SM Kids, LLC v. Google LLC

Misia, WL

DOCUMENT

ELECTRON

UNITED STATES DISTRICT COURT DOC #: ICALLY FILED

SOUTHERN DISTRICT OF NEW YORK □

DATE FILED:__ 2/23/2021

SM Kids, LLC, as successor-in-interest to

Stelor Productions, LLC,

1:18-cv-02637 (LGS) (SDA

Plaintiff, (LGS) (

. OPINION AND ORDER

-against- TO

Google LLC et al.,

Defendants.

STEWART D. AARON, United States Magistrate Judge:

Before the Court is a Letter Motion by Defendants Google LLC, Alphabet Inc. and XXVI

Holdings Inc. (collectively, the “Defendants”) challenging assertions of privilege made by Plaintiff

SM Kids, LLC (“SM Kids” or “Plaintiff”) on its privilege log. (Defs.’ 2/9/21 Ltr. Mot., ECF Nos. 186,

187.) This Letter Motion is resolved as set forth below.

BACKGROUND

I. Background Facts

The background facts underlying this case are as follows. In 1995, Steven Silvers created

the Googles brand. Two years later, he registered the Googles trademark and the internet

domain name www.googles.com. The website launched in 1998 as a children’s education and

entertainment website. That year, the search engine Google adopted the Google name.

Subsequently, in 2005, Silvers sued Google for trademark infringement. In February 2007, Silvers

+The facts set forth in this Background Facts section are adapted from the Second Circuit’s Opinion in SM

Kids, LLC v. Google LLC, 963 F.3d 206, 209-10 (2d Cir. 2020).

assigned all rights in Googles to Stelor Productions, LLC (“Stelor”). In December 2008, Google and

Stelor settled the trademark infringement litigation.

As the trademark infringement litigation unfolded, in 2006 Stephen Garchik invested in

Stelor. The company soon defaulted on Garchik’s loans. Following a bankruptcy proceeding, in

2011 Stelor assigned the “entire interest and the goodwill” of the Googles trademark to Garchik,

doing business as Stelpro Loan Investors, LLC (“Stelpro”). By that point, the Googles website

remained operational, but there is some evidence that its content was static and quickly growing

outdated. Garchik later transferred the Googles assets to SJM Partners Inc. (“SJM”), a company

of which he is the sole owner. Following this transfer, Garchik replaced the Googles website with

a “coming soon” page, posted a solicitation for joint venture partners, and added some

audiovisual content. Finally, in February 2018, SJM transferred the Googles assets to SM Kids, a

newly formed firm owned by Garchik.

In February 2018, SM Kids sued Google LLC, Alphabet Inc., XXVI Holdings Inc. and 100 John

and/or Jane Doe defendants in New York County Supreme Court, alleging that Google had

breached the 2008 settlement agreement. That agreement prohibited Google from “intentionally

mak[ing] material modifications to its [then-]current offering of products and services in a

manner that is likely to create confusion in connection with Stelor’s present business.” (Settl.

Agmt., ECF No. 23-3, ¶ 7.) Google agreed not to “create, develop and publish children’s books,

fictional children's videos, or other fictional children’s related content that have a title of

‘GOOGLE’ or a ‘GOOGLE-’ formative title or mark.” (Id.)

The complaint alleged that Google had breached that agreement by creating Google Play

and YouTube Kids, which publish and distribute children’s content. SM Kids further objected to

Google’s acquisition of several children’s entertainment businesses, including Launchpad Toys

and the “Toontastic” application.

II. Dramatis Personae

In order to put the privilege issues into proper context, certain additional individuals must

be identified. These individuals, none of whom is an attorney, are as follows:2

Matt Mazer: Mazer was an entertainment industry executive who Garchik engaged in

2013 to advise him on the Googles intellectual property that Garchik had obtained from Stelor.

(See Defs.’ 2/9/21 Ltr. Mot. at 3; Pl.’s 2/16/21 Resp., ECF No. 194, at 7.)

Allan Cohen: A. Cohen is the managing member of Taral Productions, LLC (“Taral”). (Pl.’s

2/16/21 Resp. at 7.) As of February 6, 2014,3 Taral and Stelpro entered into an agreement with

respect to the Googles intellectual property, in which they agreed that any proceeds derived from

such property would be divided between Taral and Stelpro. (See id.; Taral/Stelpro Agmt., ECF No.

200-3, ¶ 4.) They also agreed that “all decisions related to the [Googles intellectual property]

shall be jointly made by Taral and Stelpro.” (Taral/Stelpro Agmt. ¶ 3.) The agreement was

amended as of December 19, 2014 to provide that certain of the proceeds derived from the

property would be divided among Taral, Stelpro and Jared Lader (who is identified below). (See

Taral/Stelpro Amend., ECF No. 200-4.)

Jared Lader: Lader acted as an employee and an independent contractor of Taral with

respect to the Googles intellectual property—i.e., his status changed over time from employee

2 These individuals are set forth in the order they are addressed in Defendants’ Letter Motion. (See Defs.’

2/9/21 Ltr. Mot. at 2.)

3 Although the agreement is dated as of February 6, 2014, it was executed on March 2, 2014. (See

Taral/Stelpro Agmt. at 3.)

to independent contractor. (See A. Cohen Dep., ECF No. 199-3, at 35 (“Jared Lader was . . . an

employee of Taral [who] basically did everything for me”), 36 (A. Cohen testifying that Lader also

worked as an independent contractor); Defs.’ 2/9/21 Ltr. Mot. at 3 (“Lader was an independent

contractor who worked ‘on and off’ for [Taral]”).) As set forth above, as of December 19, 2014,

Lader joined in a profit sharing agreement with respect to the Googles intellectual property. (See

Taral/Stelpro Amend. ¶ 1.)

