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  • Cresco Labs New York, Llc, a New York limited liability company, Cresco Labs Llc, An Illinois Limited Liability Company v. Fiorello Pharmaceuticals, Inc., a New York corporation, Eric Sirota, Susan Yoss, John Does 1 - 10 Commercial Division document preview
  • Cresco Labs New York, Llc, a New York limited liability company, Cresco Labs Llc, An Illinois Limited Liability Company v. Fiorello Pharmaceuticals, Inc., a New York corporation, Eric Sirota, Susan Yoss, John Does 1 - 10 Commercial Division document preview
  • Cresco Labs New York, Llc, a New York limited liability company, Cresco Labs Llc, An Illinois Limited Liability Company v. Fiorello Pharmaceuticals, Inc., a New York corporation, Eric Sirota, Susan Yoss, John Does 1 - 10 Commercial Division document preview
  • Cresco Labs New York, Llc, a New York limited liability company, Cresco Labs Llc, An Illinois Limited Liability Company v. Fiorello Pharmaceuticals, Inc., a New York corporation, Eric Sirota, Susan Yoss, John Does 1 - 10 Commercial Division document preview
  • Cresco Labs New York, Llc, a New York limited liability company, Cresco Labs Llc, An Illinois Limited Liability Company v. Fiorello Pharmaceuticals, Inc., a New York corporation, Eric Sirota, Susan Yoss, John Does 1 - 10 Commercial Division document preview
  • Cresco Labs New York, Llc, a New York limited liability company, Cresco Labs Llc, An Illinois Limited Liability Company v. Fiorello Pharmaceuticals, Inc., a New York corporation, Eric Sirota, Susan Yoss, John Does 1 - 10 Commercial Division document preview
  • Cresco Labs New York, Llc, a New York limited liability company, Cresco Labs Llc, An Illinois Limited Liability Company v. Fiorello Pharmaceuticals, Inc., a New York corporation, Eric Sirota, Susan Yoss, John Does 1 - 10 Commercial Division document preview
  • Cresco Labs New York, Llc, a New York limited liability company, Cresco Labs Llc, An Illinois Limited Liability Company v. Fiorello Pharmaceuticals, Inc., a New York corporation, Eric Sirota, Susan Yoss, John Does 1 - 10 Commercial Division document preview
						
                                

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FILED: NEW YORK COUNTY CLERK 12/14/2021 01/10/2022 11:15 06:59 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 263 464 RECEIVED NYSCEF: 12/14/2021 01/10/2022 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ----------------------------------------------------------X CRESCO LABS, NEW YORK, LLC, a New York limited liability company, and CRESCO Index No.: 652343/2018 LABS LLC, an Illinois limited liability company, Hon. Andrew Borrok Plaintiffs, Mot. Seq. No. __ -against- FIORELLO PHARMACEUTICALS, INC., a New York corporation, Defendant. ----------------------------------------------------------X MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT’S MOTION TO PRECLUDE DOCUMENTS WITHHELD FROM DISCOVERY IZOWER FELDMAN, LLP Attorneys for Defendant Fiorello Pharmaceuticals, Inc. 1325 Franklin Avenue, Suite 255 Garden City, NY 11530 Tel: (646) 688-3232 Fax: (646) 304-7071 On the brief Ronald D. Lefton Rachel Izower-Faddé 1 of 31 FILED: NEW YORK COUNTY CLERK 12/14/2021 01/10/2022 11:15 06:59 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 263 464 RECEIVED NYSCEF: 12/14/2021 01/10/2022 TABLE OF CONTENTS TABLE OF CONTENTS ...................................................................................... i TABLE OF AUTHORITIES............................................................................... ii PRELIMINARY STATEMENT ..........................................................................1 POINT I CRESCO SHOULD BE PRECLUDED FROM RELYING ON ITS PRIVILEGE LOG AND THE DOCUMENTS REFERENCED THEREIN ........................................................................3 A. Privilege logs are not evidence in admissible form, and should be disregarded ............................................................................. 4 B. The privilege log references are not probative ................................................... 