Amor Vincit Omnia? Tezos court denies document request because of marital privilege

Quick Take

  • Court in Tezos’ class action litigation denies motion to compel filed by Plaintiff
  • Married defendants argued that their communication together was privileged under the marital communications privilege

In re Tezos Securities Litigation, Case No. 17-cv-06779-RS, "Order on Discovery Dispute", 7/30/2019

Link to opinion

The Tezos litigation has taken a number of procedural twists and turns but still remains a putative class action (no class has been certified). The litigants have gone to battle over a number of issues, the latest of which is whether marital privilege protects husband/wife communications between Arthur and Kathleen Breitman from production to the plaintiffs.

In prior pieces published on the Block, we've covered (1) the nature of the marital privilege in this case and (2) the arguments that the parties have raised in connection with a motion to compel filed by the Plaintiffs. In short, the Breitmans, who created Tezos, refused to produce various communication between them, arguing that because they are married the law protects it from disclosure.  

The Court agreed. Specifically, the Court held that "that the marital communications privilege shields from disclosure communications between Kathleen and Arthur that were withheld from production in this litigation and placed on [a] privilege log."

Looking at applicable caselaw, the Court said that there was no dispute that the communications at issue were made between two validly married people. At issue, per the Court, was "the confidential nature of the communications." The defendants provided sworn statements to the effect that they didn't believe that their email communications were likely to be overhead/read by third parties. Given this, the Court said that the Plaintiffs did not meet their burden to show that the privilege was inapplicable.

Plaintiffs also argued in the alternative that even if the privilege applied there's an exception for communications that would have been made anyway in the ordinary course of business if the spouses weren't married. The Court rejected this argument and declined to apply a business exception to the marital communications privilege:

THE SCOOP

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