Opinion
Civil Action Number 96-1285 (RCL)
March 3, 2003
J. Christopher Kohn, U.S. Dept. of Justice, Commercial Litigation Branch, Washington, DC, Brian L. Ferrell, U.S. Dept. of Justice, ENRD, Washington, DC, Mark E. Nagel, Robert Craig Lawrence, Scott Sutherland Harris, U.S. Atty.'s Office, Washington, DC, Charles Walter Findlay, III, Washington, DC, Henry A. Azar, Jr., U.S. Dept. of Justice, Federal Programs Branch, Washington, DC, Seth Brandon Shapiro, U.S. Dept. of Justice, Civ. Div., Washington, DC, Jonathan Brian New, U.S. Dept. of Justice, Civ. Div., Federal Programs Branch, Washington, DC, Jennifer R. Rivera, U.S. Dept. of Justice, Civ. Div., Washington, DC, Sandra Peavler Spooner, David J. Gottesman, Peter Blaze Miller, Cynthia L. Alexander, U.S. Dept. of Justice, Commercial Litigation Branch, Washington, DC, John Charles Cruden, John Stemplewicz, U.S. Dept. of Justice, Civ. Div., Washington, DC, Amalia D. Kessler, U.S. Dept. of Justice, Commercial Litigation Branch, Washington DC, for Kevin Gover.
J. Christopher Kohn, U.S. Dept. of Justice, Commercial Litigation Branch, Washington, DC, Brian L. Ferrell, U.S. Dept. of Justice, ENRD, Washington, DC, Phillip Martin Seligman, U.S. Dept. of Justice, Civ. Div., Washington, DC, Mark E. Nagel, Robert Craig Lawrence, Scott Sutherland Harris, U.S. Atty.'s Office, Washington, DC, Henry A. Azar, Jr., U.S. Dept. of Justice, Federal Programs Branch, Washington, DC, Terry M. Petrie, U.S. Dept. of Justice, ENRD, Gen. Litigation, Denver, CO, Michael John Quinn, Seth Brandon Shapiro, U.S. Dept. of Justice, Civ. Div., Washington, DC, Jonathan Brian New, U.S. Dept. of Justice, Civ. Div., Federal Programs Branch, Washington, DC, Gino D. Vissicchio, Jennifer R. Rivera, U.S. Dept. of Justice, Civ. Div., Washington, DC, Sandra Peavler Spooner, John Warshawsky, David J. Gottesman, Peter Blaze Miller, Mathew J. Fader, John J. Siemietkowsi, U.S. Dept. of Justice, Commercial Litigation Branch, Washington, DC, John R. Kresse, Timothy E. Curley, U.S. Dept. of Justice, Civ. Div.--Commercial Litigation Branch, Washington, DC, Tracy Lyle Hilmer, U.S. Dept. of Justice, Civ. Div., Washington, DC, Dodge Wells, U.S. Dept. of Justice, Washington, DC, John Stemplewicz, U.S. Dept. of Justice, Civ. Div., Washington, DC, for Dept. of Interior.
J. Christopher Kohn, U.S. Dept. of Justice, Commercial Litigation Branch, Washington, DC, Mark E. Nagel, Robert Craig Lawrence, Scott Sutherland Harris, U.S. Atty.'s Office, Washington, DC, Henry A. Azar, Jr., U.S. Dept. of Justice, Federal Programs Branch, Washington, DC, Daniel Gordon Jarcho, McKenna Long Aldridge LLP, Washington, DC, Seth Brandon Shapiro, U.S. Dept. of Justice, Civ. Div., Washington, DC, Jonathan Brian New, U.S. Dept. of Justice, Civ. Div., Federal Programs Branch, Washington, DC, Jennifer R. Rivera, U.S. Dept. of Justice, Civ. Div., Washington, DC, Herbert Lawrence Fenster, Michael James Bearman, McKenna Long Aldridge, LLP, Washington, DC, Sandra Peavler Spooner, David J. Gottesman, Peter Blaze Miller, Cynthia L. Alexander, Mathew J. Fader, Tracy Lyle Hilmer, U.S. Dept. of Justice, Civ. Div., Washington, DC, Dodge Wells, U.S. Dept. of Justice, Washington, DC, John Stemplewicz, U.S. Dept. of Justice, Civ. Div., Washington, DC, Amalia D. Kessler, U.S. Dept. of Justice, Commercial Litigation Branch, Washington, DC, for Gale Norton.
Robert D. Luskin, Patton Boggs LLP, Washington, DC, Henry A. Azar, Jr., U.S. Dept. of Justice, Federal Programs Branch, Washington, DC, Seth Brandon Shapiro, U.S. Dept. of Justice, Civ. Div., Washington, DC, Jonathan Brian New, U.S. Dept. of Justice, Civ. Div., Federal Programs Branch, Washington, DC, Jennifer R. Rivera, U.S. Dept. of Justice, Civ. Div., Washington, DC, David J. Gottesman, Peter Blaze Miller, Cynthia L. Alexander, Mathew J. Fader, Amalia D. Kessler, U.S. Dept. of Justice, Commercial Litigation Branch, Washington, DC, for John D. Leshy.
Robert D. Luskin, Patton Boggs LLP, Washington, DC, Seth Brandon Shapiro, U.S. Dept. of Justice, Civ. Div., Washington, DC, Jonathan Brian New, U.S. Dept. of Justice, Civ. Div., Federal Programs Branch, Washington, DC, Jennifer R. Rivera, U.S. Dept. of Justice, Civ. Div., Washington, DC, David J. Gottesman, Peter Blaze Miller, Cynthia L. Alexander, Mathew J. Fader, Amalia D. Kessler, U.S. Dept. of Justice, Commercial Litigation Branch, Washington, DC, for Edward B. Cohen.
Henry A. Azar, Jr., U.S. Dept. of Justice, Federal Programs Branch, Washington, DC, Seth Brandon Shapiro, U.S. Dept. of Justice, Civ. Div., Washington, DC, Jonathan Brian New, U.S. Dept. of Justice, Civ. Div., Federal Programs Branch, Washington, DC, Elizabeth Wallace Fleming, Trout Richards, P.L.L.C., Washington, DC, Jennifer R. Rivera, U.S. Dept. of Justice, Civ. Div., Washington, DC, David J. Gottesman, Peter Blaze Miller, Cynthia L. Alexander, Mathew J. Fader, Amalia D. Kessler, U.S. Dept. of Justice, Commercial Litigation Branch, Washington, DC, for Michael G. Rossetti.
B. Michael Rauh, Manatt, Phelps Phillips, L.L.P., Washington, DC, Henry A. Azar, Jr., U.S. Dept. of Justice, Federal Programs Branch, Washington, DC, Seth Brandon Shapiro, U.S. Dept. of Justice, Civ. Div., Washington, DC, Jonathan Brian New, U.S. Dept. of Justice, Civ. Div., Federal Programs Branch, Washington, DC, Jennifer R. Rivera, U.S. Dept. of Justice, Civ. Div., Washington, DC, David J. Gottesman, Tracy Lyle Hilmer, U.S. Dept. of Justice, Civ. Div., Washington, DC, Dodge Wells, U.S. Dept. of Justice, Washington, DC, for Neal McCaleb.
Amy S. Koch, Cameron McKenna, Washington, DC, for Quapaw Tribe of Oklahoma.
Charles Allen Hobbs, Hobbs, Straus, Dean Walker, Washington, DC, for National Congress of American Indians.
ORDER
This matter comes before the Court on motions by two non-parties, the National Congress of American Indians (NCAI) and the Quapaw Tribe of Oklahoma, for leave to file amici curiae briefs in the instant case. This Court has recently stated that "[a]n amicus curiae, defined as "friend of the court," . . . does not represent the parties but participates only for the benefit of the Court. Accordingly, it is solely within the discretion of the Court to determine the fact, extent, and manner of participation by the amicus." United States v. Microsoft Corp., 2002 WL 319366 at *2 (D.D.C. 2002) (citing Ryan v. Commodity Futures Trading Comm'n, 125 F.3d 1062, 1064 (7th Cir. 1997)). In this context, the Seventh Circuit has opined that
[a]n amicus brief should normally be allowed when a party is not represented competently or is not represented at all, when the amicus has an interest in some other case that may be affected by the decision in the present case (though not enough affected to entitle the amicus to intervene and become a party in the present case), or when the amicus has unique information or perspective that can help the court beyond the help that the lawyers for the parties are able to provide. Otherwise, leave to file an amicus curiae brief should be denied.