Karen Salmansohn: Salmansohn was engaged on behalf of SJM to develop content for

googles.com in a work-for-hire capacity. (See Pl.’s 2/16/21 Resp. at 9.) As of May 10, 2016,

Salmansohn entered into a Collaboration Agreement with Bungalow Media + Entertainment

(“Bungalow”) “in connection with the development and production of the Googles brand

concept.” (See Salmansohn/Bungalow Agmt. at 1.) However, the Collaboration Agreement stated

that she and Bungalow agreed to the terms set forth “in the event” that an agreement was

secured with the “Client” (i.e., SJM). (See id. ¶ 2.) Bungalow did not secure such an agreement

until late June or July 2016, as set forth immediately below.

Robert (Bobby) Friedman: Friedman is a member of Bungalow.4 (Pl.’s 2/16/21 Resp. at 6.)

As of June 30, 2016,5 SJM retained Bungalow to “solicit a sale, joint venture, or other capital

infusion for [SJM] and its primary asset googles.com.” (See Googles 6/30/16 Agmt. at 1.)

4 There also is an individual named David Cohen (“D. Cohen”), who is an employee of Bungalow, but is no

relation to A. Cohen. (See Pl.’s 2/16/21 Resp. at 10.)

5 Although the agreement is dated as of June 30, 2016, it was executed on July 14 and 17, 2016. (See

Googles 6/30/16 Agmt., ECF No. 199-4, at 5.)

Carina Sayles and Alan Winnikoff: Sayles and Winnikoff are principals at Sayles &

Winnikoff, which is a public relations firm. (See Pl.’s 2/16/21 Resp. at 10.) Sayles & Winnikoff was

retained by Friedman to promote his efforts to potential investors. (Defs.’ 2/9/21 Ltr. Mot. at 3.)

In addition to the foregoing individuals who were not attorneys, an attorney named

Robert (Bob) Wyman was a party to many of the communications challenged by Defendants.

Wyman was a partner at Wyman & Isaacs LLP (“W&I”), and later became a partner at Davis

Wright Tremaine (“DWT”), when W&I was merged into DWT. (See Pl.’s 2/16/21 Resp. at 7; Pl.’s

2/19/21 Ltr., ECF No. 200, at 1.) Prior to February 2014, Wyman and W&I represented Taral. (See

Taral/Stelpro Agmt. ¶ 9.) In the agreement between Taral and Stelpro, they acknowledged the

“future representation” of them by W&I and Wyman “related to various matters arising in

connection with the [Googles intellectual property]” and agreed to waive any conflict of interest

by reason of their prior representation of Taral and joint representation going forward. (See id.)

On January 9, 2015, following W&I’s merger into DWT, DWT entered into an engagement

agreement with A. Cohen and his “related entities . . . in connection with such matters as may be

mutually agreed upon.” (See DWT 1/9/15 Agmt., ECF No. 200-1, at 1.) Later, on September 16,

2015, DWT entered into an engagement agreement with Garchik “in connection with such

matters as may be mutually agreed upon,” including “in connection with maintenance of selected

trademarks and general business transactional matters related to his ‘googles’ matters.” (See

DWT 9/16/15 Agmt., ECF No. 200-2, at 1.) For “clarity,” the engagement agreement with Garchik

provided that DWT also would be representing Garchik’s “affiliated persons and entities as

agreed to by [DWT].” (See id. at 1.)

III. Relevant Procedural History

On January 19, 2021, Plaintiff produced a privilege log to Defendants that contained 4,587

entries. (See Defs.’ 2/9/21 Ltr. Mot. at 1.) On February 5, 2021, the parties met-and-conferred,

but were at an impasse with respect to certain categories of documents. (See id. at 5.) On

February 9, 2021, Defendants filed the Letter Motion that is the subject of this Opinion and Order

and attached to it Exhibits 1 through 6,6 which consisted of excerpts from Plaintiff’s privilege log

containing items that Defendants were challenging. (See id., Ex. 1 to 4.)

On February 12, 2021, the Court entered an Order setting forth a briefing schedule for

Defendants’ Letter Motion, and requiring the parties to each identify exemplar documents from

the Exhibits 1 to 5 of the Letter Motion that the Court would subject to an in camera review. (See

2/12/21 Order, ECF No. 192.) On February 16, 2021, Plaintiff filed its response letter. (See Pl.’s

2/16/21 Resp.) On February 16, 2021, Plaintiff transmitted to the Court its exemplar documents

from Exhibits 1 to 5 of Defendants’ Letter Motion, as well as the single document contained in

Exhibit 6, as required, for the Court’s in camera review.

On February 18, 2021, Defendants identified exemplar documents to be provided to the

Court from Exhibits 1 to 5 of Defendants’ Letter Motion, and on February 19, Plaintiff transmitted

such documents to the Court. Also on February 19, 2021, Defendants filed their reply. (See Defs.’

2/19/21 Reply, ECF No. 198, 199.) Oral argument by telephone was held with the parties on

February 22, 2021. (See 2/22/21 Tr., ECF No. 204.)

6 Each exhibit related to a different individual or entity: Ex. 1 (Mazer), Ex. 2 (A. Cohen), Ex. 3 (Lader), Ex. 4

(Salmansohn), Ex. 5 (Bungalow) and Ex. 6 (Sayles and Winnikoff).

LEGAL STANDARDS

I. Choice Of Law Regarding Attorney-Client Privilege

Because this Court’s subject matter jurisdiction is based upon diversity (see Not. of

Removal, ECF No. 1, ¶ 5), state law provides the rule of decision concerning claims of attorney-

client privilege. See Fed. R. Evid. 501; Dixon v. 80 Pine St. Corp., 516 F.2d 1278, 1280 (2d Cir.

1975); see also Reliance Ins. Co. v. Am. Lintex Corp., No. 00-CV-05568 (WHP) (KNF), 2001 WL

604080, at *2 (S.D.N.Y. June 1, 2001) (“Both Reliance’s underlying claim and the defendants’

affirmative defense are based on New York law. Therefore, New York law governs the instant

claim of privilege.”); Gen. Elec. Co. v. APR Energy plc, No. 19-CV-03472 (VM) (KNF), 2020 WL

2061423, at *7 (S.D.N.Y. Apr. 29, 2020) (“It is not contested that, in a diversity case, the issue of

privilege is to be governed by the substantive law of the forum state.” (quoting Dixon, 516 F.2d

at 1280)).

