Case 2:14-cv-00111-AJS Document 171 Filed 02/05/15 Page 1 of 6
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF PENNSYLVANIA
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`DRONE TECHNOLOGIES, INC.,
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`Plaintiff,
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`vs.
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`PARROT S.A. and
`PARROT, INC.
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`Defendants.
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`Civil Action No. 2:14-cv-00111
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`Judge Arthur J. Schwab
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`ELECTRONICALLY FILED
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`ORDER OF COURT RE: DEFENDANTS’ OBJECTIONS TO THE COURT’S
`FEBRUARY 2, 2015 ORDER REQUIRING DEFENDANTS TO PRODUCE
`DOCUMENTS FOR IN CAMERA REVIEW; AND NOTICE PURSUANT TO FEDERAL
`RULE OF CIVIL PROCEDURE 53(B)(1) OF INTENTION TO APPOINT A SPECIAL
`MASTER RE: IN CAMERA REVIEW OF ATTORNEY-CLIENT PRIVILEGE AND
`ATTORNEY WORK PRODUCT DISPUTE
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`A. Background
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`The proceedings in this “exceptional” case have been fraught with disagreements over the
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`most basic discovery matters. See Doc. No. 106. On November 3, 2014, the Court entered
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`default judgment as to liability against Defendants and struck their Answer and Counterclaims
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`because of Defendants’ “persistent refusal” to comply with this Court’s Orders and “defiance of
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`their Court-ordered discovery obligations” for over four months. Doc. No. 106, 13.
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`On November 19, 2014, the Court set the jury trial on damages only, to commence on
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`April 27, 2015, and entered a Case Management Order and Pretrial Order, which provided
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`deadlines for pretrial processes, including discovery, which is scheduled to be completed by
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`February 20, 2015. Doc. Nos. 126, ¶ 2 and 127.
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`Plaintiff has moved this Court on three occasions to compel Defendants to comply with
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`their discovery obligations as to damages:
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`Case 2:14-cv-00111-AJS Document 171 Filed 02/05/15 Page 2 of 6
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` Motion to Compel Damages Discovery (Doc. No. 138)-December 5, 20141;
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` Second Motion to Compel Damages Discovery (Doc. No. 150)-January 12, 2015; and
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` Third Motion to Compel Damages Discovery (Doc. No. 158)-January 29, 20152
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`B. Current Discovery Dispute
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`Presently, the Parties are at loggerheads over whether: (i) Defendants have waived any
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`privilege by allegedly failing to produce privilege logs in a timely manner and (ii) whether
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`Defendants have improperly withheld documents based upon purported attorney-client privilege
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`and alleged attorney work product (“privilege”). Doc. Nos. 158, 161, 164. The issue was raised
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`by Plaintiff in its Third Motion to Compel Damages Discovery. Doc. No. 158. In this Motion,
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`Plaintiff set forth that Defendants had allegedly not timely produced complete privilege logs in
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`contravention of the Federal Rules of Civil Procedure and this Court’s Orders and have “broadly
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`assert[ed] privilege to conceal communications with third parties . . . .” Doc. No. 158, 3-4.
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`Defendants’ privilege logs were attached to Defendants’ Response to Plaintiff’s Third Motion to
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`Compel, dated January 29, 2015. Doc. No. 161, Attachments 2-5.
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`C. Initial Protocol to Analyze Privilege Assertions
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`The Court was unable to ascertain whether privilege had been improperly asserted, as
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`claimed by Plaintiff, and as such, on February 2, 2015, the Court ordered Defendants to provide
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`1 Defendants filed a Motion to Compel Plaintiff’s Damages Information on December 5, 2014. Doc. No. 139. As a
`result, the Court ordered the Parties to file a Joint Status as to Plaintiff’s compliance with discovery obligations.
`02/02/2015 Text Order. The Joint Status Report has been filed and evidences that the Parties continue to
`fundamentally disagree whether Plaintiff has complied with discovery obligations. Doc. No. 166. The Court has
`ordered that Defendant may file a supplement motion to compel on or before February 6, 2015, at NOON.
`02/02/2015 Text Order. Plaintiff shall file a response to any supplemental motion on or before February 10, 2015.
`Id. At that time, the matter will be ripe for disposition.
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`2 Discovery disputes between the Parties have caused this Court to extend deadlines for the Parties’ Expert Reports
`by 11 days. 1/30/2015 Text Order. Plaintiff’s damages expert reports are now due to be filed on or before February
`13, 2015; Defendants’ expert report by February 23, 2015; damages depositions shall be completed by March 3,
`2015. Id. As ordered, all other dates in the Case Management Order and Pretrial Order remain in effect. Id.
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`Case 2:14-cv-00111-AJS Document 171 Filed 02/05/15 Page 3 of 6
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`the Court with the documents set forth in privilege logs. The Court further ordered that portions
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`of the documents, which Defendants contend contain privileged matters, be highlighted. Doc.
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`No. 164. Defendants have provided these documents to the Court, in five (5) binders, with an
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`accompanying cover letter. In this cover letter, Defendants set forth that their review of
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`documents for in camera inspection revealed that 44 previously documents may not include
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`privileged information and would be provided to Plaintiff that afternoon.
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`On February 3, 2015, fifteen minutes prior to the 3:30PM deadline to deliver the
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`highlighted documents, Defendants filed Objections to the Court’s Order on Plaintiff’s Third
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`Motion to Compel. Doc. No. 165. Defendants contend that in camera review of the provided
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`documents was not appropriate because Plaintiff allegedly did not object to the appropriateness
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`of withholding the documents. Id. Rather, Defendants argue that Plaintiff’s sole objection is the
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`alleged untimeliness of their production of privilege logs. Id. Thus, the Court ordered that
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`Plaintiff file a Response to Defendants’ Objections to allow Plaintiff to specify the grounds for
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`any objection as to Defendants’ privilege logs and assertion of privilege. 02/04/15 Text Order.
