United States District Court, Southern District of Indiana, Evansville Division
ENTRY ON PLAINTIFF’S MOTION TO COMPEL TESTIMONY AND DOCUMENTS
William G. Hussmann, Jr. United States Magistrate Judge Southern District of Indiana
This matter is before the Magistrate Judge on Plaintiff Berry Plastics Corporation’s Motion to Compel Testimony and Documents (Filing No. 183) and Chief Judge Young’s Order of Reference of December 19, 2013. The motion is fully briefed. (Filing No. 184; Filing No. 190; Filing No. 192.) The Magistrate Judge, having considered the motion, the parties’ filings, and relevant law, and being duly advised, hereby DENIES Berry’s motion.
At the outset, the Magistrate Judge wishes to emphasize the scope of this Entry. Berry asks the Court to invoke the crime-fraud exception to the attorney-client privilege to compel Intertape to produce documents and testimony it has withheld as privileged. This raises a question regarding the scope of discovery-and nothing more.
Berry offers numerous allegations and offered extensive evidence suggesting Intertape engaged in inequitable conduct or defrauded the United States Patent and Trademark Office (USPTO). Intertape responds with numerous defenses and extensive evidence suggesting its dealings with the USPTO were lawful and forthright. For the Magistrate Judge to determine whose account is truthful or whose evidence is most compelling would exceed his authority in this action and would be improper at this stage in the litigation. Whether Intertape has perpetrated a fraud upon the USPTO is one of the ultimate issues in the action and will be decided at trial before Chief Judge Young. (Filing No. 1 at ¶¶ 38–39, 45, 47.) Here, the Magistrate may consider only whether the parties’ respective showings merit imposition of the crime-fraud exception to the attorney-client privilege during the discovery phase of the litigation.
II. Legal Standard
A party to litigation is entitled to discover from his adversary “any nonprivileged matter that is relevant to any party’s claim or defense.” Fed.R.Civ.P. 26(b)(1). Where federal law decides the case, federal common law determines the existence and applicability of any evidentiary privilege. Fed.R.Evid. 501; see also United States v. BDO Seidman, LLP, 492 F.3d 806, 814 (7th Cir. 2007).
Federal common law protects from discovery communications between attorneys and their clients, but the privilege is negated where the communications are made in furtherance of a crime or fraud. United States v. Zolin, 491 U.S. 554, 562–63 (1983). When courts apply the attorney-client privilege, they compromise their truth-seeking mission in deference to the principle that justice is better served by ensuring free and frank discussions between attorneys and clients. Id. at 562. Because neither interest is promoted where a client seeks (or an attorney offers) advice to facilitate the perpetration of a crime or fraud, the privilege does not reach such communications. Id. at 562–63.
The parties agree that Federal Circuit precedent controls application of the crime-fraud exception in patent cases like this one. (See Filing No. 184 at ECF p. 9 and Filing No. 190 at ECF p. 6 (both applying Unigene Labs., Inc. v. Apotex, Inc., 655 F.3d 1352 (Fed. Cir. 2011)).) To pierce the attorney-client privilege, Berry must present a prima facie showing that Intertape has engaged in common-law fraud. E.g., In re Spalding Sports Worldwide, Inc., 203 F.3d 800, 807 (Fed. Cir. 2000). To prevail, Berry must offer evidence demonstrating that:
1) Intertape made a false representation as to a material fact;
2) Intertape made its false representation with intent to deceive;
3) the USPTO justifiably relied upon Intertape’s false representation; and
4) the USPTO suffered an injury as a consequence of its reliance on Intertape’s ...