The opinion of the court was delivered by: Karen E. Schreier Chief Judge
Plaintiffs, Daniel Pucket, Amy Pucket, Luke Pucket, and Benjamin Pucket (collectively referred to as plaintiffs), filed a lawsuit under 42 U.S.C. § 1983 against defendants Hot Springs School District and its School Board (collectively referred to as School District) alleging that School District's refusal to bus children to Bethesda Lutheran School violates the First and Fourteenth Amendments to the United States Constitution. Intervenor defendants Lawrence Long and Mark Barnett intervened to defend the constitutionality of article VI, section 3, and article VIII, section 16, of the South Dakota Constitution. This order rules on the following pending motions: ! School District's motion to compel answers and motion for sanctions based on groundless assertion of privilege during depositions (Docket 213) ! Plaintiffs' motion to compel production of documents and to continue
Hagedorn deposition (Docket 226) ! School District's motion to file a third-party complaint against Beth Spitzer (Docket 242) ! School District's second motion to compel Spitzer answers and third motion for sanctions (Docket 249) ! School District's motion to file a third party complaint against Anthony Picarello, individually, and the Becket Fund (Docket 270) ! Plaintiffs' motion to compel production of documents withheld by School District defendants (Docket 272) ! Plaintiffs' motion to strike School District's second amended third-party complaint against Beth Spitzer or in the alternative, for leave to file a sur-reply (Docket 289) ! School District's motion to amend answer (Docket 294) ! Plaintiffs' motion to strike School District's second amended third-party complaint against the Becket Fund and Anthony Picarello, or in the alternative, for leave to file a sur-reply (Docket 296)
Plaintiffs are students at Bethesda Lutheran School (Bethesda) and their parents. Bethesda is a private, sectarian school located in the Hot Springs School District. Beth Spitzer was the principal of Bethesda.
In July of 2002, School District decided to ban the busing of students to Bethesda. School District refused to bus students at the beginning of the 2002-2003 school year, although the School District did not adopt an official motion or resolution banning busing of Bethesda students until requested to do so by Spitzer during a Hot Springs Board of Education meeting on December 9, 2002. School District reinstated busing of Bethesda students on May 16, 2003. Plaintiffs assert that School District violated their constitutional rights by denying busing to Bethesda students. Plaintiffs are represented by the Becket Fund in this litigation.
During discovery in this case, School District deposed Spitzer, Amy Pucket, and Dan Pucket. School District moves to compel responses to certain deposition questions, arguing that plaintiffs' attorneys obstructed these depositions and improperly instructed the deponents not to answer.
School District also seeks leave to file a third-party amended complaint against Beth Spitzer alleging claims for deceit and contribution. School District seeks leave to file a third-party complaint against Anthony Picarello and the Becket Fund, asserting claims for deceit, barratry, maintenance and champerty, and contribution. School District also seeks leave to amend its answer to assert waiver and estoppel as affirmative defenses.
Plaintiffs move to compel discovery. Specifically, plaintiffs move to compel disclosure of documents created by Vern Hagedorn, superintendent of the Hot Springs School District. The documents were requested pursuant to a timely request for document production.
I. School District's Motions to Compel School District moves to compel answers to questions posed during the depositions of Beth Spitzer, Amy Pucket, and Daniel Pucket. Plaintiffs oppose the motions. For the reasons discussed below, both motions are granted in part and denied in part.
A. Spitzer's First Deposition
School District moves to compel answers to questions posed to Spitzer regarding her relationship with Rollyn Samp.*fn1 School District attempted to inquire about Spitzer's conversation with Samp regarding his advice that an indemnification agreement might solve the insurance issue preventing the busing of Bethesda students. Becket Fund asserted attorney-client privilege and instructed Spitzer not to answer.
Fed. R. Civ. P. 26(b)(1) defines the scope of discovery as "any matter, not privileged, that is relevant to the claim or defense of any party . . . ." Rule 26(b)(1) further defines relevance broadly to include not only information admissible at trial but also any information "reasonably calculated to lead to the discovery of admissible evidence." This broad scope of discovery applies to depositions, and thus, "instructions to a deponent not to answer certain questions are generally inappropriate." Armstrong v. Hussman Corp., 163 F.R.D. 299, 302 (E.D. Mo. 1995). There are only three instances when it is appropriate to instruct a deponent not to answer a question: (1) to preserve a privilege; (2) to enforce a court order limiting discovery; and (3) to present a motion to terminate the deposition that is being conducted in bad faith or in a manner that unreasonably annoys, embarrasses, or oppresses the deponent or a party. See Fed. R. Civ. P. 30(d)(1); see also Armstrong, 163 F.R.D. at 302. A motion to compel is the proper procedure for obtaining an answer to a question if the opposing the witness is wrongfully instructed not to answer. See Fed. R. Civ. P. 37(a)(2)(B); see also Plaisted v. Geisinger Med. Ctr., 210 F.R.D. 527, 532 (M.D. Pa. 2002).
