Contract analysis

I. EXECUTIVE SUMMARY On June 14, 2023, counsel for Plaintiff Vantor Holdings Corp. ("Vantor") — Jason Whitford of Caldwell Royce & Shapiro LLP ("CRS") — sent a letter to Calderwood & Harkness LLP challenging seven entries on Stonefield Logistics Group Inc.'s ("Stonefield") Privilege Log. Specifically, CRS challenges Entries 312 through 318, asserting that the documents described therein were improperly withheld from

II. BACKGROUND A. The Privilege Log and the Challenged Entries Stonefield served its first privilege log on April 14, 2023, concurrently with Stonefield's first production of documents in this litigation. That initial production encompassed 42,387 documents totaling approximately 186,000 pages, bearing Bates numbers SLG-000001 through SLG-042387. The accompanying privilege log identified 1,247 documents withheld on t

III. VANTOR'S CHALLENGE TO ENTRIES 312–318 A. Summary of CRS's Arguments CRS's June 14, 2023 letter advances four arguments in support of its contention that Entries 312–318 are improperly withheld. Each argument is summarized below:

1. Business Purpose / Not Legal Advice. CRS contends that the Hess–Beckwith communications concern "ordinary business decisions" about contract administration and compliance monitoring. Specifically, CRS argues that decisions about whether to issue a cure notice, how to assess VTS's performance data against contractual benchmarks, and how to effectuate the termination of a commercial agreement are "operational" decis

2. Dual-Purpose Communications. In the alternative, CRS argues that even if the obtaining of legal advice was one purpose of the communications, it was not the primary purpose. CRS contends that the primary purpose of the Hess–Beckwith exchanges was to obtain business advice about how to manage the VTS contractual relationship and administer the cure and termination process. CRS invokes the "primary purpose" test app

3. Waiver by Disclosure to Non-Attorney Business Personnel. CRS notes that Entry 318 includes Tobias Wren, Stonefield's General Counsel, as a CC recipient. CRS argues that sharing communications with in-house counsel does not create or preserve privilege where the underlying communication is fundamentally business-oriented in nature. CRS further argues, in general terms, that the distribution of these communications

4. Crime-Fraud Exception. CRS makes a passing reference to the crime-fraud exception to the attorney-client privilege, suggesting that if Stonefield's termination of the TSA was pretextual — as Vantor alleges in its Complaint — then the Hess–Beckwith communications were made "in furtherance of a plan to wrongfully terminate the TSA" and are therefore not protected by the privilege. This argument is largely undevelope

IV. LEGAL ANALYSIS — ATTORNEY-CLIENT PRIVILEGE APPLIES A. Governing Legal Standard This action is a diversity action in which jurisdiction rests on 28 U.S.C. § 1332. The TSA is governed by New York law. In federal diversity cases in which state law supplies the rule of decision, federal courts in the Second Circuit apply federal common law of privilege. See In re Grand Jury Subpoena Dated January 4, 1984, 750 F.2d 22

V. LEGAL ANALYSIS — NO WAIVER A. Distribution Limited to the Privileged Circle CRS's waiver argument fails because the challenged communications were distributed only among privileged persons — that is, persons within the scope of the attorney-client relationship. The communications in Entries 312 through 317 were exchanged solely between Raymond Hess (an authorized corporate employee communicating with counsel on co

VI. LEGAL ANALYSIS — CRIME-FRAUD EXCEPTION DOES NOT APPLY A. Standard for the Crime-Fraud Exception The crime-fraud exception to the attorney-client privilege provides that the privilege does not protect communications made for the purpose of furthering a crime or fraud. See Clark v. United States, 289 U.S. 1, 15 (1933); In re Grand Jury Subpoena Duces Tecum Dated September 15, 1983, 731 F.2d 1032, 1038 (2d Cir. 1984

VII. ADDITIONAL CONSIDERATIONS A. Relationship to the FRE 502(d) Stipulation and Order The parties in this action entered into a stipulated clawback agreement pursuant to Federal Rule of Evidence 502(d), which was incorporated into the Case Management Order entered by Judge Calloway on February 17, 2023 (Dkt. No. 34). The Rule 502(d) stipulation provides that the inadvertent production of privileged documents in this

VIII. RECOMMENDATION A. Defend All Seven Entries All seven entries (Entries 312 through 318) on Stonefield's Privilege Log are properly designated as protected by the attorney-client privilege. The privilege designations should be vigorously defended against CRS's challenge. As set forth in detail in Sections IV through VI above, CRS's arguments are without merit. The communications are primarily — and indeed almost

1. Reaffirm the privilege designations for all seven challenged entries (Entries 312–318);

2. Provide a summary of the legal bases supporting the privilege assertions, including: (a) the existence of a formal attorney-client relationship between Stonefield and Ashford Meridian LLP; (b) the legal nature of the communications, which involve the seeking and provision of legal advice regarding the interpretation of the TSA and the legal sufficiency of the cure and termination process; (c) the absence of any wa

3. Invite CRS to file a motion to compel if it disagrees with Stonefield's privilege designations, rather than prolonging the parties' letter-writing exchange; and

4. Reserve all rights and arguments in connection with any such motion. The tone of the response should be firm but measured. Given the strength of our position on the merits, we should welcome — rather than seek to avoid — judicial resolution of the dispute. A confident invitation to CRS to present its arguments to the Court, if it wishes to pursue the challenge, is the most effective way to signal the strength of o

1. Supporting Declaration. Prepare a declaration from Samuel Eklund (Responsible Partner) or Patrick Gallagher (Lead Associate) describing: (a) the nature of the attorney-client relationship between Stonefield and Ashford Meridian LLP; (b) the circumstances under which the challenged communications were made; (c) the legal advice sought and provided (described at a level of generality sufficient to support the privil

2. In Camera Review. Offer the seven challenged documents for in camera review by Judge Calloway, to allow the Court to independently verify that the communications are privileged. This approach demonstrates confidence in our position and is likely to be well received by the Court.

3. Briefing. Prepare a memorandum of law in opposition to any motion to compel, incorporating and expanding upon the analysis in this memorandum. Preparation of these materials should be completed promptly so that we are in a position to respond expeditiously if CRS does file a motion. That said, the likelihood that CRS will actually file a formal motion to compel is uncertain. The weakness of CRS's arguments, as set

IX. CONCLUSION Entries 312 through 318 on Stonefield's Privilege Log are properly designated as protected by the attorney-client privilege. They represent a series of confidential communications between Raymond Hess, a Stonefield employee authorized to communicate with counsel on contract compliance matters, and Lorraine Beckwith and Troy Nakamura, attorneys at Ashford Meridian LLP serving as Stonefield's outside leg