[*1]
| Nicholson v Keyspan Corp. |
| 2007 NY Slip Op 50330(U) [14 Misc 3d 1236(A)] |
| Decided on February 28, 2007 |
| Supreme Court, Suffolk County |
| Sgroi, J. |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| This opinion is uncorrected and will not be published in the printed Official Reports. |
Supreme Court, Suffolk County
Robert V. Nicholson, Jeff Mattera, Donald Watson, Jack R. Meltzer, individually and on behalf of all others similarly situated, Plaintiffs,
against
Keyspan Corp., Keyspan Energy Corp., Keyspan Gas East Corp., Marketspan Corp., d/b/a Keyspan Energy and "John Does", Defendants, Newsday and News 12, Intervenors.
|
17458-2006
REILLY, LIKE & TENETY, ESQS.
Attorney for the Plaintiffs
179 Little East Neck Road North
P.O. Box 818
Babylon, New York 11702
JOHN E. REILLY, ESQ.
Attorney for Defendants
175 East Old Country Road
Hicksville, New York 11801
LEVINE, SULLIVAN, KOCH & SCHULZ, LLP
Attorneys for Newsday and News 12
321 West 44th St., Ste. 510
New York, New York
MCLANE, FRAF, RAULERSON & MIDDLETON, P.A.
BRUCE W. FELMLY, ESQ. (admitted Pro Hac Vice)
BARRY NEEDLEMAN, ESQ. (admitted Pro Hac Vice)
RACHEL A. HAMPE, ESQ.(admitted Pro Hac Vice)
900 Elm Street, P.O. Box 326
Manchester, New Hampshire 03105
Sandra L. Sgroi, J.
Upon the following papers numbered 1 to 49 read on this Motion for an injunction and for other relief: Notice of Motion and supporting papers 1-18; Affirmation in opposition and supporting papers 19-25; Supplemental Affirmation in opposition and supporting papers 28-39; Defendants' affirmation in reply and supporting papers 40-45; Reply affirmation of Intervenors and supporting papers 46-47; Exhibits 26-27; 48-49; it is,
ORDERED that the motion of the KeySpan Defendants seeking injunctive and other relief against the Plaintiff, third parties and the Plaintiffs' attorneys is granted only to the extent that
the Plaintiffs and their agents, employees or other persons under their control are directed to immediately turn over to the attorney for the KeySpan Defendants all copies of the 1993 strategy paper prepared by Defendants' predecessors that are in their possession;
the Plaintiffs and their agents, employees or other persons under their control are directed to immediately delete copies of the 1993 strategy paper from any computer or other electronic device of any kind whatsoever and to remove such document from the internet and any web sites over which they have control including but not limited to the site known as "bayshoremgp";
the Plaintiffs are directed to provide the attorney for the KeySpan Defendants with a copy of affidavits alleging in detail all documents that have been destroyed or removed from data [*2]collecting or disseminating sources within five (5) days of service of a copy of this order or the action of the Plaintiffs may be dismissed;
the attorneys for the Plaintiffs are directed immediately turn over to the attorney for the KeySpan Defendants all copies of the 1993 strategy paper in their possession or the possession of their employees, agents or persons under their control;
the attorneys for the Plaintiffs are directed to immediately delete copies of the 1993 strategy paper from any computer or other electronic device of any kind whatsoever and to remove such document from the internet and any web sites in their control;
the attorneys for the Plaintiffs and the Plaintiffs are directed not to use the 1993 strategy paper or information obtained from that document any further in this litigation for any purposes whatsoever; and
the attorneys for the Plaintiffs are directed to provide the attorney for the KeySpan Defendants with affidavits alleging in detail all documents and copies of documents that have been destroyed or removed from data collecting or disseminating sources, the date that the documents and copies of documents were destroyed, and the method used to destroy the documents and copies of documents within five (5) days of service of this order or, in addition to other remedies available including monetary sanctions, the action of the Plaintiffs may be dismissed or the firm of Reilly, Like & Tenety, Esqs. may be removed as the attorneys of record for all Plaintiffs involved in any litigation involving the plume of pollution emanating from the Bay Shore Manufactured Gas Plant; and it is further
ORDERED that the KeySpan Defendants are directed to file an undertaking in the amount of Five Hundred ($500.00) Dollars; and it is further
ORDERED that the Court declines to further restrict Newsday and News 12, the intervenors, from publishing any and all documents in their possession and from publishing comments and/or stories citing or using those documents or information contained in those documents; and it is further
ORDERED that the Suffolk County Clerk is directed to seal all copies of the 1993 strategy paper and other items that the KeySpan Defendants allege are protected by attorney client privilege where that material is contained within documents submitted to the Court or where copies of that 1993 strategy paper or potentially privileged items may have been filed with the Court as part of this litigation or a related litigation under Index No. 17424-2006; and it is further
ORDERED that counsel for the KeySpan Defendants are directed to serve a copy of this order on the County Attorney and the County Clerk and counsel for the Defendants shall also immediately review the files in Index Nos. 17424-2006 and 17458-2006 to determine which documents should be sealed pursuant to this order including documents attached to papers submitted in [*3]motion sequence No.s 005 and 006; and it is further
ORDERED that the documents sealed by this order shall not be shown to any persons absent written order of this Court and if the Clerk of the Court receives any copies of the 1993 strategy paper or other documents sealed by this order, those documents shall also be sealed unless this Court issues a written order to the contrary; and it is further
ORDERED that all other relief requested by any person or party is denied.
