Court: Appellate Division of the Supreme Court of the State of New York; December 23, 1997; New York; State Appellate Court
Appeals were filed from a June 18, 1997 order of the Supreme Court in Albany County, which partially denied Hunton, Williams' motion for a protective order, and from two additional orders that denied motions from Citibank, N.A., Chase Manhattan Bank, and Philip Morris Companies, Inc. to intervene. The plaintiff, previously employed as an associate at Hunton, Williams from June 1991 to August 1993, was advised to seek other employment in October 1992 due to unsatisfactory performance. In early 1993, the plaintiff and two other associates reported alleged improper billing practices by partner Scott J. McKay Wolas. Following an internal investigation that involved extensive interactions between the plaintiff and the firm’s partners, the law firm concluded no improprieties were found, and the plaintiff's employment ended in August 1993.
In May 1996, the plaintiff initiated a lawsuit for fraud and breach of contract, claiming he was misled about the firm's banking litigation practice and that his termination was a strategy to prevent him from revealing Wolas's alleged fraudulent billing practices. The plaintiff requested documents related to the internal investigation, specifically targeting records from Citibank, Chase Manhattan Bank, and Philip Morris. The law firm objected to producing these documents based on attorney-client privilege and work product doctrine, failing to comply with CPLR 3122(b) regarding their privilege claims.
After unsuccessful informal discussions, a confidentiality stipulation was executed on May 19, 1997, requiring document production with a provision for privilege claims to be raised by May 22, 1997. Disagreements arose over whether a handwritten provision, added by the judge, was part of the stipulation. Subsequently, the law firm filed a motion on May 23, 1997, seeking to protect the disclosure of documents listed in a privilege log, supported by affidavits from its counsel and a managing partner.
The law firm sought protective orders on behalf of its clients, which the Supreme Court declined to sign. On May 23, 1997, the clients moved to intervene and obtain similar protective orders based on attorney-client privilege and work product doctrine. The law firm’s attempt to submit a reply to the plaintiff’s response was rejected due to a prior stipulation prohibiting such replies. In a decision dated June 16, 1997, the court granted in part and denied in part the law firm’s motion for a protective order, relying on the privilege log provided. The court also denied the clients' motions to intervene in separate decisions. Appeals followed, leading to a stay of proceedings and consolidation of the appeals.
The appellate court addressed the law firm’s objections regarding the Supreme Court's discovery procedures, including the refusal to accept reply papers and the handling of privilege claims. It emphasized that trial courts have broad discretion in discovery matters and that only a clear abuse of that discretion warrants appellate intervention. The court found that the procedure for raising privilege claims was not crucial to its decision-making. However, the court criticized the Supreme Court's handling of privilege claims, noting that determinations regarding document protection require factual analysis and often in camera review, rather than reliance on generalized descriptions. Consequently, the appellate court reversed the order partially denying the protective orders and remitted the matter for an in camera review of the claimed privileged documents.
Regarding the motions to intervene, the appellate court affirmed the Supreme Court's denial, stating that the clients did not adequately demonstrate that their interests were not represented by the law firm, which had actively sought to protect their privileged materials. The appellate court ordered the modification of the June 16, 1997 order for further review but affirmed the orders dated June 17, 1997. Venue was subsequently transferred to New York County.