5 C. Cresco’s use of privilege as both a “sword and shield” constitutes a waiver................................................................................12 POINT II CRESCO MAY NOT RELY ON ITS TRANSACTION WITH VALLEY TO REBUT FIORELLO’S SHOWING THAT DOH WOULD NOT APPROVE ITS TRANSACTION WITH CONTINGENT CONSIDERATION ...........................................15 A. Cresco fails to rebut the undisputed evidence presented by Fiorello that the DOH did not approve the Fiorello-GTI deal in part because it included an adult-use contingency ............................................................................15 B. Cresco should be precluded from relying on the CSEA for any purpose ......................................................................................17 1. Cresco defied its discovery obligations and multiple orders of this Court in failing to timely produce the CSEA ..........................................................18 2. Cresco’s willful conduct warrants preclusion of the CSEA or any evidence relating to alleged contingent consideration. ..............................................24 CONCLUSION ...................................................................................................26 i 2 of 31 FILED: NEW YORK COUNTY CLERK 12/14/2021 01/10/2022 11:15 06:59 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 263 464 RECEIVED NYSCEF: 12/14/2021 01/10/2022 TABLE OF AUTHORITIES Cases Aetna Cas. & Sur. Co. v. Certain Underwriters at Lloyd’s London, 676 N.Y.S.2d 727 (Supr. Ct. N.Y. Cty. 1998), aff’d, 263 A.D.2d 367 (1st Dep’t 1999) .............................................................. 9 Am. Re-Ins. Co. v. U.S. Fid. & Guar. Co., 40 A.D.3d 486 (1st Dep’t 2007) ................................................................................................12 Arpino v. F.J.F. & Sons Elec. Co., Inc., 102 A.D.3d 201 (2d Dep’t 2012) ...........................................................................................25, 26 Bolton v. Weil, Gotshal & Manges LLP, 4 Misc. 3d 1029(A) (Supr. Ct. 2004) ...........................................................................................13, 14 Chowdhury v. Hudson Val. Limousine Serv., LLC, 162 AD3d 845 (2d Dep’t 2018) .................................................................................................24 Commisso v. Orshan, 85 A.D.3d 845 (2d Dep’t 2011) ..........................................25 Deutsche Bank Tr. Co. of Americas v. Tri-Links Inv. Tr., 43 A.D.3d 56 (1st Dep’t 2007) ..........................................................................12 Rauh v. Coyne, 744 F. Supp. 1181 (D.D.C. 1990) .................................................13 Stein v. Tri-City Healthcare District, No. 12CV2524 BTM(BGS), 2014 WL 12695385 (S.D. Cal. Dec. 5, 2014) ....................................................13 Tupi Cambios, S.A. v. Morgenthau, 989 N.Y.S.2d 572 (Supr. Ct. 2014) ......... 13, 14 Zuckerman v. City of New York, et al., 49 N.Y.2d 557 (1980)................................ 4 Statutes CPLR 3126 ............................................................................................... 14, 24, 25 ii 3 of 31 FILED: NEW YORK COUNTY CLERK 12/14/2021 01/10/2022 11:15 06:59 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 263 464 RECEIVED NYSCEF: 12/14/2021 01/10/2022 PRELIMINARY STATEMENT Defendant Fiorello Pharmaceuticals, Inc. (“Fiorello”) moved for summary judgment to dismiss the alleged breach of the exclusivity provision in the February 14, 2018, letter of intent (“LOI”) among Fiorello, and Plaintiffs Cresco Labs, LLC and Cresco Labs, New York, LLC (together “Cresco”) (Motion Sequence 11). Fiorello’s motion focuses on lack of causation including because any transaction was subject to approval by Fiorello’s Shareholders and by the Department of Health (“DOH”). In opposition to Fiorello’s motion, and to support its own motion for partial summary judgment against Fiorello’s counterclaims and affirmative defenses (Motion Sequence 12), Cresco improperly seeks to rely on: (i) its lawyer’s privilege log as purported evidence of its good faith performance efforts; and (ii) the CSEA (defined herein)—a previously undisclosed October 2019 transaction