Nypl v. JP Morgan Chase & Co.

USONUITTEHDE RSTNA DTIESST RDIICSTT ROIFC TN ECWOU YROTR K

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:

JOHN NYPL, et al., :

Plaintiffs, :

: 15 Civ. 9300 (LGS)

-against- :

: ORDER

JP MORGAN CHASE & CO., et al., :

Defendants. :

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LORNA G. SCHOFIELD, District Judge:

WHEREAS, on May 20, 2015, certain plea agreements (“Plea Agreements”) were

executed between the United States Department of Justice (“DOJ”) and Barclays PLC, Citicorp,

JPMorgan Chase & Co., Royal Bank of Scotland PLC, and UBS AG. Plaintiffs represent that the

factual statements included in the Plea Agreements originated from a DOJ investigation (Dkt. No.

490);

WHEREAS, on the same day, the signatories on behalf of Barclays PLC, Citicorp,

JPMorgan Chase & Co., Royal Bank of Scotland PLC appeared in court and answered in the

affirmative to the inquiry whether “they understand and agree with the summary of their

respective plea agreements.” The signatory on behalf of UBS AG separately appeared and

answered in the affirmative to the inquiry whether, “the company engage[d] in the conduct

attributed to it in the statement of facts.” (Dkt. No. 490);

WHEREAS, Plaintiffs seek to depose the signatories to the Plea Agreements (the

"Signatory Witnesses") and/or corporate representatives designated under Rule 30(b)(6) who are

knowledgeable about the Plea Agreements, on topics limited to those agreements (the "30(b)(6)

Witnesses") (Dkt. Nos. 490, 512);

WHEREAS, Plaintiffs served deposition notices on the Signatory Witnesses and argue

that they are entitled to question the Signatory Witnesses about (1) their “knowledge of the facts”

underlying the Plea Agreements; and (2) “facts provided to the government.” (Dkt. No. 490);

WHEREAS, Plaintiffs served 30(b)(6) notices with the following relevant topic:

The facts supporting [each bank]'s guilty plea to violations of Section 1 of the

Sherman Act (15 U.S.C. § 1) in May 2015 in the United States District Court for the

District of Connecticut as set forth in its Plea Agreement at [the DOJ's website], and

any sentencing regarding such guilty plea. (Dkt. No. 521);

WHEREAS, Defendants object, inter alia, on the basis of the attorney-client privilege

(Dkt. Nos. 490, 503);

WHEREAS, pursuant to this Court’s Order on February 24, 2020, on March 16, 2020,

Defendants filed affidavits from the Signatory Witnesses describing how they came to have

knowledge of the matters underlying the Plea Agreements. They state the following:

Rohan Weerasinghe, Esq., General Counsel and Corporate Secretary, Citigroup Inc., was a

signatory of the plea agreement that Citicorp, a subsidiary of Citigroup Inc., entered into with the

DOJ. Mr. Weerasinghe attests that he has “no personal knowledge of the FX trading activities

that were the factual basis for the offense charged in the Plea Agreement,” and any knowledge he

has about the facts underlying the Plea Agreement came from privileged communications with in-

house and outside counsel, received in his capacity as General Counsel “for the purpose of

providing legal advice to Citigroup in connection with FX-related matters.” (Dkt. No. 505).

Matthew S. Fitzwater, Esq., then-Americas Head of Litigation, Investigations, and

Enforcement, Barclays PLC, signed the plea agreement between Barclays PLC and the DOJ. Mr.

Fitzwater attests that he has “no first-hand knowledge of the facts underlying” the plea

agreement, and that any knowledge he has about those facts was provided to him “exclusively in

[his] role as counsel” by outside counsel “or other internal Barclays counsel or through [his] own

participation, as counsel to Barclays, in the investigation” “to facilitate [his] legal representation

of Barclays concerning FX-related matters.” (Dkt. No. 506). A supplemental affidavit clarified

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that the referenced investigation was an “investigation that Barclays’ Legal Department

conducted with the assistance of outside counsel to respond to inquiries by the [DOJ] and other

regulatory agencies regarding Barclays’ foreign exchange (“FX”) operations starting in

approximately the Summer of 2013.” (Dkt. 534).

