The UNITED STATES, Defendant. v. FAIRHOLME FUNDS, INC. et ... · Fairholme Funds, Inc. v. United...

FairholmeFunds,Inc.v.UnitedStates2017WL4768385(Fed.Cl.2017)

UnitedStatesCourtofFederalClaims.FAIRHOLMEFUNDS,INC.etal.,Plaintiffs,

v.TheUNITEDSTATES,Defendant.

No.13–465C

ReissuedforPublicationOctober23,2017[1]FiledUnderSealOctober4,2017

AttorneysandLawFirms

CharlesJ.Cooper,Washington,DC,forplaintiffs.

KennethM.Dintzer,UnitedStatesDepartmentofJustice,Washington,DC,fordefendant.

FRE502(d);QuickPeekProcedure;ClawbackOrder;RCFC26;Discovery

OPINIONANDORDER

SWEENEY,Judge

*1Beforethecourtisplaintiffs'secondmotiontocompeltheproductionofapproximately1500documentsdefendantiscurrentlywithholdingpursuanttothedeliberativeprocessandbankexaminationprivileges.Plaintiffsseekaccesstothesedocumentspursuanttothe“quickpeek”procedureauthorizedbyRule502(d)oftheFederalRulesofEvidence(“FRE”).Thecourtdeemsoralargumentunnecessaryand,forthereasonsstatedbelow,grantsplaintiffs'motion.

I.BACKGROUND[2]

Intheirmostrecentstatusreport,filedonJune30,2017,thepartiesindicatedthat(1)defendantproducedanadditional3500documentsinresponsetothecourt'sMarch7,2017order;(2)asaresultofthatproduction,plaintiffsidentifiedthirty-eightdocumentstheycontendshouldnotbewithheldforprivilege;(3)defendantstatedthatitwasintheprocessofreviewingthethirty-eightdocumentsandwouldrespondtoplaintiffsbyJuly12,2017;and(4)absentanyadditionalmotionspractice,discoverywouldbecompletedbyAugust3,2017.June30,2017JointStatusReport1–2.Followingitsreviewofthethirty-eightdocuments,defendantproducedanadditionaltwenty-twodocuments.Pls.'Mot.2.Inresponsetothereleaseoftheseadditionaldocuments,plaintiffsproposedthatthepartiesusethequickpeekprocedureauthorizedbyFRE502(d).Id.Defendantdidnotagreetotheuseoftheprocedure.Id.at3.OnAugust3,2017,plaintiffsfiledasecondmotiontocompel—themotioncurrentlybeforethecourt.BriefingonthemotionwascompletedonAugust24,2017.

AstheydidintheFebruary24,2017jointstatusreport,plaintiffsagainseekacourtorderdirectingthepartiestoutilizethequickpeekprocedureauthorizedbyFRE502(d)intheirsecondmotiontocompel.Pls.'Mot.1.Specifically,plaintiffsseektoreviewtheapproximately1500documentsdatedMay2012andlater,whichdefendantiswithholdingpursuanttothedeliberativeprocessandbankexaminationprivileges.Id.Plaintiffscontendthatalthoughthecourtdeclinedtheirpreviousrequesttousetheprocedure,itsuseisnowappropriate.Id.

II.DISCUSSION

A.TheParties'Positions

Insupportoftheirmotion,plaintiffsstate:

WhilewedonotsuggestthatGovernmentcounselhasfailedtomakeagoodfaithefforttocomplywiththisCourt'sorders,therateatwhichanotherreviewledtheGovernmenttoabandonitsprivilegeassertionsistroublingandhighlightstheinherentdifficultyofadvocatesfortheGovernmentdeterminingwhichinformationPlaintiffsmostneedinthisimportantandfactuallycomplexcase.

