In the instant case, the report in dispute was prepared as a part of a $ 50 million employment lawsuit against prominent hedge fund Touradji Capital Management. The plaintiffs, Gentry Beach and Robert Vollero were former portfolio managers at Touradji from 2005 to 2008. After leaving their jobs, they sued their former employer claiming an amount of $ 50 million in unpaid compensation. Touradji countersued claiming that the men had stolen proprietary files from computers in order to form a new fund Vollero Beach Capital Funds.
During the discovery, Vollero submitted a set of computer files related to his former employer, which prompted Touradji to request permission to examine the two laptops of Vollero. Ultimately the parties agreed upon a third party forensic analyst for examining the computers. On examination, the expert found hundreds of deleted files related to Touradji, and the files were turned over to the hedge fund.
During his deposition, the analyst said he had prepared a written report which he had thoroughly reviewed before giving his testimony. However, the special Master on the case denied a request by the hedge fund to have a copy of that report. The denial was affirmed by the lower court which held that the reports were attorney work product.
However, the First Department has held that the material was prepared for litigation, and cannot earn a blanket declaration of being an attorney work product unless it was examined in camera. Justice Sheila Abdus-Salaam writing on behalf of the four-judge panel observed “The information in the reports as to how the search was conducted, what was found, what was deleted, when it was deleted, etc., is material prepared for litigation, and defendants have demonstrated a substantial need for the reports and are unable to obtain the information by any other means.”
The appeals court also observed, “Additionally, the conditional privilege that attaches to material prepared for litigation is waived when used by a witness to refresh a recollection prior to testimony.”
In order to avoid confusion on the issue, the First Department made it clear that the privilege over attorney work product was also not automatically waived simply because a witness reviews the document before providing testimony.