As a threshold matter, the court considers plaintiffs' contention that the court should deny the motion to compel without reaching the merits of the privilege issue because School District failed to comply with the requirements of D.S.D. LR 37.1. This local rule requires the parties to meet and confer regarding discovery disputes before filing a motion to compel. The court finds that the discussion between plaintiffs' attorneys and School District's attorneys during Spitzer's deposition regarding application of the attorney-client privilege to communications between Spitzer and Samp satisfies the meet-and-confer requirements of D.S.D. LR 37.1. The court thus proceeds to the merits of whether plaintiffs' attorneys properly instructed Spitzer not to answer based upon attorney-client privilege.
According to Fed. R. Evid. 501, federal common law determines the scope of the attorney-client privilege in this § 1983 action. Proposed Fed. R. Evid. 503 provides a " 'useful starting place' for an examination of the federal common law of attorney-client privilege." In re Grand Jury Subpoena Duces Tecum, 112 F.3d 910, 915 (8th Cir. 1997) (quoting In re Bieter Co., 16 F.3d 929, 935 (8th Cir. 1994)). Proposed Rule 503(b) states: "A client has a privilege to refuse to disclose and to prevent any other person from disclosing confidential communications made for the purpose of facilitating the rendition of professional legal services to the client . . . between himself or his representative and his lawyer or his lawyer's representative . . . ." 24 Charles Alan Wright & Kenneth W. Graham, Jr., Federal Practice & Procedure at 37 (1986). "In order for the privilege to be applicable, the parties to the communication in question must bear the relationship of attorney and client." Diversified Indus., Inc. v. Meredith, 572 F.2d 596, 602 (8th Cir. 1977). If, however, a person seeks legal advice from an attorney and reasonably believes that the attorney represents him or her, then communications between that person and the attorney are subject to the attorney-client privilege even if no actual attorney-client relationship exits or develops. Westinghouse Elec. Corp. v. Kerr-McGee Corp., 580 F.2d 1311, 1319-20 (7th Cir. 1978); see also In re Grand Jury Subpoena Duces Tecum, 580 F.3d at 923 ("[C]courts have found the privilege applicable where the client . . . reasonably believed that a lawyer represented the client rather than another party."). Voluntary disclosure of the confidential communication to either an opposing or third party expressly waives the privilege. United States v. Workman, 138 F.3d 1261, 1263 (8th Cir. 1998). The scope of an express waiver is not limited to the communication disclosed but applies to "other communications relating to the same subject matter." John Morrell & Co. v. Local Union 304A of United Food & Commercial Workers, AFL--CIO & CLC, 913 F.2d 544, 556 (8th Cir. 1990); see also Engineered Prods. Co. v. Donaldson Co., 313 F. Supp. 2d 951, 1020 (N.D. Iowa 2004).
School District argues that Spitzer and Samp did not enter into an attorney-client relationship, and thus, the attorney-client privilege does not apply. The court disagrees. The court finds that Spitzer and Samp had an attorney-client relationship because Spitzer explicitly testified that she sought and obtained legal advice from Samp. (Docket 231-2, at 198-99). Additionally, the court's review of communications between Spitzer and Samp indicated that Samp provided legal advice. See Westinghouse, 580 F.2d at 1320 ("The professional relationship for the purposes of the privilege for attorney-client communications hinges upon the client's belief that he is consulting a lawyer in that capacity and his manifested intention to seek professional legal advice." (internal quotation omitted)); see also Edna Selan Epstein, The Attorney-Client Privilege and the Work-Product Doctrine 47 (4th ed. 2001).
School District also argues that Spitzer waived the attorney-client privilege for all communications that she had with Samp because the Becket Fund, acting as Spitzer's attorney, disclosed two letters that Samp wrote to Spitzer. Plaintiffs concede that this waives the attorney-client privilege for the communications contained in these two letters. The parties dispute, however, the scope of this explicit waiver.
The court disagrees with School District's suggestion that disclosure of one communication between Spitzer and Samp automatically waives the attorney-client privilege for all communications between them. Instead, the disclosure of the letters from Samp only waives the attorney-client privilege for communications regarding the same subject matter as the communications contained in the disclosed letters. See John Morrell & Co., 913 F.2d at 556.