Ryan, 125 F.3d at 1063.
The Court has concluded that the amicus brief submitted by the National Congress of American Indians may be helpful and of interest to the Court in the instant litigation. Although NCAI acknowledges that it is "speaking not for individual Indians but for tribes," it nevertheless persuasively argues that
[i]t should be of interest to the Court, as it considers the individual claims, to be aware of the Tribes' interest in (1) the Government's handling of tribal trust funds which are in many cases the same kind of trust fund accounts as the ones owned by plaintiffs in the Cobell case (even being called by the same name — "IIM accounts"); (2) the Government's handling of trust land and natural resources owned by individual Indians, which, the tribes argue, must be handled consistent with tribal law and applicable federal laws, even when that reduces the income from the trust account; and (3) the Government's handling of trust land and natural resources where the land is owned by both individuals and as a tribe as tenants in common, or where individual and tribal land is jointly managed and leased.
NCAI's Reply Br. at 2. The Court is certainly cognizant that this is a case concerning individual Indian money accounts, not accounts owned by American Indian tribes. Nevertheless, given the broad nature of the relief at issue in Phase 1.5 of this litigation, it does not seem unreasonable for the Court to consider the potential impact that such relief might have on American Indian tribes. Additionally, NCAI notes that although its interests frequently coincide with the interests of the plaintiffs in this litigation, there nevertheless exists the "potential for some disagreement between tribes and the individual plaintiffs" concerning defendants' management of trust land and natural resources. Id. at 3. Therefore, despite defendants' characterization of the NCAI amicus brief as "nothing more than a proxy brief filed by a Plaintiffs-amicus-interest group," it is does not appear to the Court that the amicus brief of NCAI would simply repeat the arguments presented by plaintiffs. Defs.' Opp. B.R. at 8 n. 3. The Court is mindful of defendants' argument that "[t]he parties to this suit have plenty of pleadings from their opponents to respond to, and should not have to divert their focus from the case in chief to respond to an amicus brief." Id. at 10. However, defendants also represent that "the Department of Justice is litigating numerous cases brought by Indian tribes in various courts around the country." Id. at 3. Given the fact that there is probably some overlap between the issues raised in these cases and the issues raised in NCAI's amicus brief, and that defendants are free to file motions for extensions of time to file responsive briefs, the Court concludes that it would not constitute an undue burden on defendants to respond to the NCAI amicus brief. Accordingly, the Court will grant NCAI's motion for leave to file its amicus brief.
On the other hand, the Court does not believe the filing of an amicus brief by the Quapaw Tribe would necessarily prove helpful to the Court in the instant litigation. First, given that both defendants and plaintiffs have submitted motions opposing the Quapaw Tribe's motion for leave to file, the Court would be overriding the express objections of both parties if it were to grant the Quapaw Tribe's motion. Second, the interests of the tribe are already fully represented because it has filed an independent civil action against defendants. Third, unlike the NCAI, which represents the interests of over 250 American Indian tribes and Alaska Native villages, the Quapaw Tribe represents the interests of only a single tribe. Both plaintiffs and defendants persuasively argue that granting the Quapaw Tribe's motion would encourage other individual tribes to move for leave to file similar amici briefs, which would unduly expand the already extensive record in this case. Pls.' Opp. Br. at 5-6; Defs.' Opp. Br. at 7. Therefore, the Court will deny the Quapaw Tribe's motion for leave to file an amicus brief in the present case. Accordingly, it is hereby
ORDERED that the motion of the Quapaw Tribe of Oklahoma (O-Gah-Pah) for the admission pro hac vice of Stephen R. Ward and Jason B. Aamodt for the sole purpose of seeking leave to file, and filing, a brief amicus curiae [1753-1] be, and hereby is, GRANTED. It is further
ORDERED that the motion of the Quapaw Tribe of Oklahoma (O-Gah-Pah) to file an amicus curiae brief [1752-1] be, and hereby is, DENIED. It is further
ORDERED that the motion of the National Congress of American Indians for leave to file an amicus curiae brief [1755-1] be, and hereby is, GRANTED. It is further
ORDERED that, pursuant to Rule 83.2(d) of the Rules of the U.S. District Court for the District of Columbia, the motion of the National Congress of American Indians to grant leave for Geoffrey D. Strommer to appear pro hac vice on its behalf in the instant litigation [1756-1] be, and hereby is, GRANTED. It is further
ORDERED that defendants' motion for an enlargement of time to file an opposition brief to the National Congress of American Indians' Amicus Brief [1800-1] be, and hereby is, GRANTED. Defendants shall have eleven (11) days from the date of the instant order in which to serve and file a memorandum of points and authorities in opposition to the amicus brief of the National Congress of American Indians. It is further
ORDERED that the Brief for Amicus Curiae National Congress of American Indians, dated January 28, 2003, which is attached as an exhibit to the NCAI's motion for leave to file, shall be filed by the Clerk of Court.
ORDER
This matter comes before the Court on defendants' motion to strike scandalous materials from plaintiffs' response to defendant's historical accounting plan for individual Indian money accounts [1795-1], which was filed on February 10, 2003. Rule 12(f) provides in relevant part that "upon motion made by a party within 20 days after the service of the pleading upon the party . . ., the court may order stricken from any pleading any insufficient defense, or any redundant, immaterial, impertinent, or scandalous matter." It has been observed by well-respected commentators that
[t]he court possesses considerable discretion in disposing of a motion to strike redundant, impertinent, immaterial, or scandalous matter. However, because motions to strike on these grounds are not favored, often being considered `time wasters,' they usually will be denied unless the allegations have no possible relation to the controversy and may cause prejudice to one of the parties.
5A CHARLES ALAN WRIGHT ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1382 (2d ed. 1990) (citing cases) (footnotes omitted). In relation to material alleged to be "scandalous" in nature, the same authorities have explained that "[i]t is not enough that the matter offends the sensibilities of the objecting party if the challenged allegations describe acts or events that are relevant to the action" and that "[t]he granting of a motion to strike scandalous matter is aimed, in part, at avoiding prejudice to a party by preventing a jury from seeing the offensive matter or giving the allegations any other unnecessary notoriety. Of course, if the complaint will not be submitted to the jury, or if the case will be tried to the court, . . . there is less need to strike scandalous allegations." Id. (citing cases) (footnotes omitted).
In a recent case, United States v. Property Identified as Lot Numbered 718, 983 F. Supp. 9, 13 (D.D.C. 1997), this Court denied a motion to strike allegedly scandalous material from the government's response to an affidavit, observing that
it was hardly "scandalous," Fed.R.Civ.P. 12(f), "bear[ing] no possible relationship to the controversy." Talbot v. Robert Matthews Distributing Co., 961 F.2d 654, 664 (7th Cir. 1992). Indeed, [the] motion to strike must be denied because it commits the equally objectionable sin of frivolity.
These observations apply equally to defendants' motion. Accordingly, it is hereby
ORDERED that defendants' motion to strike [1795-1] be, and hereby is, DENIED.
ORDER
This matter comes before the Court on Interior Defendants' motion to strike plaintiffs' untimely filings [1760], which was filed on January 30, 2003. Defendants state that plaintiffs made three filings in an untimely manner, and that these filings should be struck as untimely filed. Although plaintiffs concede that the filings were made in an untimely manner, plaintiffs state that the lateness of the filing was due to an inadvertent miscalculation of the date by which they were required to respond to defendants' filings. The Court accepts plaintiffs' representation that the lateness of their filings resulted from a good faith misunderstanding regarding the date on which they were required to respond. Additionally, the Court is mindful of Rule 6(b)(2) of the Federal Rules of Civil Procedure, which provides in relevant part that "[w]hen . . . by order of court an act is required or allowed to be done at or within a specified time, the court for cause shown may at any time in its discretion . . . upon motion made after the expiration of the specified period permit the act to be done where the failure to act was the result of excusable neglect." However, plaintiffs have failed to file any motion seeking relief under Rule 6(b)(2). Additionally, if the Court were to deem plaintiffs' opposition brief to constitute such a motion, it would be necessary for the Court to permit defendants to file an opposition brief in response, and to permit plaintiffs to submit a reply brief. The Court concludes that this simple procedural issue does not merit another round of briefing, especially given the parties' recent penchant for flooding the Court with motion after motion. Finally, although there might be merit in plaintiffs' argument that no prejudice has accrued to defendants from plaintiffs' having filed their responsive briefs a day or so late, the Court nevertheless concludes that it is only fair to require all parties to the present case to comply with the Federal Rules of Civil Procedure and Local Rules. Accordingly, it is hereby
In a memorandum and order dated February 5, 2003, the Court granted defendants' motion as to the fourth of these filings, plaintiffs' reply brief in support of their motion to compel the testimony of Acting Special Trustee Donna Erwin.
