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Three major personal injury firms accused of racketeering and suborning false testimony as part of ongoing asbestos litigation have won a protective order shielding their former and current employees from being interviewed without the presence of counsel. U.S. District Judge Robert W. Sweet of the U.S. District Court for the Southern District of New York issued the order — which had been sought by New York’s Weitz & Luxenberg and two other law firms — on the grounds that firm employees might divulge information protected by the attorney client privilege without counsel present. “[I]t is unrealistic to expect even the best intentioned lay person to be able to safeguard the attorney client privilege,” Sweet said in G-I Holdings Inc. v. Baron & Budd, 01 Civ. 0216. The ruling involved an attempt by G-I, a holding company that includes former asbestos manufacturers, to block the law firms from seeking rulings in other courts that would prevent G-I from interviewing their employees. In addition to Weitz & Luxenberg, the two law firms involved were Baron & Budd and Ness, Motley, Loadholt, Richardson & Poole. G-I’s racketeering lawsuit charges the personal injury firms with devising a scheme to flood the legal system with hundreds of thousands of asbestos cases, regardless of merit, and committing illegal acts to further their conspiracy, including coaching witnesses to lie or become forgetful in depositions. After G-I filed suit, a private investigation firm working for it began conducting ex parte interviews with former employees of the three law firms. Among those contacted for interviews were an administrative assistant and a “claims paralegal,” a person who enters data on client waivers, consents and death compromise petitions into one of the firm’s computer systems. The claims paralegal was asked how his firm generated litigation documents, how clients were prepared for depositions and which attorneys were responsible for deciding the allocation of settlement funds among clients. The private investigators, Sweet said, were instructed to tell the employees they interviewed not to disclose privileged communications or information during questioning. In February, both Baron & Budd and Ness Motley obtained orders enjoining G-I investigators from contacting current and former firm employees. Baron & Budd’s order was issued by a Texas state court, and Ness Motley obtained an order in a South Carolina state court. G-I then moved for a preliminary injunction before Sweet that would block the firms from pursuing state court litigation regarding discovery matters. The motion was made under the All Writs Act, 28 U.S.C. Section 1651. A hearing on the issue was held April 3. Because the state court action in Texas had been removed to federal court in Dallas, and because Ness Motley had withdrawn the South Carolina state court action, Sweet said there was no state court action pending and, therefore, the relief sought by G-I was unnecessary. BALANCING HARDSHIPS Judge Sweet then turned to the protective order sought by the three firms. G-I, he said, argued that the interviews “may not be precluded because they are merely engaging in a time honored investigatory technique, they do not seek to uncover privileged matters, and the mere risk that such matters might be disclosed does not constitute good cause for the protective order sought.” But former employees who are not lawyers, Sweet said, pose a special problem when it comes to ex parte interviews, because “it is unrealistic to think that [they] will know what information or communications are privileged, so that even where disclosure of such matters is not intended it may well occur inadvertently.” In addition, he said, the “danger of inadvertent disclosure is compounded,” where, as here, the interviewer is also not a lawyer but a private detective. In this case, Sweet said, the claims paralegal and the administrative assistant were certainly exposed to privileged information — and even G-I did not dispute that some privileged matters were disclosed. “Moreover, assuming that G-I Holdings does not actually seek to invade the privilege, the fact remains that some of the areas of inquiry — such as how the firms prepare their clients for deposition — come dangerously close to such matters,” he said. Balancing the hardships in the case, Sweet said they weighed in favor of the law firms. And saying that the case presented a situation “in which it is very difficult to craft a compromise,” Sweet said he would allow the interviews to continue, but only with notice to the law firms’ counsel and the right of counsel to be present. As an alternative, the judge said the interviews may be conducted in the presence of a special master who will monitor the interviews with respect to the issue of privilege. The two sides, he added, will share the cost of the special master. Peter N. Wang, of Friedman, Wang & Bleiberg, along with Thomas J. Kavaler and Susan Buckley, of Cahill Gordon & Reindel, represented G-I Holdings. Mark C. Zauderer and Jonathan D. Lupkin of Solomon, Zauderer, Ellenhorn, Frischer & Sharp, along with Abbe David Lowell and Pamela J. Marple of Manatt, Phelps & Phillips, represented Baron & Budd. Storch Amini & Munves represented Ness Motley. Elkan Abramowitz, Lawrence S. Bader and Robert M. Radick, of Morvillo, Abramowitz, Grand, Iason & Silberberg, represented Weitz & Luxenberg.

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