1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ATHLETICS INVESTMENT GROUP, Case No. 21-cv-05246-MMC (DMR)

LLC,

8 Plaintiff, ORDER ON JOINT DISCOVERY 9 LETTER RE: WAIVER OF THE v. ATTORNEY-CLIENT PRIVILEGE 10 AND WORK PRODUCT DOCTRINE

SCHNITZER STEEL INDUSTRIES, INC.,

11 Re: Dkt. No. 210 Defendant. 12 13 Plaintiff Athletics Investment Group, LLC (“AIG”) moves for an order finding that third 14 party Bay Area Air Quality Management District (“BAAQMD”) waived any claim of privilege 15 over 67 documents because of its untimely assertions of privilege and protection. [Docket Nos. 16 210, 212.] BAAQMD contends that its actions should not result in a waiver. As part of that 17 argument, it explains that 34 of the 67 disputed documents are “partial (near) duplicates of 18 documents” for which it previously asserted privilege. The court ordered BAAQMD to lodge 19 those 34 documents for in camera review. [Docket Nos. 212, 218, 222.] 20 This matter is suitable for resolution without a hearing. Civ. L.R. 7-1(b). For the 21 following reasons, the court finds that BAAQMD has waived the attorney-client privilege and 22 work product protection with respect to 43 of the 67 documents it withheld from production. 23 I. BACKGROUND 24 This is an action brought under the Clean Air Act’s (“CAA”) citizen suit enforcement 25 provision, 42 U.S.C. § 7604, to challenge Defendant Schnitzer Steel Industries, Inc.’s 26 (“Schnitzer”) operations at its metal shredding facility in West Oakland. 27 The undersigned’s May 14, 2024 and May 28, 2024 Orders detail the factual and 1 (May 28, 2024 Order).] In brief, in March 2023 AIG served a subpoena on BAAQMD for 2 production of 17 categories of documents, to which BAAQMD responded in April 2023. In 3 January 2024, following several requests for extensions, BAAQMD produced approximately 4 5,000 responsive documents and served a privilege log stating that it withheld more than 9,300 5 documents based on various privileges and confidentiality agreements. This included withholding 6 approximately 9,000 documents based on the deliberative process privilege. BAAQMD also 7 redacted information from over 900 documents on the ground that the information was non- 8 responsive. AIG moved to compel, challenging the sufficiency of BAAQMD’s privilege log, its 9 claim of deliberative process privilege, the withholding of documents pursuant to interagency 10 confidentiality agreements, and the redactions for relevance. [See Docket No. 103 (Jan. 12, 2024 11 Jt. Letter).] 12 Following in camera review of exemplar documents, the court held that “[s]ome but not all 13 of BAAQMD’s claims of deliberative process privilege are supported by the record and by the 14 law,” concluding that it had established the privilege over approximately one-third of the 15 exemplars. May 14, 2024 Order 2, 6-7. The court ordered BAAQMD to re-review each document 16 withheld based on the deliberative process privilege “using the rulings provided . . . and applying 17 them as guidance across the universe of withheld documents” and to produce documents for which 18 it withdraws its deliberative process privilege claim and provide updated privilege logs by May 19 21, 2024. Id. at 14-15. It also ordered the parties to brief AIG’s argument that BAAQMD’s 20 claims of the deliberative process privilege should be overridden based on AIG’s need for the 21 information. Id. at 14. See F.T.C. v. Warner Commc’ns Inc., 742 F.2d 1156, 1161 (9th Cir. 1984) 22 (“[a] litigant may obtain deliberative materials if [their] need for the materials and the need for 23 accurate fact-finding override the government’s interest in non-disclosure.”). The court later 24 ordered the parties to meet and confer to focus on the district’s pre-2020 documents, which AIG 25 identified as key to the claims and defenses at issue, and to use targeted search terms for the 26 remaining documents. The parties subsequently agreed to extend the deadline for the re-review of 27 responsive documents and production of an updated privilege log to June 7, 2024. [Docket Nos. 1 On May 28, 2024, the court ruled that “AIG’s need for disclosure of the documents 2 withheld based on the deliberative process privilege overrides BAAQMD’s interest in 3 confidentiality” with respect to all pre-2020 documents withheld by BAAQMD based on the 4 deliberative process privilege, “as well as withheld documents from 2020 and later that have been 5 or will be identified by the parties via targeted search terms.” May 28, 2024 Order 6-7. The court 6 also found that BAAQMD had withdrawn any claim