The settlement agreement at issue in this case provides that it “shall be governed by and

construed in accordance with the laws of New York, without giving effect to principles of conflicts

of law.” (See Settl. Agmt. ¶ 16.) The substantive law to be applied in this case is New York law

because New York courts honor choice of law provisions in contracts. See Gen. Elec. Co. v. APR

Energy plc, No. 19-CV-03472 (VM) (KNF), 2020 WL 2061423, at *6 (S.D.N.Y. 2020) (“Under New

York law, courts will generally enforce choice-of-law clauses because contracts should be

interpreted so as to effectuate the parties’ intent.” (internal quotation marks omitted) (quoting

AEI Life LLC v. Lincoln Benefit Life Co., 892 F.3d 126, 132 (2d Cir. 2018))); Bank of New York v.

Yugoimport, 745 F.3d 599, 609 (2d Cir. 2014) (“New York choice-of-law rules . . . ‘require[] the

court to honor the parties’ choice [of law provision] insofar as matters of substance are

concerned, so long as fundamental policies of New York law are not thereby violated.’” (quoting

Woodling v. Garrett Corp., 813 F.2d 543, 551 (2d Cir. 1987))).

Since New York law is the substantive law to be applied in this case, the Court will apply

New York law on attorney-client privilege. See Madelaine Chocolate Novelties, Inc. v. Great N.

Ins. Co., No. 15-CV-05830 (RJD) (SMG), 2020 WL 606447, at *2 (E.D.N.Y. Feb. 7, 2020) (“This is a

diversity jurisdiction case involving a claim of breach of contract under New York law. . . .

Accordingly, questions of privilege are governed by New York law.” (citations omitted)); Cytec

Indus., Inc. v. Allnex (Luxembourg) & Cy S.C.A., No. 14-CV-01561 (PKC), 2016 WL 3542453, at *1

(S.D.N.Y. 2016) (“New York law governs [the attorney-client privilege] inquiry because subject

matter jurisdiction is based on diversity of citizenship, and the underlying agreement is governed

by New York law ‘without regard to principles of conflicts of law.’” (citations omitted)).

The cases cited by Plaintiff to argue that “Florida law applies to communications made in

Florida between Floridians because Florida has the most significant relationship with those

communications, persons, and conduct” (see Pl.’s 2/16/21 Resp. at 2-3) are inapposite. Most of

the cases cited by Plaintiff did not involve a breach of contract claim based upon a contract with

a New York choice of law provision. See Microsoft Corp. v. Fed. Ins. Co., No. M8-85 (HB), 2003 WL

548758 (S.D.N.Y. Feb. 25, 2003) (third-party subpoena in insurance coverage dispute; no choice

of law provision); AroCHEM Int’l, Inc. v. Buirkle, 968 F.2d 266 (2d Cir. 1992) (defamation and

tortious interference with contractual and commercial relationship claims); Brandman v. Cross &

Brown Co. of Florida, Inc., 125 Misc. 2d 185, 185 (Sup. Ct., Kings Cty., 1984) (counterclaim for

fraudulent inducement and breach of partnership agreement, but agreement “contained no

choice-of-law clause”); Tartaglia v. Paul Revere Life Ins. Co., 948 F. Supp. 325, 326-27 (S.D.N.Y.

1996) (third-party subpoena in breach of contract action; no choice of law provision); Veleron

Holding, B.V. v. BNP Paribas SA, No. 12-CV-05966 (CM) (RLE), 2014 WL 4184806, at *4 (S.D.N.Y.

Aug. 22, 2014) (securities fraud claims; breach of contract claim had been dismissed; no choice

of law provision).

In Askari v. McDermott, Will & Emery, LLP, 179 A.D.3d 127 (2d Dep’t 2019), another case

cited by Plaintiff (see Pl.’s 2/16/21 Resp. at 3), the New York Appellate Division, Second

Department, chose to disregard a choice of law provision in an agreement between the parties

and instead applied to assertions of privilege the law of the state where the communications

took place. Id. at 153-54. In choosing to disregard the choice of law provision, however, the

Second Department relied on the fact that the dispute between the parties did not relate to the

agreement that contained the choice of law provision. Id. at 153 (“Significantly, the issue at bar

does not concern a dispute arising under the [agreement].”). In fact, there were multiple

documents governing the relationship between the parties, and the singular agreement that did

include a choice of law provision was not implicated by the issues in the case. See id. (“[T]he

choice-of-law provision in the [relevant agreement] is not even implicated here.”). In the present

case, by contrast, the agreement that contains the New York choice of law clause is the very

agreement upon which Plaintiff bases its claims.7

Finally, in Satcom Int’l Grp., P.L.C. v. Orbcomm Int’l Partners, L.P., No. 98-CV-09095 (DLC)

1999 WL 76847 (S.D.N.Y. Feb. 16, 1999), also cited by Plaintiff (see Pl.’s 2/16/21 Resp. at 2), in

the lead up to a preliminary injunction hearing, the court noted that “it appear[ed] that New York

7 In addition, in Askari, the Second Department held that enforcement of the choice of law provision would

have been contrary to public policy. See 179 A.D.3d at 154. Here, there is no suggestion that the

application of New York privilege law would be contrary to public policy, nor could there be.

law [would] otherwise apply to the substantive claims in [the] action because of choice of law

clauses in the licensing agreements,” but nevertheless made “a separate inquiry into which

state’s law [would] apply” to attorney-client privilege, and used a “grouping of contacts” analysis

to determine that Virginia privilege law applied.8 See id. at *1. A fact that distinguishes Satcom

from the present case is that the plaintiff in that case had asserted a claim for tortious

interference with prospective business advantage, in addition to a breach of contract claim. See

id.

