Free Response in Opposition to Motion - District Court of Arizona - Arizona

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David B. Rosenbaum, Atty. No. 009819 Dawn L. Dauphine, Atty. No. 010833 OSBORN MALEDON, P.A. 2929 North Central Avenue, Suite 2100 Phoenix, AZ 85012-2794 Telephone: (602) 640-9000 [email protected] [email protected] Michael L. Banks, Pro Hac Vice Azeez Hayne, Pro Hac Vice MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, PA 19103 Telephone: (215) 963-5000 [email protected] [email protected] Howard Shapiro, Pro Hac Vice PROSKAUER ROSE LLP 909 Poydras Street, Suite 1100 New Orleans, LA 70112-4017 Telephone: (504) 310-4088 [email protected] Amy Covert, Pro Hac Vice PROSKAUER ROSE LLP One Newark Center, 18th Floor Newark, NJ 07102 Telephone: (973) 274-3258 [email protected]

Christopher Landau, P.C., Pro Hac Vice Craig S. Primis, P.C., Pro Hac Vice Eleanor R. Barrett, Pro Hac Vice KIRKLAND & ELLIS LLP 655 Fifteenth Street, N.W. Washington, DC 20005-5793 Telephone: (202) 879-5000 [email protected] [email protected] [email protected]

Attorneys for Defendants IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Barbara Allen, Richard Dippold, Melvin Jones, Donald McCarty, Richard Scates and Walter G. West, individually and on behalf of all others similarly situated, Plaintiffs, vs. Honeywell Retirement Earnings Plan, Honeywell Secured Benefit Plan, Plan Administrator of Honeywell Retirement Earnings Plan, and Plan Administrator of Honeywell Secured Benefit Plan, Defendants. No. CV04-0424 PHX ROS

DEFENDANTS' OPPOSITION TO PLAINTIFFS' RENEWED MOTION TO COMPEL DISCLOSURE OF DOCUMENTS WITHHELD BY DEFENDANTS ON CLAIM OF ATTORNEY-CLIENT AND/OR WORK PRODUCT PRIVILEGE Oral Argument Requested

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INTRODUCTION Plaintiffs' ongoing attempts to seek production of privileged documents must fail. In particular, plaintiffs' reliance on the so-called "fiduciary exception" to the attorney-client privilege is misplaced: that exception, as the Ninth Circuit has explained, is narrow, and applies only to communications meeting the following two

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Shortly after the Garrett Retirement Plan merged into the Signal Retirement 21 22 23 24 25 26 Garrett Corporation is now part of Honeywell International Inc. This brief collectively refers to Garrett and its successor corporations, including Honeywell, as the Company.
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conditions.

First, the person receiving the information was acting in a fiduciary

capacity pursuant to ERISA, and second, the communication provides advice on matters of plan administration. See, e.g., United States v. Mett, 178 F.3d 1058, 1065 (9th Cir. 1999). The problem for plaintiffs is that these conditions are not met with respect to the 60 documents that remain in dispute. In addition, plaintiffs' alternative arguments for the production of these documents, based on waiver grounds, fare no better. Under settled law, privilege is not waived merely because a single law firm represents both the plan and the plan sponsor, or when protected documents are shared with non-lawyers who are assisting in preparation for potential litigation. Because plaintiffs have not shown that production of the remaining documents in dispute is warranted, this Court should deny the motion to compel. BACKGROUND

Plan effective January 1, 1984, the Company began receiving complaints regarding the SBA offset.1 In June 2001, attorney Susan Martin began requesting broad

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information about the merger. See O'Neill Decl. (Ex. B to Doc. #225) ¶¶ 10-12 & Ex. 3-9. In October, 2001, the Company learned that a group of retirees had hired an attorney and began soliciting donations to challenge the SBA and Social Security offsets. Id. On July 26, 2002, Ms. Martin filed a benefit claim with the Plan

