actively protecting that privilege. See In re Katz, 623 F.2d 122 (2d Cir.1980).¶

HCA claims that various documents in Claire Nelson’s possession are HCA documents, subject to the attorney-client privilege, and that she should not be permitted to produce, or otherwise use, such privileged documents in this lawsuit. The pa-¶

tion. Be that as it may, Nelson has produced them, and questioned Greenspoon about them; therefore, plaintiff has essentially made them the subject of this action at this stage.¶

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103 FEDERAL RULES DECISIONS¶

rameters of the claimed privilege in this diversity action are defined by state law. Fed.R.Evid. 501. The attorney-client privilege in New York is governed by section 4503 of the New York Civil Practice Law and Rules (“CPLR”); however, it is deeply rooted in common law. See People O’Connor, 85 A.D.2d 92, 94, 447 N.Y.S.2d 553, 556 (4th Dep’t 1982).¶

[5, 6] The existence of such a privilege is based upon a policy of encouraging openness and full disclosure between a client and his or her attorney. See Upjohn Co. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 682, 66 L.Ed.2d 584 (1981); Priest Hennessy, 51 N.Y.2d 62, 67–68, 431 N.Y. S.2d 511, 513–514, 409 N.E.2d 983, 985–986 (1980). Nonetheless, the application of the privilege serves to exclude reliable evidence and, often, to block the truth-determining processes of the courts. Priest, 51 N.Y.2d at 68, 431 N.Y.S.2d at 514, 409 N.E.2d at 986; In re Jacqueline F., 47 N.Y.2d 215, 219, 417 N.Y.S.2d 884, 886–87, 391 N.E.2d 967, 969–70 (1979). In order to minimize the intrusion of the privilege upon the ascertainment of truth, the scope of the privilege must be, and is, confined to the narrowest possible ambit which will still achieve the purpose of full disclosure. Priest, 51 N.Y.2d at 68, 431 N.Y.2d at 514, 409 N.E.2d at 986; see also In re Bekins Storage Co., 118 Misc.2d 173, 177, 460 N.Y. S.2d 684, 690 (Sup.Ct.N.Y.Co.1983).¶

[7] The specific formulation of the privilege, as set out in section 4503 of the CPLR, provides, in relevant part, as follows:¶

Unless the client waives the privilege, … any person who obtains without the knowledge of the client evidence of a confidential communication made between the attorney … and the client in the course of professional employment, shall not … be allowed to disclose such communication.¶

N.Y.Civ.Prac.Law § 4503 (McKinney 1963)¶

(Supplementary Pamphlet 1964 to 1983).¶

3. Although, as discussed below, it is not always clear who the client was.

Whether or not that privilege covers the communications here at issue must be resolved by this Court, but the burden of establishing the existence of an attorney-client privilege applicable to these particular circumstances is upon HCA, the party claiming the privilege. See Priest, 51 N.Y.2d at 69, 431 N.Y.S.2d at 514, 409 N.E.2d at 986; see also Katz, 623 F.2d at 125; United States. Demauro, 581 F.2d 50, 55 (2d Cir.1978).¶

HCA argues initially that these communications were made during the course of an attorney-client relationship, and there appears to be no dispute about this.³ HCA further argues that these corporate communications are confidential, urging baldly that “[c]onfidentiality exists where the communications sought to be protected were made for the purposes of either receiving or giving legal advice.” HCA’s Memorandum in Support of Motion, p. 4. HCA also argues baldly that it has not waived its privilege, and that Nelson possessed these documents without HCA’s knowledge. These last three contentions are hotly disputed.¶

Treating the last argument first, it is beyond peradventure that HCA “knew” Nelson obtained these documents, since she is named on the documents (or at least most of them) as an addressee, either of the original or of a copy. Nelson argues, therefore, that section 4503, by its terms, is inapplicable. HCA argues in response that Nelson received these documents solely in her capacity as corporate officer. As such, HCA argues, Nelson’s receipt was the equivalent of HCA’s receipt, so the documents remained privileged (to the same extent that they were privileged to begin with). HCA argues further that it did not “know” that she retained the documents after she left her employ there, and that such retention was wrongful and did not divest HCA of its claimed privilege. Nelson, on the other hand, responds that these documents were addressed to her personally, not as corporate officer, and/or that¶

4. At least insofar as a corporation can “know” anything.

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NELSON v. GREENSPOON Cite as 103 F.R.D. 118 (1984)¶

123¶

HCA knew she retained them, at least because Jules (the sole remaining shareholder, chief officer, and director of HCA) shipped them to her and knew she had them. HCA argues that Jules’ knowledge of, or even complicity in, Nelson’s retention of the documents is irrelevant because he did not have the authority to waive HCA’s privilege.⁵¶

The Court has attempted to parse these bickering thrusts and parries in an effort to determine the applicability of section 4503. It is essential that the general nature of the relationship among the four parties involved—Claire, Jules, HCA and Greenspoon—be understood. HCA is, or was a very closely held corporation. Claire and Jules were the sole shareholders, and were the principal officers, of the corporation. HCA was, in sum, very much a “Mom and Pop” operation—the alter ego of Claire and Jules. Greenspoon, was the attorney for all three. He handled the Nelsons’ personal affairs as well as their business affairs. The distinctions that HCA makes now, between Claire Nelson, as corporate officer, and Claire Nelson, as individual, and between Claire Nelson and HCA, were not so neatly defined in fact.⁶¶

[8] A perusal of the documents as to which HCA claims its privilege⁷ indicates that Greenspoon quite simply did not always distinguish between Claire, the individual, and HCA. In other words, several of the documents were addressed to personal matters as well as corporate ones. For example, document D 220 discusses property owned by Jules and Claire Nelson in the context of a broader discussion of corporate matters. Likewise, document D¶

5. HCA makes this argument through the affidavit of its attorney without any citation or support in case law or in corporate records. The Court, however, need not address this content here.