ORDERED that defendants' motion to strike [1760] be, and hereby is, GRANTED.
MEMORANDUM AND ORDER
This matter comes before the Court on defendants' motion to file under seal a portion of their response to the Seventh Report of the Court Monitor ("Seventh Report") [1304-1], which was filed on May 16, 2002 and defendants' unopposed motion to file under seal their notice of filing the original declaration of James E. Cason [1315-1], which was filed on May 30, 2002. Also before the Court is defendants' motion for a protective order regarding allegedly privileged documents that were referenced in the Seventh Report [1320-1], which was filed on May 31, 2002. Upon consideration of defendants' motions, plaintiffs' opposition thereto, defendants' reply briefs, and the applicable law in this case, the Court finds that defendants' motions should be granted.
I. PROCEDURAL BACKGROUND
On May 2, 2002, the Court Monitor (now Special Master-Monitor) ("Monitor") filed the Seventh Report. The attachments submitted with the Seventh Report included four letters between Justice Department attorneys and Interior Department officials, and two interdepartmental memoranda from the Office of the Special Trustee to the Office of the Solicitor (collectively, "the Six Documents"). On May 16, defendants filed their response to the Seventh Report. On the same date, defendants moved to file under seal a portion of their response that discussed the Six Documents, claiming that the documents fell under the protection of the attorney-client privilege and the work product doctrine. Attachment 3 of defendants' response contained a facsimile copy of a declaration that was composed by Associate Deputy Interior Secretary James E. Cason. Plaintiffs filed their opposition brief on May 30, and defendants submitted their reply brief on June 11. On May 30, defendants filed an unopposed motion seeking to file under seal the original declaration of James E. Cason.
During the events at issue, the authority of the Monitor was provided by the terms of his appointment order of April 16, 2001. The Court makes no determination in the instant memorandum regarding the scope of the Monitor's authority pursuant to the September 17, 2002 order appointing him Special Master-Monitor under Rule 53 of the Federal Rules of Civil Procedure.
On May 31, defendants moved for a protective order regarding the Six Documents, again asserting that the documents were protected by attorney-client privilege and the work product doctrine. The relief sought in the order included (1) striking the copies of the Six Documents attached to the Seventh Report from the record and ordering them to be returned to defendants, (2) striking from the record portions of the Seventh Report that discussed the Six Documents, (3) ordering the Monitor, plaintiffs, and plaintiffs' counsel to return all copies of the Six Documents to defendants, and (4) barring use or publication of the Six Documents without permission from defendants or a court order. Plaintiffs submitted an opposition brief on June 14, and defendants filed a reply brief on June 26.
II. LEGAL ANALYSIS
A. Attorney-Client Privilege
1. Applicability
"The attorney-client privilege protects confidential communications made between clients and their attorneys when the communications are for the purpose of securing legal advice or services." In re Lindsey, 148 F.3d 1100, 1103 (D.C. Cir. 1998). The party that asserts the existence of the attorney-client privilege possesses the burden of demonstrating its applicability. Federal Trade Commission v. TRW, Inc., 628 F.2d 207, 213 (D.C. Cir. 1980). Not only the privileged relationship but all essential elements of the privilege must be shown "by competent evidence and cannot be `discharged by mere conclusory or ipse dixit assertions.'" See Martin v. Valley National Bank of Arizona, 140 F.R.D. 291, 302 (S.D.N.Y. 1991) (internal citation omitted).
In a recent opinion, this Court explained the applicability of the attorney-client privilege to the instant litigation, in which trust beneficiaries are asserting claims against a trustee:
The Court will, consistent with logic and prevailing authority, recognize the existence of an attorney-client privilege where a trustee seeks legal advice solely in his own personal interest or where the discovery material has been shown to relate exclusively to non-fiduciary matters. But the Court will not immunize every communication with counsel simply because it involved some incidental interest, or benefit distinguishable from, but ancillary to, that of the trust beneficiaries. With regard to litigation-related communications, the Court will not recognize the existence of an attorney-client privilege except where a trustee obtained legal advice solely to protect himself personally or the government from civil or criminal liability, an objective that is inherently inconsistent with his or her fiduciary capacity.
Mem. and Order dated Dec. 23, 2002 at 10 (emphasis in original) (footnotes and citations omitted). Accordingly, the Court must determine (1) whether any of the Six Documents fall under the protection of the attorney-client privilege and (2) if so, whether the fiduciary exception applies to any of the Six Documents.
After examining the Six Documents, the Court concludes that the four letters and one of the memoranda fall within the scope of the attorney-client privilege. The letters from Justice Department counsel to the Office of the Solicitor provide legal advice in the form of recommendations about the steps that Interior Department officials should take in order to respond to the document requests of Special Master Balaran ("Master"). The first of the two memoranda from the Office of the Special Trustee to the Office of the Solicitor, which is dated April 12, 2002 (the "first memorandum" or "earlier memorandum"), seeks answers to a series of questions about how to comply with these document requests. The second of the two memorandum, which is dated April 24, 2002 (the "second memorandum" or "later memorandum"), discusses and responds to one of the four letters from Justice Department Counsel to the Solicitor's Office. Two of the letters appear to have been originally accompanied by a cover letter stating that their contents may be "privileged, confidential, or otherwise protected from disclosure under applicable law." Additionally, the four letters and the earlier memorandum were submitted to the Master accompanied by a transmittal letter explaining that they were being provided for his in camera review, and requesting that they not be publicly disclosed without first providing defendants an opportunity to seek a final ruling on the issue of whether they were protected under attorney-client privilege or as work product. See Dept. of the Interior's Resp. to the Seventh Report of the Ct. Monitor ("Resp. to Seventh Report") at 14 Attach. A-E. Defendants have also submitted an affidavit representing that the four letters were treated by their senders and recipients as confidential communications. See Interior Defs.' Mot. for Protective Order Regarding Privileged Docs. Referenced in the Seventh Report of the Ct. Monitor ("Mot. for Protective Order"), Attach. A (Declaration of Larry Jensen) ¶¶ 5-7.
However, the Court is unable to conclude that the second memorandum merits protection under the attorney-client privilege. Although it arguably "provides legal advice or services," in that it quotes from and summarizes one of the four letters and opines as to the credibility of the opinions expressed in that letter, defendants have failed to demonstrate that the recipient and sender expected that the memorandum would remain confidential. In Linde Thomson Langworthy Kohn Van Dyke, P.C. v. Resolution Trust Corp., 5 F.3d 1508, 1514 (D.C. Cir. 1993), the D.C. Circuit explained that "the critical factor for purposes of the attorney-client privilege was that the communication be made `in confidence for the purpose of obtaining legal advice from the lawyer.'") (quoting FTC v. TRW, Inc., 628 F.2d 207, 212 (D.C. Cir. 1980)) (emphasis in original). But there is no statement accompanying the letter indicating that its contents were to remain confidential. Defendants' briefs contain only the conclusory statement that although the memorandum was produced to the Master without a transmittal letter informing him that its contents should remain confidential, it "is privileged nonetheless." Resp. to Seventh Report at 13; Mot. for Protective Order at 4. Defendants provide no basis for this legal conclusion. Finally, although the declaration of Justice Department attorney Larry Jensen does state that after he received a copy of the memorandum, its recipient and he "did not further disseminate [it], and thus we made appropriate efforts to preserve [its] confidentiality," his declaration provides no evidence that the sender and recipient had an expectation of confidentiality when the letter was originally transmitted. Mot. for Protective Order, Attach. A, ¶ 8. Accordingly, the Court is unable to find that this memorandum warrants the protection of the attorney-client privilege. However, the Court does find that the four letters and the earlier memorandum constitute confidential communications between a client (the Interior Department) and its attorneys (the Office of the Solicitor and Justice Department) made for the purpose of providing or securing legal advice, and are therefore protected under attorney-client privilege.
The second issue is whether the fiduciary exception, as it applies in the instant case, applies to these five documents. The Court must determine whether the advice contained in the letters and the first memorandum was not provided solely to protect the recipient personally, or the Interior Department generally, from the threat of civil or criminal liability, but instead related in some way to trust administration. As stated above, the subject matter of these documents is the proposed response of the Interior Department to the document requests of the Master. On their face, they do not appear to relate to administration of the trust even in the most tangential way. Moreover, nothing in plaintiffs' briefs indicate that these documents bear any relation to trust administration. The Court therefore concludes that these five documents do not fall within the scope of the fiduciary exception to the attorney-client privilege.