of privilege over documents previously 7 withheld based on interagency agreements under the law enforcement/official information 8 privilege. Id. at 8. As a result, it ordered BAAQMD to produce all documents withheld solely on 9 the basis of the law enforcement/official information privilege, as well as all documents withheld 10 on that basis plus the deliberative process privilege where that privilege had been overridden. Id. 11 The court noted it was “unclear” if revised privilege logs were necessary in light of its rulings and 12 ordered the parties to meet and confer on the issue. It ordered BAAQMD to produce any revised 13 privilege log by June 7, 2024. Id. The parties later agreed to extend that deadline to June 19, 14 2024. [Docket Nos. 206, 208.] 15 The parties filed this joint letter brief on June 26, 2024. [Docket No. 210 (Jt. Letter).] 16 According to BAAQMD, in preparing its production of documents withheld based on the 17 deliberative process privilege, it discovered 214 documents that it contends, for the first time, “are 18 privileged on grounds other than the deliberative process privilege.” It revised its privilege log to 19 reflect these new assertions of attorney-client privilege and attorney work product protection. Id. 20 at 3. AIG argues that BAAQMD waived these privilege claims by asserting them in late June 21 2024. Id. at 2. It also argues that BAAQMD has not met its burden of sustaining the claims of 22 attorney-client privilege and work product protection. Id. at 2-3. BAAQMD argues that the court 23 should not find waiver of the new assertions of attorney-client privilege and work product 24 protection and contends that its privilege log is sufficient. Id. at 4-5. BAAQMD also asserted that 25 it was “working to compile a complete list of duplicate copies where attorney privileges were 26 previously asserted” and stated its intention to notify AIG of “any assertions that are being 27 withdrawn” and to identify any duplicate documents for which it previously asserted attorney- 1 On July 3, 2024, the court issued an order laying out the applicable federal law regarding 2 the attorney-client privilege and the work product doctrine. The order expressed a lack of 3 confidence “that BAAQMD has properly and narrowly applied the foregoing standards in its 4 privilege review,” based on the court’s knowledge of BAAQMD’s privilege assertions through 5 conducting in camera review. [Docket No. 211 (July 3, 2024 Order) 2-3.] Before analyzing the 6 waiver issue as to the 214 disputed documents, the court ordered BAAQMD to “immediately re- 7 review its claims of privilege and protection over the remaining documents in light of [the July 3, 8 2024] order,” and to produce an amended privilege log by July 8, 2024. The court ordered the 9 parties to then meet and confer and file a joint status report by July 11, 2024. Id. at 3-4. 10 The parties filed a timely joint status report in which they explained that they narrowed 11 their dispute from 214 to 67 documents. Of the 67, BAAQMD contends that “34 are partial (near) 12 duplicates of documents for which [it] previously asserted attorney privileges.” The remaining 33 13 are “documents where no duplicate is alleged.” [Docket No. 212 at 2.] AIG responds that the 14 “partial/near duplicate documents appear to differ in significant ways from their alleged duplicate 15 documents” and maintains that BAAQMD waived any privilege or protection over all 67 16 documents. Id. 17 On August 5, 2024, the court ordered BAAQMD to lodge for in camera review the 34 18 documents alongside the “partial/near duplicate” documents over which BAAQMD previously 19 asserted the attorney-client and/or work product doctrine (i.e., 34 sets of paired documents). The 20 court ordered BAAQMD to annotate and highlight the documents to clearly note any differences 21 between the paired documents and to submit the relevant excerpts of its privilege log 22 corresponding to its original assertion of attorney client privilege and work product protection. 23 [Docket No. 218.] BAAQMD timely lodged the requested materials. [Docket No. 222.] 24 II. LEGAL STANDARDS 25 Federal Rule of Civil Procedure 45 governs discovery of nonparties by subpoena. Fed. R. 26 Civ. P. 45. The Advisory Committee Notes to Rule 45 state that “the scope of discovery through a 27 subpoena is the same as that applicable to Rule 34 and the other discovery rules,” which in turn is 1 34(a) (“A party may serve on any other party a request within the scope of Rule 26(b).”). Federal 2 Rule of Civil Procedure 26 provides:

3 Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the 4 needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to 5 relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense 6 of the proposed discovery outweighs its likely benefit. 7 Fed. R. Civ. P. 26(b)(1). “Information within this scope of discovery need not be admissible in 8 evidence to be discoverable.” Id. 9 “A person commanded to produce documents or tangible things” by a subpoena may serve 10 written objections. Fed. R. Civ. P. 45(d)(2)(B). “The objection must be served before the earlier 11 of the time specified for compliance or 14 days after the subpoena is served.” Id. Rule 45 further 12 provides that “[a] person withholding subpoenaed information under a claim that it is privileged or 13 subject to protection as trial-preparation material must: (i) expressly make the claim; and (ii) 14 describe the nature of the withheld documents, communications, or tangible things in a matter that, 15 without revealing information itself privilege of protected, will enable the parties to assess the 16 claim.” Fed. R. Civ. P. 45(e)(2). The Advisory Committee Notes to Rule 45 explain that the 17 language of this provision “corresponds” to Federal Rule of Civil Procedure 26(b)(5), and that the 18 purpose of the provision “is to provide a party whose discovery is constrained by a claim of 19 privilege or work product protection with information sufficient to evaluate such a claim and resist 20 if it seems unjustified.” Advisory Committee Notes to 1991 Amendment; see Fed. R. Civ. P. 21 26(b)(5). “A nonparty’s failure to timely make objections to a Rule 45 subpoena duces tecum 22 generally requires the court to find that any objections have been waived.” Moon v. SCP Pool 23 Corp., 232 F.R.D. 633, 636 (C.D. Cal. 2005) (citations omitted). 24 The Ninth Circuit has held that boilerplate assertions of privilege do not satisfy Rule 25 26(b)(5)’s notice requirement. Burlington N. & Santa Fe Ry. Co. v. U.S. Dist. Court, 408 F.3d 26 1142, 1148-49 (9th Cir. 2005). “The most common way to [comply with Rule 26(b)(5)] is with a 27 privilege log.” Apple Inc. v. Samsung Elecs. Co., 306 F.R.D. 234, 239 (N.D. Cal. 2015); see Mi 1 party’s privilege logs in response to subpoena). Under Ninth Circuit law, a privilege log must 2 contain (a) the privilege asserted, “(b) the nature of the document, (c) all persons or entities shown 3 on the document to have received or sent the document, (d) all persons or entities known to have 4 been furnished the document or informed of its substance, and (e) the date the document was 5 generated, prepared, or dated.” Apple, 306 F.R.D. at 238 (citing In re Grand Jury Investigation, 6 974 F.2d 1068, 1071 (9th Cir. 1992)). 7 Failure to produce a timely privilege log may result in waiver. See Burlington, 408 F.3d at 8 1149. The Ninth Circuit has expressly rejected “a per se rule that failure to produce a privilege log 9 in a timely manner triggers waiver of privileges.” Id. at 1147. Instead, it instructs courts to make 10 waiver determinations on a “case-by-case determination” and to consider the following factors: 1) 11 “the degree to which the objection or assertion of privilege enables the litigant seeking discovery 12 and the court to evaluate whether each of the withheld documents is privileged”; 2) “the timeliness 13 of the objection and accompanying information about the withheld documents”; 3) “the magnitude 14 of the document production”; and 4) “other particular circumstances of the litigation that make 15 responding to discovery unusually easy . . . or unusually hard.” Id. at 1149. The Ninth Circuit has 16 explained that “these factors should be applied in the context of a holistic reasonableness analysis, 17 intended to forestall needless waste of time and resources, as well as tactical manipulation of the 18 rules and the discovery process.” Id. Although waiver is a harsh sanction, courts have not 19 hesitated to find waiver where a party repeatedly engages in inexcusable or unjustifiable conduct. 20 See id. at 1149-50 (affirming waiver where the “[privilege] log [was] not only not filed during the 21 Rule 34 time limit, but was filed five months later,” there were no mitigating circumstances, the 22 offending party was a sophisticated corporate litigant, and the untimely privilege log was 23 deficient); Mi Familia Vota, 344 F.R.D. at 520-31 (finding waiver of claims of First Amendment 24 protection and attorney-client privilege where third party asserted privileges over more than 25 62,000 documents that it admitted that it had not reviewed and privilege logs did not provide 26 information sufficient to evaluate validity of privilege claims). 