The court does agree with School District's argument, however, that disclosure of the letters from Samp waived the attorney-client privilege protection for three questions Spitzer refused to answer during her deposition. In the letter dated July 16, 2002, Samp provides Spitzer two specific types of legal advice: (1) that a release and indemnification provision might solve the lack of insurance problem, and (2) that an attorney general's opinion is not law. Further, in the July 24, 2002 letter, Samp informed Spitzer that School District should agree to an indemnification provision before Samp would draft the indemnification form.
The court finds that the three questions Spitzer was instructed not to answer during her deposition were on the same subject matter, namely whether Bethesda students and their parents could use an indemnification agreement to solve the insurance issue that was allegedly preventing busing. In the first question, School District directly referenced the July 16, 2004 letter, in which Samp informed Spitzer that he reviewed all the documents that Spitzer sent him. School District asked Spitzer: "What documents had you sent to Rolly Samp?" (Docket 213-2, at 62). The court finds that the documents Samp reviewed in formulating his advice are on the same subject matter as the advice itself, which was voluntarily disclosed. See Fujisawa Pharm. Co. v. Kapoor, 162 F.R.D. 539, 541-52 (N.D. Ill. 1995) (holding that waiver of attorney-client privilege regarding attorney's legal advice also applied to the information attorney considered in giving the advice).
The court finds that the second and third questions also are on the same subject matter as the July 16, 2002, and July 24, 2002, letters. In the second question, School District asked Spitzer "Ma'am, did you suggest the issue of indemnification to Rolly Samp?" (Docket 213-2, at 65). In the third question, School District asked "Did you ask Rolly Samp to offer you information about the viability of an indemnification agreement to solve the problem of busing?" (Docket 213-2, at 65). The court finds that these questions go directly to the disclosed legal advice-that an indemnification provision could solve the insurance problem. As a result, the attorney-client privilege was waived regarding these questions as well.
In sum, the court finds that Spitzer was improperly instructed not to answer these three questions regarding her communications with Samp because Spitzer waived the attorney-client privilege protection governing these questions. As a result, the court will permit an additional deposition of Spitzer. The deposition will be limited, however, to Spitzer's unprivileged communications with Samp as identified here.
B. Spitzer's Second Deposition
School District also moves to compel answers to four questions posed to Spitzer in her second deposition.*fn2 Upon instruction of counsel, Spitzer invoked the attorney-client privilege and refused to answer these questions.
The first question asks Spitzer: "Do you agree with me that you had the Becket Fund rewrite part of your Eagle Report to the congregation?" (Docket 249-2, at 17). To the extent that this question seeks disclosure of a communication between Spitzer and her attorneys, the court finds that Spitzer waived any attorney-client privilege protection. In fact, Spitzer, without any invocation of privilege, essentially answered this question when she testified that she wrote a draft of the Eagle Report, faxed it to Anthony Picarello for corrections, and incorporated those corrections in the final version. (Docket 249-2, at 8). As a result, the court finds that Spitzer waived the attorney-client privilege protection governing any communications regarding the drafting of the Eagle Report. See John Morrell & Co., 913 F.2d at 556.
In the second question, the following dialogue occurred: Q: November 24, 2002, your first entry, "We are TOO LATE!"
TOO LATE in caps with an exclamation mark. Too late for what?
A: Well, I believe that Anthony and Rollyn were going to write --
Mr. Severino: Hold on a moment. You do not have to disclose attorney-client communications to you. * * * Mr. Severino: I am instructing the witness not to divulge attorney-client communications. If she doesn't need to, she may answer as much as she likes. * * * A: Yeah, I'm going to say that was between the attorneys and I, and I -- (Docket 249-2, at 63-64). Based on this colloquy, the court finds that the answer would have disclosed confidential communications between Spitzer and her attorneys, and thus, the attorney-client privilege was properly asserted to prevent Spitzer from answering.