2. Waiver
The next issue is whether defendants have waived the protection afforded by the privilege. Defendants assert that the production of the Six Documents to the Master and the Monitor was not voluntary and therefore did not constitute a valid waiver of attorney-client privilege. Additionally, defendants assert that the publication of the Six Documents in the Seventh Report, and their subsequent dissemination, also did not constitute a valid waiver of attorney-client privilege. The Court will examine each of these claims in turn.
The leading case in the D.C. Circuit on the inadvertent waiver of privileged materials is In re Sealed Case, 877 F.2d 976 (D.C. Cir. 1989). In that case, Judge Silberman declared that "[s]hort of court-compelled disclosure, or other equally extraordinary circumstances, we will not distinguish between varying degrees of `voluntariness' in waivers of the attorney-client privilege." Id. at 980 (citation omitted). However, the case law that discusses inadvertent waiver in the context of privileged documents that were obtained by adversary parties manifestly does not apply to the instant situation, in which the Six Documents were not obtained by a party to this litigation but by an officer of the Court. Moreover, another court in this Circuit has clarified that "[v]oluntary disclosure means the documents [at issue] were not judicially compelled." Chubb Integrated Sys. Ltd. v. Nat'l Bank of Washington, 103 F.R.D. 52, 63 n. 2 (D.D.C. 1984). Accordingly, the issue before the Court is whether the disclosure of the Six Documents to the Monitor was judicially compelled.
In the Seventh Report, the Monitor explained the means by which he had obtained the Six Documents:
Pursuant to this Court's April 16, 2001 Order and the Secretary of the Interior's April 24, 2001 subsequent direction in light of that Order that the Court Monitor should be provided "access to any Interior offices or employees to gather information necessary or proper to fulfill his duties," the Court Monitor secured these memoranda in light of the issues presented that are of interest to this Court in its determination of the progress of trust reform and any actions of the Defendants and their counsel that might delay that reform.
Seventh Report at 68. In other words, the Monitor obtained these memoranda under the authority vested in him by an order of this Court. The receipt of the documents by a judicial officer under these circumstances is thus analogous to the receipt of documents by this Court for in camera review. It would be difficult for the Court to conclude that, under such circumstances, the disclosure of these documents to the Monitor was not judicially compelled.
A recent D.C. Circuit case accords with this Court's conclusion. In SEC v. Lavin, 111 F.3d 921 (D.C. Cir. 1997), after defense counsel was informed by the defendant's employer that tapes of the defendant's conversations with his wife had been provided to the Federal Reserve pursuant to its examination powers under 12 U.S.C. § 325, he immediately asserted the confidential marital communications privilege. Id. at 924. The D.C. Circuit found that this disclosure did not constitute a waiver of the privilege because the tapes were turned over in response to the Federal Reserve's invocation of its statutory examination powers. Id. at 932. Its finding turned in part on its analogy of the martial communications privilege to the attorney-client privilege:
Generally, the considerations that support a strict approach to waiver in the attorney-client context would appear to apply as well in the marital context: while both privileges serve to promote important public interests by encouraging full and frank communications within special relationships, they must be narrowly construed because of their adverse effect on the full disclosure of truth.
Id. at 929 (internal citations omitted). The D.C. Circuit also noted that, in order to establish the existence of the privilege, the defendant had submitted transcripts of the tapes to the district court for in camera review. Id. at 933. The court's discussion of this occurrence is particularly relevant to the present situation:
Citing In re Sealed Case, 877 F.2d at 980, which involved disclosure of privileged materials to third parties, not to the court, the SEC maintains that the [defendant's] uninvited submission of the transcripts for the district court's in camera review was improper, and the resulting disclosure thus constituted waiver of the privilege. This contention is meritless. Not only did the district court properly exercise its discretion in deciding to review the tapes in camera, but we know of no case, and the SEC points to none, where the submission of privileged material to the court for in camera review in order to demonstrate the existence of a privilege has itself been held to constitute waiver.
Id. at 933 n. 15. This Court is also unaware of any case in which the submission of privileged material for in camera review has been deemed to constitute a waiver of the asserted privilege. It would thus be illogical to find that a closely analogous situation — namely, the submission of privileged documents to a judicial officer acting pursuant to the authority vested in him by court order — resulted in a waiver of privilege.
Case law from other circuits lends credence to the Court's conclusion in this regard. For example, in Shields v. Sturm, Ruger Co., 864 F.2d 379 (5th Cir. 1989), the Fifth Circuit refused to find a waiver of the work product doctrine for a survey used in a prior judicial proceeding when the survey's use in the prior case was compelled by court order and produced over the defendant's objections. The court explained that when a party is compelled to disclose work product, and does so only after objecting and taking other reasonable steps to protect the privilege, "one court's disregard of the privileged character of the materials does not waive the privilege before another court." Id. at 382. Similarly, in Schaffer v. Below, 278 F.2d 619, 628 (3d Cir. 1960), the court held that a disclosure of attorney-client correspondence in response to a court-ordered subpoena did not destroy the privilege. And in a case in which the federal government had been granted permission to inspect the defendants' corporate files and records, the court in United States v. New Wrinkle, Inc., [1954] Trade Cas. (CCH) ¶ 67,883 (S.D.Ohio 1954), found that no waiver had resulted from the inspections. The court reasoned that
[i]f Government agents come into a place of business and ask or demand to see files and records, and in a spirit of cooperation, the files and records are turned over to the agents by the business, it does not, in the opinion of this Court, constitute a voluntary turning over of records which can be claimed by the Government as a waiver. There is at least an implied coercion in a request or demand made by Government agents.
Id. Accordingly, the Court finds that the letters and the earlier memorandum did not lose the protection of the attorney-client privilege when they were turned over to the Monitor in the course of his investigations.
The Court next turns to defendants' claim that the Monitor's inclusion of the Six Documents as attachments to the Seventh Report, and their subsequent dissemination, did not constitute a waiver of attorney-client privilege. Defendants contend that because these were involuntary disclosures made by third parties, not by defendants themselves, no waiver of privilege resulted.
Recent case law from this Circuit provides support for defendants' contention. In Lavin, the D.C. Circuit addressed the argument that the attorney-client privilege had been waived because the defendant's employer and the employer's four outside law firms had had "unfettered access" to the tapes containing the privileged conversations. Lavin, 111 F.3d at 929. The court first noted that
the cases cited [by the district court and the parties] that discuss implied waiver when the holder of the privilege or his attorney is in possession of the materials at issue and fails to take adequate precautions to maintain their confidentiality, i.e., negligent or inadvertent disclosures, offer limited guidance on whether disclosures by third parties over whom the holder of the privilege has virtually no control, i.e., involuntary disclosures, may nonetheless be held to constitute waiver. In cases of involuntary disclosure, at least one court has held that waiver occurs only when the holder has failed to take reasonable steps to reclaim the protected material.
Id. at 930. The court concluded that the attorney-client privilege was preserved, although the communications might have been involuntarily disclosed by third parties, if the holder of the privilege made efforts reasonably designed to protect and preserve the privilege. Id. The court explained that "[u]nless communications remain privileged as long as the holder has acted reasonably in attempting to protect them, involuntary disclosures by third parties may render illusory the privilege's guarantee of privacy. Id. Cf. National Wildlife Fed'n v. EPA, 286 F.3d 554, 574-76 (D.C. Cir. 2002) (reaching the same conclusion regarding information protected as confidential trade secrets).
This Court concludes that when defendants learned about the disclosures by the Monitor, they commenced efforts that were reasonably designed to preserve the attorney-client privilege. In a portion of defendants' response to the Seventh Report that they seek to file under seal, defendants assert the privilege and request that portions of the Seventh Report that discuss the Six Documents be stricken from the record. Defendants subsequently filed a protective order regarding the Six Documents in a timely manner. In Lavin, the court concluded that defense counsel's assertion of the privilege as soon as he learned that the SEC had requested their production sufficed as "reasonable steps to protect [the client's] taped conversations from disclosure and thus did not waive the privilege." Lavin, 111 F.3d at 930. It noted that
[e]ven if Mr. Lavin could have foreseen that third parties might eventually seek to examine the tapes, we know of no case, and the SEC points to none, that requires a privilege holder to engage in a preemptive strike to prevent further disclosure of involuntarily disclosed, privileged materials — in other words, to assert the privilege or institute other legal measures absent a concrete threat of further disclosure.