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Pls.'Mot.3.Plaintiffsfurthercontendthatportionsofthebelatedlyproduceddocuments,suchasportionsofFHFA00070607,werenotprivilegedinthefirstinstancebecausetheycontainedsegregablefactualinformation.Id.at3–4.Inaddition,plaintiffsclaimthatdocumentssuchasFHFA00038592andFHFA00077771demonstratethatplaintiffs'needfortheinformation“wasclearlysufficienttoovercometheGovernment'squalifieddeliberativeprocessandbankexaminationprivileges.”Id.at4.Accordingtoplaintiffs,FHFA00038592,anelectronic-mailmessagesentbyanofficialoftheFederalHousingFinanceAgency(“FHFA”)“threedaysbeforetheNetWorthSweepwasannouncedthatacknowledgedthattheCompanies'Boardshaddiscussedre-recordingcertaindeferredtaxassetsthathadbeenwrittenoffbasedontheviewthattheyweregoingtobeprofitablegoingforward,”disprovesaDecember17,2013sworndeclarationbyMarioUgoletti,SpecialAdvisortotheOfficeoftheDirectoroftheFHFA.[3]Id.(internalquotationmarksomitted).Inhisdeclaration,Mr.Ugolettistated:“‘AtthetimeofthenegotiationandexecutionoftheThirdAmendment,theConservatorandtheEnterpriseshadnotyetbeguntodiscusswhetherorwhentheEnterpriseswouldbeabletorecognizeanyvaluetotheirdeferredtaxassets.’”Id.(quotingDeclarationofMarioUgoletti20,Appendix(“A”)38).WithrespecttoFHFA00077771,“aninternalFHFA[electronic-mailmessage]summarizingaJune13,2012meetingbetweenFHFAofficialsand[FannieMae'sChiefFinancialOfficer(“CFO”)],SusanMcFarland,”plaintiffsargueitshouldhavebeenproducedearlierbecauseit“speaksdirectlytotheCompanies'profitabilityandtheanticipatedeffectoftheNetWorthSweep.”Id.at4–5.Intheelectronic-mailmessage,Ms.McFarlandstates:“‘[I]tispossiblethat[FannieMae]maytakeanegativeprovisionof$1to$2billioninthereserves(thiswouldincreaseincome)duetolowerthanexpectedcreditlosses.’”Id.at4(quotingA40).

*2Initsresponsetoplaintiffs'motion,defendantarguesthattheuseofthequickpeekprocedurewasnotappropriatewhenplaintiffsfirstsuggesteditandisevenlessappropriatenow.Def.'sResp.1.Defendantnotesthatfollowingitsproductionoftheadditionaltwenty-twodocuments,defendantreconsidereditsposition“regardingcertaindocumentsconcerningtheCompanies'loanlossreservesand/ordeferredtaxassets”andproducedatotaloffifteenmoredocuments.Id.at4–5.Defendantfurthernotesitscontinuedobjectiontotheuseofthequickpeekprocedurewithrespecttothedocumentscurrentlybeingwithheldonthebasisofthedeliberativeprocessandbankexaminationprivileges.Id.at5.

InsupportofitsoppositiontotheuseofFRE502'squickpeekprocedure,defendantcontendsthattheuseoftheprocedureisinappropriateinthiscasebecauseitdoesnotconsentandbecauseithasalreadyconductedacomprehensivereviewoftheprivilegedmaterials.Id.at6.Accordingtodefendant,thepurposeoftheprocedureis“tolessentheproducingparty'sburdentoreviewvoluminouselectronicallystoredinformation(ESI)forprivilegeandinvesttheresourcesnecessarytocomplywiththestricturesofRule26(b)(5)”oftheRulesoftheUnitedStatesCourtofFederalClaims(“RCFC”),id.at7,thegeneralrulegoverningaproducingparty'sobligationtoidentifyprivilegeddocuments,id.at6.Whentheprocedureisused,defendantadds,courtsentera“clawback”ordertoensurethattheproducingpartydoesnotwaiveanyprivilegesbyvirtueofitallowingitsopponenttoreviewthedocuments.Id.at7.QuotinganotepublishedbyTheSedonaConferencefromitseponymousjournal,defendantavers:

“[FRE]502(d)doesnotauthorizeacourttorequirepartiestoengagein‘quickpeek’...productionsandshouldnotbeuseddirectlyorindirectlytodoso....Rule502wasdesignedtoprotectproducingparties,nottobeusedasaweaponimpedingaproducingparties'righttoprotectprivilegedmaterial.Compelleddisclosureofprivilegedinformation,evenwitharighttolaterclawbacktheinformation,forcesaproducingpartytoringabellthatcannotbeun-rung.”

Id.(quotingTheSedonaConference,CommentaryonProtectionofPrivilegedESI,17SedonaConf.J.99,140(2016)).

Further,defendantarguesthatitisawareofonlyonecaseinwhichacourtorderedtheuseofthequickpeekprocedureoveraproducingparty'sobjections.Id.at9.Accordingtodefendant,inthatcase—Summervillev.Moran,No.14-cv-2099,2016WL233627(S.D.Ind.Jan.20,2016)—thecourtpermittedtheuseoftheprocedurebecausethedefendant'sprivilegelogwasinadequateandbecausethedefendantrefusedtocooperatewithplaintiffduringdiscovery.Id.TheprocedurewasusedinSummerville,defendantopines,“asanalternativetoimposingwholesaleprivilegewaiverasasanction.”Id.Inthiscase,defendantnotes,nosuchconducthasbeenalleged.Id.DefendantalsosuggeststhattheuseoftheprocedureisunnecessarybecausedefendanthasalreadyinvestedthetimeandresourcesrequiredbyRCFC26(f).[4]Id.