document— as purported evidence the DOH approved an adult legalization contingency in Cresco’s merger with Valley Agriceuticals, Inc. (“Valley”). First, a privilege log is a discovery device that Cresco’s counsel used to shield the content of identified documents in order to prevent disclosure. It cannot now be used by that same counsel as a sword to prove the truth of the contents of certain selected documents that Cresco still refuses to produce. The failure of Cresco to disclose the contents of the documents on which it now relies, precludes it from 1 4 of 31 FILED: NEW YORK COUNTY CLERK 12/14/2021 01/10/2022 11:15 06:59 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 263 464 RECEIVED NYSCEF: 12/14/2021 01/10/2022 relying on any purported content of the information. Similarly, counsel’s hearsay characterizations of those materials must be disregarded. Second, the CSEA is not relevant to Fiorello’s evidence: the affidavit of Fiorello’s regulatory counsel, with personal knowledge, that DOH told Fiorello in August 2018 that it would not at that time approve any transaction that included a provision for additional consideration for adult legalization. GTI and Fiorello relied on the DOH’s statements to renegotiate the terms of their merger. Cresco’s agreement with Valley regarding contingent consideration—which is dated after DOH approved the Cresco-Valley deal—has no bearing on what DOH told Fiorello about the Fiorello-GTI deal the year prior. This Court should preclude Cresco from relying on the content of (or representations about the information contained in) documents identified on its privilege log and the late-produced CSEA in support of its claims and defenses, and strike and disregard all portions and references in their opposition, cross motion, and expert report referring to same. 2 5 of 31 FILED: NEW YORK COUNTY CLERK 12/14/2021 01/10/2022 11:15 06:59 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 263 464 RECEIVED NYSCEF: 12/14/2021 01/10/2022 POINT I CRESCO SHOULD BE PRECLUDED FROM RELYING ON ITS PRIVILEGE LOG AND THE DOCUMENTS REFERENCED THEREIN 1 Cresco seeks to establish its good faith performance of its obligations by attaching its privilege log and arguing the undisclosed documents listed on it somehow demonstrate that Cresco began working on draft transaction documents “even before the LOI was fully executed.” 2 This proposition is unverified by anyone other than counsel for Cresco and is belied by the uncontroverted documentary record that no draft stock purchase agreement was sent to Fiorello until March 1, 2018. The initial draft agreement was forwarded by Much Shelist, Cresco’s outside counsel, not by its in-house counsel.3 The record also shows that the March 1, 2018, draft was withdrawn the next day, on March 2, in response to preliminary comments by Fiorello, and that no new draft was forwarded by Cresco to Fiorello until March 8, 2018. 4 Cresco’s argument that in-house counsel worked on a note even be3fore the LOI was executed is undermined by the uncontroverted fact that no draft note was proposed to Fiorello until March 15, 2018, which was wholly unsuitable to the 1 All references to exhibits (“Ex.”) are to the correspondingly lettered exhibits to accompanying Affirmation of Rachel Izower-Fadde (the “RIF Aff.”). 2 Ex. P (Hipp Cross Mtn. Aff.) ¶ 19. 3 Ex D. 4 Ex. C (Lucosky Aff.) ¶¶17-19; Ex. B (Sirota PI Aff.) ¶ 50; Ex. D; Ex. Q; Ex. I (Lewis Tr.) at 130, 272:14-273:5. 3 6 of 31 FILED: NEW YORK COUNTY CLERK 12/14/2021 01/10/2022 11:15 06:59 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 263 464 RECEIVED NYSCEF: 12/14/2021 01/10/2022 transaction. 