Id. at 931. Similarly, defendants were not under any obligation to assert the privilege with respect to the Six Documents until they discovered that they had been filed as attachments to the Seventh Report. The motions that defendants filed thereafter represent reasonable and adequate measures taken in order to preserve the protection of the attorney-client privilege. Accordingly, the Court finds that any disclosures of the four letters and of the first memorandum made by parties other than defendants after the filing of the Seventh Report do not constitute a waiver of the attorney-client privilege with respect to these five documents.
B. Work Product
Because the Court has determined that five of the Six Documents are protected under the attorney-client privilege, it will be unnecessary to determine whether they are also shielded by the work product doctrine. Therefore, the Court will consider the applicability of that doctrine only in conjunction with the second memorandum.
The work product doctrine protects (1) documents and tangible things (2) prepared in anticipation of litigation (3) by or for the attorney for a party. Fed.R.Civ.P. 26(b)(3). Courts may order production of such materials upon a twofold showing: (1) that the opposing party has a "substantial need of the materials in the preparation of the party's case" and (2) that the opposing party is "unable without undue hardship to obtain the substantial equivalent of the materials by other means." Id. The Court may not, however, order discovery of so-called "core work product," i.e., documents that contain "the mental impressions, conclusions, opinions, or legal theories" of opposing counsel. Id. As explained by this Court in its memorandum opinion issued on February 5, 2003, in the instant case, defendants may invoke the work product doctrine only upon a showing that the materials at issue were developed exclusively for purposes other than the benefit of trust beneficiaries, i.e., solely to aid in litigation.
The Court finds that the second memorandum is a document that was developed in aid of the instant litigation for the attorneys for defendants. Additionally, upon examination of the memorandum, the Court finds no indication that it was created in order to facilitate the administration of the IIM trusts. Again, there is nothing in plaintiffs' briefs that would indicate otherwise. The Court therefore concludes that the second memorandum constitutes protected work product.
The Court next turns to the question of whether the memorandum constitutes "core work product." It has been observed that "[i]n contrast to fact work product, which is discoverable upon a showing of both a substantial need and an inability to secure the substantial equivalent of the materials by alternate means without undue hardship, opinion work product enjoys a nearly absolute immunity and can be discovered only in very rare and extraordinary circumstances." In re Allen, 106 F.3d 582, 607 (4th Cir. 1997). Although the second memorandum was not composed by an attorney, it does quote from and respond to the opinions of a Justice Department attorney that were set forth in one of the four letters. The Court therefore finds that the second memorandum constitutes core work product. Accordingly, the Court must protect the second memorandum from further disclosure in the course of the ongoing discovery proceedings in this case.
III. CONCLUSION
The Court must take steps to remedy the disclosures of privileged material and protected work product that have already occurred. Additionally, it must take steps to prevent further disclosures of these materials. Accordingly, it is hereby
ORDERED that defendants' motion to file under seal a portion of their response to the Seventh Report of the Court Monitor [1304-1] be, and hereby is, GRANTED. It is further
ORDERED that the portion of defendants' response to the Seventh Report of the Court Monitor that discusses the Six Documents shall be filed under seal. It is further
ORDERED that defendants' unopposed motion to file under seal their notice of filing the original declaration of James E. Cason and of erratum in reference to the declaration [1315-1] be, and hereby is, GRANTED. It is further
ORDERED that defendants' notice of filing the original declaration of James E. Cason and of erratum in reference to the declaration, and the Declaration of James E. Cason attached thereto, shall be filed under seal. It is further
ORDERED that defendants' motion for a protective order regarding allegedly privileged documents that were referenced in the Seventh Report [1320-1] be, and hereby is, GRANTED in part. It is further
ORDERED that the following five (5) documents identified in defendants' motion for a protective order are and remain protected by the attorney-client privilege:
(1) March 29, 2002 letter from Sandra P. Spooner, Deputy Director, Department of Justice ("DOJ") to Larry Jensen, Counselor to the Solicitor, Department of the Interior ("DOI"), transmitting and discussing recent Special Master requests and attaching certain prior letters from DOJ (produced to the Special Master as SMREQ002156-P through SMREQ002160-P), which was attached to the Seventh Report at Tab 13 ("Document 1").
(2) March 25, 2002 letter and revised draft supplemental search memorandum for the Special Master's February 7, 2002 request (as clarified on March 8, 2002) regarding the OIRM move, from Peter B. Miller, Trial Attorney, DOJ, to Larry Jensen, Counselor to the Solicitor, DOI (produced to the Special Master as SMREQ0002167-P through SMREQ0002172-P), which was attached to the Seventh Report at Tab 13 ("Document 2").
(3) March 20, 2002 letter from Peter B. Miller, Trial Attorney, DOJ, to Larry Jensen, Counselor to the Solicitor, DOI, transmitting and discussing the Special Master's March 20, 2002 request regarding IT security (produced to the Special Master as SMREQ0002180-P), which was attached to the Seventh Report at Tab 13 ("Document 3").
(4) April 12, 2002 memorandum from Thomas Slonaker, Special Trustee, to William Myers, Solicitor, DOI, discussing legal advice received by the Office of the Special Trustee concerning its document production in response to the Special Master's March 19, 2002 request regarding the Lee's Summit records transfer and quoting and transmitting the March 19, 2002 letter from DOJ to the Office of the Solicitor transmitting and discussing the Special Master's March 19, 2002 request (produced to the Special Master as SMREQ0002610-P through SMREQ0002614-P), unnumbered copies of which are attached to the Seventh Report at Tab 16 ("Document 4").
(5) March 19, 2002 letter from Amalia B. Kessler, Trial Attorney, DOJ, to Larry Jensen, Counselor to the Solicitor, DOI, transmitting and discussing the Special Master's March 19, 2002 request regarding Lee's Summit records transfer (produced to the Special Master as SMREQ0001357-P through SMREQ0001358-P and as SMREQ0002613-P through SMREQ0002614-P); an unnumbered copy of which is attached to the Seventh Report at Tab 16 ("Document 5").
It is further
ORDERED that the following document identified in defendants' motion for a protective order be and remain protected under Federal Rule of Civil Procedure 26(b)(3) as core work product:
(6) April 24, 2002 memorandum from Thomas Thompson, Principal Deputy Special Trustee, DOI, to William Myers, Solicitor, DOI and Larry Jensen, Counselor to the Solicitor, through Tom Slonaker, Special Trustee, DOI, discussing the March 29, 2002 letter from Sandra Spooner, DOJ, to Larry Jensen, which is attached to the Seventh Report at Tab 12 and Tab 16 ("Document 6").
It is further
ORDERED that the Clerk of the Court shall remove Documents 1-6 from the original and all copies of the Seventh Report of the Court Monitor, which was filed on May 2, 2002, and shall transmit such documents to defendants. It is further
ORDERED that Documents 1-6 shall be deemed stricken from the record in this case. It is further
ORDERED that the Special Master-Monitor identify to the Court all parts and passages in the Seventh Report in which the Special Master-Monitor disclosed or discussed the contents of Documents 1-6, and that all such parts and passages shall be deemed stricken from the record in this case. It is further
ORDERED that the Special Master-Monitor, plaintiffs, and plaintiffs' attorneys shall return to defendants all copies of Documents 1-6 that are in their possession, custody, or control. It is further ORDERED that Documents 1-6 shall not be disclosed or used without the prior express permission of defendants or prior authorization by this Court.
MEMORANDUM AND ORDER
This matter comes before the Court on defendants' motion for reconsideration of the Court's December 23, 2002 order prohibiting communications with class members pursuant to Rule 23(d) of the Federal Rules of Civil Procedure [1715-1], which was filed on January 8, 2003. Upon consideration of defendants' motion, defendants' reply brief, and the applicable law in this case, the Court finds that defendants' motion should be denied.
Defendants have moved to strike plaintiffs' opposition brief as untimely filed. In a separate order issued this date, the Court granted defendants' motion to strike plaintiffs' opposition brief.
