United States District Court, D. Nebraska
MEMORANDUM AND ORDER
F. Bataillon, Senior United States District Judge.
matter is before the court on defendant's objection,
Filing No. 98, to the order of the magistrate judge, Filing
No. 81, denying his motion to compel, Filing No. 60. Further,
defendant files a second objection, Filing No. 99, to the
magistrate judge's order, Filing No. 89, granting a
motion to compel, Filing No. 77. Plaintiff Deborah Rasby sues
defendant James Pillen to set aside a release and to obtain
the fair market value of her interest in certain properties.
magistrate judge's authority over nondispositive pretrial
matters is governed by 28 U.S.C. § 636(b)(1)(A).
Gomez v. United States, 490 U.S. 858, 873-74 (1989);
see also Fed.R.Civ.P. 72(a). On review of a decision of the
magistrate judge on a nondispositive matter, the district
court may set aside any part of the magistrate judge's
order that it finds is clearly erroneous or contrary to law.
28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a);
see Ferguson v. United States, 484 F.3d
1068, 1076 (8th Cir. 2007). (“A district court may
reconsider a magistrate judge's ruling on nondispositive
pretrial matters where it has been shown that the ruling is
clearly erroneous or contrary to law.”). A magistrate
judge is afforded broad discretion in the resolution of
nondispositive discovery disputes. Bialas v. Greyhound
Lines, Inc., 59 F.3d 759, 764 (8th Cir. 1995).
review of a magistrate judge's order on a nondispositive
matter, the “district judge in the case must consider
timely objections and modify or set aside any part of the
order that is clearly erroneous or is contrary to law.”
Fed.R.Civ.P. 72(a). A decision is “‘clearly
erroneous' “when although there is evidence to
support it, the reviewing court on the entire evidence is
left with the definite and firm conviction that a mistake has
been committed.'” Chakales v. C.I.R., 79
F.3d 726, 728 (8th Cir. 1996) (quoting Chase v.
Commissioner, 926 F.2d 737, 740 (8th Cir. 1991).
to Compel, Filing No. 60
seeks production of documents requested from third-party
attorneys who previously represented plaintiff Deborah Rasby
during a transaction that served as the preface to this
magistrate found the following facts, and the court adopts
them for purposes of this Memorandum and Order:
This cases arises from the parties' business
relationship, which culminated in an agreement between them
for Pillen to purchase Rasby's business ownership
interest in associated companies such as Progressive Swine
Technologies, Inc. (PST), a management company for various
entities dealing with pork production including farms, feed
mills, and swine genetics. See Filing No. 5
- Amended Complaint ¶¶ 7-8, 11. PST began
operations on January 1, 1994, when Pillen held a 90%
interest and Rasby held the remaining 10%. Id.
¶ 8. The parties each received a salary from 2001 to
2011. Id. ¶ 9. Since 1994 PST paid
distributions to the parties based on their ownership
interests, with Rasby receiving approximately $2, 250, 471
between the years 2000 through 2011. Id. ¶ 10.
Rasby alleges she learned Pillen was using their company
assets to benefit himself and his personal companies to her
disadvantage. Id. ¶¶ 12-16. Rasby states
she confronted Pillen with her information, but he became
hostile and refused to discuss it. Id. ¶ 16. In
May of 2011, Rasby decided to retire from PST with the
understanding she would still receive monthly distributions.
Id. ¶ 17. After Rasby's retirement, Pillen
increased his salary from $110, 000 to $1, 000, 000 and
stopped making distribution payments. Id.
¶¶ 19-21. On April 13, 2012, Pillen offered to
purchase Rasby's interest in the companies at less than
market value and warned her he planned to liquidate PST and
stop cash distributions from her other companies.
Id. ¶¶ 23-24, 26. Rasby understood if she
retained her business interests she would have substantial
tax liability exposure without the income or distributions to
pay it. Id. ¶¶ 22, 24, 27. Rasby alleges
Pillen's agent told her Pillen “was going to
‘F' with her” and he threatened to
“blow up PST” so she “would be looking for
work again.” Id. ¶ 28. Rasby searched for
investors to buy her interest but, due to Pillen's
actions, investors refused. Id. ¶ 29. Pillen
gave Rasby two weeks to agree to sell to him or he would
close PST. Id. ¶ 30. On June 29, 2012, Rasby
executed the Unit Purchase Agreement, selling her interests
in the companies to Pillen. Id. ¶ 31.
Filing No. 81, at 1-2. Rasby claims Pillen forced her to
agree and enter into the Purchase Agreement. She claims undue
influence (Count 1), fraudulent misrepresentation (Count II),
securities fraud (Count III), loss of opportunities (Count
IV), and breach of fiduciary duty (Count V). Pillen denies
these claims and alleges that Rasby engaged in wrongdoings.
Pillen also asserts claims for breach of contract for filing
this lawsuit in violation of the express terms of the
Purchase Agreement (First Counterclaim), breach of fiduciary
duty (Second Counterclaim), breach of duty of loyalty (Third
Counterclaim), unjust enrichment (Fourth Counterclaim), fraud
(Fifth Counterclaim), conversion (Sixth Counterclaim), and
civil extortion (Seventh Counterclaim).
dispute in question now before the court occurred when Pillen
requested production of documents from Rasby that related to
her previous attorneys, McGrath North law firm. The request
related to the drafting and negotiation of the purchase
agreement. The parties eventually agreed that McGrath would
produce the responsive documents to Rasby with a privilege
log. Certain documents were produced to Pillen in February,
March and May. There were redacted emails in the May
production, and the content was not listed on the privilege
contends that Rasby waived the attorney-client privilege with
regard to the redacted emails. He wants them to establish
Rasby's state of mind when entering into the agreements.
Rasby argues she did not waive the attorney-client privilege.
She contends she placed only Pillen's conduct at issue,
as she was aware of the tax implications of his threats.
The magistrate carefully analyzed the facts and law and
determined that Rasby “placed only Pillen's conduct
at issue when she alleged fraud and duress. Rasby did not
engage in an affirmative act which placed her confidential
attorney-client communications at issue.” Filing
No. 81, at 7. The magistrate further concluded that
“[t]he facts associated with Rasby's claims,
including Pillen's alleged conduct, whether Rasby sought
and received the advice of counsel, and other influences on
Rasby's state of mind, may be relevant. Pillen has means
to access such facts, for example by asking Rasby what
alternatives she considered. Rasby's confidential
attorney-client communications extend beyond the facts to
encompass matters sheltered in the interests of justice by an
important privilege and the ultimate issues for resolution by
Id. at 7-8.
next contended that Rasby waived her rights to assert
attorney-client privilege when she disclosed some full and