Preview
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