In the third question, the School District's attorneys asked Spitzer: "And at the time you were doing that, you had not established any attorney-client relationship with the Becket Fund, had you?" (Docket 249-2, at 77). The court finds that this question does not require the disclosure of privileged communications, and thus, Spitzer was inappropriately instructed not to answer. As a result, School District can ask Spitzer this question in her next deposition.*fn3
In the fourth question, the School District's attorney asked a follow-up question following a waiver of the attorney-client privilege by Spitzer. Spitzer waived her attorney-client privilege regarding a communication with her attorneys on December 6, 2002, in which her attorneys instructed her to contact the School District and find out why she was not on the agenda for an impending school board meeting. (Docket 249-2, at 83). Spitzer testified that she followed her attorneys' advice and called the School District. Spitzer was then asked "And, again, all of this was in preparation for getting you on the agenda in front of the Hot Springs School District to ask them to make an official declaration that they would not bus the children, correct?" Plaintiffs' attorneys instructed Spitzer to limit her answer to information gained from attorney-client communications on December 6, 2002.
The court finds that plaintiffs' attorneys erroneously instructed Spitzer to limit her answer. Spitzer's waiver of her attorney-client privilege is not limited to communications that occurred on December 6, 2002. Instead, by disclosing that her attorneys instructed her to contact the School District to determine why the busing issue was absent from the school board meeting's agenda, Spitzer waived the attorney-client privilege for all communications on the subject, including why her attorneys wanted her to attend the meeting. See John Morrell & Co., 913 F.2d at 556. As a result, School District may inquire into this subject at Spitzer's next deposition.
In sum, the court finds that plaintiffs' attorneys improperly instructed Spitzer not to answer three questions in her second deposition. As a result, the court will allow Spitzer to be re-deposed on these issues.
C. Deposition of Amy Pucket and Dan Pucket
Plaintiffs move to compel Amy Pucket and Dan Pucket (collectively referred to as the Puckets) to answer several questions that they were instructed not to answer during their deposition based upon privilege. These questions fall into two categories. The first category includes questions attempting to get at the substance of conversations that the Puckets had with other clients of the Becket Fund, including Spitzer and the Wilhelms. The second line of questions seeks information regarding plaintiffs' fee arrangement with the Becket Fund.
1. Conversations Between Co-Clients School District asked Amy
Pucket and Dan Pucket questions regarding conversations that they had either among themselves or with Spitzer or the Wilhelms. Plaintiffs' attorneys asserted privilege and instructed the Puckets not to answer the questions. Plaintiffs argue that the communications are protected by the common interest doctrine. School District contends that the communications are not privileged.
The common interest doctrine is an exception to the rule that voluntary disclosure of confidential, privileged material to a third party waives the privilege. See In re Grand Jury Subpoena Duces Tecum, 112 F.3d at 922. The common interest doctrine permits persons or entities with a common interest to share privileged information without waiving the underlying privilege. See id.; see also In re Grand Jury Subpoenas 89-3 & 89-4, 902 F.2d 244, 248 (4th Cir. 1990). Because it is an exception to waiver, the common interest doctrine "presupposes the existence of an otherwise valid privilege, and the rule applies not only to communications subject to the attorney-client privilege, but also to communications protected by the work-product doctrine." In re Grand Jury Subpoenas 89-3 & 89-4, 902 F.2d at 249.
School District contests application of the common interest doctrine for three reasons. First, School District argues that the common interest doctrine cannot apply to communications between Spitzer and the Puckets before December 3, 2002, because this is the first time that the Becket Fund lawyers contacted the Puckets. Implicitly, School District is arguing that there is no attorney-client relationship between the Puckets and the Becket Fund before December 3, 2002, and thus, there is not an underlying privilege governing communications involving the Puckets.
School District's argument erroneously assumes that the underlying privilege must belong to the Puckets. Instead, the underlying privilege was the attorney-client privilege covering communications between the Becket Fund and Spitzer. As the court noted in its previous order dated April 13, 2006, communications between the Becket Fund and Spitzer were protected by the attorney-client privilege. Further, as discussed below, Spitzer could share the substance of these communications with the Puckets without waiving the attorney-client privilege because Spitzer and the Puckets had a common interest.
Second, School District argues that the common interest doctrine does not apply to communications between Spitzer and the Puckets because Spitzer and the Puckets do not have a legally cognizable common interest. The court disagrees. According to the Eighth Circuit, "[t]he common interest may be either legal, factual, or strategic in nature." In re Grand Jury Subpoena Duces Tecum, 112 F.3d at 922 (internal quotation omitted); see also Restatement (Third) of Law Governing Lawyers § 76 cmt. e (2000). Here, the court finds that Spitzer and the Puckets have a common legal and factual interest, namely the reinstatement of busing of Bethesda students. Spitzer, as the principal of Bethesda, worked actively throughout the summer, fall, and winter of 2002 to reinstate busing for Bethesda students. She eventually sought legal advice from the Becket Fund on how to obtain the reinstatement of busing. The Puckets, as parents of ...