In this civil action the Plaintiffs seek damages and injunctive relief based upon their exposure to contaminants from the alleged migration of these contaminants in an underground plume from a decommissioned manufactured gas plant in Bay Shore that was formerly owned by predecessors of KeySpan. This case raises issues of public concern not only because of the effect of the plume on the health, safety and welfare of the persons directly in the path of the plume, but because the financial costs involved in remediating the plume of contaminants may be borne by the ratepayers of KeySpan if KeySpan passes those expenses through to the utility's customers and the plume itself allegedly is or soon may be polluting the Great South Bay. The Plaintiffs and the KeySpan Defendants have been vigorously represented by their respective counsel throughout this litigation.
The Plaintiffs previously sought disclosure of a document, known by various names, in a motion to unseal (motion sequence #
004). This document is called a "strategy paper" in this decision [FN1] but it has also been known as a strategy report and it was prepared by LILCO in 1993. It is this document that is the primary focus of this motion by the KeySpan Defendants although other documents that KeySpan alleges are privileged also are at issue herein. The Plaintiffs' prior motion to unseal records requested the disclosure of other documents listed in a Keyspan privilege log prepared for a different litigation if those documents contained information on the subject of manufactured gas plants, relevant to the issues in this matter. The other law suit was commenced in New York Supreme Court approximately ten (10) years ago, involves insurance protection purchased by LILCO from a number of insurance companies and it is still a pending matter (bearing Index No. 604714-1997).
The 1993 "strategy paper" was sealed in the Supreme Court, New York County civil action between Plaintiffs Long Island Lighting Company and Marketspan Corporation d/b/a Key Span Energy, and Defendants Aetna Casualty & Surety Company and fourteen other insurance companies as Defendants, bearing Index No. 604714-1997. This Court previously issued a [*4]decision that found that the 1993 "strategy paper" should not be produced by the KeySpan Defendants as part of the discovery process in this Suffolk action because it was protected by attorney client privilege (see also, Long Island Lighting Co. v. Allianz Underwriters Ins. Co., 301 AD2d 23, 749 NYS2d 488).
This 1993 strategy paper, according to the Appellate Division, First Department in Long Island Lighting Co. v. Allianz Underwriters Ins. Co. (supra ) was:
co-authored by LILCO's Environmental Engineering Department and Legal Department, entitled "Manufactured Gas Plant Sites: Hempstead Gas Plant, Bay Shore Gas Plant—Investigation Summary and Remediation Strategy Recommendations" (hereinafter, together with its transmittal memorandum, the December 1993 Report).[FN2] The December 1993 Report, which was marked "Privileged and Confidential—Attorney Work Product—Attorney-Client Communication," analyzed the federal and state statutory and regulatory framework relevant to MGP sites in New York, discussed the anticipated action of the regulatory agencies concerned, summarized the results of LILCO's investigation of the environmental damage at the two sites, set forth several remediation options for each site and the estimated cost of each option, and offered recommendations for the option to be implemented for each site and the strategy to be pursued in negotiations with the regulators. The recommendations made in the December 1993 Report were based on a combination of factors, legal as well as scientific and economic.
Although this Court previously refused to direct that the KeySpan Defendants turn over the 1993 strategy paper as part of the pre-trial discovery process in this case because the contents of that document were protected by attorney client privilege, the Plaintiffs, apparently with the advice of counsel, have continued to disseminate this privileged paper to the public, governmental entities and the media and they may also be distributing other documents of the KeySpan Defendants that are possibly protected by an attorney client privilege.