James B. Fuqua, Esq., then-General Counsel and Managing Director, UBS Investment Bank

Americas, signed the plea agreement between UBS AG and the DOJ. Mr. Fuqua attests that he

does “not recall having first-hand knowledge of the alleged misconduct underlying UBS’s

LIBOR plea agreement or the attached Factual Basis for Breach relating to the FX business,” and

that any knowledge he has of those facts was “provided to [him] by inside and outside counsel

exclusively as part of legal advice to facilitate execution of the agreement.” (Dkt. No. 507).

Stephen M. Cutler, Esq., then-General Counsel of JPMorgan Chase & Co., signed the plea

agreement between JPMorgan Chase & Co. and the DOJ. Mr. Cutler attests that he has “no first-

hand knowledge of the facts underlying JPMorgan’s Plea Agreement” and any knowledge that he

possesses about those facts was gained “exclusively in [his] role as General Counsel . . . either

from [outside counsel] or internal JPMorgan counsel or through [his] own participation, as

counsel to JPMorgan, in the investigation”, “to facilitate [his] legal representation of JPMorgan

concerning FX-related matters.” (Dkt. No. 508). A supplemental affidavit clarified that the

referenced investigation was an “internal investigation conducted by in-house and outside counsel

to JPMorgan, undertaken to provide legal advice in connection with ongoing and anticipated

investigations conducted by the [DOJ] and other government agencies into JPMorgan’s foreign

exchange operations, in anticipation of related civil litigation, and once litigation commenced in

November 2013, in connection with ongoing litigation.” (Dkt. 535).

James M. Esposito, Esq., then-United States General Counsel and Co-General Counsel of

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The Royal Bank of Scotland plc (now known as NatWest Markets Plc), signed the plea

agreement between The Royal Bank of Scotland plc and the DOJ. He attests that he has “no first-

hand knowledge of the facts underlying” the plea agreement and any knowledge of those facts

“derives exclusively from privileged communications made to [him] in [his] role . . . as part of

the FX-related investigation conducted by” in-house and outside counsel, “so that [he] could

provide legal advice to RBS concerning FX-related matters.” (Dkt. No. 509);

WHEREAS, communications between Defendants’ employees and Defendants’ counsel

during an internal investigation, undertaken to provide legal advice in connection with anticipated

or ongoing litigation, are privileged. See Upjohn Co. v. United States, 449 U.S. 383, 390 (1981)

(holding that communications during internal investigation between corporate employees and

counsel were protected by attorney client privilege because “the privilege exists to protect not

only the giving of professional advice to those who can act on it but also the giving of

information to the lawyer to enable him to give sound and informed advice”). Counsel may not

be deposed about facts learned solely from such communications. See United States v.

Cunningham, 672 F.2d 1064, 1073 n.8 (2d Cir. 1982) (observing that a client’s “counsel may not

be examined as to communications from [the client] and may not be examined as to facts he

learned only from such confidential communications”); Camp v. Berman, No. 14 Civ. 1049, 2015

WL 3917538, at *4 (S.D.N.Y. June 25, 2015) (holding that questions of an attorney regarding

“confidential communications with [his client] – or as to any facts that he learned solely from

such communications” – are protected by the attorney-client privilege and therefore off-limits

during a deposition). Rule 30(b)(6) depositions are not to be used to access privileged

information. See In re Zyprexa Prod. Liab. Litig., No. 04 MD 1596, 2009 WL 9522945, at *2

(E.D.N.Y. Feb. 18, 2009) (where plaintiff sought a 30(b)(6) deposition regarding the terms of a

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corporate defendant’s guilty plea agreement, the court barred the deposition because, inter alia,

“[t]he information sought concerns corporate, not individual, motivations and conduct, and the

most knowledgeable witnesses undoubtedly derived their information as or through counsel”)1;

WHEREAS, Defendants represent that they “lack access to employees with first-hand

nonprivileged knowledge relating to the communications and conduct upon which the relevant

DOJ Agreements were based.” (Dkt. No. 503). It is hereby

ORDERED that the deposition notices to the Signatory Witnesses are quashed to the

extent that they seek information about the facts underlying the Plea Agreements, because the

Signatory Witnesses have such information only through protected attorney-client

communications.

Defendants are relieved of their obligations to produce a Rule 30(b)(6) witness to testify

about the facts underlying the Plea Agreement based on their representations that (1) they do not

have access to anyone who has first-hand, non-privileged responsive information, and (2) the

only basis to prepare a witness with non-privileged material is with same chat transcripts and

other documents that are equally available to Plaintiffs.