*3Initsresponse,defendantalsoaddressesplaintiffs'claimthattheyneedtwoparticulardocuments:FHFA00077771andFHFA00038592.Id.at10–11.Accordingtodefendant,“substantivelysimilar

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information”isavailablefromothersources.Id.at10.First,defendantstatesthatalthough“FHFA00077771brieflymentionsFannieMae'sexpectedprofitabilityforthequarterendingJune30,2012,[its]actualearningsforthatquarterarepubliclyavailableinitsSECfilings.”Id.Second,defendantstatesthatalthough“plaintiffserroneouslycontendthattheyneedFHFA00038592becauseitallegedlycontradictsastatementcontainedinadeclarationsubmittedbyaformerFHFAofficialinaseparatelitigation...plaintiffsobtainedsubstantivelysimilarinformationfrom[their]depositionofFannieMae'sformer[CFO].”Id.DefendantfurthernotesthatitprovidedplaintiffswithacopyofFHFA00038592duringtheparties'meet-and-confer.Id.at11.Finally,defendantarguesthatplaintiffs'suggestionthattheuseofthequickpeekprocedureiswarrantedbecausedefendantfailedtoproduce“threepagesofsegregable,factualinformationfromaFannieMaepresentationpreparedforFHFA,”untilafterthemeet-and-conferisaninsufficientreasontoallowplaintiffstoreviewapproximately1500additionalprivilegeddocuments.Id.Instead,defendantcontendsthatthepartiesshouldresumebriefingondefendant'smotiontodismiss.Id.at12.

Intheirreply,plaintiffssuggestthatthequickpeekreviewtheyproposecouldbecompletedinapproximatelyonemonthandwouldensureplaintiffsreceiveallofthedocumentstowhichtheyareentitled.Pls.'Reply1.First,plaintiffsarguethatthecourthastheauthoritytoordertheuseoftheprocedureabsenttheproducingparty'sconsent.Id.at1–2.Insupportoftheirargument,plaintiffsreferencetheadvisorycommitteenotetoFRE502(d),whichstatesthat“[u]ndertherule,aconfidentialityorderisenforceablewhetherornotitmemorializesanagreementamongthepartiestothelitigation[andthatp]artyagreementshouldnotbeaconditionofenforceabilityofafederalcourtorder.”Id.at1(quotingFRE502(d)advisorycommitteenote(internalquotationmarksomitted)).PlaintiffsalsoreferencetheCongressionalRecord,whichstatesthatFRE502(d)“isdesignedtoenableacourttoenteranorder,whetheronmotionofoneormorepartiesoronitsownmotion.”Id.at1–2(quoting154Cong.Rec.H7818–19(Sept.8,2008)(internalquotationmarksomitted)).

Next,plaintiffsarguethatnoneofthedecisionsreferencedbydefendantinitsresponsestandsforthepropositionthatacourtcannotordertheuseofthequickpeekprocedureabsenttheproducingparty'sconsent.Id.at2.Inaddition,plaintiffsdiscountdefendant'srelianceonthepositiontakenbyTheSedonaConference,arguinginsteadthatTheSedonaConference“failstoreconcileitspositionwithRule502'sAdvisoryCommitteeNoteandthelegislativehistory”andthatconcernovertheramificationsofforcingaproducingpartyto“ringabellthatcannotbeunrung”isunwarrantedwithrespecttothequalifieddeliberativeprocessandbankexaminationprivileges“inacaseinwhichtheCourthasalreadydeterminedthatPlaintiffs'needforcertainmaterialsissufficienttoovercometheGovernment'sinterestinconcealingthem.”Id.at3.Furthermore,plaintiffscounterdefendant'sargumentthattheuseoftheprocedureisonlyappropriateifdoneatthebeginningofthediscoveryprocess,notingthatinSalemFinancial,Inc.v.UnitedStates,102Fed.Cl.793,800(2012),thiscourtutilizedtheprocedureaftertheproducingpartyhadreviewedandwithheldapproximately390documentsasprivileged.Id.

Finally,plaintiffssuggestthattheuseofthequickpeekprocedureistheonlywaytoensurethattheyreceiveallofthedocumentstowhichtheyareentitled.Id.at3–4.Inplaintiffs'view,thefactthatdefendantreleasedadditionaldocumentseachtimeplaintiffschallengeditsprivilegeclaimsremainstroublingandcanonlyberemediedthroughtheuseofthequickpeekprocedure,irrespectiveofwhetheritisviewedbythecourtas“analternativetoimposingwholesaleprivilegewaiverasasanction.”Id.at4.