Although the court in Satcom does not discuss the language and/or scope of the choice

of law clauses at issue in that case, the court may have applied Virginia law because of the

presence of the tort claim.9 To the extent that Satcom is read to suggest that a court need not

apply New York privilege law to a breach of contract claim where the contract at issue contains

a New York choice of law provision, that decision is against the clear weight of authority in the

Second Circuit.10

8 The Satcom court noted that “[n]either party addresse[d] choice of law issues in its letter brief.” See

Satcom, 1999 WL 76847, at *1. Thus, the Court did not have the benefit of briefing by the parties before

engaging in its choice of law analysis.

9 New York courts typically apply the law selected in contractual choice-of-law clauses only to claims

sounding in contract, “unless the express language of the choice-of-law provision is sufficiently broad as

to encompass the entire relationship between the contracting parties.” H.S.W. Enter., Inc. v. Woo Lae Oak,

Inc., 171 F. Supp. 2d 135, 141 (S.D.N.Y. 2001). Indeed, as stated in what the Second Circuit has referred to

as the “the leading New York case on the scope of choice-of-law clauses,” Fin. One Pub. Co. v. Lehman

Bros. Special Fin., 414 F.3d 325, 334 (2d Cir. 2005), “the [fact the] parties agreed that their contract should

be governed by an expressed procedure does not bind them as to causes of action sounding in tort, and,

as to the tort causes of action, there is no reason why all must be resolved by reference to the law of the

same jurisdiction.” Knieriemen v. Bache Halsey Stuart Shields Inc., 74 A.D.2d 290, 293 (1st Dep’t 1980),

overruled on other grounds, Rescildo v. R.H. Macy’s, 187 A.D.2d 112 (1st Dep’t 1993); accord Mayaguez

S.A. v. Citigroup, Inc., No. 16-CV-06788 (PGG), 2018 WL 1587597, at *9 (S.D.N.Y. Mar. 28, 2018) (citing

Knieriemen).

10 As noted by Defendants (see Defs.’ 2/19/21 Reply at 1), the Satcom court cited to Tartaglia, 948 F. Supp.

at 326-27, for the apparent proposition that a different choice of law analysis applied to substantive law

II. New York Law On Attorney-Client Privilege

In New York, the statutory codification of the privilege is as follows:

[A]n attorney or his or her employee, or any person who obtains without the

knowledge of the client evidence of a confidential communication made between

the attorney or his or her employee and the client in the course of professional

employment, shall not disclose, or be allowed to disclose such communication,

nor shall the client be compelled to disclose such communication . . . .

N.Y. C.P.L.R. § 4503(a)(1).11 The party asserting privilege carries the burden of establishing “that

the communication at issue was between an attorney and a client ‘for the purpose of facilitating

the rendition of legal advice or services, in the course of a professional relationship;’” that the

communication “is predominantly of a legal character;” and that the communication was

confidential. Ambac Assur. Corp. v. Countrywide Home Loans, Inc., 27 N.Y.3d 616, 624 (2016)

(quoting Rossi v. Blue Cross & Blue Shield of Greater N.Y., 73 N.Y.2d 588, 593-94 (1989)). “The

critical inquiry is whether, viewing the lawyer’s communication in its full content and context, it

claims than applied to privilege claims, even where there is a choice of law clause, see Satcom, 1999 WL

76847, at *1, but Tartaglia did not involve a choice of law provision.

11 Under federal law, “[t]he attorney-client privilege protects communications (1) between a client and

his or her attorney (2) that are intended to be, and in fact were, kept confidential (3) for the purpose of

obtaining or providing legal advice.” United States v. Mejia, 655 F.3d 126, 132 (2d Cir. 2011) (citing In re

Cnty. of Erie, 473 F.3d 413, 419 (2d Cir. 2007)). New York law on attorney-client privilege is “generally

similar to accepted federal doctrine.” Bank of Am., N.A. v. Terra Nova Ins. Co. Ltd., 211 F. Supp. 2d 493,

495 (S.D.N.Y. 2002); accord Argos Holdings Inc. v. Wilmington Tr. Natl. Ass’n, No. 18-CV-05773 (DLC), 2019

WL 1397150, at *2 (S.D.N.Y. Mar. 28, 2019) (“New York law of attorney-client privilege is, with certain

exceptions, substantially similar to the federal doctrine.” (internal quotation marks and citation omitted));

Edebali v. Bankers Stand. Ins. Co., No. 14-CV-07095 (JS) (AKT), 2017 WL 3037408, at *4 n.2 (E.D.N.Y. July

17, 2017) (“[T]he distinction between New York and federal law on attorney-client privilege is quite

indistinguishable, as the law intersects in all of its facets, and are viewed interchangeably.”) (internal

quotation marks and citation omitted). Because the law of the two jurisdictions is similar in all respects

(except with respect to the common interest exception to privilege waiver, discussed infra), the Court

sometimes cites to cases applying federal law.

was made in order to render legal advice or services to the client.” Spectrum Sys. Int’l Corp. v.

Chem. Bank, 78 N.Y.2d 371, 379 (1991).

“A corporation’s communications with counsel, no less than the communications of other

clients with counsel, are encompassed within the legislative purposes of CPLR 4503, which

include fostering uninhibited dialogue between lawyers and clients in their professional

engagements, thereby ultimately promoting the administration of justice.” Rossi, 73 N.Y.2d at

592. “The privilege extends to communications of ‘one serving as an agent of either attorney or

client.’” Hudson Ins. Co. v. Oppenheim, 72 A.D.3d 489, 489 (1st Dep’t 2010) (internal quotation

marks and citation omitted); accord Khan v. Midland Funding LLC, 956 F. Supp. 2d 515, 520

(S.D.N.Y. 2013) (citing Hudson Ins. Co.); see also In re Copper Mkt. Antitrust Litig., 200 F.R.D. 213,

217 (S.D.N.Y. 2001) (“[C]ourts have held that the attorney-client privilege protects

communications between lawyers and agents of a client where such communications are for the

purpose of rendering legal advice.”).12

“The proponent of the privilege has the burden of establishing that the information was

a communication between client and counsel, that it was intended to be and was kept

confidential, and [that] it was made in order to assist in obtaining or providing legal advice or

services to the client.” Charter One Bank, F.S.B. v. Midtown Rochester, L.L.C., 191 Misc. 2d 154,

166 (Sup. Ct., Monroe Cty., 2002). Such showings must be based on competent evidence, usually

12 Defendants reliance upon Cohen v. Cohen, No. 09-CV-10230 (LAP), 2015 WL 745712, at *3 (S.D.N.Y. Jan.

30, 2015), for the proposition that, for the privilege to apply, disclosure by an attorney to an agent must

be “necessary for the client to obtain informed legal advice” (see Defs.’ 2/9/21 Ltr. Mot. at 2) is misplaced.