Defendants have brought this motion under Rule 59(e) of the Federal Rules of Civil Procedure, which provides that "[a]ny motion to alter or amend a judgment shall be filed no later than 10 days after entry of the judgment." However, the December 23 order was not a final judgment by this Court, but an interlocutory order. Defendants suggest that the Court construe defendants' motion as having been brought under to the Court's inherent power to reconsider its own interlocutory orders. Defs.' Reply Br. at 2. Defendants cite the following observations made by this Court in a memorandum and order dated September 17, 2002:
District courts have broad discretion to grant or deny a motion for reconsideration. The court may invoke its discretion and deny such a motion unless it finds an intervening change in controlling law, the availability of new evidence, or the need to correct clear error or manifest injustice.
Cobell v. Norton, 226 F. Supp.2d 175, 177 (D.D.C. 2002) (citations omitted). However, defendants have failed to direct this Court to any relevant changes in the law since December 23, proffered any new evidence, or convinced the Court that reconsideration of its order is necessary to correct a clear error or manifest injustice. Instead, defendants absurdly maintain that the notices in the account statements they mailed to class members did not constitute communications concerning the subject matter of the representation. Defendants also announce to this Court that, despite having found reliable evidence indicating that defense counsel violated ethics rules through its participation in the efforts to produce the account statements, its referral of defense counsel to the Disciplinary Panel is "without foundation." Interior Defs.' Mot. for Reconsideration of Order Prohibiting Communications with Class Members ("Mot. to Reconsider") at 3.
But the only thing that defendants' motion demonstrates is that defendants have fundamentally misunderstood this Court's December 23 opinion. In order to avoid further misunderstanding, the Court will explain the findings of fact and the legal conclusions that it made in that opinion.
The first paragraph of the notices that defendants mailed to the class members declared that "DOI's Office of Historical Trust Accounting (OHTA) recently performed an accounting of this account from the time it was open through December 31, 2000." Under the heading "What You Should Do Next," the notice repeated that "OHTA completed the enclosed Historical Statement of Account for the time from the opening of the account through December 31, 2000," and then announced:
If you have concerns about the Historical Statement of Account included with this letter or if you believe it is in error, you may wish to file a challenge with OHTA. . . . If you do not challenge the historical account statement or request an extension within 60 calendar days of the postmark on the envelope containing this letter, the enclosed Historical Statement of Account will be final and cannot be appealed. . . . You may appeal OHTA's final response to the Interior Board of Indian Appeals (IBIA) by filing a Notice of Appeal with IBIA within 30 calendar days of the date you receive OHTA's response. [emphasis in original].
Defendants now claim that "[t]he notification made clear that recipients could bring to Interior's attention any information they believed relevant within a sixty-day period. Following that period, Interior would treat the individual accountings as final, absent further orders in this litigation calling into question that validity of the accountings under applicable statutory standards." Mot. to Reconsider at 9. The Court will set aside for a moment the issue of whether defendants did not intend the notices to preclude judicial review of defendants' administrative proceedings, a statement that the Court finds extremely dubious. Regardless of defendants' purported intent, the fact remains that without having obtained the consent of the Court, defendants mailed notices to class members that affected the rights of the class members to a full and accurate historical accounting — the very claims that lie at the heart of Phase II of this litigation. Defendants thus altered the class members' rights to a full accounting by subjecting the historical statements of account that the members had received to an administrative appeals process, without having consulted the Court about the changes that defendants were proposing. Thus, even if the notices could be considered to be legally accurate, it was improper for defendants to have sent them without first obtaining the Court's approval.
But the notices, in fact, were not accurate because they failed to inform the class members of their rights in this litigation. In their supplemental opposition brief, defendants complain that it might have been "misleading" for them to have mentioned this litigation in the notices. Defs.' Supp. Opp. Br. at 8. But defendants were not without recourse in this matter. The proper course of action would have been for defendants to file a motion requesting an order from this Court finding that their proposed communications with class members would not violate the ethical rules prohibiting contact with represented parties, precisely as they did in March 2000 and December 2001, when administrative processes they were contemplating involved contacts with class members. Defendants could have waited until the Court had ruled on plaintiffs' motion for a temporary restraining order and preliminary injunction against the transmission of the account statements. At the very least, given that defendants purport to have had the best interest of the class members at heart, defendants could have consulted with class counsel about the notices they were planning to send out. It is true that defendants alleged that they were concerned about potential Privacy Act violations, but defendants nevertheless were too impatient to wait for this Court's ruling on their motion that had raised those concerns.
Incredibly, rather than admit they had acted rashly by failing to wait for the Court to rule on this pending motion, defendants shifted the blame to plaintiffs' counsel and to the Court:
MR. SELIGMAN: This is a situation where we weren't trying to go behind the Court's back or behind counsel's back. We — before they went out we went to plaintiffs' counsel and asked for their consent to our order, and we could have had this resolved at that time, but they refused to consent to it and said, "No, there's an issue with — the protective order is enough." But if they had just consented, then we would have had an order in place before these went out.
THE COURT: But they didn't consent, so why didn't you let the Court rule on it before you acted?
MR. SELIGMAN: Well, there was quite a bit of time went by, Your Honor.
THE COURT: Well, you know, I'm in a murder trial with 31 murders. It's not like I have nothing to do but this Indian case.
Transcript of Motions Hearing, Nov. 1, 2002, at 17-18. In fact, the record of this case shows that defendants waited all of thirteen days after their motion for an order permitting them to provide copies of the account statements to plaintiffs' counsel was ripe before mailing out the statements to the class members.
Nevertheless, defendants include the following as a "statement of fact" in their motion for reconsideration: "[P]laintiffs' counsel opposed Interior's motion and sought a temporary restraining order and a preliminary injunction preventing Interior from distributing these account statements on the ground that they would be misleading. . . . This Court did not rule on plaintiffs' request for injunctive relief." Mot. to Reconsider at 3-4. What defendants mean by this last sentence is unclear. Apparently, defendants are implying that if the Court does not rule on a motion within three weeks of the time that it was filed, defendants are free to conclude that the Court will not be ruling on the motion at all. The Court is admittedly intrigued by the implications of this theory of "judicial estoppel." The logical corollary of this argument is that because defendants have failed to act since 1887, the Court may assume that they will not act at all, and enter a default judgment for plaintiffs.
In their supplemental opposition brief, defendants claim that their March 2000 and December 2001 motions were only filed "out of an abundance of caution." Id. at 3 n. 3. A dose of that caution would have served defendants well in this matter. Rather than filing a motion for an order permitting them to transmit the account statements, or even waiting for the Court to rule on the pending motions dealing with these statements, defendants went ahead and mailed out over a thousand statements to class members, so that they could issue a press statement lauding their own valiant efforts at trust reform. See Pls.' Notice of Supp. Authority in Support of Mot. for TRO and Prelim. Inj., Exh. 1. Indeed, in their surreply brief, defendants announce that "Interior opposes withholding the statements from the account holders while waiting for Court and Plaintiffs' counsel `approval' of them." Defs.' Surreply at ¶ n. 8. Defendants thus have only themselves to blame for the consequences of their impatience and obstinacy.
As noted above, defendants allege that the notices included with the account statements stating that the rights of the class members to appeal the account statements they had received would be lost unless the members objected within sixty days were never intended to supplant any remedy that the Court might order in Phase II of this litigation. The Court has just explained why defendants' purported intentions are irrelevant. But even assuming that these intentions mattered, the weight of the evidence suggests that defendants never intended these notices to be anything but an attempt to extinguish the rights of the class members without the possibility of judicial review. For one, their statements to this Court during oral argument contain not the slightest hint that any other message was ever intended. During the hearing on plaintiffs' motion for a preliminary injunction, the Court raised this very issue with defense counsel:
THE COURT: Well, where did this regulation come in that they lose all their rights after 60 days once they get this? Where did that come up, then?
MR. SELIGMAN: Well, my understanding is that there was already a procedure in place for appeals from Bureau of Indian Affairs' hearings, and the regulation that has been proposed now is basically to allow the Office of Hearings and Appeals to go ahead and hear these types of appeals, basically in an effort to try to narrow any possible disputes they might have. The typical —
THE COURT: And to extinguish the rights of anybody that doesn't file the appeal in 60 days —
MR. SELIGMAN: Well, I —
THE COURT: — which are class members; right?
MR. SELIGMAN: Well, yes.
THE COURT: So you're going to have class members lose all their rights in 60 days with a notice from you with no notification to plaintiffs' counsel and no notification to the Court; is that what you propose?
MR. SELIGMAN: Well, the proposal was to be able to give notification, and that's why we filed this motion.
