After Rica Chamberlain, former counsel for bankrupt boy-band promoter Lou Pearlman, failed to respond to his requests for turnover of records and computer files relating to one of Pearlman’s companies and answer questions posed at 2004 examination, the trustee filed an emergency motion for contempt against her, alleging that she had failed to comply with a court order directing her to produce responsive documents, provided an incomplete privilege log, and failed to answer questions during her 2004 examination based on improper assertion of the attorney-client privilege.
The emergency motion requested the court to compel Chamberlain to answer deposition questions and produce documents, conduct an in camera inspection of documents which she claimed were privileged, appoint a computer expert to conduct a forensic examination of her computers, and impose sanctions against her for contempt. It also set forth spoliation concerns because she claimed a laptop computer containing responsive documents was lost or stolen shortly after the original date set for her deposition and she had refused to turnover backup discs to the court for inspection.
After hearing, the court entered an agreed order on the emergency motion:
- requiring Chamberlain to produce all documents responsive to the trustee’s Rule 2004 subpoena to the trustee;
- requiring her to produce her laptop computer, all back up discs, and all ESI (electronically stored information) devices (including her Blackberry and digital phone) to a computer expert also appointed by the court, for creation of forensic copies of all data on the devices without regard to privileged content or waiver of privileges;
- directing Chamberlain to review and identify privileged documents in the forensic copies and produce a detailed privilege log, including the information required by Fed R. Civ Pro 26(b)(5)(A), within 10 days of receiving the reconstructed data, and directing her to produce all documents not claimed to be privileged within that period;
- permitting the trustee to review and challenge any items claimed as privileged in the privilege log;
- providing for the court to conduct an in camera inspection of all documents claimed as privileged to ascertain the validity of the claimed privilege.
It is clear that the trustee, Soneet Kapila, believes that Pearlman’s counsel has assisted Pearlman in hiding information, and is unwilling to accept assertions of privilege at face value. Some documents claimed as privileged have already been submitted to the court for in camera inspection.
Pearlman previously lodged his own separate objection to production of documents by his counsel on grounds of his Fifth Amendment privilege against self-incrimination. The agreed order provides for copies of the privilege log to be provided to Pearlman’s criminal counsel, but makes no provision for criminal counsel to review the reconstructed documents not mentioned in the privilege log before they are produced. Therefore, to the extent that Chamberlain does not identify potentially incriminating documents as privileged and such documents are produced, this may pave the way for an argument that Pearlman has waived his Fifth Amendment rights with respect to those documents.