Identity of Confidential Informants in Securities Class Action Are Not Protected from Disclosure as Work Product — As Distinct from Request for All Witnesses Interviewed, Which Seeks Protected Information

Plumbers & Pipefitters Local Union No. 630 Pension Annuity Trust Fund v. Arbitron, Inc., 2011 U.S. Dist. LEXIS 131091 (S.D.N.Y. Nov. 14, 2011):

This decision addresses a discovery dispute. Defendant Arbitron, Inc., moves for an order directing the lead plaintiff, Plumbers and Pipefitters Local Union No. 630 Pension-Annuity Trust Fund (Plaintiff), to disclose the names of 11 former Arbitron employees whom the Complaint designates as "Confidential Informants" (CIs). ***

In this Court's view, the names of the persons identified in the SAC as confidential informants are not entitled to any work product protection; and if any work product protection does apply to these names, it is minimal. In the first instance, it is important to isolate just how limited a disclosure is at issue in this case. Plaintiff has already disclosed the fact that these 11 people (and 72 others), all identified to the defense by name, likely possess discoverable information [in Plaintiffs’ 26(a)(1) disclosures]. Plaintiff has also already disclosed important aspects of what the 11 CIs have stated in interviews about the events at issue in this case. To the extent Lead Plaintiff has chosen not to reveal other parts of the CIs' witness statements, Arbitron's present motion does not seek their disclosure. All that Arbitron seeks to learn is which of the 83 names identified by Plaintiff correspond to the 11 CIs described in the SAC. This would expedite the discovery process, for all parties, by allowing Arbitron (as it has explained) to focus its depositions immediately on these important "firsthand" witnesses, rather than having to engage in a costly process of elimination in which it would take numerous depositions simply to smoke out which of the 83 disclosed names are the 11 CIs.

It is difficult to see how syncing up the 11 CIs with these already disclosed names would reveal Plaintiff's counsel's mental impressions, opinions, or trial strategy. Plaintiff's argument on this point was that opposing counsel, upon learning the names of the 11 CIs, might surmise that Plaintiff's counsel had judged the other 72 named witnesses to be less helpful witnesses for its cause. Perhaps so, but any such surmise would be just that, surmise — not a reliable indicator of counsel's actual thought processes. There are many other plausible reasons for a counsel not to list a witness in a complaint (as a CI or by name) apart from an assessment that the witness was peripheral. These may include, among others, the witness's insistence on not being quoted, even pseudonymously, until later in the case; and a strategic judgment by counsel that it is best not to unduly showcase or "out" a particularly potent trial witness early in the life-cycle of a case. The Court thus finds, on the facts here, that an insufficient showing has been made that opinion work product would be implicated by granting the pending motion. See In re Grand Jury Subpoena Dated July 6, 2005, 510 F.3d at 183-84.

It is also relevant to the Court's work product analysis that the CI's names will almost certainly eventually become known during this litigation, if Arbitron pursues the deposition process long enough (as it has represented that it will given the CIs' centrality). ***

In holding that the CIs' names in this case are not entitled to work product protection, the Court is, finally, mindful that Plaintiff has utilized the CIs offensively. By attributing extensive factual allegations to the 11 CIs in the SAC, Plaintiff buttressed its complaint, presumably with the goal of protecting it against dismissal. It is, of course, entirely proper and common for a plaintiff to rely on confidential witnesses in a complaint, and attributions to such witnesses may and often are credited on motions directed to the pleadings. See Novak v. Kasaks, 216 F.3d 300, 314 (2d Cir. 2000). But, once the discovery phase begins, the balance of interests shifts. The priority becomes reciprocal and robust fact-gathering as the parties seek to discover relevant evidence. See IPO Securities Litigation, 220 F.R.D, at 37. The parties' interrogatories — including interrogatories aimed at helping the propounding party assess which witnesses are most likely to possess probative, admissible evidence — are an integral part of this process.