B.Analysis

RCFC26,captioned“DutytoDisclose;GeneralProvisionsGoverningDiscovery,”iscomprisedofsixmajorsubsections:subsection(a)addresses“RequiredDisclosures,”subsection(b)addresses“DiscoveryScopeandLimits,”subsection(c)addresses“ProtectiveOrders,”subsection(d)addressesthe“TimingandSequenceofDiscovery,”subsection(e)addresses“SupplementalDisclosuresandResponses,”andsubsection(g)addresses“SigningDisclosuresandDiscoveryRequests,Responses,andObjections.”[5]Variousprovisionswithinthesubsectionsgoverntheparties'handlingofprivilegedorprotectedmaterials.Forexample,RCFC26(b)(5)(A)describesthestepsthatapartymusttakeifseekstowithhold“informationotherwisediscoverablebyclaimingthattheinformationisprivilegedorsubjecttoprotectionastrial-preparationmaterial.”Next,RCFC26(b)(5)(B)identifiesthestepsthatapartymusttakeifithasinadvertentlyproducedsuchinformation.Lastly,RCFC26(c)establishestheparametersofcourt-orderedprotectiveorders:

*4(1)InGeneral.Apartyoranypersonfromwhomdiscoveryissoughtmaymoveforaprotectiveorder.Themotionmustincludeacertificationthatthemovanthasingoodfaithconferredorattemptedtoconferwithotheraffectedpartiesinanefforttoresolvethedisputewithoutcourtaction.Thecourtmay,forgoodcause,

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issueanordertoprotectapartyorpersonfromannoyance,embarrassment,oppression,orundueburdenorexpense,includingoneormoreofthefollowing:

(A)forbiddingthedisclosureordiscovery;

(B)specifyingterms,includingtimeandplaceortheallocationofexpenses,forthedisclosureordiscovery;

(C)prescribingadiscoverymethodotherthantheoneselectedbythepartyseekingdiscovery;

(D)forbiddinginquiryintocertainmatters,orlimitingthescopeofdisclosureordiscoverytocertainmatters;

(E)designatingthepersonswhomaybepresentwhilethediscoveryisconducted;

(F)requiringthatadepositionbesealedandopenedonlyoncourtorder;

(G)requiringthatatradesecretorotherconfidentialresearch,development,orcommercialinformationnotberevealedorberevealedonlyinaspecifiedway;and

(H)requiringthatthepartiessimultaneouslyfilespecifieddocumentsorinformationinsealedenvelopes,tobeopenedasthecourtdirects.

In2008,[6]thecourt'sgeneralauthoritytomanagediscoveryandresolvediscoverydisputeswasaugmentedwithanaddition,nottotheFederalRulesofCivilProcedure(“FRCP”)—andthereforebyextensiontotheRCFC—buttotheFRE.[7]AccordingtoFRE502'sadvisorycommitteenote,thegeneralpurposeoftherule,captioned“Attorney–ClientPrivilegeandWorkProduct;LimitationsonWaiver,”wastwofold.First,theadvisorycommitteesoughttoresolve“longstandingdisputesinthecourtsabouttheeffectofcertaindisclosuresofcommunicationsorinformationprotectedbytheattorney-clientprivilegeorasworkproduct—specificallythosedisputesinvolvinginadvertentdisclosureandsubjectmatterwaiver.”FRE502'sadvisorycommitteenote.Second,theadvisorycommitteesoughttorespond“tothewidespreadcomplaintthatlitigationcostsnecessarytoprotectagainstwaiverofattorney-clientprivilegeorworkproducthavebecomeprohibitiveduetotheconcernthatanydisclosure(howeverinnocentorminimal)willoperateasasubjectmatterwaiverofallprotectedcommunicationsorinformation,”especiallyincasesinvolvingESI.Id.Subsection(d)oftheruleprovidesthat“[a]federalcourtmayorderthattheprivilegeorprotectionisnotwaivedbydisclosureconnectedwiththelitigationpendingbeforethecourt—inwhicheventthedisclosureisalsonotawaiverinanyotherfederalorstateproceeding.”FRE502(d).Withrespecttosubsection(d),theadvisorycommitteestated:

Confidentialityordersarebecomingincreasinglyimportantinlimitingthecostsofprivilegereviewandretention,especiallyincasesinvolvingelectronicdiscovery.Buttheutilityofaconfidentialityorderinreducingdiscoverycostsissubstantiallydiminishedifitprovidesnoprotectionoutsidetheparticularlitigationinwhichtheorderisentered.Partiesareunlikelytobeabletoreducethecostsofpre-productionreviewforprivilegeandworkproductiftheconsequenceofdisclosureisthatthecommunicationsorinformationcouldbeusedbynon-partiestothelitigation.