27 III. DISCUSSION 1 assess whether the later-identified versions are duplicates of those for which BAAQMD had 2 already asserted privilege. Of these, BAAQMD no longer claims privilege over Documents 15 3 and 18. Having reviewed the remaining 32 paired documents, the court finds that 16 are exact or 4 nearly exact duplicates of documents over which BAAQMD previously asserted the attorney- 5 client privilege and work product doctrine: Documents 5-7, 9, 10, 14, 16, 17, 19, 20, 24, 26-28, 6 30, and 32.1 Additionally, Documents 4, 8, 11, 12, 22, and 23 consist of portions of longer email 7 threads, where BAAQMD previously asserted the attorney-client privilege and work product 8 doctrine over the longer threads. The court concludes BAAQMD did not waive its claims of 9 privilege or protection as to these 22 documents. 10 The remaining ten documents are not complete duplicates. Although they each contain 11 email threads over which BAAQMD previously asserted privilege or protection, they also include 12 additional emails or email headers that were not previously produced as part of the original 13 threads. These are Documents 1-3, 13, 21, 25, 29, 31, 33, and 34. The following discussion of 14 waiver applies to the non-duplicative portions of those ten documents, plus the 33 documents that 15 BAAQMD did not contend were duplicates of documents over which it previously claimed 16 privilege or protection—43 documents in total. 17 The parties dispute whether BAAQMD waived its belated assertions of privilege and 18 protection over these remaining documents. BAAQMD argues that the “harsh sanction of waiver” 19 is not warranted where it “inadvertently failed to include all claims of privilege in its January 20 logs[.]” Jt. Letter 5. The parties agree that the Burlington test for waiver applies to the dispute. 21 Jt. Letter 2, 4. 22 The first and second factors of the Burlington test for waiver examine “the degree to which 23 the objection or assertion of privilege enables the litigant seeking discovery and the court to 24 evaluate whether each of the withheld documents is privileged,” and “the timeliness of the 25 objection and accompanying information about the withheld documents.” Burlington, 408 F.3d at 26 1149. Here, AIG served the subpoena on BAAQMD in March 2023 and BAAQMD served 27 1 written objections to the subpoena in early April 2023. BAAQMD states that it “then spent 2 months negotiating with AIG, attempting to limit the scope of” the requests. Jt. Letter 4. 3 BAAQMD finally produced responsive documents and a privilege log in January 2024 but did not 4 assert privilege or protection over the original group of 67 documents until June 2024, after it was 5 ordered to meet and confer with AIG about the need for revised privilege logs following the 6 court’s rulings on the deliberative process privilege and the District’s withdrawal of its assertions 7 of law enforcement/official information privilege. Given this timeline, the first two factors weigh 8 in favor of waiver as BAAQMD’s failure to timely claim privilege or protection over the 9 documents hindered AIG’s ability “to assess the claim[s]” of privilege or protection. Fed. R. Civ. 10 P. 26(b)(5); Fed. R. Civ. P. 45(e)(2). 11 The third factor examines “the magnitude of the document production.” Burlington, 408 12 F.3d at 1149. “When evaluating this factor, courts consider the breadth of the discovery request, 13 how many documents the privilege proponent has already produced, and the number of documents 14 subject to the privilege claim.” Mi Familia Vota, 344 F.R.D. at 522 (citations omitted). The 15 parties do not directly address this factor but BAAQMD appears to suggest that the volume of 16 documents weighs against waiver. See Jt. Letter 4 (referring to “voluminous documents”). It 17 states that the parties “spent months negotiating” the scope of the subpoena, that it “diligently 18 worked to review thousands of complex documents on a compressed schedule,” and that it 19 “produced approximately 5,000 documents and logged approximately 9,000 privileged 20 documents” by January 2024. These statements are somewhat conclusory. BAAQMD does not 21 explain what it means by a “compressed schedule” and offers no details about the purported 22 challenges it faced in responding to the subpoena. Many documents have been lodged in camera 23 and they do not appear to pose unique challenges for review. BAAQMD also argues that its 24 original privilege log included almost 4,000 assertions of the attorney-client privilege and over 25 2,600 assertions of attorney work product and that it “inadvertently” failed to include all privilege 26 and protection claims in its January 2024 privilege log. See Jt. Letter 4-5. Ultimately, this cuts 27 against BAAQMD’s position in light of the court’s expressed concern about over-designation that 1 confidence that BAAQMD “properly and narrowly applied” applicable attorney-client privilege 2 and work product standards in its privilege review). The vast majority of BAAQMD’s original 3 assertions of privilege have been successfully challenged or withdrawn, suggesting that 4 BAAQMD’s document review process has been flawed. On the other hand, the number of 5 documents still at issue—43—is a small subset of the overall production of 11,000 documents. 