Wednesday, October 7, 2020

Trump Org. denies attorney waived attorney-client privilege in NY AG Investigation

Trump Org. denies attorney waived attorney-client privilege in NY AG Investigation

By Daniel Tay// Law360

Law360 (October 6, 2020, 6:32 PM EDT) -- A former Trump Organization attorney's actions cannot waive the organization's privilege in a probe into whether President Donald Trump inflated his asset values, the organization said, asking a New York state court to privately review contested documents.

A failure by land use attorney Charles Martabano, who formerly worked with the Trump Organization, to produce an adequate privilege log should not have meant the organization's attorney-client and work product privileges were deemed waived, the organization, Eric Trump and Martabano told the court Monday. They asked New York Supreme Court Judge Arthur Engoron to conduct a private review of the documents at issue, which New York Attorney General Letitia James had subpoenaed as part of a probe into actions surrounding a Trump property in Westchester County.

Martabano, Eric Trump and the Trump Organization criticized James' response to their motion to reargue Judge Engoron's ruling that Martabano's actions had waived the organization's privilege over the documents. James' office said the court hadn't misconstrued the law and didn't overlook any facts in finding that Martabano had waived privilege.

The Trump Organization said James had not shown any case where a New York court found a privilege holder had waived privilege "as a sanction for its former attorney's failure to adequately comply with a subpoena that was directed to that attorney personally. The reason for this is simple — it is unprecedented under New York law." 

The fight over records held by Martabano are the latest volley of court actions surrounding an investigation that includes whether the Trump Organization inflated the value of Seven Springs Estate, an approximately 212-acre property in Westchester County, to claim a $21.1 million tax deduction in 2015.

Martabano worked with the Trump Organization in the potential development of the Seven Springs property starting in about 2011. He previously asked the court to deny the office's request to compel him to produce additional documents and to be further deposed.

James' office in August asked the court to compel the Trump Organization, Morgan Lewis & Bockius LLP, Eric Trump and others to supply information in response to the probe. Those subpoenaed by James' office argued they wanted to preserve attorney-client and other privileges, while James' office said they made overbroad privilege objections.

Judge Engoron ruled on Sept. 23 that Trump couldn't wait until after the November election to sit for a deposition and largely ruled that various subpoenaed parties must hand over records to James' office. But on Sept. 30, Martabano and the Trump Organization asked to reargue the issues in Judge Engoron's holding. In response, Judge Engoron ordered the stay last week and instructed James to show why the Trump Organization and Martabano should not be allowed to reargue his holding.

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