5 By that time, two-thirds of the exclusivity period had been squandered by Cresco. This evidentiary chronology demonstrates the absence of good faith performance by Cresco. This factual record cannot be rebutted by a hearsay argument based on privilege log entries. Arguments of counsel are not evidence, and cannot serve as a proxy to the discovery conducted in the case. Having withheld those documents from discovery, Cresco cannot now rely on their contents as evidence. Cresco’s suggestion that its counsel’s privilege log entries somehow establishes that substantive work Cresco performed during the LOI period must be rejected. None of this so-called evidence is (a) proof in admissible form as required to support a motion for summary judgment, or (b) probative of Cresco’s supposed good faith efforts. Cresco’s self-serving representations and selective use of privilege material constitutes an abuse of privilege, is proffered in bad faith, and should be stricken from the record and accorded no weight by this Court. A. Privilege logs are not evidence in admissible form, and should be disregarded On summary judgment a party must establish their position by “tender of evidentiary proof in admissible form.” Zuckerman v. City of New York, 49 N.Y.2d 557, 562 (1980) (internal citation and quotation omitted). By their very nature, privilege logs are hearsay statements of counsel that it reviewed documents and they 5 Ex. C (Lucosky Aff.) ¶¶ 20-22; Ex. R. 4 7 of 31 FILED: NEW YORK COUNTY CLERK 12/14/2021 01/10/2022 11:15 06:59 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 263 464 RECEIVED NYSCEF: 12/14/2021 01/10/2022 are being withheld from production, and use in the subject litigation, on the grounds of privilege. A privilege log is an objection to using a document as evidence. It necessarily is not evidence of either the documents referenced and withheld, nor of their contents. A privilege log constitutes only an objection to admissibility. Cresco’s attempt to use that objection to prove an affirmative fact, that it supposedly acted in good faith to perform its obligations, is completely inappropriate. If allowed, it would constitute a complete waiver of the attorney client privilege necessitating that discovery of Cresco, including new depositions, be reopened. B. The privilege log references are not probative Cresco also misrepresents the documents on which it relies. None of this so- called evidence is probative of Cresco’s supposed “good faith efforts.” Under penalty of perjury, Mr. Hipp affirms, “By February 12, 2018 (three days before the LOI was executed), Cresco had prepared a draft promissory note.” 6 Why then did it take more than a month to send any such draft to Fiorello? 7 That delay, especially in light of the short 30 business days to complete a stock purchase agreement and all other documents to comprise a Definitive Agreement, bespeaks bad faith, not good. 6 Ex. P (Hipp Cross Mtn. Aff.) ¶ 19. 7 See nn.4&5, supra, and surrounding text. 5 8 of 31 FILED: NEW YORK COUNTY CLERK 12/14/2021 01/10/2022 11:15 06:59 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 263 464 RECEIVED NYSCEF: 12/14/2021 01/10/2022 Moreover, the privilege log does not establish Mr. Hipp’s hearsay. The log merely lists 3 items, each described as “Draft promissory note in the files of John Figone” (Cresco’s in-house counsel). 8 The log does not describe the contents of the draft notes, whether they pertain to the transaction contemplated by the LOI or some other transaction or purpose, what work (if any) was performed on the documents and when, or even who actually drafted the notes. 9 Similarly, Mr. Hipp argues that Cresco’s privilege log shows Mr. Figone had prepared drafts of several other deal documents by February 19, 2018.10 Not so. The log simply identifies draft documents in the files of Mr. Figone 11 and several documents allegedly drafted by him. 12 This Court and Fiorello are left guessing as to what those documents really are. But, we do know Cresco’s outside counsel, Much Shelist, prepared the transaction documents 13 and that nothing whatsoever was transmitted to Fiorello prior to March 1, and nothing usable provided until March 8. 14 The record is also unequivocal that in the two-week period between February 8 Ex. P (Hipp Cross Mtn. Aff.), Ex. 16, lines 2-4. 9 Indeed, because Cresco fails to state whether these draft documents were created by, for, or at the direction of an attorney for the purpose of obtaining legal advice, Cresco’s claim of privilege over these documents is dubious at best. 10 Ex. P (Hipp Cross Mtn. Aff.) ¶ 19. 11 Ex. P (Hipp Cross Mtn. Aff.), Ex. 16, lines 19-25. 12 Id. lines 17, 18, 26-30. 