In Cohen, the individual to whom attorney-disclosures were made was a litigation funder for the client,

not an agent of the client; indeed, the agreement with the funder expressly stated that the funder was

“not an agent, employee, servant o[r] representative of” the client or her attorneys. See Cohen, 2015 WL

745712, at *1 (S.D.N.Y. Jan. 30, 2015).

through affidavits, deposition testimony or other admissible evidence. See von Bulow by

Auersperg v. von Bulow, 811 F.2d 136, 147 (2d Cir. 1987); Bowne of N.Y. City, Inc. v. AmBase Corp.,

150 F.R.D. 465, 472 (S.D.N.Y. 1993); accord EFCG, Inc. v. AEC Advisors, LLC, No. 19-CV-08076 (RA)

(BCM), 2020 WL 6378943, at *3 (S.D.N.Y. Oct. 30, 2020) (citing Bowne). The burden cannot be

met by “mere conclusory or ipse dixit assertions” in unsworn motion papers authored by

attorneys. See von Bulow, 811 F.2d at 146 (quoting In re Bonanno, 344 F.2d 830, 833 (2d Cir.

1965)). “[W]hether a particular document is or is not protected [by the attorney-client privilege]

is necessarily a fact specific determination . . . most often requiring in camera review,” and left

to the discretion of the trial court. Charter One, 191 Misc. 2d at 157 (quoting Spectrum, 78 N.Y.2d

at 378).

The party asserting a privilege also has the burden to establish that it has not been

waived. See John Blair Commc’ns, Inc. v. Reliance Capital Grp., 182 A.D.2d 578, 579 (1st Dep’t

1992); accord Wultz v. Bank of China Ltd., 304 F.R.D. 384, 391 (S.D.N.Y. 2015) (“The party invoking

the privilege also has the burden to show that the privilege has not been waived.” (citation

omitted)).

Generally, “disclosure to a third party by the party of a communication with his attorney

eliminates whatever privilege the communication may have originally possessed.” In re Horowitz,

482 F.2d 72, 81 (2d Cir. 1973); see also La Suisse, Societe d’Assurances Sur La Vie v. Kraus, 62 F.

Supp. 3d 358, 363 (S.D.N.Y. 2014) (“The attorney-client privilege does not normally attach to

privileged communications that are disclosed to persons who are neither the attorney nor the

client.” (citing Ratliff v. Davis Polk & Wardwell, 354 F.3d 165, 170 n.5 (2d Cir. 2003))).

Notwithstanding this general rule, there are circumstances where courts have not found a waiver

even where attorney-client communications were shared with a third party. For example, where

persons who receive an entity’s privileged communications are the “functional equivalent” of

employees, disclosure of otherwise privileged communications to them “does not operate as a

waiver of the attorney-client privilege.” See Twentieth Century Fox Film Corp. v. Marvel Enters.,

Inc., No. 01-CV-03016 (AGS) (HBP), 2002 WL 31556383, at *2 (S.D.N.Y. Nov. 15, 2002)

(independent contractors held to be functional equivalent of employees).

In addition, the attorney-client privilege is not necessarily waived by the disclosure of an

otherwise privileged communication to a public relations firm. See Pecile v. Titan Capital Grp.,

LLC, 119 A.D.3d 446, 446-47 (1st Dep’t 2014) (citing In re Copper Mkt., 200 F.R.D. at 215).13

However, “[f]or [a party’s] press communications to merit protection from disclosure as

attorney-client privilege information . . ., ‘[t]he predominant purpose of a communication must

involve legal advice.’” Breest v. Haggis, 64 Misc. 3d 1211(A), 2019 WL 3023881, at *1 (Sup. Ct.,

N.Y. Cty., 2019) (citation omitted). “Though the communications may reflect counsel’s legal

advice and mental impressions, ‘the discussion of such matter with a public relations firm for the

primary purpose of advancing a public relations strategy—and not for the purpose of developing

or furthering a legal strategy—results in the loss of the protection of attorney-client privilege.’”

Id. (citation omitted).

One area where the New York law of attorney-client privilege diverges from federal law

is with respect to the common interest exception to attorney-client privilege waiver. Under New

13 In Copper Mkt., the client’s English language skills were not sufficiently sophisticated for media relations,

the communications involving the public relations firm were for the purpose of obtaining legal advice and

the documents withheld had not been prepared for business purposes. See In re Copper Mkt., 200 F.R.D.

at 215-16.

York law, “where two or more clients separately retain counsel to advise them on matters of

common legal interest, the common interest exception allows them to shield from disclosure

certain attorney-client communications that are revealed to one another for the purpose of

furthering a common legal interest.” Ambac, 27 N.Y.3d at 625 (emphasis in original). However,

New York law further requires that the common legal interest involve “pending or reasonably

anticipated litigation.” Id. at 628.14

ANALYSIS

Defendants assert that communications with each of Mazer, A. Cohen, Lader,

Salmansohn, Bungalow, Sayles and Winnikoff are not privileged since they are third parties and

that the disclosure of privileged information to them waives the privilege. The Court below

addresses the privilege issues as to each of these individuals or entities generally and, where

applicable, in the context of the exemplars that were provided to the Court for in camera review.