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 LEGAL STANDARD AND BURDEN OF PROOF 20 21 22 23 24 25 26
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Administrator. See O'Neill Decl. (Ex. B to Doc. #225) ¶¶ 13-15 & Ex. 10. In July 2002, the Company delegated its Plan Administration authority to the Senior Vice President of Human Resources and Communications, who further subdelegated that authority to Brian Marcotte. See O'Neill Decl. (Ex. B to Doc. #225) ¶ 6 & Exs. 1 & 2. The delegation to Marcotte included all fiduciary responsibility for determining Plaintiffs' Administrative Claims. See O'Neill Decl. (Ex. B to Doc. #225) Exs. 1 & 2. Marcotte, in turn, delegated plan administration duties to Kathleen Mathis. Thus, with respect to plaintiffs' administrative claims, only Marcotte and Mathis acted in a fiduciary capacity. In 2002, the Company engaged the law firm of Covington & Burling LLP both to provide legal advice to the Company and to assist the Plan Administrator in responding to plaintiffs' administrative claims. See O'Neill Decl. (Ex. B to Doc. #225) ¶¶ 17-20; Shea Decl. (Ex. C to Doc. #225) ¶¶ 1-6.

In the Ninth Circuit, the attorney-client privilege is "jealously guarded." Fischel v. Equitable Life Assurance, 191 F.R.D. 606, 607 (N.D. Cal. 2000). Thus, "where attorney-client privilege is concerned, hard cases should be resolved in favor of the privilege, not in favor of disclosure." Mett, 178 F.3d at 1065. Equally critical to the system of justice is the work product privilege, which allows a party to prepare

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for potential litigation without fearing that an adversary will be able to "free ride" on its attorneys' mental impressions and legal theories. In Re Grand Jury Subpoena, 357 F.3d 900, 907 (9th Cir. 2004) ("At its core, the work-product doctrine shelters the mental processes of the attorney, providing a privileged area within which he can

5 6 7 8 9 10 11 12 13 14 15 16 17 attorney-client privilege requires production of all documents created before the end 18 19 20 21 22 23 24 25 26 ERISA fiduciary is disabled from asserting the attorney-client privilege against plan
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analyze and prepare his client's case."). As the party seeking to breach these bedrock legal protections, plaintiffs bear the burden of showing that an exception applies. See e.g., Mett, 178 F.3d at 1064. ARGUMENT PLAINTIFFS HAVE NOT SHOWN THAT PRODUCTION OF THE REMAINING DOCUMENTS IN DISPUTE IS WARRANTED. Plaintiffs argue that the remaining documents in dispute should be produced on two grounds: (1) the "fiduciary exception," Mot. 2-12 (Doc. #332), and (2) waiver, see id. at 12-15. They are wrong on both grounds. I. The Fiduciary Duty Exception Does Not Apply. At the most basic level, plaintiffs argue that the "fiduciary exception" to the

of the claim review process discussing any facet of the claim, on the theory that at that point, "an employee benefit plan's participants and beneficiaries ... are considered to be the true clients of attorneys who provide legal advice regarding matters of plan administration, including participant administrative claims and appeals." Mot. 2. That argument is plainly incorrect. "The fiduciary exception provides that `an employer acting in the capacity of

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beneficiaries on matters of plan administration.'" Mett, 178 F.3d at 1063 (quoting In Re Long Island Lighting Co., 129 F.3d 268 (2d Cir. 1997)). By its terms, therefore, that exception applies only where (1) the person receiving the information was acting in a fiduciary capacity pursuant to ERISA, see id; see also In re Unisys Corp. Retiree