*5FRE502(d)'sadvisorycommitteenote.Theadvisorycommitteefurthernotedthat“whenaconfidentialityordergoverningtheconsequencesofdisclosureinthatcaseisenteredinafederalproceeding,itstermsareenforceableagainstnon-partiesinanyfederalorstateproceeding,”thusprovidingproducingpartieswith“predictableprotectionfromacourtorder—predictabilitythatisneededtoallowthepartytoplaninadvancetolimittheprohibitivecostsofprivilegeandworkproductreviewandretention.”Id.Further,theadvisorycommitteeconfirmedthat,asisthecasewithallfederalcourtorders,“aconfidentialityorderisenforceablewhetherornotitmemorializesanagreementamongthepartiestothelitigation.”Id.Finally,withrespecttosubsection(d),theadvisorycommitteecautionedthatFRE502(d)“doesnotallowthefederalcourttoenteranorderdeterminingthewaivereffectsofaseparatedisclosureofthesameinformationinotherproceedings,stateorfederal.”Id.;seealso6JamesWm.Moore,Moore'sFederalPractice§26.49[5][h][v](3ded.2012)(footnotesomitted)(“Federalcourtsmayenterconfidentialityordersprovidingthatdisclosureofprivilegedorprotectedmaterialinalitigationpendingbeforethecourtdoesnotconstitutewaiverinotherstateorfederalproceedings.Insuggestingthisprovision,theAdvisoryCommitteeacknowledgedthattheutilityofaconfidentialityorderinreducingdiscoverycostsissubstantiallydiminishedifitprovidesnoprotectionoutsidetheparticularlitigationinwhichtheorderisentered.Entryofaconfidentialityorderwillpreventnonpartiestothelitigationfromobtainingprivilegedmaterialproducedpursuanttosuchaconfidentialityorder.Therulealsoencompassessituationsinwhichthepartiesareorderedtoprovidedocumentsundera‘claw-back’or‘quickpeek’arrangement.Thesetypesofarrangementsallowthepartiesto

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producedocumentsforreviewandreturnwithoutengaginginaprivilegereview,butwithoutwaiverofprivilegeorworkproductprotection,asawaytoavoidtheexcessivecostsoffullprivilegereviewanddisclosurewhenlargenumbersofdocumentsareinvolved.Theruleprovidesthepartieswithpredictableprotectionfromwaiverwhenrespondingtoacourtorderforproductionofdocumentspursuanttosuchanarrangement.”).

Asnotedabove,thenarrowissuebeforethecourtiswhether,absentdefendant'sconsent,thecourtshouldgrantplaintiffs'requestandenteranFRE502(d)orderallowingplaintiffstoreviewthe1500documentsbeingwithheldbydefendantpursuanttothedeliberativeprocessandbankexaminationprivileges.Inthiscase,theanswerisyes.

DiscoveryinthiscasebeganonApril7,2014,seeApril4,2014Order,andisongoing.OnJuly16,2014,thecourtenteredaprotectiveorder,whichwassubsequentlymodifiedonAugust8,2014.SeeJuly16,2014ProtectiveOrder(modifiedAugust8,2014).Theprotectiveorderspecificallystatedthatitwas“notintendedtoaddressorgovernclaimsofprivilegethatmayotherwisebeassertedbyanyoftheparties.”Id.at1.Rather,theexpresspurposeoftheprotectiveorderwastoprotect“proprietary,confidential,tradesecret,ormarket-sensitiveinformation,aswellasinformationthatisotherwiseprotectedfrompublicdisclosureunderapplicablelaw.”Id.2.Further,theprotectiveorderprovidedthatsuchinformation

maybeusedsolelyforthepurposesofFairholmeFunds,Inc.v.UnitedStates(No.13–465,Fed.Cl.),includinganyappellateproceedings,andmaynotbegiven,shown,madeavailable,discussed,orotherwiseconveyedinanyform,exceptasotherwiseagreedbythepartiesorasotherwiseprovidedinthisProtectiveOrderorinanysubsequentordersissuedbythecourtinthisaction.

Id.3.Inthecaseofinadvertentlydisclosedprivilegedmaterial,theprotectiveordercontainedaclawbackprovision:

Theinadvertentdisclosureofanyinformationordocumentthatissubjecttoprivilegewillnotbedeemedtowaiveaparty'sclaimofprivilegeforthatdocumentorthesubjectmatterofthedocument,toitsprivilegedorprotectednature,orestopthatpartyortheprivilegeholderfromdesignatingtheinformationordocumentasprivilegedatalaterdate.