Transcript of Motions Hearing, Nov. 1, 2002, at 5-6. Thus, in response to the Court's inquiry, defense counsel pointed to the fact that in September, defendants had filed a motion for an order permitting defendants to provide class counsel with copies of the statements of account that they were planning to send out. But defense counsel never contradicted the Court's assertions that class members would lose their rights to appeal the historical accountings provided by defendants if the members did not object within sixty days. Nor did defense counsel make any such statement when the Court raised the issue a second time:
THE COURT: All right. Do you think you have a right to tell them all their rights are extinguished and not have the Court approve that kind of a notice before you do it?
MR. SELIGMAN: Well, I think that there are very tricky issues of —
THE COURT: It's not tricky at all. Class action litigation, this is a classic question in class action litigation, isn't it?
MR. SELIGMAN: But I think there are — there are issues about APA jurisdiction and what a Court can and can't do.
THE COURT: You've got to tell that one to somebody else other than me.
MR. SELIGMAN: Well, I understand that that's not maybe something you want to hear, and — but the issue isn't so much —
THE COURT: It's something I've already ruled on.
Id. at 9. Again, when asked whether defendants possessed the right to extinguish the class members' rights to historical accountings, defense counsel did not claim that the notices were not intended to have any such effect. Instead, defense counsel responded by challenging the jurisdiction of the Court to adjudicate the instant case.
Nor, when the Court raised the issue for a third time, did defense counsel challenge the statement that the notices would extinguish the rights of class members:
THE COURT: There's no class action in the history of the country that operates by one party just taking it upon themselves to tell the members of the class all of their rights and privileges and obligations without any consultation with the Court once the class has been certified. How can that be?
MR. SELIGMAN: Well, it's not telling them about all their rights. They're only telling them about the rights with respect to these historical statements of account.
THE COURT: Right.
* * * * * * * * * * *
THE COURT: How would they know if there is a mistake?
MR. SELIGMAN: Well, it depends on the type of mistake. They may have independent records that show what their share should have been, and they can go and say, "No, no, no. The tribe gave you wrong information, or you got your wrong information somehow," and we can fix these kinds of problems before they ever get to the Court. So there is a whole class — there's thousands of these — of these types of accounts that [the] Department of Interior is able to start doing something on. They have a requirement to do these historical accountings, and —
THE COURT: And if they don't challenge it within 60 days, you're going to argue to me that all their rights are extinguished?
MR. SELIGMAN: Well, I — I don't know what will be argued later. I mean, there is the traditional exhaustion of administrative remedies, and maybe that would be argued, but at the same time I think they —
THE COURT: That's what you're telling them in this letter: If you don't do it in 60 days, you lose your rights; right?
MR. SELIGMAN: Right. They lose their rights, perhaps, under this accounting, for this accounting, but if overall their [sic] can approach their attorney and they can say, "Wait a minute. Bring this before Judge Lamberth. There is a problem." There certainly is somebody who is —
THE COURT: But you're not telling them they even have an attorney —
MR. SELIGMAN: Well, I'm not telling them —
THE COURT: — since there's no class notification.
Id. at 10-11, 13-14. It is true that defense counsel did concede during this colloquy that if class members somehow were to discover an error in the statements of account, they were entitled to "approach" their own counsel to ask them to inform this Court of the error. But defense counsel nowhere challenges the Court's assumption that if class members failed to challenge the statements of account within sixty days, their rights to appeal the statements to the Court would be lost.
Finally, when defense counsel was presented with a fourth opportunity to correct any misunderstanding of the Court as to the intended effect of the notices, defense counsel only confirmed the Court's interpretation:
THE COURT: I take it, you did misspeak. The regulations [sic] is not proposed, it is in effect.
MR. SELIGMAN: We can go back over the transcript. I don't remember saying that the regulation was just a proposal. I was — my understanding was that the — I was referring to the information that's in the letter that goes with the statement. It just proposes how the information is — or the procedure by which these people are —
THE COURT: Right, but the regulation is in effect, that if they don't take the appeal in 60 days, they lose their rights? It's not a proposed regard.
MR. SELIGMAN: That's my understanding, but, I mean, the regulation as to what it would cover does speak for itself.
THE COURT: Right.
MR. SELIGMAN: So whatever it says is what it covers.
THE COURT: Right.
MR. SELIGMAN: I did want to make clear that when we say we will agree not to send out — basically, we're agreeing we're not going to send out any of these types of statements —
THE COURT: Historical accountings.
MR. SELIGMAN: — historical accountings, but there are quarterly statements —
THE COURT: I understand regular accountings go out all the time, but they're not losing any rights with those, right?
MR. SELIGMAN: No, not that I'm —
THE COURT: Right. This is the only notice where they are going to lose rights.
MR. SELIGMAN: Where they potentially could lose rights, if they don't —
THE COURT: If they don't contest it in 60 days.
MR. SELIGMAN: Yes, Your Honor.
THE COURT: That's the only notices I'm talking about.
MR. SELIGMAN: Okay.
Id. at 42-43. Thus, far from undermining the conclusion that the notices represented an attempt to extinguish the rights of class members to a full and accurate historical accounting, the statements of defense counsel actually bolster this conclusion.
The briefs filed by defendants prior to the instant motion are similarly bereft of any claim that the notices, despite their unambiguous language, were not intended to extinguish the rights of class members. In their motion to reconsider, defendants do claim that they are "renew[ing]" an offer they allegedly made in their supplemental opposition brief to inform class members "that any failure to file an administrative appeal within the 60 day period does not extinguish the beneficiary's right to an accounting as may be determined in this case." Mot. to Reconsider at 11. But the opposition brief contains no such offer. Instead, it only offered to inform the class members of the existence of the instant litigation, while continuing to insist that defendants' "communication with the account holders regarding the historical statements of account and the applicable administrative process was appropriate." Defs.' Supp. Opp. Br. at 8.
In fact, defendants' briefs only contain a vague allusion to the possibility of judicial review in a footnote that is, at best, ambiguous:
No account holder has yet had any purported rights extinguished by the 60-day rule or any other aspect of the administrative procedure. If that happens, then and only then, would the issue be ripe for the Court to hear. Interior, of course, does not concede that a challenge would then be appropriate or that the Court would have jurisdiction to challenge the routine administrative process adopted by Interior. Interior only acknowledges that it would then be ripe for review.
Id. at 7 n. 6. Thus, while acknowledging that after the expiration of the sixty-day period, the issue of whether the members' rights would then be "ripe," defendants simultaneously mount challenges to the propriety of judicial review and to the notion that the Court would even possess jurisdiction to undertake a review of the administrative process that the notices claimed was "final and cannot be appealed." Accordingly, defendants' convenient post hoc representations that they never intended the notices to extinguish the rights of class members to a full and accurate accounting are demonstrably false.
Defendants also insist that the Court's referral of defense counsel to the Disciplinary Panel for violations of Rule 4.2(a) of the District of Columbia Rules of Professional Conduct was both "unwarranted" and "improper" because the attorneys themselves "did not make the communications to the class members." Mot. to Reconsider at 12, 13. Again, defendants completely misconstrue the Court's December 23 opinion, which never rested on such a finding. The language of Rule 4.2(a) provides, in relevant part, that "a lawyer shall not communicate or cause another to communicate about the subject of the representation with a party known to be represented by another lawyer in the matter" (emphasis added). Therefore, relying on the plain language of the rule, two federal cases, and the statements of three secondary commentators, all of which the Court cited in its opinion, the Court concluded that "knowing participation in the efforts of a defendant to engage in improper communications with members of a class action litigation constitutes a violation of attorney ethics rules." Mem. and Order dated Dec. 23, 2002 at 13.
Instead of confronting the authorities cited in the Court's opinion, defendants cite three cases that they claim bolster their arguments. An examination of these cases demonstrates that they do nothing of the sort. In EEOC v. McDonnell Douglas Corp., 948 F. Supp. 54 (E.D.Mo. 1996), the EEOC moved for a protective order prohibiting the defendant from communicating settlement offers to former employees of the defendant who had never filed a complaint with the EEOC, and who had not sought legal representation by the EEOC. The district court specifically noted that "the Defendant has agreed not to communicate directly with the aggrieved parties who have filed a charge of discrimination with the Equal Employment Opportunity Commission." Id. at 55. The court denied the EEOC's motion, finding that the communications were permissible under the Missouri Rules of Professional Conduct. Id. McDonnell Douglas plainly has nothing to do with the instant case, in which defendants communicated with class members, who are parties in the instant litigation. Moreover, unlike the D.C. Rules of Professional Conduct, the Missouri rules contain no clause prohibiting attorneys from "caus[ing] another to communicate" with represented parties.