I. Mazer

A. Privilege Issues Generally

The Court finds that, based upon the record before it, as well as its in camera review of

documents, Mazer was acting as an agent for Garchik and his companies with respect to the

Googles intellectual property. However, this does not mean that all communications between

Mazer and Garchik are privileged. Rather, in order for communications between Mazer and

Garchik to be privileged, they must relate to communications between Garchik and/or Mazer, on

14 As noted by the dissent in Ambac, “the majority of federal courts that have addressed the issue, and a

significant number of state jurisdictions, either through case law or by statute, have held that the privilege

applies even if litigation is not pending or reasonably anticipated.” Ambac, 27 N.Y.3d at 635 (Rivera, J.,

dissenting).

the one hand, and counsel for Garchik, on the other, for the purpose of facilitating the rendition

of legal advice. See Rossi, 73 N.Y.2d at 593.

B. Exemplar Documents From Exhibit 1 To Defendants’ Letter Motion

Applying the foregoing principles to the exemplars reviewed, the Court finds as follows:

1. Doc. No. 20201106_817-000022018

This document is privileged because it reflects a request for legal advice by Garchik to an

attorney at the Finnegan law firm. This communication remained privileged even though it was

forwarded to Mazer because Mazer was acting as an agent for SJM. Thus, this document need

not be produced.

2. Doc. No. ID004208

This document is not privileged because it is a communication between Mazer and

Garchik, neither of whom is an attorney and does not reflect legal advice from an attorney. During

oral argument, Plaintiff withdrew its privilege assertion as to this document. (2/22/21 Tr. at 7.)

Thus, this document shall be produced.

II. A. Cohen

A. Privilege Issues Generally

The Court finds that, based upon the record before it, as well as its in camera review of

documents, once A. Cohen and Taral, on the one hand, and Garchik and Stelpro on the other,

executed the agreement between them on March 2, 2014, they effectively became joint clients

of Wyman and W&I. Prior to executing the agreement, however, Wyman and W&I had

represented only A. Cohen and Taral. (See Garchik Dep., ECF No. 199-5, at 228.) In addition, the

Taral/Stelpro agreement provides that all decisions regarding the Googles intellectual property

“shall be jointly made by Taral and Stelpro.” (See Taral/Stelpro Agmt. ¶ 3.) Thus, as the content

and context of the privileged documents reviewed by the Court reflect, the actions of Stelpro

(and its successors) and Taral with respect to legal advice in connection with the Googles

intellectual property were being carried out on behalf of one another—that is, they essentially

were acting as agents for one another.15 Accordingly, after March 2, 2014, communications

between Wyman and/or W&I and Garchik and/or Stelpro are privileged, but such

communications prior to that date are not privileged.

B. Exemplar Documents From Exhibit 2 To Defendants’ Letter Motion

Applying the foregoing principles to the exemplars reviewed, the Court finds as follows:

1. Doc. Nos. ID003100-01, ID004795 & ID006008-09

These documents are emails regarding drafts of the agreement that Taral and Stelpro

executed on March 2, 2014. They are dated prior to March 2, 2014, at which time Wyman and

W&I only represented A. Cohen and Taral. Thus, Garchik and/or Stelpro and its successor entities

may not claim privilege with respect to these documents, and these documents shall be

produced.

15 To be clear, the Court is not applying the common interest exception to attorney-client privilege waiver,

which is not recognized under New York law where, as here, there was not pending or reasonably

anticipated litigation at the time the communications were made. See Ambac, 27 N.Y.3d at 628. As noted

in Ambac, the common interest exception applies “where two or more clients separately retain counsel

to advise them on matters of common legal interest.” Id. at 625 (emphasis in original). In the present case,

by contrast, Garchik/Stelpro and A. Cohen/Taral effectively were joint clients of Wyman and W&I on and

after March 2, 2014, such that the privilege applies under New York law. See Ambac, 27 N.Y.3d at 631 (“In

the joint client or co-client setting . . . the clients indisputably share a complete alignment of interests in

order for the attorney, ethically, to represent both parties [and] there is no question that the clients share

a common identity and all joint communications will be in furtherance of that joint representation”). Also,

with respect to privileged communications from Wyman and W&I, as well as other counsel, Garchik and

A. Cohen shared such communications with one another in circumstances where Taral and Stelpro were

contractually required to jointly make all decisions regarding the Googles intellectual property, and again

their interests are completely aligned.

2. Doc. No. ID20201106_817-000057003

This document is an exchange of emails on December 22, 2014 among Wyman, Garchik,

A. Cohen and Lader regarding a court case. By this time, Wyman effectively is representing

Garchik, A. Cohen and Taral and these communications are privileged. Since Lader was an agent

of Taral, his inclusion on these emails does not waive the privilege. Thus, this document need not

be produced.

3. Doc. No. 20201106_817-000022416

This document consists of emails in March 2015 between Greg Galloway, who is a

trademark attorney retained by Mazer,16 and Garchik, which Garchik then forwards to A. Cohen.

From the content and context of the emails, it is clear that Galloway was retained to, and did in

fact, provide legal advice to Garchik and SJM and that these emails are privileged. The fact that

these emails were shared with A. Cohen did not waive the privilege since, as set forth above, A.

Cohen through Taral and Garchik through SJM (as successor to Stelpro) essentially were acting

as agents for one another with respect to the Googles intellectual property, as they were required

to jointly make decisions. Thus, this document need not be produced.

4. Doc. No. 20201106_817-000034942

This document consists of a series of emails, the first of which chronologically is an email

from Wyman to Taral in December 2013 regarding the settlement agreement at issue in this case.

The email is forwarded to Garchik. As of December 2013, Wyman did not represent Garchik; he

16 See Defs.’ 2/19/21 Reply at 5 n.2.

only represented A. Cohen and Taral. Thus, Garchik and/or Stelpro and its successor entities may

not claim privilege with respect to this document and this document shall be produced.

