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Broidy Capital Management LLC v. Muzin
Citation: Not availableDocket: Civil Action No. 2019-0150
Court: District Court, District of Columbia; November 14, 2023; Federal District Court
Original Court Document: View Document
The Court denied ArentFox Schiff LLP’s Motion for a Protective Order and Sanctions concerning work-product privilege. Arent Fox, which represented Joseph Allaham until August 2023, contended that Allaham improperly disclosed protected correspondence to Broidy Capital Management, LLC, without consent. The Court determined that Allaham validly waived any privilege by voluntarily sharing the documents with Broidy, thereby nullifying Arent Fox's claim of privilege. The work product privilege, which protects documents prepared by attorneys for litigation, can be waived by the client, and the attorney must abide by the client's decisions when their interests conflict. Arent Fox's argument that attorneys have an independent right to protect their work product was rejected, as it cannot be asserted at the client's expense. The motion was denied, affirming that Arent Fox's assertion of privilege was without merit. Former clients' failure to object to discovery requests does not waive attorney work-product privilege, as established in QBE Ins. Co. v. Griffin. Additionally, a foreign liquidator cannot waive privilege on behalf of an entity’s Audit Committee, as seen in Krys v. Paul, Weiss. The Fifth Circuit's analysis in In re Grand Jury focused on the crime/fraud exception rather than client privilege waivers via plea agreements. The fact that Allaham is no longer a party does not lessen his interest in sharing Arent Fox's work product with Broidy, as work-product privilege remains post-litigation according to FTC v. Grolier. Allaham obtained these documents while a defendant, and transferring them to Broidy could have aided his exit from the case, indicating a legitimate interest that Arent Fox, as his fiduciary, must respect. Arent Fox's claim that Allaham breached a joint-defense agreement with former co-defendants does not affect his rights against his lawyers, as parties generally cannot claim relief based on the rights of third parties. Thus, Arent Fox's motion for a protective order and sanctions has been denied. Broidy's cross-motion for sanctions is also denied, as Arent Fox's motion, while lacking merit, was not deemed frivolous. A separate order will follow this memorandum opinion.