13 Ex. I (Lewis Tr.) at 58; and Ex. G (Figone Tr.) at 129-30 (testifying the 3/1 SPA draft was “Ms. Lewis’ document,” not his). 14 See nn.4&5, supra. 6 9 of 31 FILED: NEW YORK COUNTY CLERK 12/14/2021 01/10/2022 11:15 06:59 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 263 464 RECEIVED NYSCEF: 12/14/2021 01/10/2022 14, 2018 and March 1, 2018, rather than performing its obligations, Cresco was refusing to make the Good Faith Payment due upon execution unless Fiorello agreed to an escrow agreement. No such escrow was contemplated by the LOI and Fiorello had to come up with an escrow agent because Cresco could not.15 Moreover, Cresco’s privilege log is deficient because it contains no useful information about the contents of the withheld documents—only characterizations by counsel. Curiously, each of these documents were created and last modified on the same day.16 There is no probative value in the description, “Draft consulting agreement in the files of John Figone,” created on February 19 at 7:47pm and last modified on February 19 at 7:47pm. 17 No draft consulting agreement was transmitted to Fiorello until March 9, 2018. That draft did not reflect the contemplated terms, and was withdrawn by Cresco days later.18 How much “good faith” effort can we glean from a document described as a “Draft secretary’s certificate” that was created on February 19 at 7:58pm and never modified? 19 The answer is obvious: none. 15 Ex. J (Sirota SJ Aff.) ¶ 13. 16 Ex. P (Hipp Cross Mtn. Aff.), Ex. 16, lines 17-30. 17 See id. at line 23. 18 Ex. S. 19 See id. at line 26. 7 10 of 31 FILED: NEW YORK COUNTY CLERK 12/14/2021 01/10/2022 11:15 06:59 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 263 464 RECEIVED NYSCEF: 12/14/2021 01/10/2022 Whether a document exists, even a draft document created by an attorney, does not, by itself, evidence Cresco’s “good faith efforts.” Cresco provides no material information about how much time or effort (if any) went into drafting the documents described on their privilege log, their contents, who drafted them or why, how robust they were, or even the page count. Nothing Cresco identified is probative of work performed or good faith exerted. Having refused to produce the documents and shielded them and their witnesses from inquiry about them, Cresco cannot now use them affirmatively to try to establish substantive factual matters. Furthermore, Fiorello’s efforts to question Figone and Lewis about their work during the LOI period were severely constrained by Cresco’s privilege objections. Virtually every question was objected to by outside counsel on privilege grounds, and Lewis was instructed not to answer numerous factual questions—not because the question called for a protected communication, but because the source of the facts reflected in drafts might have come from Cresco. 20 20 E.g., Ex. I (Lewis Tr.) at 13-17 (instructed not to answer who the owners of Cresco were); 53- 54 & 55-57, 58-60 (instructed not to answer if Figone’s “template” documents differed from the drafts MS sent to Fiorello); 76-77 (instructed not to answer whether Cresco directed MS when to send the draft SPA); 78 & 80-81 (instructed not to answer follow up questions about a shareholder election Lewis believed MS prepared in connection with this transaction); 96-97 (instructed not to answer when Cresco had to complete due diligence pursuant to the LOI); 158-59 (instructed not to answer why compensation language in draft SPA deviated from language in the LOI); 167-68 (instructed not to answer whether Cresco had the money to consummate the transaction on March 8th); 168-70 (instructed not to answer whether Cresco was raising capital); 186 (instructed not to answer why the Independent Contractor Form was replaced with a Consulting Agreement). 