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 privileged because they relate to matters of plan administration." Mot. 4 (Doc. #332). 20 21 22 23 24 25 26
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Medical Benefits ERISA Litig., 1994 WL 6883 (E.D. Pa. Jan. 6, 1994); and (2) the communication provides advice on matters of plan administration, Mett, 178 F.3d at 1066. Notably, when a fiduciary seeks advice "for its own personal defense in

contemplation of adversarial proceedings against its beneficiaries," or where the advice involves settlor conduct, such as "the adoption, modification, or termination of an employee benefit plan," the fiduciary exception does not apply, and the privilege remains intact. Wachtel v. Health Net, Inc., 482 F.3d 225, 233 (3d Cir. 2007); see also, e.g., Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 444 (1999) (amending or modifying a plan is settlor, not fiduciary, conduct); Walling v. Brady, 125 F.3d 114, 119-20 (3d Cir. 1997) (adjusting plan design is settlor not fiduciary conduct). These straightforward principles refute plaintiffs' argument that any "documents generated or reviewed during the ERISA claims process are not

Indeed, the Ninth Circuit rejected that very argument in Mett, where the Government (like the plaintiffs here) also argued that "the attorney-client privilege should be defeated whenever otherwise privileged legal advice `relates to' fiduciary matters." 178 F.3d at 1064. As the Ninth Circuit explained, that "expansive view of the fiduciary exception ... must be rejected for at least four reasons." Id. at 1065. First,

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that view of the fiduciary exception "threaten[ed] to swallow the entirety of the attorney-client privilege for ERISA trustees," because "any legal advice concerning an ERISA plan could be construed as relating, at least indirectly, to the administration of the plan." Id. Second, that expansive view "unmoors the fiduciary exception from

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 fiduciaries. And, as explained in Subsection B, many of those documents do not 20 21 22 23 24 issue here for the simple reason that no fiduciary sent, received, or was copied on 25 26 those documents. See Chart (attached as Ex. A) (Documents 7-14, 19, 28, 31-40, 47Case 2:04-cv-00424-ROS 5 Document 352 Filed 12/21/2007 Page 6 of 16

its justifying rationales." Id. Third, "and most importantly, where attorney-client privilege is concerned, hard cases should be resolved in favor of the privilege, not in favor of disclosure." Id. And fourth, "from a policy perspective, an uncertain

attorney-client privilege will likely result in ERISA trustees shying away from obtaining legal advice regarding the performance of their duties," which would not be in the best interests of the fiduciaries. Id. Ultimately, the Ninth Circuit emphasized, this expansive view of the fiduciary exception (which plaintiffs advance here) "stretches the fiduciary exception far beyond its foundations, threatening to swallow the fiduciary's attorney-client privilege whole." Id. at 1066. As noted in the following sections, none of the disputed documents falls within the narrow scope of the fiduciary exception as outlined in Mett. As explained in Subsection A, many of those documents do not involve legal advice provided to plan

involve plan administration. A. Many Disputed Documents Do Not Involve Legal Advice Provided To Plan Fiduciaries. Under Mett, the fiduciary exception does not apply to most of the documents at

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48, 50-58, 66, 68, 87, 101-104 & 106). As noted above, the Company in July 2002 delegated to Marcotte the authority to administer and interpret the plan. See O'Neill Decl. (Ex. B to Doc. #225) ¶ 6 & Exs. 1 & 2. As a result, after July 2002 the fiduciary duties owed by the plan administrator to the beneficiaries lay with Marcotte

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 B. 20 Under Mett, the fiduciary exception does not apply to many of the documents 21 22 23 24 25 26
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and his designee, Mathis, not with the Company.

