This quarter's docket saw cases that highlight the need for clear and unambiguous communication between an attorney and client about settlement authority and the complications of discovery involving metadata and confidential department records from municipalities.

Whether Plaintiff's Attorney Had Settlement Authority

In Lolonga-Gedeon v. Child and Family Services, No. 08-CV-300, 2019 U.S. Dist. LEXIS 117319 (W.D.N.Y. Oct. 11, 2019), Magistrate Judge Jonathan W. Feldman held a fact-finding hearing before addressing defendant's motion to enforce a settlement. He held the hearing to determine whether plaintiff's attorney, Sanders, had authority to settle with defense counsel, Feinstein.

The fact-finding hearing revealed that Sanders and plaintiff engaged in email conversations discussing settling the case. Id. at *3. Sanders asked plaintiff if she would give him authority to propose a specific settlement sum to defendant. Id. at *4. (The specific amount proposed was redacted by the court because the settlement agreement has not been found to be enforceable yet. An unredacted version of the court's Decision and Order is filed under seal.) After weeks of not responding to Sanders' emails, plaintiff finally answered and wrote "yes, convey the offer." Id. Sanders testified that he understood this response as conveying that he had authority to propose that settlement figure to Feinstein. Sanders and Feinstein thus engaged in settlement negotiations.

Around this time, Sanders contacted plaintiff by email informing her that if the case proceeded much further, she would need to proceed pro se because it was clear she could no longer afford his services. In the same email, Sanders advised plaintiff to reduce her settlement demand. According to the court, "Less than an hour after sending the email, [] Sanders received plaintiff's succinct response." Id. at *5. Sanders testified that he understood this response as giving him authority to propose a specific demand to defendant. Id. Sanders subsequently conveyed this demand to Feinstein. Defendant accepted. Id. at *6.

Then Sanders notified plaintiff that defendant had accepted the settlement proposal and once Sanders received the settlement agreement from Feinstein, he provided it to plaintiff to approve and sign. Id. Plaintiff then raised two concerns with the agreement, one regarding the allocation of settlement funds between wages, emotional distress, and attorney fees and the other whether she would be able to refer to the facts and circumstances of the settlement in a family dispute. Id. Sanders told plaintiff he would address these concerns with Feinstein. Id. at *8. Sanders testified that the fact that he was engaged in negotiations with Feinstein over these concerns with the agreement "only confirmed to him that he was negotiating on behalf of his client and had the authority to settle the case once those two concerns were addressed." Id.

Having no objection to the suggestions Feinstein made regarding addressing plaintiff's concerns, the parties agreed to inform the court they had reached agreement and were in the process of "papering" it. Id. The court noted, however, that a final written agreement was never filed. Id. at *2.

Via email, Sanders sent the written settlement agreement to plaintiff and asked her to return the original signed agreement. Id. at *8. After weeks and sending several unanswered follow-up emails to plaintiff, plaintiff finally sent Sanders an email—but instead of addressing the settlement agreement she simply asked for Sanders' bank account information. Id. at *9. A week later, still not having received the signed settlement agreement, Sanders moved for substitution of counsel. (The Western District's local rules require a party seeking to withdraw as counsel demonstrate "good cause." Sanders submitted that he had good cause to withdraw on the grounds that plaintiff had failed to pay his legal fees as required by the retainer agreement and that plaintiff's conduct with respect to the settlement agreement creates a conflict of interest between them. The court agreed to permit Sanders to withdraw, noting that "the current record pays tribute to the fact that [ ] Sanders stands in an impossibly conflicted position." Docket # 261 at 6.)

Sanders testified that at no point during settlement negotiations did he represent to Feinstein that he lacked authority to enter into a settlement agreement. Feinstein also testified that he never understood Sanders to lack settlement authority. In contrast, plaintiff's testimony—that the court noted "was often difficult to decipher"—seemed to indicate that she was never interested in settling the case at all. Id

The Court's Analysis

The court first noted that while there is a presumption that "an attorney-of-record who enters into a settlement agreement, purportedly on behalf of a client, has authority to do so" (citation omitted), courts generally require such a hearing where there is a dispute over whether a former attorney had the client's authority to settle the case. Id. at *11. Moreover, the court stated that plaintiff, as the party challenging her attorney's authority, bears the "not insubstantial" burden of proving that Sanders lacked the authority to enter into the settlement agreement with defendant. Id.

Judge Feldman found that plaintiff failed to meet her burden and in fact, held that "the proof confirmed that [] Sanders had actual authority to settle plaintiff's claims when he informed [] Feinstein that plaintiff had accepted defendant's settlement offer." Id. Judge Feldman gave four reasons for so holding: (1) the email communications between Sanders and plaintiff indicated he was careful not to settle the case without her authority; (2) the communications between plaintiff and Sanders regarding plaintiff's two specific concerns with the written agreement confirmed that she gave him actual authority to negotiate on her behalf; (3) no evidence corroborated plaintiff's contention that she did or said anything withholding Sanders' settlement authority; and (4) he found Sanders' testimony regarding his communications with plaintiff to be credible. Id. at *12-15.

Ultimately, the court held that because Sanders had authority to settle plaintiff's claim on her behalf, defendant was permitted to move to enforce the settlement. Judge Feldman specifically stated that "whether the settlement ultimately reached can be enforced in the absence of a signed writing is an issue reserved for another time." Id. at *15.