Id.13.Significantly,theprotectiveorderfurtherstatedthatthe“clawbackprovisionshallbegovernedbyFederalRuleofEvidence502(d).”Id.Lastly,theprotectiveorderprovidedthatany“[i]nadvertentfailuretodesignateanyinformationpursuanttothisProtectiveOrdershallnotconstituteawaiverofanyotherwisevalidclaimforprotection,”id.14,and“shallsurviveandremaininfullforceandeffectafterterminationofthisaction,”id.28.

*6Althoughplaintiffdoesnotallegeandthecourtdoesnotfindthatthegovernmenthasfailedtosatisfyitsdiscoveryobligations,thecourtnotesthat,asplaintiffpointsoutandthegovernmentconcedes,thegovernment'sproductionofdocumentsinthiscasehasbeenpiecemeal.Therefore,inanefforttofacilitatethespeedyandefficientconclusionofjurisdictionaldiscoveryinthiscase,thecourtherebyallowstheuseofFRE502(d)'squickpeekprocedureforthe1500documentsatissue.Specifically,thecourtordersdefendanttoprovideplaintiffswithaccessto,atalocationofdefendant'schoosing,theapproximately1500documentsplaintiffsseektoreview.Uponreviewingthedocuments,plaintiffshallidentifythosedocumentsitseekstobeproduced.Defendantwillthenbegivenonelastopportunitytoreviewthedocumentsidentifiedbyplaintiffs.Ifdefendantstillmaintainsthatthedocumentsareprivileged,defendantshallsoindicate.If,however,defendantnolongerseekstoasserteitherthedeliberativeprocessorbankexaminationprivilegeoverthedocuments,itshallproducethedocumentstoplaintiffs.Astothosedocumentsoverwhichdefendantcontinuestoassertaprivilege,plaintiffsmayfileamotiontocompeltheirproductioniftheybelievethatthosedocumentsarenotprivileged.Defendantwillthenprovidethedocumentstothecourtforanincamerareview.

Inresponsetodefendant'sargumentthatuseofFRE502(d)'squickpeekprocedureisinappropriatebecause(1)defendanthasalreadyconductedacomprehensivereviewofitsdocuments,(2)onceplaintiffshaveviewedprivilegedinformation,defendanthasnowaytounringthebell,and(3)defendantdoesnotconsenttouseoftheprocedure,thecourtaddsthefollowing.

Firstandforemost,itis“axiomaticthatatrialcourthasbroaddiscretiontofashiondiscoveryorders[.]”WhiteMountainApacheTribeofAriz.v.UnitedStates,4Cl.Ct.575,583(1984);accordSchismv.UnitedStates,316

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F.3d1259,1300(Fed.Cir.2002)(“Atrialcourt‘haswidediscretioninsettingthelimitsofdiscovery.’”(quotingMoorev.ArmourPharm.Co.,927F.2d1194,1197(11thCir.1991) ));FlorsheimShoeCo.,Div.ofInterco,Inc.v.UnitedStates,744F.2d787,797(Fed.Cir.1984)(“Questionsofthescopeandconductofdiscoveryare,ofcourse,committedtothediscretionofthetrialcourt.”).Althoughdiscoveryrules“aretobeaccordedabroadandliberaltreatment,”Hickmanv.Taylor,329U.S.495,507,67S.Ct.385,91L.Ed.451(1947),thecourtmust,“[i]ndecidingeithertocompelorquashdiscovery,...balancepotentiallyconflictinggoals,”EvergreenTrading,LLCexrel.Nussdorfv.UnitedStates,80Fed.Cl.122,126(2007) .

Second,ifthecourtweretodenyplaintiffs'request,thecourthaseveryreasontobelievethatplaintiffswouldfileanothermotionseekingthecourt'sincamerareviewofalloftheremaining1500documents.Giventhecourt'sheavycaseloadandlimitedresources,theuseofthequickpeekprocedureisamuchmoreviableandattractiveoption.Notonlywillthecourtnothavetoexpenditstimeandresourcesonataskthatshouldbeperformedbytheparties,butbothpartieswillbenefitfromtheprompt(oratleastmoreprompt)resolutionofoutstandingdiscoverydisputes.Thus,eventhoughdefendanthasalreadyreviewedthesubjectmaterialmultipletimes,plaintiffswillcontinuetoseekproductionofthesematerials,whichwill,inturn,continuetoplaceaburdenonthecourt—onewhichcouldbealleviatedthroughtheparties'useofthequickpeekprocedure.