Newsday and News 12 (hereinafter "intervenors") are among the entities and persons who have received copies of the 1993 strategy paper and other potentially privileged documents. The Plaintiffs and their attorneys have engaged in a course of conduct designed to disseminate the privileged document and other documents that may be protected by privilege to as wide a public [*5]audience as they can despite the fact that the January 19, 2007 decision of this Court in motion sequence #
004 has not been modified or reversed and the attorneys for the KeySpan Defendants have forcefully, properly and expeditiously opposed and protested the actions of the Plaintiffs and their attorneys in distributing these materials to the public.
The Plaintiffs' attempt to raise the fraud exception to the attorney client privilege rule to excuse their actions is without merit. It is true that client communications in furtherance of a fraudulent scheme are not protected by attorney-client privilege (see, Surgical Design Corp. v. Correa, 21 AD3d 409, 799 NYS2d 584). However, here there is no factual basis for finding any probable cause that the 1993 strategy paper or the other documents that this Court has not yet ruled upon were prepared in furtherance of a fraud or a crime (see, Nowlin v. People of State of New York, 1 AD3d 172, 767 NYS2d 77).[FN3]
To establish entitlement to a preliminary injunction against the Plaintiffs and other persons, the KeySpan Defendants must show a probability of success on the merits, a danger of irreparable injury if an injunction is not given, and a balance of the equities in their favor (see, Aetna Ins. Co. v Capasso, 75 NY2d 860, 862, 552 NE2d 166, 552 NYS2d 918; Regatta Condominium. Assn. v Village of Mamaroneck, 303 AD2d 741, 742, 758 NYS2d 813; Klein, Wagner & Morris v Lawrence A. Klein, P.C., 186 AD2d 631, 588 NYS2d 424). Further, a preliminary injunction is an extraordinary and drastic remedy rarely granted by the Courts and, then only under unusual circumstances where such relief is required to maintain the status quo pending the trial (see, Rosa Hair Stylists v Jaber Food Corp., 218 AD2d 793, 794, 631 NYS2d 167; Times Square Stores Corp., v Bernice Realty Co., 107 AD2d 677, 682, 484 NYS2d 591). While injunctive relief requires the Court to address each of these prongs, the issuance of a protective order does not require a different, less exacting, showing and this Court, pursuant to CPLR § 3103 (c), "may make an appropriate order, including an order that the information be suppressed" if documents have been improperly or irregularly obtained and a substantial right of a party has been prejudiced.
This Court had already set in place a procedure to determine the privileged status of documents in this matter and the Plaintiffs and their attorneys have chosen to ignore that procedure and have taken significant steps to disseminate possibly privileged documents and a document this Court has already found not to be discoverable to a wide group of persons and the news media. If the Court does not now immediately stop further actions by the Plaintiffs, their resort to self help will [*6]render futile any future order of this Court seeking to preserve the privilege to which the KeySpan Defendants are entitled under the law. The purpose of the limited injunction and protective order issued today is not to restrain free speech but to permit the parties the opportunity to utilize the judicial procedures and system in place to obtain rulings and, if necessary, an appellate review of those rulings in a reasoned, procedurally sanctioned manner.
While disclosure of a privileged document may result in a waiver of the privilege, inadvertent disclosure or unauthorized disclosure of the privileged documents to a party or to third persons does not result in a waiver of the attorney client privilege by a party to an action (see, New York Times Newspaper Div. of New York Times Co. v. Lehrer McGovern Bovis, Inc., 300 AD2d 169, 752 NYS2d 642). In New York Times Newspaper Div. of New York Times Co. v. Lehrer McGovern Bovis, Inc., (supra ), the Appellate Division, First Department stated:
Disclosure of a privileged document generally operates as a waiver of the privilege unless it is shown that the client intended to maintain the confidentiality of the document, that reasonable steps were taken to prevent disclosure, that the party asserting the privilege acted promptly after discovering the disclosure to remedy the situation, and that the parties who received the documents will not suffer undue prejudice if a protective order against use of the document is issued (cites omitted).
The issue of whether the KeySpan Defendants have waived their attorney client privilege has already been addressed by the Appellate Division, First Department in Long Island Lighting Co. v. Allianz Underwriters Ins. Co., (supra ) when it stated:
Turning to the issues relating to the December 1993 Report, we find, contrary to Supreme Court's view, that LILCO established in its initial cross motion for a protective order that it did not waive any privilege attaching to the December 1993 Report by inadvertently disclosing it in the Federal Action.