In the Court's view, where a party has attempted to satisfy the pleading requirements of the PSLRA "by 'showcasing' statements from a limited number of confidential witnesses, it may not thereafter refuse to disclose who they are" on grounds of work product. Ross v. Abercrombie & Fitch Co., No. 2:05-CV-0819,2008 WL 821059, at *3 (S.D. Ohio Mar. 24, 2008); id. ("partial disclosure of information protected by the work product doctrine may constitute a waiver, and [] a party is not permitted to use such doctrines as both a shield and a sword."); cf. NXlVM Corp. v. O'Hara, 241 F.R.D. 109, 142 (N.D.N.Y. 2007) ("Just as the attorney-client privilege cannot be used as a shield and sword, neither can a work product document, especially one that does not include an attorney's impression, opinions, or strategies."); Computer Assoc. Int'l, Inc. v. Simple.com, Inc., No. 02-CV-2748, 2006 WL 3050883, at *3 (E.D.N.Y. Oct. 23, 2006) (as to assertions of fact work product, noting the need for "courts to 'balance the policies to prevent sword and shield litigation tactics with the policy to protect work product'") (citing In re Echostar, 448 F.3d 1294, 1302 (Fed. Cir. 2006)).

Even assuming some minimal work product protection applies to the 11 CIs' identities, such protection would be overcome in this case. ***

The deposition process in this case thus could potentially vary in scope by threefold or more depending on whether Arbitron's interrogatory as to the names of the CIs is enforced. In the Court's view, Arbitron has shown both a "substantial need" for these names, and that it would entail "undue hardship[] to obtain the substantial equivalent... by other means." IPO Securities Litigation, 220 F.R.D. at 35. Relevant in this regard, Arbitron is a mid-size company (between 1,200 and 1,500 employees during the events at issue) and its counsel has represented that the cost of preparing for and taking dozens of additional depositions of former employees would impose a substantial expense on the company. ***

In reaching this conclusion, the Court has carefully reviewed the many cases addressing similar applications. Although many such cases turn on particular facts, it is safe to say that the case law is not unitary as to the application of the work product doctrine to motions to compel the names of a witness referenced but not named in a complaint. Of these cases, the Court found the analysis in four particularly instructive.

In In re Aetna,[No. Civ. A. MDL 1219, 1999 WL 354527, at *2 (E.D. Pa. May 26, 1999)], the court enforced interrogatories that sought the names of witnesses identified in the complaint by such terms as "a former regional general manager of Aetna" or "a former Aetna vice-president of sales and customer service." The court held that the names of such individuals were not protected by the work product doctrine. It noted that "[p]laintiffs chose to include this allegation in their Second Amended Complaint and chose the way in which this allegation was framed. Defendants are entitled to the discovery of the name and address of those persons described in the Second Amended Complaint." 1999 WL 354527, at *2. The court also held that disclosure of the names would not reveal opinion work product; and that even if any "minimal work product content" were implicated, it was outweighed: "Without the Court's intervention, Defendants would be forced to engage in a time-consuming and expensive effort to ferret out the veritable needle in the haystack." Id. at *4 (any qualified protection "must yield to the need of the Defendants to get on with discovery in this case").

In In re Theragenics Corp. Sec. Litig., 205 F.R.D. 631 (N.D. Ga. 2002) ... the court addressed a set of interrogatories, upholding two ... which sought the names of persons referenced but not named in the complaint. Rejecting the claim that such information was "core work product," the court observed that identifying such persons "tells the defendants nothing new about the mental processes of the plaintiff's lawyers, leaving the policy behind the work product doctrine intact." Id. at 635 (citing American Floral Servs., Inc. v. Florists' Transworld Delivery Ass 'n, 107 F.R.D. 258, 261 (N.D. 111. 1985)). The Court added: "The disclosure sought here will provide minimal, if any, disclosure of an attorney's thought processes. It will not reveal Plaintiffs' litigation strategy. Certainly, the work product doctrine was not devised to protect all work by attorneys in the global sense." Id. at 636.

In In re Harmonic, [245 F.R.D. 424, 427 (N.D. Cal. 2007)], the court similarly enforced interrogatories as to the names of five confidential witnesses, holding that the work product doctrine does not apply. It noted, on facts closely akin to those here, that because plaintiff's initial disclosures had already listed the five among the 77 witnesses listed on its initial disclosures, "[t]he issue here ... is not if the CWs' identities will ever be discovered, but rather when they will be discovered." 245 F.R.D. 424, 427 (N.D. Cal. 2007) (citation omitted). Thus, "there is no cognizable strategic advantage to be gained by Plaintiffs in withholding the identities. The only effect is to force the Defendants to expend resources on taking the depositions of 77 people in order to obtain the information." Id. at 428. The court rejected the claim that revealing the CWs' names would reveal trial strategy. "Plaintiffs have already revealed their legal strategy by including the CWs' statements in the SAC." Id. As in Aetna, the court concluded by holding that even if some de minimus factual work product were implicated, that interest was outweighed by "the interest in discovery." Id. at 429.