Third,eventhoughitisclearfromtheadvisorycommitteenotetoFRE502(d)thatthepurposeoftherulewastoaddresstwoissuesnotrelevanttothecurrentdispute—theneedtoprovideprotectionforinadvertentlydisclosedmaterialsandtheneedtoaddressthehighcostofdiscoveryincasesinvolvinglargequantitiesofESI—theprocedureitsetsforthisneverthelesshelpfulintheinstantcase.Notonlyistheprocedureusefulinthiscasebecauseitallowsbothsidestoresumebriefingondefendant'smotiontodismisssothatthecourtmayfinallyaddresstheviabilityandmeritsofplaintiffs'complaint,butaconfidentialityorderenteredinfederalcourtpursuanttoFRE502(d)providesbothpartieswithgreaterprotectionsthanitwouldnecessarilyhaveunderanRCFC26(c)protectiveordersince,asnotedabove,Rule502(d)'stermsapplytononpartiesinanyotherfederalorstateproceeding.

*7Fourth,althoughdefendantclaimsthatallowingplaintiffstoreviewthedocumentswouldbeakintoringingabellthatcannotbeunrung,thecourtremindsbothpartiesthat,pursuanttotheprotectiveorderthathasalreadybeenenteredinthiscase,onlythoseindividualswhohavecompliedwiththeprocesssetforththereinwillbegivenaccesstoprotectedinformation:

PersonsseekingaccesstoProtectedInformationmustreadthisProtectiveOrder,completetheappropriateapplicationform(attachedtothisProtectiveOrderasAttachmentA),andfiletheexecutedapplicationwiththecourt.Theapplicantmustconsultwithopposingcounselandsetforthintheapplicationwhetheropposingcounselagreestooropposestheapplicant'sadmission.Ifthereisnoopposition,theapplicantwillautomaticallybegrantedaccesstoProtectedInformation.Ifthereisopposition,opposingcounselwillfileasubmissiondescribingsuchoppositionwithinthree(3)daysoftheapplicationbeingfiled.Theotherpartywillthenhavethree(3)daystofilearesponse.TheobligationtocompleteandfilesuchanapplicationdoesnotapplytopersonsidentifiedinParagraph5ortocounselwhohaveenteredanappearanceinthisaction.

July16,2014ProtectiveOrder(modifiedAugust8,2014)7.Furthermore,asnotedabove,withrespecttoprivilegedmaterial,theprotectiveorderalreadycontainsanFRE502(d)clawbackagreement.Id.13(“ThisclawbackprovisionshallbegovernedbyFederalRuleofEvidence502(d).”).Thus,althoughthereisnowaytounringabellthathasalreadybeenrung,bothpartiescanbeassuredofthefactthatpursuanttotheprotectiveorderalreadyinplace,protectedinformation—whichincludesbothconfidentialandprivilegedinformation—isjustthat.

Finally,thecourtisnotconvincedthatitlackstheauthoritytoordertheuseofthequickpeekprocedureabsentdefendant'sconsent.Initsresponsetoplaintiffs'motion,defendantidentifiedonlyonecase,Summerville,inwhichacourt“compelledaquickpeekoveraproducingparty'sobjection.”Def.'sResp.9.InSummerville,asdefendantnotes,theDistrictCourtfortheSouthernDistrictofIndiana—absentanyreferencetoFRE502(d)—orderedtheuseofthequickpeekprocedureasanalternativetoimposingsanctionsonthedefendantforfailingtoprovidetheplaintiffwithanadequateprivilegelogandforrefusingtocooperatewithplaintiffduringdiscovery.See2016WL233627,at*5–6.Inthecaseatbar,thecourthasalreadystatedthatitsuseofthequickpeekprocedureisnotintendedasasanctionforanybehaviorondefendant'spartbutratherasameansofexpeditingthecompletionofjurisdictionaldiscoveryinthiscaseandconservingthecourt'slimitedresources.Thus,notonlyisSummervillenotcontrolling,itisdistinguishable.SeealsoThermal

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Sols.,Inc.v.ImuraInt'lUSA,Inc.,No.2:08-cv-2220(JWL/DJW),2010WL11431562,at*13–14(D.Kan.Apr.28,2010)(allowingthedefendantstoconductaquickpeekreviewofcertainfilesbelongingtotheplaintiffasasanctionfortheplaintiff'sfailuretocomplywithFRCP26(g)(1)andnotingthatthepartiespreviouslyagreedtotheuseofthequickpeekprocedure;noreferencemadetoFRE502(d)).