Next, defendants cite Miano v. AC R Advertising, Inc., 148 F.R.D. 68 (S.D.N.Y. 1993) for the proposition that "the DOJ attorneys were under no obligation to prevent communications made by their client (Interior) to its IIM account holders." Mot. to Reconsider at 12. At best, this proposition oversimplifies the holding in that case; at worse, it misstates its conclusions. The issue in Miano, an age discrimination case, was whether the court should suppress taped conversations of the defendant's employees that had been made by plaintiffs, who had failed to inform the employees that they were being taped. Id. at 72. One of the grounds for the defendant's suppression motion was that plaintiffs were acting at the behest of their attorney, in violation of Disciplinary Rule 7-104, the forerunner of Rule 4.2 of the Rules of Professional Conduct. Id. at 72-73. The Court found that no violation of DR 7-104 had occurred because when the tapings at issue were made, the employees were not represented parties. Id. at 80. The Court next turned to the issue of whether plaintiffs' counsel had violated DR-102(A)(4), which prohibits "conduct involving dishonesty, fraud, deceit or misrepresentation" and DR-104(A)(2), which prevents an attorney from "circumvent[ing] a disciplinary rule through the actions of another." Id. at 82. Because DR 7-104, like Rule 4.2, prohibits attorneys from "caus[ing] someone else" to communicate with a represented party, the court looked to cases examining DR 7-104 for guidance in its interpretation of the phrase "circumvent[ing] . . . through the actions of another." Id. at 81-82.
The court began by noting that neither of the two phrases "is susceptible of precise definition, and [thus] by necessity resolution of this issue requires an ad hoc determination based upon the facts of each particular case." Id. at 82. Having observed that an attorney cannot delegate to another a task that he himself is prohibited from doing, the court continued:
There is an argument to be made, however, that the constraints on an attorney must go even further, so as to address the situation where he or she does not explicitly instruct another to act but accomplishes the same result indirectly. Therefore, as the Committee on Professional and Judicial Ethics of the New York City Bar Association concluded in the context of DR 7-104(A)(1), "causing" a client to communicate with another party
. . . includes not just using the client as an agent or in the place of the lawyer for making the communication (i.e. where the lawyer directs, supervises or plans the substance of the communication), but also the act of suggesting or recommending to the client that he or she engage in such communication, even though the lawyer has no further involvement in or knowledge of the substance of the communication that subsequently takes place, or the endorsement or encouragement of such a course of action, even when it is first raised or proposed by the client. . . . [T]he lawyer can still in fact "cause" the client to communicate by observing or advising that it might be desirable for the client to . . . speak to the adverse party, if the lawyer's action is a material factor in the client's final decision to engage in such a communication.
N.Y.C. Formal Opinion No. 1991-2, at 7. In assessing whether an attorney's acts or words were a material factor in the client's decision, the Committee suggested a focus "not on the client's actual recognized subjective decision-making process, but instead on whether the lawyer's words and actions would reasonably be understood to suggest or encourage that the client engage in the communication." Id., n. 4.
Id. The Court explained that plaintiffs' counsel's
ongoing discussions and receipt of information from Miano, derived from taped conversations, presents a troubling and close ethical question — whether [counsel] was so embroiled in Miano's conduct so as to be considered to have circumvented the disciplinary rules through Miano. There obviously would be less ambiguity with respect to an attorney's ethical obligations in a situation such as existed in this case, if it was clear that attorneys are either required to control their clients' behavior or so completely disassociate themselves from the clients' behavior so as to preclude any discussion with clients of what action they contemplate or are engaged in. Nevertheless, that is not clearly expected.
Id. at 89. Noting that while counsel may have been aware of the tapings, he "did not suggest, plan or supervise what Miano was doing," the court concluded:
Although I believe [counsel] came perilously close to crossing the line of circumventing the disciplinary rules through the actions of Miano, and [that he] would have been better advised to have further distanced himself from Miano's undertakings, I am not prepared to conclude that [his] knowledge of Miano's activity or receipt of information from Miano placed [him] in violation of the disciplinary rules.
Id.
Beyond the numerous factual dissimilarities between Miano and the instant case, the key difference between the two cases is that in Miano, the court was asked to determine whether a violation of the ethical rules had occurred, in order to issue a ruling on the defendant's motion to suppress. By contrast, this Court has not been asked to render a final determination as to whether defense counsel has or has not violated the ethics rules. Instead, Canon 3B(3) of the Code of Conduct for United States Judges directs this Court to "initiate appropriate action when the judge becomes aware of reliable evidence indicating the likelihood of unprofessional conduct by a judge or lawyer" (emphasis added). In its December 23 opinion, the Court determined that reliable evidence existed "indicat[ing] that defense counsel's participation in the efforts to produce the statements of account constituted a violation of Rule 4.2(a)." Mem. and Order dated Dec. 23, 2002, at 17. Defendants have failed to put forth any evidence that would undermine that conclusion, and thus the Court sees no reason why its referral to the Disciplinary Panel should be rescinded. Accordingly, the Court will leave it to the Disciplinary Panel to determine whether defense counsel committed an infraction of the ethics rules.
Finally, defendants cite United States v. Lemonakis, 485 F.2d 941 (D.C. Cir. 1973) for the proposition that "an attorney is not responsible for communications made by another unless that person is acting as the attorney's `alter ego.'" Mot. to Reconsider at 12. But Lemonakis, another case in which the issue presented was whether to suppress a series of taped conversations, made no such broad finding. In that case, an informant, acting under the direction of the U.S. Attorney's office, surreptitiously taped conversations between suspects in a series of burglaries and himself. Lemonakis, 485 F.2d at 946. The death of the informant prior to trial forced the government to resort to the tapes as its primary evidence against the defendants, who moved to suppress the tapes. Id. at 947. After rejecting the defendants' Fifth and Sixth Amendment arguments, the court turned to their claim that government attorneys had violated the no-contact rule with respect to the defendants who had retained counsel at the time that the taped conversations took place. Acknowledging that the claim "present[ed] a somewhat novel claim for this court," the court nevertheless concluded, on the specific facts presented, that the attorneys had not violated the no-contact rule. Id. at 955. After quoting United States v. Massiah, 307 F.2d 62 (2d Cir. 1962), rev'd, 377 U.S. 201 (1964), the court explained:
Similarly here, in a non-custodial situation, the Government's instructions to its informant, although provided by a U.S. Attorney as well as the investigating officers, were not such as to constitute [the informant] the "alter ego" of the U.S. Attorney's office. Moreover, the Massiah surveillance was undertaken after the indictment of the suspect. Here, in the investigatory stage of the case, the contours of the "subject matter of the representation" by appellants' attorneys, concerning which the code bars "communication," were less certain and thus even less susceptible to the damage of "artful" legal questions the Code provisions appear designed in part to avoid. Finally, we cannot say that at this stage of the Government's investigation of a criminal matter, the public interest does not-as opposed to the different interests involved in civil matters — permit advantage to be legally and ethically taken of a wrongdoer's misplaced belief that a person to whom he voluntarily confides his wrongdoing will not reveal it. We find there was no ethical breach by the U.S. Attorneys prosecuting the case; accordingly, we need not reach what legal consequences might flow had we concluded otherwise.
Id. at 956 (internal citations omitted). The factual and legal differences between Lemonakis and the instant case are so numerous that it hardly suffices merely to say that the earlier case is inapposite. However, the Court will limit itself to observing that nowhere in Lemonakis does the D.C. Circuit "ma[k]e clear that an attorney is not responsible for communications made by another unless that person is acting as the attorney's `alter ego.'"
In short, defendants' motion to reconsider fails to set forth any persuasive arguments why this Court should reconsider the opinion it issued on December 23, 2002. Instead, defendants misinterpret the language contained in the notices they mailed to class members, misrepresent statements made by their defense counsel to this Court, and mischaracterize the holdings of the cases that they claim lend support to their arguments, all in an attempt to re-open issues that have already been the subject of two rounds of briefing and oral arguments. There is no better way to waste the limited resources of a court than for a party to ask it to return to issues that the party has already litigated and lost. In their surreply to plaintiffs' motion for a preliminary injunction and a Rule 23 order, defendants announced that "[b]riefing on this issue is now complete." Defs.' Surreply at 1. Briefing on these issues is now more than complete. Accordingly, it is hereby
ORDERED that defendants' motion for reconsideration of the Court's December 23, 2002 order [1715-1] be, and hereby is, DENIED.