5. Doc. No. 20201106_817-000052471

This document consists of a series of emails. The first four chronologically are March 10,

2014 emails among W&I, Garchik and Taral regarding legal advice and were privileged. However,

the emails then were forwarded to Richard Rakowski, a third-party, and the privilege was waived

as to the first four emails at that point. The emails between Garchik and Rakowski also are not

privileged. Nor are any of the subsequent emails that are part of this chain privileged, since they

are not authored by an attorney and do not seek legal advice. Thus, this document shall be

produced.

6. Doc. No. 20201106_817-000066042

This document consists of an August 22, 2014 email from Wyman to A. Cohen responding

to an enclosed voicemail message left by A. Cohen regarding googles.com. The email then is

forwarded to Garchik. This document is privileged and need not be produced.

7. Doc. No. 20201106_817-000066580

This document consists of August 2014 emails among W&I, SJM and Taral regarding items

to be provided to counsel and is privileged. It need not be produced.

8. Doc. No. ID004912

This document consists of a series of emails in late February 2014 between and among

W&I, Garchik, Taral and A. Cohen regarding drafts of the agreement that Taral and Stelpro

executed on March 2, 2014. These emails were sent prior to March 2, 2014, at which time Wyman

and W&I only represented A. Cohen and Taral. Thus, Garchik and/or Stelpro and its successor

entities may not claim privilege with respect to this document, and this document shall be

produced.

III. Lader

A. Privilege Issues Generally

The Court finds that, based upon the record before it, as well as its in camera review of

documents, Lader was acting as an agent for and/or was the functional equivalent of an

employee of Taral with respect to the Googles intellectual property. Lader was an agent of Taral

when he was employed by it, and was the functional equivalent of an employee when he did

work for Taral as an independent contractor.

B. Exemplar Documents From Exhibit 3 To Defendants’ Letter Motion

Applying the foregoing principles to the exemplars reviewed, the Court finds as follows:

1. Doc. No. 20201106_817-000052461

This document consists of a series of March 10, 2014 e-mails between and among Lader,

Taral, W&I and Garchik regarding legal advice. It is privileged and need not be produced.

2. Doc. No. 20201106_817-000052477-78

This document consists of a series of emails. The first four chronologically are March 10,

2014 emails among W&I, Garchik and Taral regarding legal advice and were privileged. However,

the emails then were forwarded to Richard Rakowski, a third-party, and the privilege was waived

as to the first four emails at that point. The emails between Garchik and Rakowski also are not

privileged. After Garchik forwards Rakowski’s email to A. Cohen, Lader and Wyman, there are

emails sent by Wyman that are privileged (i.e., the ones sent at 4:52 p.m. and 5:38 p.m. on March

10, 2014). Thus, this document shall be produced, except that Plaintiff may redact the two

Wyman emails referenced in the prior sentence.

3. Doc. No. 20201106_817-000066660

This is an October 23, 2017 email from Lader to SJM and A. Cohen regarding information

requested by “the lawyers.” It is privileged and need not be produced.

4. Doc. No. 20201121_546-000019059

This document consists of a series of March 2016 emails between and among DWT, SJM

and Taral regarding legal matters, the last of which is forwarded by A. Cohen to Lader. This

document is privileged and need not be produced.

5. Doc. No. 20201121_546-000019983

This document consists of a September 2015 email sent by A. Cohen to Wyman at DWT

regarding legal matters that then is forwarded by A. Cohen to Lader. The document is privileged

and need not be produced.

IV. Salmansohn

A. Privilege Issues Generally

The Court finds that, based upon the record before it, as well as its in camera review of

documents, Salmansohn was acting as an agent on behalf of SJM through her agreement with

Bungalow to develop content for googles.com, and Bungalow secured an agreement with SJM in

late June or July 2016. Because Salmansohn was acting as agent for SJM, SJM did not waive

privilege by sharing privileged communications with her in and after late June/ or July 2016.17

17 The Court does not have before it any Salmansohn exemplar documents that fall between the June 30,

2016 “as of” date of Bungalow’s agreement with SJM and the July 2016 dates when it was executed. (See

Googles 6/30/16 Agmt. at 5.) Because a decision regarding whether any of such documents is privileged

B. Exemplar Documents From Exhibit 4 To Defendants’ Letter Motion

Applying the foregoing principles to the exemplars reviewed, the Court finds as follows:

1. Doc. No. 20201106_817-000023464

The first chronological email in this document was sent by Salmansohn to A. Cohen and

Garchik regarding her “favorite ideas from original proposal.” It is not privileged and shall be

produced. In the second email, dated May 25, 2016, Garchik communicates to Salmansohn legal

advice received from “IP counsel” and then she responds. However, because Salmansohn was

not yet acting as agent for SJM in May 2016, Garchik waived attorney-client privilege by sharing

the advice with Salmansohn.18 Thus, there is no privilege and this document shall be produced.

2. Doc. No. ID007077

This document consists of a series of July 2016 emails between Salmansohn and Friedman

(and others) regarding her work for, and agreement with, Bungalow. It is not privileged. During

oral argument, Plaintiff withdrew its privilege assertion as to this document. (2/22/21 Tr. at 36.)

Thus, it shall be produced.

V. Bungalow

A. Privilege Issues Generally

The Court finds that, based upon the record before it, as well as its in camera review of

documents, Bungalow was retained in late June or July 2016 to solicit a sale, joint venture or

depends upon the content and context of such documents, the Court leaves the issue of the privileged

status of any such documents open.

