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Ciuffitelli v. Deloitte & Touche LLP

United States District Court, D. Oregon, Portland Division

March 1, 2017

LAWRENCE P. CIUFFITELLI, for himself and as Trustee of CIUFFITELLI REVOCABLE TRUST; GREG and ANGELA JULIEN; JAMES and SUSAN MACDONALD, as Co-Trustees of the MACDONALD FAMILY TRUST; R.F. MACDONALD CO.; ANDREW NOWAK, for himself and as Trustee of the ANDREW NOWAK REVOCABLE LIVING TRUST U/A 2/20/2002; WILLIAM RAMSTEIN; and GREG WARRICK, for himself and, with SUSAN WARRICK, as Co-Trustees of the WARRICK FAMILY TRUST, individually and on behalf of all others similarly situated, Plaintiffs,
v.
DELOITTE & TOUCHE LLP, EISNERAMPER LLP; SIDLEY AUSTIN LLP; TONKON TORP LLP; TD AMERITRADE, INC.; and INTEGRITY BANK & TRUST, Defendants.

          OPINION AND ORDER

          JOHN V. ACOSTA United States Magistrate Judge.

         Introduction

         Intervening parties Robert Jesenik, Brian Oliver, and Scott Gillis (collectively, "Intervenors") move for aprotective order requiring defendant law firms Sidley Austin LLP ("Sidley") and Tonkon Torp LLP ("Tonkon") (collectively, "the law firm defendants") to allow Intervenors to review documents in each of the law firm defendants' possession. Intevenors seek review of these documents so that they may determine if any of those documents are protected by the attorney-client privilege. Intervenors wish to conduct this review before Sidley and Tonkon produced any documents in this case, and they propose both protocols and a time line for their document review.[1]

         Because Intervenors, and each of them, have failed to demonstrate the existence of a attorney-client relationship with either of the law firm defendants, the court denies Intervenors' motion.

         Background

         I. The Lawsuits.

         Plaintiffs filed this securities fraud lawsuit against an international accounting firm, an international law firm, a national accounting firm, an Oregon law firm, a national stock trading firm, and a bank, alleging that each of them participated in and aided the Aequitas group of companies' ("Aequitas companies") sale of securities through material misrepresentations and omissions. (ECF No. 1 (Complaint), at ¶ 1; ECF No. 57 (First Amended Complaint), at ¶ 1.) Plaintiffs served on each of the defendants in this lawsuit extensive requests for production all of which have been the subject of motions for protective orders. The court already has ruled on those motions. (See ECF No. 174 (granting in part and denying part motions for protective order filed by defendants Deloitte & Touche LLP, and EisnerAmper LLP); ECF No. 213 (granting in part and denying in part motions for protective order filed by defendants Sidley; TD Ameritrade, Inc.; and Integrity Bank & Trust).)

         Intervenors are former executives of one or more Aequitas companies and defendants in a separate lawsuit, Securities and Exchange Commission, etal. v. Aequitas Management, LLC, et al, Case No. 3:16-cv-00438-PK, filed in this district on March 10, 2016 ("SEC lawsuit"). Specifically, Jesenik formerly served as Chief Executive Officer, Chief Investment Officer, and President of certain Aequitas companies; Oliver formerly served as Executive Vice President of "at least one" Aequitas company; and Gillis formerly served as Executive Vice President, Chief Operating Officer, and Chief Financial Officer of certain Aequitas companies. Jesenik and Oliver also are part owners in Aequitas Management, LLC, the lead defendant in the SEC lawsuit. All three Intervenors are alleged to have engaged in a "scheme to defraud and misuse client assets in connection with investments offered through the Aequitas group of companies[, ]" (SEC lawsuit, ECF No. 1, at 1.)

         II. The Intervenors' Requested Protective Order.

         Based on a claim of individual attorney-client privilege, Intervener ask the court in this case to enter a protective order requiring both Sidley and Tonkon to:

(a) identify among any documents that are responsive to Plaintiffs' discovery requests certain e-mail communications and other electronically searchable documents using the e-mail addresses and search terms set forth in the Proposed Protective Order attached hereto as Exhibit 1; (b) withhold the documents identified using these e-mail addresses and search terms from production to Plaintiffs (the "Provisionally Withheld Documents"); and © allow the Individuals 45 days to review the Provisionally Withheld Documents to identify those that are subject to personal claims of privilege, and 15 additional days to produce a privilege log to Sidley and/or Tonkon and to Plaintiffs. After this 60-day review and log period has passed, Sidley and Tonkon would be permitted to produce to Plaintiffs any of the Provisionally Withheld Documents not contained on the log of any Individual. Sidley and Tonkon could produce any other documents to the Plaintiffs without prior review by the Individuals (the "Directly Produced Documents"), subject to claw-back by the Individuals following another 60-day review and log period to determine whether any personal claims of privilege may exist over those documents.

(ECF No. 196, at 3-4.)

         III. The Parties' Positions.

         Intervener assert that a protective order is necessary so that they may review documents from Sidley's and Tonkon's respective files to determine whether any of those documents are subject to "personal claims of privilege by one or more" of them. (ECF No. 196, at 2-3.) Interveners observe that Sidley represented certain Aequitas companies in the SEC's investigation and claim that Tonkon represented certain Aequitas companies "in connection with other matters involving one or more of the [Intervenors], including litigation in which one or more of the [Intervener] was named as a defendant and/or received advice from Tonkon in connection with the litigation." (ECF No. 196, at 4-5.) Intervenors also assert that "[o]ne or more of the [Intervenors] sought, and received, confidential legal advice ...


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