8 11 of 31 FILED: NEW YORK COUNTY CLERK 12/14/2021 01/10/2022 11:15 06:59 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 263 464 RECEIVED NYSCEF: 12/14/2021 01/10/2022 To the extent Figone was permitted to testify about his efforts at all, his testimony contradicts Cresco’s new assertion that these privilege log items represent substantive, good faith work toward Definitive Agreements. Figone repeatedly referred to himself as merely a “scrivener” with respect to the transaction contemplated by the LOI. 21 As such, no privilege lies at all. Aetna Cas. & Sur. Co. v. Certain Underwriters at Lloyd’s London, 676 N.Y.S.2d 727, 730 (Supr. Ct. N.Y. Cty. 1998), aff’d, 263 A.D.2d 367 (1st Dep’t 1999). With respect to drafting documents, Figone testified he merely took “boilerplate language and start[ed] to develop it so it would be useful.” 22 He was not permitted to testify about what substantive relationship (if any) that boilerplate language had to the documents drafted by Much Shelist and shared with Fiorello. 23 There is no evidence that Figone’s boilerplate documents are even what is described in Cresco’s privilege log or that his boilerplate documents were used by Much Shelist at all in connection with the deal. 24 Hipp further affirms that “Cresco’s outside counsel then revised the draft documents [listed on Cresco’s privilege log], completing a…draft of the definitive 21 Ex. G (Figone Tr.) at 27-28, 95, & 109. 22 Id. at 124-25. 23 Id. at 128-30. 24 Id. 9 12 of 31 FILED: NEW YORK COUNTY CLERK 12/14/2021 01/10/2022 11:15 06:59 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 263 464 RECEIVED NYSCEF: 12/14/2021 01/10/2022 agreement within the first two weeks of the LOI period.” 25 Once again, this exaggerates Lewis’s testimony. Lewis confirmed she had received “templates” from Figone, 26 but was instructed by Cresco’s counsel not to supply any information at deposition on what the contents of those documents were, or how or to what extent were they used in crafting the March 1 SPA draft. 27 There is simply no evidence at all that the documents on Cresco’s privilege log were ever transmitted to Much Shelist. Figone was similarly prohibited by Cresco from testifying about the content of the “template” or “boilerplate” documents and how or even if they were communicated to Much Shelist. 28 To the extent Figone was permitted to testify on the subject at all, he only confirmed that the March 1 SPA draft was “Ms. Lewis’s document,” not his. Id. Stripping away the privilege log entries, the only thing Cresco points to in support of its claimed “good faith” work during the period between signing the LOI on February 14 and producing its initial SPA draft on March 1 (promptly withdrawn and replaced on March 8), is having hired outside counsel Much Shelist to represent Cresco in the transaction. 29 In deposing Figone and Lewis—the two deponents 25 Ex. P (Hipp Cross Mtn. Aff.) ¶ 20. 26 Ex. I (Lewis Tr.) at 53. 27 Ex. I (Lewis Tr.) at 53-57. 28 Ex. G (Figone Tr.) at 129-30. 29 Ex. I (Lewis Tr.) at 261-62 (confirming earliest billing on LOI transaction 2/22/2018, more than a week after Cresco executed the LOI). 10 13 of 31 FILED: NEW YORK COUNTY CLERK 12/14/2021 01/10/2022 11:15 06:59 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 263 464 RECEIVED NYSCEF: 12/14/2021 01/10/2022 responsible for what should have been the bulk of the work conducted during this period—Fiorello’s counsel attempted to probe what that work was. Cresco attorneys repeatedly obstructed testimony with privilege objections and instructed their witnesses not to answer questions about their work during this period. 30 Cresco’s obstreperous conduct made it impossible for Fiorello to discover what supposed “good faith” work Cresco engaged in during this critical 30 business day period. Once again, outside counsel made an intentional decision to block information from disclosure so Fiorello was left with only a bare bones chronology of when drafts were finally sent to its counsel—a usable first draft of a stock purchase agreement on March 8; a wholly unacceptable form of note and a proposed exchange agreement on March 15. 