Similarly,thecourtisunpersuadedbydefendant'sreferencetothepositiontakenbyTheSedonaConference.Asstatedabove,thecourt'suseofthequickpeekprocedureinthecaseatbarisnotmotivatedbyaneedto(1)protectinadvertentlydisclosedmaterials,(2)addressthehighcostofdiscoveryincasesinvolvinglargequantitiesofESI,or(3)punishdefendant.Thecourt'ssolepurposeinutilizingtheprocedureistobringjurisdictionaldiscoverytoanendsothatthecasemaymoveforward.Giventhecourt'swidediscretiontomanagediscoverypursuanttoRCFC26,andgiventhemutuallyagreed-toprotectiveorderalreadyenteredinthiscase,thecourt'suseofthequickpeekprocedureiseminentlyappropriate.[8]

III.CONCLUSION

*8Inaccordancewiththecourt'sconclusions:

(1)Defendantshallprovideplaintiffswiththeopportunitytoreviewtheapproximately1500documentsatissue—whicharecurrentlybeingwithheldbydefendantasprivilegedpursuanttothedeliberativeprocessandbankexaminationprivileges—atatimeandplacetobedeterminedbydefendant.Insodoing,defendantshallnotbedeemedtohavewaivedanyprivilegesastothesedocuments.

(2)Plaintiffsshallthenidentifythosedocumentsthattheybelievearerelevanttothecaseandthattheybelieveshouldbeproducedinlightofthiscourt'sSeptember20,2016OpinionandOrderonplaintiffs'motiontocompelandtheUnitedStatesCourtofAppealsfortheFederalCircuit'ssubsequentrulingonJanuary30,2017.

(3)Thepartiesshallthenmeetandconferinanefforttoresolvetheirdifferenceswithoutfurthercourtinvolvement.Iftheyareunabletodoso,plaintiffsmayfilearenewedmotiontocompelthosedocumentstheycontendarebothrelevantandnotprivileged.Inconjunctionwiththefilingofitsresponsetoplaintiffs'motion,defendantshallprovidethecourtwithcopiesofthedocumentssoughtbyplaintiffsforanincamerareview.

ITISSOORDERED.

Footnotes

[1]

Pursuanttotheparties'jointstatusreportsubmittedonOctober17,2017,thisreissuedOpinionandOrdercontainsnoredactions.

[2]

Foradditionalbackgroundinformationonthenatureofthecaseandtheparties'positionswithrespecttotheinstantdiscoverydispute,seeFairholmeFunds,Inc.v.UnitedStates,128Fed.Cl.410(2016),theredactedversionofthecourt'sSeptember20,2016OpinionandOrder.

[3]

Mr.Ugoletti'ssworndeclarationwassubmittedinthecaseofPerryCapitalLLCv.Lew,CivilActionNo.13–cv–1025,whichiscurrentlypendingintheUnitedStatesDistrictCourtfortheDistrictofColumbia.Pl.'sMot.4.

[4]

RCFC26(f),whichiscaptioned“ConferenceoftheParties;PlanningforDiscovery,”directsthereadertoAppendixA3oftheRCFC,whichiscaptioned“EarlyMeetingofCounsel,”andprovidesalistoftopicsforcounseltoconsiderpriortofilingtheirJointPreliminaryStatusReport.Onetopicis“anyissuesrelatingtoclaimsofprivilegeorofprotectionastrial-preparationmaterial,including—ifthepartiesagreeonaproceduretoassertsuchclaimsafterproduction—whethertoaskthecourttoincludetheiragreementinanorderunderFederalRuleofEvidence502.”RCFCApp.A3(d)(4).

[5]

Asnotedabove,subsection(f)refersthereadertoAppendixA3oftheRCFC.

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©2017eDiscoveryAssistantLLC.NoclaimtooriginalU.S.GovernmentWorks.

[6]

FRE502wasenactedin2008.SeePub.L.No.110–322,§1(a),122Stat.3537(2008).

[7]

“[T]otheextentpermittedbythiscourt'sjurisdiction,”theRCFC“shallbeconsistentwiththeFRCP....”RCFC83(a).InterpretationoftheRCFC“willbeguidedbycaselawandtheAdvisoryCommitteeNotesthataccompanythe[FRCP].”RCFCrulescommittee'snote(2002);seealsoZoltekCorp.v.UnitedStates,71Fed.Cl.160,167(2006)(notingthatinterpretationoftheFRCP“informstheCourt'sanalysis”ofthecorrespondingRCFC).

[8]

BecausethecourtisdirectingthepartiestoutilizeFRE502(d)'squickpeekprocedure,itneednotaddresstheargumentsmadebythepartieswithrespecttoFHFA00077771andFHFA00038592.

EndofDocument.

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