Free Order - District Court of Delaware - Delaware

Case 1:04-cv-01339-SLR Document 158 Filed 05/15/2007 Page 1 of 4
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
IN RE: ALH HOLDINGS, LLC ) Civ. N0. 04-1339-SLR
O R D E R
At Wilmington this 15th day of May, 2007, having now reviewed in camera all of
the documents submitted by defendants as being protected by the attorney client
privilege;
IT IS ORDERED that all but a single document (L13098-L13104, and any other
copies of it) shall be produced to plaintiffs, as I conclude that the remaining documents
are not entitled to protection, for the reasons that follow:
1. Under Delaware law, the attorney client privilege protects "(1)
communications (2) made between privileged persons (3) in confidence (4) for the
purpose of obtaining or providing legal assistance for the client." SIPCA Holdings S.A.
v. Optical Coating Lab., Inc., Civ. A. No. 15129, 1996 WL 577143, at *2 (Del. Ch. Sept.
23, 1996). Although the application of the privilege is rarely disputed where a client is
disclosing present facts to a retained lawyer for the sole or primary purpose of getting
that |awyer’s legal advice or professional assistance, the analysis becomes more
complicated when the context primarily involves business communications or where the
lawyer occupies multiple roles. In the first instance,
the presence of a lawyer at a business meeting called to consider
a problem that has legal implications does not itself shield the
communications that occur at that meeting from discovery, even
if all persons present at the meeting are bound by contract or

Case 1:04-cv-01339-SLR Document 158 Filed 05/15/2007 Page 2 of 4
professional ethics to keep the discussions confidential. What
are protected are communications to a lawyer by or on behalf
of a client for the purpose of the rendition of legal services or
lawyer statements constituting legal services. The discussions
that occur at [a] . . . corporate meeting are discussions among a body
of persons for the purpose of formulating an appropriate business
strategy. As such they are, in a sense, ultimately disclosures for
the benefit of the responsible business decision-maker. Legal
considerations may, of course, play a part in the formulation of a
business policy or strategy, but unless the claimant of a privilege
can specifically identify a disclosure made specifically to a lawyer
for the purpose of assisting in the rendition of legal services
(and not made at the meeting for purposes of business strategy),
the fact that a lawyer gave incidental (or important) advice in the
course of such a meeting does not protect from disclosure
statements made at the meeting.
g (emphasis in original). Certainly written communications (e.g., emails) wherein
business strategies constitute the primary focus of discussion fall within the analytical
framework identified above. Moreover, in situations where a lawyer occupies multiple
roles, so that it is not readily ascertainable from the documents whether they should be
protected from disclosure by the privilege, the status of such documents
should be resolved against the claim of privilege .... because
it was the defendants who would have created the problem,
by placing [the lawyer] in multiple — and potentially conflicting —
fiduciary roles. Having created that conflict and its resulting
ambiguity, and having been in a position to prevent the conflict
from arising in the first place, the defendants . . . cannot be
allowed to benefit from the ambiguity by asserting a privilege that
might not otherwise have been available.
Grimes v. LCC Int'I, Inc., Civ. A. No. 16957, 1999 WL 252381, at *2 (Del. Ch. April 23,
1999) (citation omitted).
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Case 1:04-cv-01339-SLB Document 158 Filed 05/15/2007 Page 3 of 4
2. In the case at bar, both complicating factors are present. It is not apparent
from the documents reviewed in cameral that the communications to and from Isaac
Neuberger? are encompassed by the privilege. There is no unambiguous indication that
Mr. Neuberger was retained as a lawyer by any party other than SELl<;° indeed, many
ofthe 2002 communications I reviewed involved Messrs. Neuberger and Lamm working
in conjunction with Mr. Lamm's attorney (J. Jay Lobell) to put a deal together to salvage
ALH generally, and the Class B investment specifically. Even if I were to assume that
the parties involved in the communications at issue considered Mr. Neuberger to be a
lawyer representing their interests, it is apparent that the focus of the communications
was business strategy, not the rendition of traditional legal advice. Under these
circumstances, I decline to allow defendants to benefit from the ambiguities they
1For instance, I extracted all of the emails created during the year 2002 (the first
year at issue), put them in chronological order, and tracked the correspondence
between the various players to try to determine their relationship.
2Mr. Neuberger was a lawyer who represented the majority ownership of SELK,
one of the Class B investors in ALH. (L13B13)
3Of the countless documents I reviewed, there is a single email from Mr. Lamm
to Mr. Neuberger that is identified by Mr. Lamm as a communication between attorney
and client. (L13925, dated May 22, 2002) This characterization is inconsistent with a
later email, however, where Mr. Lamm suggests to Mr. Arenson that the Class B’s
should compensate Mr. Neuberger for the time and expenses he has devoted to the
"B’s". (CLASSB01439, dated July 31, 2002). There has been no retention agreement
brought to my attention whereby Mr. Neuberger was formally retained by any ofthe
parties to the transactions in dispute, or even any document wherein Mr. Neuberger
claims that he is representing, as an attorney, the interests of Mr. Lamm or the Class B
investors or anyone else.
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Case 1:04-cv—01339—SLR Document 158 Filed 05/15/2007 Page 4 of 4
created in this truly messy business deal gone awry, by blanketing their
communications with the protection of the attorney-client privilege.
United Staés District Judge
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