This is not a case where the parties asserting the privilege, the KeySpan Defendants, waited an unreasonably long period of time to seek an order to protect the documents that were improperly disclosed (see, AFA Protective Systems, Inc. v. City of New York, 13 AD3d 564, 788 NYS2d 128, 130). The KeySpan Defendants have shown that it is likely that the documents that they seek to protect are privileged and that the Plaintiffs have disregarded the process set in place by this Court to determine the privileged status of those documents. Further, the Plaintiffs and their attorneys have shown no inclination nor have they offered to cease dissemination of the documents that are or may be privileged until the Courts have finally ruled on their contentions. Therefore, in order to maintain the status quo and to prevent further irreparable injury, the Court [*7]will grant the application of the Defendants for both a protective order and injunctive relief as against the Plaintiffs and the attorneys for the Plaintiffs to the extent provided in this order.
The CPLR requires that the Court direct that an undertaking be filed whenever injunctive relief is ordered (see, CPLR § 6312; Hightower v. Reid, 5 AD3d 440, 772 NYS2d 575; Glorious Temple Church of God in Christ v. Dean Holding Corp., 2006 NY App. Div. LEXIS 15873, 2006 NY Slip Op 10018, NY App. Div. 2d Dep't Dec. 26, 2006; ). The Court therefore directs the KeySpan Defendants to file an undertaking in the amount of $500.00.
While this Court has issued a protective order and an injunction against the Plaintiffs and their attorneys, it must still address the KeySpan Defendants' application for restraints against third persons who are not parties to this action and for a protective order aimed at restricting the press from using the privileged documents or potentially privileged documents received from the Plaintiffs. Newsday and News 12 have appeared herein and previously have requested leave to intervene in this action to address this issue (see motion sequence #
005). The Court granted the motion for intervention of Newsday and News 12 (hereinafter "intervenors") and it has received submissions from the attorneys for the intervenors in opposition to the motion by the KeySpan Defendants.
As noted above, the intervenors herein, Newsday and News 12, have been provided with copies of some if not all of the privileged and potentially privileged documents in the possession of the Plaintiffs by persons involved in this litigation or persons in contact with the Plaintiffs and the Plaintiffs' attorneys. The KeySpan Defendants request that the Court issue various restraints against the intervenors including preventing them from divulging the contents of the documents. The intervenors oppose the motion of the KeySpan Defendants to restrain them and seek permission of this Court to utilize the information contained in the documents that they have obtained from the Plaintiffs and the Plaintiffs' representatives. There is no allegation herein that the intervenors have conspired with the Plaintiffs or agents of the Plaintiff to improperly obtain the documents that are the focus of this decision.
The intervenors are respected news organizations on Long Island and they allege herein that it would be improper to restrain them and any such restraint on their right to publish would violate the protections afforded them under both the United States Constitution and the New York State Constitution. This Court agrees with that assessment. Both the United States Constitution and the New York Constitution protect the rights of free speech and freedom of the press, both of which are basic freedoms that we enjoy as Americans. The United States Constitution and the New York Constitution prohibit the passing of any law that restricts or abridges the liberty of the press to publish. This broad constitutional prohibition on restraints on the press does not exempt from its operation comment on items covered by attorney client privilege if the document covered by attorney client privilege comes into conflict with the right of the press to publish and [*8]comment on matters of public concern as long as the press did not improperly conspire to obtain the material that was covered by the privilege (see, Smith v. Daily Mail Publ'g Co., 443 U.S. 97, 103, 99 S.Ct. 2667, 61 L.Ed.2d 399; see generally, In re Zyprexa Injunction, __ F. Supp. 2d __, 2007 WL 460838 (E.D.NY Feb. 13, 2007).
The United States Supreme Court in New York Times Co. v. United States, (403 U.S. 713, 91 S.Ct. 2140, 29 L.Ed.2d 822) stated:
Any system of prior restraints of expression comes to this Court bearing a heavy presumption against its constitutional validity.' Bantam Books, Inc. v. Sullivan, 372 U.S. 58, 70, 83 S.Ct. 631, 639, 9 L.Ed.2d 584 (1963); see also Near v. Minnesota ex rel. Olson, 283 U.S. 697, 51 S.Ct. 625, 75 L.Ed. 1357 (1931).