See, e.g., Gelardi v. Pertec

Computer Corp., 761 F.2d 1323, 1325 (9th Cir. 1985) (per curiam) ("Once [the company] appointed the Plan Administrator and gave him control over the Plan, [the company] was no longer a fiduciary because it retained no discretionary control over the disposition of claims."). Accordingly, after July 2002, the Company was not "acting in the capacity of ERISA fiduciary." Mett, 178 F.3d at 1063. It follows that any of the disputed documents that post-date July 2002, and that were not sent by, received by, or copied to Marcotte and/or Mathis, cannot be subject to the fiduciary exception. See In re Unisys., 1994 WL 6883, at *3. It really is that simple, and plaintiffs have offered no valid authority or argument to the contrary. As a result, the attorney-client privilege for Documents 7-14, 19, 28, 31-40, 47-48, 50-58, 66, 68, 87, 101-104 and 106 should not be breached. Many Disputed Documents Do Not Involve Plan Administration.

at issue here for a second reason: those documents do not involve plan administration. See Chart (attached as Ex. A) (Documents 7-14, 19, 28, 31-41, 66, 68, 87, 101-106, 107.). Plaintiffs appear to believe that a document necessarily involves plan

administration and cannot be privileged if it was prepared during the administrative

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claims process. See Mot. 9-10 (Doc. #332). But that is not correct: one may obtain privileged legal advice while a claim is pending. As the Ninth Circuit explained in Mett, "[w]hen an ERISA trustee seeks legal advice for his own protection, the legal fiction of `trustee as representative of the beneficiaries' is dispelled, notwithstanding

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 its in-house and outside counsel to evaluate its potential liability stemming from 20 21 22 23 24 25 26 litigation with the retirees, and to prepare for the anticipated litigation: · Many of the challenged documents reflect communications regarding information that the Company's in-house and outside counsel needed to render the requested advice and/or that the Company or its representatives needed to prepare for anticipated litigation. See Gangone Decl. (Ex. F to Doc. #225) ¶¶ 5-11, 13-14; Vine Decl. (Ex. E to Doc. #225) ¶¶ 4, 6-9; O'Neill Decl. (Ex. B to Doc. #225) ¶ 26; Shea Decl. (Ex. C to Doc. #225) ¶ 9; Huevelle Decl. (Ex. I to Doc. #225) ¶ 5; Hayne Decl. (Ex. A to Doc. #225) Ex. 3 at #s 31, 34, 35, 36, 37, 38, 39, 40.
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the fact that the legal advice may relate to the trustee's administration of the trust." 178 F.3d at 1065 (emphasis added). Moreover, "where a fiduciary seeks legal advice for her own protection, the core purposes of the attorney-client privilege are seriously implicated and should trump the beneficiaries' general right to inspect documents relating to plan administration." Id. As a result, the fiduciary exception does not apply "as to any advice that a fiduciary obtains in an effort to protect herself from civil or criminal liability." Id. at 1066. This is true even if that advice is not "solely related to personal, non-fiduciary matters." Id. (emphasis in original). In this case, defendants have already established the facts necessary to support the privilege assertions over the legal advice rendered during the claims administration process. As set forth more fully in the Declarations previously

submitted, the challenged documents reflect legal advice that the Company sought from