18 During oral argument, the Court had expressed the view that the advice from “IP counsel” could be

redacted as privileged, based upon the premise that Salmansohn had been engaged as SJM’s agent as

early as May 2016. (See 2/22/21 Tr. at 34-35.) However, since Salmansohn’s agency was through

Bungalow and Bungalow’s agreement with SJM was “as of” June 30, 2016, and was not executed until July

2016, communications with Salmansohn in May 2016 are not privileged.

other capital infusion for SJM and googles.com. Because Bungalow was acting as agent for SJM,

SJM did not waive privilege by sharing privileged communications with Bungalow’s

representatives in and after late June or July 2016.19

B. Exemplar Documents From Exhibit 5 To Defendants’ Letter Motion

Applying the foregoing principles to the exemplars reviewed, the Court finds as follows:

1. Doc. No. 20201106_817-000033649

This document consists of an exchange of emails on July 31 and August 1, 2017 between

Bungalow and Garchik regarding legal advice from Wyman. It is privileged and need not be

produced.

2. Doc. No. 20201106_817-000033650

This is an August 2, 2017 email from Bungalow’s Friedman to Garchik (with copies to A.

Cohen and D. Cohen) regarding legal advice from Wyman. It is privileged and need not be

produced.

3. Doc. No. 20201106_817-000035505

This document contains an August 20, 2014 email from Wyman to Friedman, A. Cohen,

Lader and SJM regarding his comments on a “release draft.” Since this email pre-dates the June

30, 2016 agreement among Taral, Bungalow and SJM (see Googles 6/30/16 Agmt.), any privilege

was waived by sharing this email with Friedman. Even though at that point, Friedman may have

had a common interest with the parties who received the email, there is no common interest

19 The Court does not have before it any Bungalow exemplar documents that fall between the June 30,

2016 “as of” date of Bungalow’s agreement and the date when it was executed. (See Googles 6/30/16

Agmt. at 5.) Because a decision regarding whether any of such documents is privileged depends upon the

content and context of such documents, the Court leaves the issue of the privileged status of any such

documents open.

exception to privilege waiver under New York law since there was no pending or reasonably

anticipated litigation at that time. This document shall be produced.

4. Doc. No. 20201106_817-000033669

This document is an August 2017 exchange of emails between Freidman and Garchik. The

only portion of this document that is privileged is the third sentence of the email that was sent

by Garchik at 10:05 p.m. on August 11, 2017, which relates to work that Wyman was doing.

Plaintiff may redact that sentence from the email, but the remainder of the document shall be

produced.

5. Doc. No. 20201121_546-000450487

This document contains an August 5, 2015 email from Wyman to A. Cohen that was

forwarded to Friedman. Since this email pre-dates the June 30, 2016 agreement among Taral,

Bungalow and SJM (see Googles 6/30/16 Agmt.), A. Cohen waived any privilege by forwarding

the email to Friedman. Again, no common interest exception to privilege waiver exists under New

York law since there was no pending or reasonably anticipated litigation at that time. Thus, this

document shall be produced.

6. Doc. No. ID004914

This document consists of a series of July 2016 emails between Salmansohn and Friedman

(and others) regarding her work for, and agreement with, Bungalow, the second to last of which

is an email from Garchik to Salmansohn that he then forwards to Friedman. It is not privileged.

During oral argument, Plaintiff withdrew its privilege assertion as to this document. (2/22/21 Tr.

at 42.) Thus, it shall be produced.

VI. Sayles And Winnikoff

As set forth above, Sayles and Winnikoff are principals at Sayles & Winnikoff, which is a

public relations firm retained by Friedman to promote his efforts to potential investors. With

respect to the single document contained in Exhibit 6 to Defendants’ Letter Motion regarding

Sayles and Winnikoff (Doc. No. ID007363), Plaintiff stated that it “is prepared to withdraw its

privilege claim over this email because it does not discuss legal advice in any detail and does not

discuss how the public relations strategy may relate to legal strategy.” (Pl.’s 2/16/21 Resp. at 10.)

Thus, this document shall be produced. Plaintiff also stated that it “reserves the right to continue

to assert attorney-client privilege and work product protection when appropriate concerning

communications that involve legal strategy or preparing for litigation.” (Id.) In that regard, the

Court reminds Plaintiff that, for its press communications to merit protection from disclosure as

attorney-client privileged information, the predominant purpose of such communications must

involve legal advice. See Breest, 2019 WL 3023881, at *1.20

* * *

Based upon the Court’s guidance and rulings set forth above, the parties shall meet and

confer in a good faith effort to resolve any remaining disputes regarding Plaintiff’s privilege

assertions.

20 To the extent that the work product doctrine protects any communications that were shared with Sayles

& Winnikoff, the Court notes that the standards for waiver of the work product doctrine differ from those

for waiver of the attorney-client privilege. See JA Apparel Corp. v. Abboud, No. 07-CV-07787 (THK), 2008

WL 111006, at *3 (S.D.N.Y. Jan. 10, 2008) (“[W]aiver of the work-product doctrine is significantly more

difficult to establish than waiver of the attorney-client privilege. Unlike the attorney-client privilege, the

work-product privilege is not necessarily waived by disclosure to any third party; rather, the courts

generally find a waiver of the work product privilege only if the disclosure substantially increases the

opportunity for potential adversaries to obtain the information.” (citations and quotation marks

omitted)).

CONCLUSION

For the foregoing reasons, Plaintiff shall produce to Defendants within seven (7) days of

the date of this Order the following exemplar documents: Doc. No. |D004208, Doc. No. |D003100-

01, Doc. No. 1D004795, Doc. No. ID006008-09, Doc. No. 20201106 _817-000034942, Doc. No.

20201106_817-000052471, Doc. No. ID004912, Doc. No. 20201106 _817-000052477-78 (with

redactions as noted above), Doc. No. 20201106 _817-000023464, Doc. No. ID007077, Doc. No.

20201106 _817-000035505, Doc. No. 20201106 _817-000033669 (with redaction as noted

above), Doc. No. 20201121 546-000450487, Doc. No. ID004914 and Doc. No. 1ID007363.

No later than March 2, 2021, the parties shall meet and confer as set forth above. No later

than March 5, 2021, the parties shall file a joint letter with the Court advising the Court of the

Status of the meet and confer process.

SO ORDERED.

Dated: New York, New York

February 23, 2021

Risa hd, Car

STEWART D. AARON

United States Magistrate Judge

26