31 Cresco’s privilege log entries about draft documents in Figone’s unproduced files fail to support the premise that Cresco “made good faith efforts to promptly prepare the documents.” Moreover, the limited testimony Cresco’s attorneys were 30 See n.20, supra. Mr. Figone testified he started assembling “boilerplate language” in connection with preparing a draft SPA (Ex. G (Figone Tr.) at 124-25), but was not permitted to testify what, if anything, of the “boilerplate language” made its way into the 3/1 SPA draft (id. at 130). When asked what, if anything, of substance he recognized in the 3/1 SPA as being part of the work he did developing “boilerplate language,” he testified, “[t]here are certain, certainly, commodities, but this is Ms. Lewis’ document.” Id. at 130. Indeed, Mr. Figone was not permitted to testify as to “what transpired on between February 14 and March 1 on [Cresco’s] end regarding this transaction,” only whether he liaised with Fiorello’s counsel during that time. Id. at 128-29. Thus, Mr. Figone was shut down from testifying about the early work or draft documents Mr. Figone allegedly performed or prepared prior to March 1st—which Cresco now alleges constitute evidence of Cresco’s “good faith.” 31 See nn.4&5, supra. 11 14 of 31 FILED: NEW YORK COUNTY CLERK 12/14/2021 01/10/2022 11:15 06:59 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 263 464 RECEIVED NYSCEF: 12/14/2021 01/10/2022 permitted to provide suggest the logged documents were not used by Much Shelist in formulating the March 1 SPA draft shared with Fiorello. Accordingly, this Court should accord no weight to Cresco’s unsubstantiated claim that it “made good faith efforts to promptly prepare the documents, as required by the LOI….” 32 C. Cresco’s use of privilege as both a “sword and shield” constitutes a waiver Even if the privilege log entries might suggest Cresco’s alleged good faith efforts, it is blackletter law that the attorney-client privilege may not be used as both a shield and a sword. See Am. Re-Ins. Co. v. U.S. Fid. & Guar. Co., 40 A.D.3d 486, 492 (1st Dep’t 2007) (“privilege is a shield and must not be used as a sword”). 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,” waiver has occurred. Deutsche Bank Tr. Co. of Americas v. Tri-Links Inv. Tr., 43 A.D.3d 56, 63 (1st Dep’t 2007) (emphasis added). Cresco’s attempt to rely on the documents listed on its privilege log plainly violates this precept.33 Similarly, parties 32 Ex. P (Hipp Cross Mtn. Aff.) ¶¶ 18-19. 33 In an effort to avoid the instant motion, Cresco suggested it “ha[d] not used or disclosed any privileged materials or communications. Instead, Cresco merely cited a handful of entries on its privilege log…to corroborate that one of Cresco’s attorneys had prepared certain documents by certain dates.” Ex. T (Hipp email 11/1/2021 citing Deutsche Bank). That is manifestly false. Cresco argues the privilege log documents are evidence that Cresco performed work, in good faith, and consistent with its obligations under the LOI. To do what Cresco asks—to view those logged documents as evidence of work performed in good faith—requires an examination of the content and substance of the documents. That it not merely “the fact that it prepared certain documents at a certain point in time,” id., but a patent intent to rely on the content of the documents, which is 12 15 of 31 FILED: NEW YORK COUNTY CLERK 12/14/2021 01/10/2022 11:15 06:59 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 263 464 RECEIVED NYSCEF: 12/14/2021 01/10/2022 have been found to waive privilege where, “the truth of the parties’ position can only be assessed by examination of a privileged communication[.]” Tupi Cambios, S.A. v. Morgenthau, 989 N.Y.S.2d 572, 576 (Supr. Ct. 2014) (quoting Bolton v. Weil, Gotshal & Manges LLP, 4 Misc. 3d 1029(A) (Supr. Ct. 2004)). Cresco waived privilege by putting its privilege log documents and privileged communications concerning those documents squarely at issue in attempting to prove it “made good faith efforts to promptly prepare the documents, as required by the LOI.” 34 Cresco selectively references privilege log entries and asks this Court to judge their content and find them material and sufficient, without any ability by Fiorello or this Court to probe or test that characterization. Moreover, Cresco’s entire log is now suspect. Put simply, there is no way to quantify or evaluate the materiality of the “efforts” evidenced by the barest description of documents on a privilege log, far less whether they show Cresco met its “good faith” obligation