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·

Other communications are legal memoranda providing advice or used to advise the Company concerning the strengths and weaknesses of the claims the retirees asserted, and the claims they could have (but did not) assert, including potential litigation defenses to those claims. See Sandstrom Decl. (Ex. H to Doc. #225) ¶¶ 8, 11, 14; Vine Decl. (Ex. E to Doc. #225) ¶¶ 8-9; Shea Decl. (Ex. C to Doc. #225) ¶ 13; Sonnenschein Decl. (Ex. J to Doc. #225) ¶ 3; Hayne Decl. (Ex. A to Doc. #225) Ex. 3 at #s 28, 33, 39, 40, 47, 50, 58. Likewise, some of the challenged documents are communications between the Company and its counsel regarding the strengths and weaknesses of the retirees' claims and potential liability from those claims. See O'Neill Decl. (Ex. B to Doc. #225) ¶¶ 24-25, 27; Vine Decl. (Ex. E to Doc. #225) ¶ 5; Hayne Decl. (Ex. A to Doc. #225) Ex. 3 at #s 9, 10, 32, 41. Other challenged documents contain or reflect counsel's notes and mental impressions used to facilitate advice to the Company concerning the threatened litigation or to prepare for that litigation. See Shea Decl. (Ex. C to Doc. #225) ¶¶ 12, 14-17, 26; Sandstrom Decl. (Ex. H to Doc. #225) ¶¶ 57, 9-12; Huevelle Decl. (Ex. I to Doc. #225) ¶ 4; Hayne Decl. (Ex. A to Doc. #225) Ex. 3 at #s 11, 13, 22, 42, 43, 48, 51, 54, 57, 58, 66, 68. Still other challenged communications concern the Company's efforts to quantify its potential liability in litigation. See Denlinger Decl. (Ex. D to Doc. #225) ¶¶ 3-4; Shea Decl. (Ex. C to Doc. #225) ¶ 10; Vine Decl. (Ex. E to Doc. #225) ¶ 5; Hayne Decl. (Ex. A to Doc. #225) Ex. 3 at #s 24 and 32. And other communications concern the Company's efforts to settle the retirees' claims before litigation ensued. See Shea Decl. (Ex. C to Doc. #225) ¶¶ 10-11; Sandstrom Decl. (Ex. H to Doc. #225) ¶ 7; Denlinger Decl. (Ex. D to Doc. #225) ¶ 4; Hayne Decl. (Ex. A to Doc. #225) Ex. 3 at #s 22, 23, 24, 29, 30.

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·

·

·

These documents, moreover, were created because there was a reasonable anticipation of litigation with the retirees, as the Declarations (including exhibits) make clear. For example, the claim letter alleged breaches of ERISA fiduciary duties and of ERISA § 502(c), which must be asserted against a plan administrator personally. See O'Neill Decl. (Ex. B to Doc. #225) Ex. 9 at 5, 12-13. In addition, the parties (including the Plan Administrator) executed a tolling agreement to "ensure that
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there is ample time to engage in settlement discussions regarding the Former Garrett Employees' claims before suit is filed." Martin Decl. (Doc. # 167) Ex. A

(emphasis added). The tolling agreement further recognized that "Honeywell has been advised that Former Garrett Employees may file suit in order to assert claims

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 (holding that documents concerning "Defendants' responses to Plaintiff's claims" did 20 21 22 23 24 25 26
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with respect to their pension benefits." Id. Under these circumstances, where legal advice was sought and received "in contemplation of adversarial proceedings against [the] beneficiaries," it does not matter that actual litigation had not yet commenced. Wachtel, 482 F.3d at 233. In Mett, for example, the documents that the Ninth Circuit found to be privileged and not subject to the fiduciary exception were created five years before actual litigation (a criminal prosecution) commenced. See Mett, 178 F.3d at 1061-62 (describing legal advice rendered in 1991 that the Government sought to introduce in a criminal prosecution that began in 1996). Plaintiffs' complaint that litigation was not actually ongoing, therefore, does not affect the inquiry, and the challenged documents should remain privileged. Mett, 178 F.3d at 1064; Anderson v. Suburban Teamsters of N. Ill. Pension Fund Bd. of Trustees, 2006 WL 1734685 at *2 (D. Ariz. June 22, 2006)

not fall within the fiduciary exception). In addition, plaintiffs cannot succeed in their attempt to discover settlor function documents (Documents 43-46 and 108-122) because those documents do not involve matters of plan administration. As discussed above, functions such as "the adoption, modification, or termination of an employee benefit plan" are settlor acts

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that do not fall within the fiduciary exception. Wachtel, 482 F.3d at 233; see also, e.g., Hughes Aircraft, 525 U.S. at 445 ("[Without exception, `plan sponsors who alter the terms of a plan do not fall into the category of fiduciaries.'"); Unisys, 1994 WL 6883 at *3 (fiduciary exception did not apply to decision to terminate the plan). Even