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`In their Response, Plaintiffs set forth that Defendants have allegedly:
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`failed to timely preserve any objection based on privilege;
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`improperly shielded documents through assertions of privilege;
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` not logged or produced so-called “phantom documents;
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` never produced redacted copies of documents for which they have claimed
`privilege; and
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` benefited by inhibiting Plaintiff from properly preparing for the damages trial
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`Case 2:14-cv-00111-AJS Document 171 Filed 02/05/15 Page 4 of 6
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`Doc. No. 170. As to the propriety of Defendants’ assertions of privilege, Plaintiff specified that
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`“it [is] clear that Defendants improperly asserted privilege for communications with third
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`parties.” Doc. No. 167. In their Reply, Defendants contend that these five grounds are without
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`merit, but do not contend that these grounds were not raised by Plaintiff. Doc. No. 170.
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`Unfortunately, as many times before, the Court is confronted with allegations of
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`Defendants’ abuse of fundamental protections, such as privilege, in an alleged effort by
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`Defendants to impede the just, speedy, and inexpensive determination of this matter, in
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`contravention of the Federal Rules of Civil Procedure. The Court finds that the issues implicated
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`by the most current discovery dispute include more than just the timeliness of Defendants’
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`production of privilege logs. Plaintiff, through briefing, has preserved both the issue of the
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`propriety of privilege designations and the timeliness of production of privilege logs and has
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`demonstrated to the Court that in camera review may reveal improper use of privilege by
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`Defendants. This finding is based, in part, upon the extraordinary procedural posture to date and
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`Defendants’ repeated failure to comply with the most basic discovery obligations.
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`D. Legal Framework
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`The Court notes that attorney-client privilege and the work-product doctrine serve
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`distinct, but important purposes. Attorney-client privilege works to “encourage full and frank
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`communication between attorneys and their clients and thereby promote . . . the observance of
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`law and administration of justice.” U.S. v. Trenk, 385 Fed.Appx. 254, 257 (3d Cir. 2010), citing
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`U.S. v. Zolin, 491 U.S. 554, 562 (1989). The work-product doctrine “promotes the adversary
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`system directly by protecting the confidentiality of papers prepared by or on behalf of attorneys
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`in anticipation of litigation. Protecting attorneys’ work product promotes the adversary system
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`by enabling attorneys to prepare cases without dear that their work product will be used against
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`Case 2:14-cv-00111-AJS Document 171 Filed 02/05/15 Page 5 of 6
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`their clients.” In re Chevron Corp., 633 F.3d 153, 164 (3d Cir. 2011), citing Westinghouse Elec.
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`Corp. v. Republic of the Phil., 951 F.2d 1414, 1428 (3d Cir. 1991).
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`E. Protocol for In Camera Review and Appointment of Special Master
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`To the extent that Defendants object to the in camera review being conducted by this
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`Court, the Court hereby notifies the Parties of its intention to appoint David White, Esq. of Burns
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`White as a Special Master, pursuant to Federal Rule of Civil Procedure 53(a)(C). Appointment
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`of a Special Master will eliminate any concern that Defendants may have about this Court both
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`reviewing potentially privileged information and presiding over the upcoming jury on damages,
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`which is scheduled to begin on April 27, 2015, and will allow the Court to allocate limited
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`judicial resources to other pressing matters, including the almost daily motions practice in this
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`case.3 The Special Master will be able to intensively conduct review and analysis of the Parties’
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`diametrically opposed positions on their compliance with discovery obligations. Doc. Nos. 137,
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`158. As such, both the Parties and the Court will benefit from the neutral review of Mr. White,
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`who has extensive experience with litigation and mediation.4 The Court has not and will
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`continue not to conduct any review any of the documents provided by Defendants and will
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`provide these materials to the Special Master upon his appointment.
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`Therefore, the following Order is entered:
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`3 The Court also finds that it would not be appropriate to have a fellow member of this District Court assist in this
`matter, in light of the limited resources of this judiciary, which currently is operating with three (3) judicial
`vacancies.
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`4 The Court has chosen Mr. White, a highly respected Pittsburgh trial attorney, in light of his expertise in these
`matters and his successful mediation in other cases, as well as his status as both a Court-appointed ADR Neutral and
`Special Master re: E-Discovery issues.
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`Case 2:14-cv-00111-AJS Document 171 Filed 02/05/15 Page 6 of 6
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`AND NOW, this 5th day of February, 2015, IT IS HEREBY ORDERED THAT:
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`(1) Defendants’ Objections to the February 2, 2015 Order Requiring Production of
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`Documents for In Camera Review (Doc. No. 165) are DENIED;
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`(2) The Parties shall file any objections to this Notice on or before February 6, 2015, at
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`NOON. Any objections shall be limited to appointment of a special master, not the
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`propriety of in camera review;
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`(3) Defendants shall produce redacted copies of documents withheld based upon any
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`privilege on or before February 6, 2015, at 4:00PM (if not already done so); and
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`(4) On or before 1:00PM on February 6, 2015, Mr. White shall file an affidavit disclosing
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`“whether there is any ground for disqualification under 28 U.S.C. § 455.” Fed.R.Civ.P.
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`53(b)(3).
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`s/ Arthur J. Schwab
`Arthur J. Schwab
`United States District Judge
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`cc:
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`All Registered ECF Counsel and Parties
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`Mr. David White (via email)
`Burns White
`dbwhite@burnswhite.com
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