In the opinion issued in New York Times Co. v. United States, (supra ), it was stated:
Madison and the other Framers of the First Amendment, able men that they were, wrote in language they earnestly believed could never be misunderstood: Congress shall make no law * * * abridging the freedom * * * of the press * * *.' Both the history and language of the First Amendment support the view that the press must be left free to publish news, whatever the source, without censorship, injunctions, or prior restraints.
While the Federal District Court in the case of In re Zyprexa Injunction (supra ) did issue an injunction restraining persons, including named members of the press, who, had individually conspired to improperly obtain privileged and non discoverable material, the individuals enjoined in that case were acting with "unclean hands" and the press organizations were not ultimately enjoined by the Federal Court (see also, Smith v. Daily Mail Publ'g Co., supra - "[I]f a newspaper lawfully obtains truthful information about a matter of public significance then state officials may not constitutionally punish publication of the information, absent a need*** of the highest order."; New York Times Co. v. United States, supra - Pentagon papers case).
This being said, the Court reiterates that attorney client privilege is an important tenet of this Country's jurisprudence and a cornerstone protection for the rights of its citizens. The Court in Prizel v. Karelsen, Karelsen, Lawrence & Nathan, 74 F.R.D. 134, 138 (S.D.NY 1977), quoting Judge Breitel in People v. Lynch, 23 NY2d 262, 296 NYS2d 327 (1968), stated:
[The attorney-client] *** privilege is of a high order. Perhaps as valuable as the [*9]privilege against self incrimination is the freedom of confidential communication between lawyer and client.'
In Spectrum Sys. Intern'l Corp. v. Chemical Bank, (78 NY2d 371, 575 NYS2d 809, 581 NE2d 1055), Chief Judge Kaye (then Associate Judge) stated the following:
The attorney-client privilege, the oldest among common-law evidentiary privileges, fosters the open dialogue between lawyer and client that is deemed essential to effective representation.
Further, to underscore the universal acceptance of the necessity of the privilege for our system to function effectively, among the various privileges recognized by our jurisprudence, the attorney client privilege is the only one acknowledged by every State of the Union, although its scope does vary by jurisdiction (see, 81 American Jurisprudence 2d Witnesses § 329).
However, even this privilege, important as it is, cannot be used to restrict the properly exercised, constitutionally protected freedom of the press to publish. The intervenors did not obtain the document at issue illegally or by improper means although the persons who gave those documents to them may have acted improperly. Therefore, the Court declines to issue an injunction against the intervenors.
While this Court has not as yet determined whether various other documents in this action are protected by a privilege, it has provided for a procedure that would permit a review of those documents. The subject matter of this litigation is of great public concern and the attorney client privilege exercised by the Defendants will be restrictively applied to encourage full and fair disclosure of information because this case will affect the health, safety and welfare of the public.
With regard to other third persons and persons using the internet who may have had access to the privileged documents, the problems raised by the issuance of restraint against those unnamed individuals and entities were directly addressed by United States District Judge Jack B. Weinstein in In re Zyprexa Injunction (supra ) when he refused to issue an injunction against unnamed persons and cited People of the State of NY by Vacco v. Operation Rescue Nat'l, (80 F.3d 64, 70 (2d Cir.1996)). The Courts of New York have not generally permitted injunctions against unnamed persons (see, Bryant Ave. Tenants' Ass'n v. Koch, 131 AD2d 318, 516 NYS2d 211) and the KeySpan Defendants have not shown that exigent circumstances require a deviation from the generally accepted rule that a Court will not issue relief against individuals over whom it has not obtained jurisdiction. Since injunctions should be crafted by the Court to be as limited and restrictive as possible, the Court declines to issue any further restraints on either the Parties or upon third persons at this time.
Dated:________________________SANDRA L. SGROI, J. S. C.
Footnotes
Footnote 1:The strategy paper is dated December 27, 1993, and it was prepared by the Environmental Engineering Department and the Legal Department of LILCO. It is conspicuously labeled "privileged and confidential" on each page of the document.
Footnote 2:The Court has identified this document in the temporary restraining order as the "strategy paper" and therefore in an attempt to be consistent with that stay has called that document the "strategy paper." It is the same document the Appellate Division is referring to in Long Island Lighting Co. v. Allianz Underwriters Ins. Co. (supra ).
Footnote 3:Even if there were some probable cause to rely upon the fraud exception to the attorney client privilege doctrine, the proper recourse of Plaintiffs and Plaintiffs' attorneys would be to make application to the Court for relief from the prior order and not to unilaterally disclose documents in the midst of a litigation without some direction from the Court.