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Burling LLP advised the Plan Administrator during the administrative claims process, 21 22 23 24 25 26
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advice regarding the "disclosure of forthcoming plan changes is protected by attorney-client confidentiality privilege," and "is not subject to the `fiduciary exception.'" Hudson v. General Dynamics, 73 F. Supp. 2d 201, 203 (D. Conn. 1999). In this case, even a cursory review of the entries on defendants' privilege log and other supporting documentation reveals that the legal advice sought and rendered involved settlor functions, such as plan changes and disclosure of plan changes. See Chart (attached as Ex. A) Documents 43-46, 108-122; Gordon Decl. (Ex. G to Doc. #225) ¶¶ 2-5; Hayne Decl. (Ex. A to Doc. #225) Ex. 3 at 70-72. As such, those documents do not fall within the fiduciary exception. II. There Has Been No Waiver. Plaintiffs' alternative arguments for production of the disputed documents, based on waiver grounds, are similarly unavailing. Plaintiffs first argue that because attorneys at the law firm of Covington &

defendants waived the attorney-client privilege when Covington simultaneously represented the Company on issues such as the potential liability associated with plaintiffs' claims. See Mot. 12-13 (Doc. #332). Again, they are wrong.

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Indeed, the Second Circuit rejected this very argument in In Re Long Island Lighting Co., 129 F.3d 268 (2d Cir. 1997). In that case, the Court considered

"whether an employer waives the attorney-client privilege with respect to all communications regarding a plan covered by ERISA by seeking advice as a plan

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 communication, obtained for a trustee's own protection, be shielded from disclosure," 20 21 22 23 24 25 26
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fiduciary and as a non-fiduciary from the same attorney." Id. at 270-71. The Second Circuit answered that question in the negative. See id. at 273 ("We ... hold that neither the fiduciary exception nor the joint client exception defeats [the defendant's] invocation of the attorney-client privilege with respect to communications with its attorneys on non-fiduciary matters."). As the Court explained, the employer's ability to assert the attorney-client privilege "turns on whether or not the communication concerned a matter as to which the employer owed a fiduciary obligation to the beneficiaries," not on the identity of the lawyer providing the advice. Id. at 271. The Ninth Circuit endorsed and applied this analysis in Mett. See 178 F.3d at 1065. "[T]he application of the fiduciary exception is not simply a question of conflict of interest, resolved `by multiplying the number of lawyers.'" Id. (quoting Long Island Lighting, 129 F.3d at 272). Rather, "the attorney-client privilege demands that a

and the "force of this general proposition is undiminished, irrespective of whether the attorney consulted also did work for the plan." Id. at 1065-66 (emphasis added). In short, contrary to plaintiffs' argument, it does not matter that the Covington firm was retained both to "provide advice and assistance to the Plan Administrator in drafting responses to Retirees' administrative claims," and to "provide advice to

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Honeywell regarding its potential liability to former Garrett employees who participated in the Garrett Retirement Plan or its successors and held a Secured Benefit Account." Shea Decl. (Ex. C to Doc. 225) ¶¶ 1, 2. Rather, it is "the nature of the particular attorney-client communication that is dispositive," and the scope of an

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 whether a communication to that party was made for a legal purpose." 20 21 22 23 24 25 26
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attorney's engagement does not bear on this "communication-by-communication analysis." Mett, 178 F.3d at 1065. Finally, plaintiffs also err by arguing that the attorney-client or work product privileges were waived with respect to Documents 10, 31, 38, 41, 44, 101-105, 109, 111, 114 and 116-120, because actuaries and/or other third-parties were copied on these communications. It is well established that "documents and tangible things prepared by or for a party, or the party's representative, in anticipation of litigation are protected from discovery" by the work product doctrine. In re CV Therapeutics, Inc. Securities Litig., No. C-03-3709 SI, 2006 WL 1699536, at *2 (N.D.Cal. June 16, 2006). "A representative of a party," moreover, "includes the party's attorney,

consultant, or agent." Id.; see also Fed. R. Civ. P. 23(b)(3). "When considering whether a nominal third party is an agent of the attorney, the crucial question is CV