Finally, in In re Marsh & McLennan, [No. 04-CV-8144, 2008 WL 2941215, at *3 (S.D.N.Y. July 30, 2008)], a case brought in this District, the court upheld a discovery demand seeking production of "documents sufficient to identify each and every" of the 17 confidential witnesses referenced in the complaint. The court held that any privilege that attached to these identities is "limited in nature," because those identities bear only an "attenuated" relationship to an attorney's case strategy or mental impressions, and reveal no more "about an attorney's mental processes than does the identification of a witness by name in the complaint itself." No. 04-CV-8144, 2008 WL 2941215, at *3 n.5 (S.D.N.Y. July 30, 2008). The court also noted that CWs who will serve as trial witnesses will necessarily be identified; and as to others, it may be possible to deduce their identities from the complaint; thus, "there is actually little confidentiality at stake." Id. Further, even if some work product protection attached to the identities, it was outweighed, because identifying the CWs by other means would take a "substantial number" of depositions. Id. at *4.

Footnote 8. Although it addresses an issue not raised here — a discovery demand that plaintiff identify the names of all persons alleged in its pleadings to have engaged in allegedly wrongful business practices — the decision in IPO Securities Litigation, [220 F.R.D. 30, 34 (S.D.N.Y. 2003)], also from this District, also offers relevant guidance. Upholding that demand, the court there noted that the work product privilege "does not... ordinarily protect the identities of... witnesses." 220 F.R.D. 30, 34, n.23 (S.D.N. Y. 2003) (citing Edna Selan Epstein, The Attorney-Client Privilege and the Work-Product Doctrine 302-03 (1997)). The court in IPO Securities Litigation also distinguished as inapposite the circumstance in which a party demands a list of persons whom opposing counsel has interviewed. Id. at 35. That circumstance — in which one party is essentially seeking, and potentially piggybacking on, a roadmap of an adversary's pretrial investigation — implicates core policies behind the work product doctrine. A number of the cases that Plaintiff has cited here, in fact, arise from such a demand or ones similar to it, not from an interrogatory akin to the one here. See, e.g., Electronic Data Systems Corp. v. Steingraber, No. 4:02-CV-225, 2003 WL 21653405, at *1 (E.D. Tex. July 9, 2003) (interrogatory asked defendant "to identify individuals who have been interviewed concerning the relevant allegations in the case"); In re Ashworth, Inc., Sec. Litig., 213 F.R.D. 385, 386 n.l (S.D. Cal. 2002) (interrogatory asked adversary to identify each former employee "who has provided information which forms the basis for any allegations" in the complaint); In re Gupta Corp. Sec. Litig., 1995 U.S. Dist. LEXIS 21847, at *3 (N.D. Cal. July 18, 1995) (interrogatories "asked counsel for plaintiff to identify each person counsel for plaintiff had contacted about this case and to disclose what each such person told counsel for plaintiff); Commonwealth of Massachusetts v. First Nat'l Supermarkets, Inc., 112 F.R.D. 149 (D. Mass. 1986) (interrogatory asked adversary, inter alia, to "[i]dentify each person who was interviewed in connection with any ... investigation"); Board of Education of Evanston Township High School, 104 F.R.D. 23, 32 (N.D. 111. 1984) (interrogatory asked adversary "to identify anyone they may have interviewed" concerning the subject of the litigation). The Court acknowledges, however, contrary authority as to the application of the work product doctrine to the identification of confidential witnesses named in a complaint. See, e.g., In re SLM Corp. Sec. Litig., No. 08-CV-1029, 2011 WL 611854 (S.D.N.Y. Feb. 15, 2011); In re Veeco Instruments, Inc. Sec. Litig, No. 05-MD-1695, 2007 WL 274800 (S.D.N.Y. Jan. 29, 2007); In re MTI Technology Corp. Sec. Litig, No. SACV 00-0745 DOC, 2002 WL 32344347 (CD. Cal. June 13, 2002). For the reasons set forth in this opinion, the Court finds the analysis in In re Aetna, In re Theragenics, In re Harmonic, and In re Marsh & McLennan the most persuasive.

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