Motion To Compel Production of Certain Agency Records

In Black Love Resists in the Rust v. City of Buffalo, No. 1:18-cv-719, 2019 U.S. Dist. LEXIS 218415 (W.D.N.Y. Dec. 19, 2019), plaintiffs, a community organization, four individual members and a purported similarly-situated class, sued defendants City of Buffalo and the Buffalo Police Department (BPD) along with individually-named officials. The lawsuit alleges that defendants conducted vehicle checkpoints without individualized suspicion of wrongdoing in areas, including near public housing complexes, with majority Black and Latino residents in violation of the Fourth and Fourteenth Amendments as well as Title VI of the Civil Rights Act of 1964. As a result, plaintiffs alleged, the number of traffic tickets issued and vehicles towed increased, causing Black and Latino residents to pay substantial fines or have their licenses suspended at disproportionate rates. Id. at *3.

After holding a status conference with the parties to address the scope of discovery, District of Vermont Judge Christina Clair Reiss, sitting in the Western District pursuant to a judge-sharing program, gave plaintiffs instructions to provide defendants with a list of custodians and terms to help prioritize the electronically-stored information (ESI) discovery. Id. at *6. Pursuant to those instructions, plaintiffs sent defendants their list, which included the use of Boolean operators. Id. Defendants did not produce any documents and instead objected to plaintiff's list of terms, arguing they were "confusing" and incompatible with the BPD email system. Id. Plaintiff thus moved to compel discovery of, among other things, responsive ESI relevant to the claims, BPD reports, BPD employment records, and Internal Affairs Division (IAD) records. Along with this information, plaintiffs requested any associated metadata.

Judge Reiss granted that portion of plaintiffs' motion seeking the production of the emails and other ESI, stating: "Because it is likely that emails and other ESI will contain information that is probative of those issues, balancing this against Defendants' unspecified burden in producing it weighs in favor of finding that Plaintiffs are entitled to ESI discovery." Id. at *14.

Regarding plaintiffs' request for metadata, Judge Reiss denied plaintiffs' request for metadata because Local Rule of Civil Procedure 26(e)(4) creates a presumption against the production of metadata unless a party can show good cause, and "[p]laintiffs have not established that the facilitation of searches by the requesting party is, on its own, 'good cause' to require the production of metadata under the Local Rules." Id. at *15. Judge Reiss did, however, require defendants to produce data revealing the dates, times, and all sender and recipient information for the emails, citing the advisory committee notes to Federal Rule of Civil Procedure 34, which requires a party producing ESI to preserve its searchability function. Id.

Defendants asked the court to consider cost-shifting if it granted plaintiffs' motion. Id. at *12. After considering the seven Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 318-19 (S.D.N.Y. 2003) factors for determining whether cost-shifting is warranted, Judge Reiss denied defendants' request on the grounds that plaintiffs narrowed their request, otherwise have no access to the documents that are likely to contain relevant information, and the information does not appear to be available from other sources. Id. at *18. Additionally, she held that because defendants claim they have already produced the information, they bear the burden of demonstrating they did. Id. Finally, the court held that "in light of the serious nature of the claims presented, the discovery sought is 'proportional to the needs of the case.'" Id. (quoting Fed. R. Civ. P. 26(b)(1)).

Next, the court considered whether defendants were required to disclose the daily and monthly BPD reports potentially relevant to the allegedly unlawful activity. Defendants argued that the request was unduly burdensome (defendants claim that the request would require the production of over 6,700 reports) and that some categories of reports sought contained confidential information requiring redaction. Id. at *20. Moreover, defendants argued the law enforcement privilege applies to the production of certain categories of the requested documents. Id. at *22.

Concerning the law enforcement privilege, Judge Reiss stated: "The privilege's purpose is 'not only to facilitate investigations, but also to protect individuals whose reputation may be damaged by disclosure of investigative leads or statements from witnesses developed during the investigation.'" Id. (citation omitted). She further reasoned that once the court determines that the privilege applies, there needs to be a strong presumption against lifting the privilege. Id. at *23. Ultimately, while the court "cannot evaluate the applicability of the law enforcement privilege without a privilege log and an in camera inspection of the Reports," in this case, plaintiffs failed to demonstrate that such a time-consuming and in-depth review of the requested records would be proportional to the needs of the case. Id. at *24. The court denied this portion of the plaintiffs' motion.

With respect to the IAD files, defendants objected to this request because it was, among things, unduly burdensome and some of the files were shielded from disclosure by Section 50-a of the New York Civil Rights law. Id. at *25. If they were ordered to produce such files, defendants requested "an in camera review of anything ordered produced, an order addressing … [§] 50-a, and a protective order specifying that [] any documents produced shall be kept confidential, used only for the purposes of this case, and that the disclosure shall be restricted to [P]laintiffs' attorney's eyes only in this case." Id. at *26.

Judge Reiss granted this portion of plaintiffs' motion, ordering defendants to produce the 168 IAD files, because plaintiffs' request was narrow and not simply for all IAD files; defendants cannot shield documents from disclosure on the grounds that their organizational system makes it burdensome to respond to the demand; and finally Section 50-a does not bar such disclosure. Id. at *26-29. The court also ruled that plaintiffs could choose between the records being subject to an in camera review by the court or for attorneys' eyes only. Id. at 34.

Finally, the court denied plaintiffs' request for attorney fees incurred in bringing the motion to compel on the grounds that the parties had a "genuine, good faith dispute with regard to what must be produced, with each party advocating a reasonable position." Id. at *33.

Sharon M. Porcellio is a member of Bond, Schoeneck & King, PLLC representing businesses and institutions in commercial litigation and employment matters. She can be reached at [email protected]. Kathleen McGraw, a law clerk with the firm and third-year law student at SUNY Buffalo Law School, assisted with the preparation of this article.