1 Plaintiffs’ caselaw is not to the contrary. See Hickman v. Taylor, 329 U.S. 495, 508 (1947)

(“For present purposes, it suffices to note that the protective cloak of this privilege does not

extend to information which an attorney secures from a witness while acting for his client in

anticipation of litigation.” (emphasis added)); Sprint Commc'ns Co., L.P. v. Theglobe.com, Inc.,

236 F.R.D. 524, 528 (D. Kan. 2006) (permitting a 30(b)(6) deposition where Sprint had not

established in its briefing that “every relevant piece of information regarding ‘preparing, filing

and revising’ Sprint’s Patents” was privileged); Great Am. Ins. Co. of New York v. Vegas Const.

Co., 251 F.R.D. 534, 541 (D. Nev. 2008) (addressing the obligations of a 30(b)(6) witness

generally, and noting that “clients cannot refuse to disclose facts which their attorneys conveyed

to them and which the attorneys obtained from independent sources.” (internal quotation marks

omitted and emphasis added)). To the extent that the holding in In re Cathode Ray Tube (CRT)

Antitrust Litig., No. 14 Civ. 2058, 2015 WL 12953930, at *4 (N.D. Cal. July 22, 2015), directing

the in camera submission of interview memoranda, suggests that a 30(b)(6) witness can be

questioned regarding facts obtained by counsel from employees about an internal investigation in

anticipation of litigation without breaching the attorney-client privilege, this Court respectfully

disagrees.

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Plaintiffs argue that the Signatory Witnesses waived any privilege over facts discovered in

Defendants’ internal investigations because the witnesses “executed [the Plea Agreements] under

oath, which included detailed factual statements originating from the DOJ investigation that

defendants claim is privileged[, and] admitted in open court that they knew the facts supporting

their pleas.” (Dkt. No. 490). Plaintiffs’ reliance on Federal Rule of Civil Procedure 502(a) is

misplaced. That rule applies only after a disclosure in a federal proceeding or to a federal office

or agency has been found to effect a waiver; the rule then addresses the extent to which that

waiver extends to other proceedings. The rule does not address whether a waiver occurred in the

first instance. Plaintiffs cite to no authority that supports their argument, nor is the Court is aware

of any.2

Plaintiffs also argue that “much of the information in [Defendants’ internal]

investigation[s] was disclosed by Defendants during the course of the federal proceedings against

them to regulators or in open court, in the guilty pleas and in the deferred prosecution

agreements, and in discussions with federal officials at the Department of Justice.” (Dkt. No.

512). But Plaintiffs present no evidence that Defendants disclosed privileged information to the

2 Plaintiffs’ case law is inapposite. See In re Steinhardt Partners, L.P., 9 F.3d 230, 235 (2d Cir.

1993) (finding trader's voluntary submission of legal memorandum to Securities and Exchange

Commission (“SEC”), with whom trader stood in adversarial position as subject of SEC

investigation in connection with which memorandum was sought, waived protections of work

product doctrine in instant case); John Wiley & Sons, Inc. v. Book Dog Books, LLC, 17 F. Supp.

3d 400 (S.D.N.Y. 2014) (finding party waived attorney-client privilege as to certain

conversations with his attorney and documents concerning the same subject matter when he

testified at his deposition about the contents of those conversations); JPMorgan Chase Bank v.

Liberty Mut. Ins. Co., 209 F.R.D. 361, 363 (S.D.N.Y. 2002) (quashing 30(b)(6) deposition topic

because, “[u]nder the guise of requesting ‘facts’ that defendants contend changed their view of

the transactions, plaintiff is really requesting defendants' mental impressions, conclusions,

opinions, and legal theory”); In re Leslie Fay Companies, Inc. Sec. Litig., 161 F.R.D. 274

(S.D.N.Y. 1995) (holding, inter alia, that production of audit committee's report to the SEC

waived attorney-client privilege over report and documents underlying report, to the extent that

underlying documents did not contain legal analysis or advice not contained or discussed in

report).

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DOJ, including any facts underlying the Plea Agreements. This argument is accordingly rejected,

but without prejudice to Plaintiffs’ seeking discovery of information that was disclosed to the

Government. It is further

ORDERED that the parties are directed to meet and confer regarding Defendants’

proposed compromise at Dkt. No. 503. It is further

ORDERED that the parties shall file a joint letter by May 19, 2020, outlining (1) the

parties’ agreement; and (2) any remaining disputes, with the parties’ respective positions and

supporting facts and legal authority.

Dated: May 5, 2020

New York, New York

UNITED STATES DISTRICT JUDGE