On March 25, 2022, Justice Masley of the New York County Commercial Division issued a decision in Pala Assets Holdings Ltd v. Rolta, LLC, 2022 NY Slip Op. 30996(U), holding that a client waived the attorney-client privilege by testifying that it acted on the advice of its counsel, explaining:
Plaintiffs’ motion is granted as to their third request to produce all communications with counsel concerning the Turnover Order, the March 5, 2021 Order granting plaintiffs’ motion for appointment of a Receiver, the April 16, 2021 Receiver Order, or the June 22, 2021 Receiver Order. Singh, defendants’ corporate representative, intentionally placed the subject matter of counsel’s advice in issue and selectively disclosed that advice, effecting a subject matter waiver under New York law. Once waived, privilege cannot be unwaived. In Deutsche Bank Trust Co. of Ams. v Tri-Links Inv. Trust, the Appellate Division, First Department reaffirms that at issue waiver of privilege occurs where a party affirmatively places the subject matter of its own privileged communication at issue in litigation, so that invasion of the privilege is required to determine the validity of a claim or defense of the party asserting the privilege, and application of the privilege would deprive the adversary of vital information. Moreover, selective
disclosure is not permitted.Singh admitted he became aware of this court’s Turnover Order immediately after it was issued. He understood that the
Turnover Order required that shares of the companies to be turned over and cash of the companies to be turned over. When asked why Rolta India has not complied with the Turnover Order, Singh repeatedly testified that it was based on advice Rolta India received from legal counsel:Q. So did you receive specific legal advice from your counsel, whether in India or elsewhere, stating that you did not – that Rolta India did not have to comply with orders from the New York court unless they had been domesticated in India.
A. Yes, please.As Singh summarized toward the end of the deposition: “I … have given testimony, time and again, in these nine hours, that whatever steps were taken by us on behalf of Rolta India were taken because of the legal advice we had, and we took that and consciously based on that.” Throughout the deposition, Singh volunteered what the advice purportedly was. Singh was repeatedly advised not to reveal the content of attorney-client communications, and his counsel even instructed Singh not to answer on certain occasions. Accordingly, defendants shall produce responsive documents by April 22, 2022.
(Internal quotations and citations omitted).