Free Letter - District Court of Delaware - Delaware

Case 1 :04-cv-01551-JJF Document 280 Filed 06/29/2007 Page 1 of 2
MoRR1s, NICHOLS, ARSHT & TUNNELL LLP
1201 NORTH MARKET STREET
P.O. Box 1347 ~
WILMINGTON, DELAWARE 19899-1347
302 658 9200
302 658 3989 FAX
WILLIAM H. SUDELL, JR.
302 351 9284
302 425 4685 FAX
wsudel1@m11at . com
June 29, 2007
E-FILED AND HAND DELIVERED
The Honorable Joseph J. Parnan, Jr.
United States District Court
District of Delaware
844 N. King Street
Room 4124, Lockbox 27
Wilmington, DE 19801
RE: Charles A. Stanziale v. Pepper Hamilton, et al., No. 04-1551
Royal Indemnity Co. v. Pepper Hamilton LLP, etal., No. 05-165
Dear Judge Parnan:
We write in response to the letter sent to Your Honor on June 26, 2007 by Royal’s
counsel. .
In November 2006, Pepper issued a subpoena to Mandiant Corporation, a nonparty
doing business in New York, demanding the production of an email server formerly used by
SFC, a copy of which is in Mandiant’s possession. We understand that the server contains
emails to and from SFC’s former counsel, including attorneys at Pepper. When Mandiant
refused to comply with the subpoena, Pepper filed a motion in United States District Court for
the Southem District of New York to compel production of the email server. The Honorable
Charles Haight transferred Pepper’s motion to this Court on February 9, 2007. A copy of the
transfer order and opinion in support thereof is enclosed. The transferred motion does not appear
to have been entered on the docket in these cases.

Case 1:04—cv—01551-JJF Document 280 Filed 06/29/2007 Page 2 of 2
The Honorable Joseph J. Farnan, Jr.
June 29, 2007
Page Two
Although both Mandiant and the Trustee concede that Pepper is entitled to a vast
majority of the emails on the server, both opposed Pepper’s motion. Mandiant, through Royal’s
counsel, objected to the motion on the grounds that complying with the subpoena would require
Mandiant to breach an out-of-court confidentiality agreement in another matter to which Pepper
is not a party. The Trustee objected to Pepper’s motion to compel on the grotmds that some
unidentified subset of the emails on the server may contain privileged communications between
consultants hired by the Trustee and the Trustee’s counsel. The Trustee argues that Pepper
should be prohibited from obtaining any of the non-privileged emails on the server unless Pepper
agrees to pay between $35,000 and $50,000, the Trustee’s estimate of the cost of conducting a
privilege review. Pepper contends that the costs associated with any review necessary to protect
the Trustee’s supposed privilege must be incurred solely by the Trustee. The parties’ positions
are more fully set forth in the enclosed briefs, which the parties filed in the United States District
Court for the Southern District of New York before Judge Haight transferred the motion to this
Court.
In its letter to Your Honor, Royal requests that the Court "determine whether the
documents sought by the subpoena can be produced by Mandiant in view of the prior
[confidentiality] agreement" and "direct that the costs of compliance be shared among the
parties." Pepper joins in this request to the extent "the costs of compliance" include only the
minimal expense involved in making a physical copy of the server. In fact, Pepper already has
offered to provide Mandiant, at its expense, with an appropriate storage device onto which
Mandiant can copy the server. Pepper objects, however, to paying for all or any portion of the
costs associated with any privilege review by the Trustee. We have enclosed a proposed order
for Your Honor’s consideration.
Respectfully Submitted,
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William H. Sudell, Jr.
WHS/bag
Enclosure
cc: All Counsel on Attached Service List
910308.1