Therapeutics, 2006 WL 1699536, at *7. "If the third party consultant is involved in the giving of legal advice, the privilege obtains." Id. In this case, the record clearly shows that the relevant third party non-lawyers were working with the Company's in-house and outside counsel to assist with the provision of legal advice to the Company, to understand the potential exposure from

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anticipated litigation, and to prepare for anticipated litigation. See O'Neill Decl. (Ex. B to Doc. #225) ¶ 21; Shea Decl. (Ex. C to Doc. #225) ¶ 8; Denlinger Decl. (Ex. D to Doc. #225) ¶ 1. That is all that is required for the privilege to attach. See id.2 As to other third parties, plaintiffs are similarly wrong to claim that there has

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Plaintiffs' contention that the non-lawyer must have been working under the "direct supervision" of the attorney is both unsupported and beside the point. It is unsupported because the two cases that plaintiffs cite allegedly in support of their "direct supervision" test say nothing about "direct supervision," and in fact neither case contains the words "direct" and "supervision" within the same paragraph. See Hoptowit v. Ray, 682 F.2d 1237, 1262 (9th Cir. 1982) (holding only that a report created by non-lawyers that "was not done with the apparent purpose of preparing for litigation, and was eventually made public" was not privileged); United States v. Ackert, 169 F.3d 136, 139-140 (2d Cir. 1999) (ruling only that an attorney's conversation with a third party accountant to obtain facts related to a proposed transaction was not privileged). It is beside the point because, even if there were a direct supervision requirement, Hewitt was retained by the Company specifically to assist the Honeywell Legal Department to prepare for anticipated litigation, Shea Decl. (Ex. C to Doc. #225) ¶ 8; Denlinger Decl. (Ex. D to Doc. #225) ¶ 1, and was thus acting under the direct supervision of the Honeywell Legal Department.
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been no showing of privilege as to documents 31, 41, 44, 48, 101-105 109, 111, 114, 116-120. See Mot. 15 (Doc. #332). As the Supreme Court has held, privilege is not waived in situations like these, because employees below upper-echelon management possess the information needed by the corporation's lawyers. See Upjohn v. United States, 449 U.S. 383, 391 (1981). The communications at issue here, moreover, are protected because the employees at issue worked in the Human Resources, Benefits, and Personnel departments, and thus the subject matter of the communications were plainly within the scope of the employees' corporate duties. Id. at 394. Therefore, with respect to documents 31, 41, 44, 48, 101-105 109, 111, 114, 116-120, the privilege applies and the Company has not waived that privilege by sharing the

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attorney-client/work product privileged communications with employees in their own organizations. CONCLUSION For the foregoing reasons, the motion to compel should be denied.

5 6 7 OSBORN MALEDON, P.A. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
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Respectfully submitted this 21st day of December, 2007.

By: /s/David B. Rosenbaum David B. Rosenbaum Dawn L. Dauphine Osborn Maledon, P.A. 2929 North Central Avenue, Suite 2100 Phoenix, AZ 85012-2794 Michael L. Banks Azeez Hayne MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, PA 19103 Howard Shapiro PROSKAUER ROSE LLP 909 Poydras Street, Suite 1100 New Orleans, LA 70112-4017 Amy Covert PROSKAUER ROSE LLP One Newark Center, 18th Floor Newark, NJ 07102-5211 Christopher Landau, P.C. Craig S. Primis, P.C. Eleanor R. Barrett KIRKLAND & ELLIS LLP 655 Fifteenth Street, N.W. Washington, DC 20005-5793 Attorneys for Defendants

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CERTIFICATE OF SERVICE I hereby certify that on December 21, 2007, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and

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1865942_1

transmittal of a Notice of Electronic Filing to all CM/ECF registrants.

s/Kelly Dourlein