241 refers to life insurance (presumably personal) amidst corporate matters. Document D 394 refers to Claire’s potential criminal exposure from HCA’s activities. These are but examples of the personal information discussed in what seem to be predominantly corporate documents. Since these documents discuss Claire’s personal matters, I find that she is properly in possession of them.¶

7. The Court notes that HCA has not shown the same vigor with which it argues its desire to

8. The other courts involved in these tripartite proceedings have apparently held to the same effect with respect to the blurred distinction between Jules and HCA.

[9] Moreover, the Court finds that some of these documents are not confidential, and therefore are not privileged. HCA’s bald assertion that a document is automatically confidential if legal advice is sought or provided in the document is not a correct statement of the law. See Herbert v. Lando, 73 F.R.D. 387, 399 (S.D.N.Y.), remanded on other grounds, 568 F.2d 974 (2d Cir.1977), rev’d and remanded on other grounds, 441 U.S. 153, 99 S.Ct. 1635, 60 L.Ed.2d 115 (1979). There, the court stated, “[n]or is privileged status automatically conferred by the fact that the memorandum may express an opinion of counsel; opinions are privileged only to the extent that they are based upon, and consequently reveal, information furnished by the client in confidence.” Id. (emphasis added): A communication is not confidential if it involves third parties. See, e.g., People v. Belge, 59 A.D.2d 307, 308, 399 N.Y.S.2d 539, 540 (4th Dept.1977) (quoting United States v. United Shoe Mach. Corp., 89 F.Supp. 357, 358–59 (D.Mass.1950) (“without the presence of strangers”)); Randy Int’l Ltd. v. Automatic Compactor Corp., 97 Misc.2d 977, 412 N.Y.S.2d 995 (Civ.Ct. Queens Co. 1979). Thus, documentary communications to or from third parties are not confidential. Likewise, documenta-¶

keep these documents privileged and confidential in the way it actually treats those documents. HCA submitted copies of the very documents it claims are privileged to this Court as exhibits in the publicly filed order to show cause. HCA did not make any effort to have those documents sealed from public access. Since I find that the documents are not privileged, I need not determine whether HCA unwittingly waived its privilege by filing these documents in this manner.¶

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ry communications are not confidential if copies thereof are sent to third parties. Furthermore, information obtained from third parties is not privileged. See Bekins Storage Co., 118 Misc.2d at 179, 460 N.Y.S.2d at 691. Document D 220 as to which HCA claims a privilege, was addressed to Mr. Terry Arch of Touche, Ross & Co., and therefore is not privileged. A copy of document D 271 was sent to Ms. Dolores Geraghty and therefore is not privileged.$^8$ Plaintiff’s Exhibits 37 and 38 (part of Exhibit 6 to the Order to Show Cause herein) contain information obtained from Mr. Arch, and refer to ongoing communications with Mr. Arch regarding the subject of the documents; therefore, these are not confidential. See J.P. Foley & Co., Inc. Vanderbilt, 65 F.R.D. 523, 526 (S.D.N.Y.1974). These are but examples of the several documents that are not confidential, and therefore not privileged for this reason as well.¶

[10] Finally, HCA has not cited a single example of the attorney-client privilege being used to regain possession of purportedly privileged documents. Given the need to limit the scope of the privilege, this Court will not countenance HCA’s attempt to create new affirmative applications for the privilege. Cf., Liberty Mut. Ins. Co. Engels, 41 Misc.2d 49, 51, 244 N.Y.S.2d 983, 986 (Sup.Ct. Kings Co.1963) (privilege is a shield, not a sword), aff’d, 21 A.D.2d 808, 250 N.Y.S.2d 851 (2d Dep’t 1964).¶

In sum, HCA has failed to carry its burden of showing that these documents are privileged. They appear to properly be in Claire Nelson’s possession, and shall remain so. HCA’s motion to intervene is GRANTED and its motion for suppression and return of the documents is DENIED. Preparation for trial is to continue apace.¶

SO ORDERED.¶

8. The Court does not know the nature of the relationship between Ms. Geraghty and HCA. Ms. Geraghty may be a corporate insider such that the communication remained confidential; however, HCA certainly did not sustain its burden of establishing that fact, if it is the case.

Action was brought to recover damages arising out of allegedly defective computer system sold to corporation. After removal from state court to federal court in Minnesota on basis of diversity, followed by transfer to the Northern District of California, seller moved to dismiss claims as time barred. Following denial of motion, counsel for defendant was directed to submit memorandum explaining why sanctions should not be imposed in connection with the motion. The District Court, Schwarzer, J., held that: (1) legal argument purporting to reflect existing law but instead being predicated upon, and not merely arguing for, an extension of the existing law violates rule relating to attorney’s certification of pleadings, motions, and other papers by his signature thereon, regardless of whether purpose is to cause unnecessary delay or needless expense or whether counsel acted in good faith, and (2) failure to cite authority adverse to movant’s position or to make reasonable inquiry to determine whether motion to dismiss is warranted by existing law also violates rule, warranting sanctions.¶

Sanctions ordered.¶

1. Attorney and Client ⇔32(14)¶

Local counsel associated in case with out-of-state counsel for party to the action¶

The same is true of documents addressed to Mr. Uri Shoham, except in the case of those documents, since they were addressed to Mr. Shoham at HCA’s address, the Court was willing to assume the insider status of Mr. Shoham in spite of HCA’s failure of proof.¶