6 See Jt. Letter 3; Mi Familia Vota, 344 F.R.D. at 522 (“[g]enerally, this factor weighs against 7 waiver when the withheld documents comprise only a small fraction of the overall number of 8 documents at issue.”). Considering the number of disputed documents, the absence of details 9 about the challenges of document production, and a record that shows over-designation of 10 privilege rather than careful document review, the court concludes that the third Burlington factor 11 weighs somewhat in favor of waiver. 12 The fourth factor asks the court to consider “other particular circumstances of the litigation 13 that make responding to discovery unusually easy. . . or unusually hard.” Burlington, 408 F.3d at 14 1149. The parties do not directly address this factor, although BAAQMD appears to suggest that 15 its status as a third-party weighs against finding waiver. See Jt. Letter 5. Notably, however, 16 BAAQMD offers no authority that this is a relevant factor in the Burlington waiver analysis. 17 Moreover, AIG responds that it has also sued BAAQMD in state court and propounded requests 18 for production to BAAQMD at the same time it served the subpoena in this case, and that “at the 19 District’s insistence—the District’s production in this case does ‘double duty’ as the District’s 20 response in the state case.” Id. at 3. In other words, while BAAQMD is technically a third party 21 in this case, it is a party in parallel litigation with AIG and the discovery at issue plays a role in 22 both cases. Thus, BAAQMD’s status as a non-party in this case is entitled to little if any 23 deference. Additionally, the court is mindful that BAAQMD only asserted its privilege and 24 protection claims over this group of documents after losing AIG’s challenge to the deliberative 25 process privilege claims. Other courts have described similar newly-asserted claims as “a second 26 bite at the apple.” See, e.g., Gen. Elec. Co. v. Johnson, No. CIV. 00-2855 (JDB), 2007 WL 27 433095, at *4 (D.D.C. Feb. 5, 2007) (“EPA’s fresh privilege claims follow on the heels of a legal 1 attempt by EPA to get a second bite at the apple by ‘re-engineering’ its privilege log to advance 2 || legal arguments that it failed to make at earlier stages of the litigation.”). Given the “second-bite” 3 nature of the assertion of privilege over these 43 documents, along with the absence of anything 4 || “unusually easy ... or unusually hard” about responding to discovery in this case, the court 5 concludes that the fourth Burlington factor weighs slightly in favor of waiver. 6 Applying the Burlington factors “in the context of a holistic reasonableness analysis,” the 7 court finds that BAAQMD waived any belated privilege or protection claims over the remaining 8 || 43 documents. While waiver is a severe outcome, it is warranted by BAAQMD’s significant 9 delay in asserting its privilege and protection claims over the documents, the “second-bite” nature 10 || of the timing of the assertion, a record suggesting a less-than-careful document review process, 11 and the failure to demonstrate any circumstances or factors weighing against waiver. With respect a 12 to Documents 1-3, 13, 21, 25, 29, 31, 33, and 34, BAAQMD’s waiver extends only to those

13 portions of the email threads that were not previously produced. In other words, BAAQMD need

v 14 || only produce the emails and/or email headers that were not part of the original threads; it may © 15 redact any portion of the original threads that were previously withheld or redacted based on Q 16 || privilege.

17 || Iv. CONCLUSION

18 For the foregoing reasons, AIG’s motion for an order finding BAAQMD’s belated 19 || privilege and protection assertions waived is granted in part. BAAQMD shall produce the 43 20 || documents for which it waived the attorney-client privilege and work product protection in 21 accordance with this order by no later than August 30, 2024. SE DIST RIS 22 IT IS SO ORDERED. SD OS 23 Dated: August 23, 2024 ky □ a 24 >| 1s SO ORP ~{ Wo Ryu < 25 Chigif M Z. 26 Zs ‘Donna MEY □ judg’ □ 27 eS A) CY 28 ep os

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