In Re U.S.

NOTE: This order is nonprecedential.
United States Court of Appeals for the Federal Circuit
MISCELLANEOUS DOCKET NO. 885
IN RE UNITED STATES,
Petitioner.
On writ of mandamus from the United States Court of Federal Claims,
case no. 04-CV-1365C, Judge Susan G. Braden.
ON PETITION FOR WRIT OF MANDAMUS
Before GAJARSA, LINN, and PROST, Circuit Judges.
PER CURIAM.
ORDER
The United States petitions for a writ of mandamus to direct the United States
Court of Federal Claims to vacate its orders that required the United States to produce
certain documents that the United States believes are protected from disclosure by the
attorney-client privilege, the work-product doctrine, or the deliberative-process privilege.
Chevron U.S.A., Inc. opposes.
Chevron and the United States each previously owned separate parcels in an oil
reserve. Pursuant to the National Defense Authorization Act for Fiscal Year 1996,
which required that the government's interest in the oil reserve be sold, the parties
agreed to an equity redetermination process through an equity process agreement. The
parties designated an independent petroleum engineer to formulate a recommendation
concerning the parties' interests. The Department of Energy's Assistant Secretary for
Fossil Energy (ASFE) issued administrative orders that established a process for equity
finalization in which Chevron's and the Department's equity finalization teams would
present their positions to the independent petroleum engineer. Chevron and the
Department entered into a decoupling agreement and an equity process agreement. A
procedure was also established involving, inter alia, finalization of equity interest
determinations by the ASFE and review by the Office of Hearings and Appeals.
Chevron sued the United States in the Court of Federal Claims in 2004, alleging
that the Department breached an Equity Process Agreement (the Agreement) and
violated an Administrative Order. Chevron asserts, inter alia, that a Department Deputy
General Counsel engaged in "ex parte communications" with the ASFE or his delegate
and that those communications were prohibited by the Agreement and the
Administrative Order. Chevron also asserts there were other improper ex parte
communications. Chevron seeks damages related to expenditures incurred in the
equity redetermination process.
In this case, the Agreement established an equity redetermination process for the
ASFE's review of the independent petroleum engineers recommendation. As quoted
by the Court of Federal Claims, the Agreement stated that:
The ASFE will not consult, directly or indirectly, with the DOE field equity
technical team concerning equity redetermination-related matters without
also consulting with the Chevron equity team on any such matter ( ... not
includ[ing] the DOE technical staff in Washington, D.C.). No such
communications by the ASFE with either equity team shall be on an ex
parte basis. Any written materials submitted to the ASFE by either equity
team shall be provided to the other party. . . .
The Court of Federal Claims also stated that the Administrative Order, which the ASFE
issued to establish an equity finalization process for presentation of the parties'
positions to the independent petroleum engineer, similarly prohibited the Department
and Chevron from having ex parte communications with the independent petroleum
engineer.
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Chevron sought discovery and the United States produced a privilege log
identifying thousands of folders of documents asserted to be protected by the attorney-
client privilege, the work-product doctrine, and/or the deliberative-process privilege.
Chevron moved to compel production of the documents and the Court of Federal
Claims conducted an in camera review of the documents considered by Chevron to be
most relevant to the lawsuit. The Court of Federal Claims conducted an in camera
review of hundreds of documents, considering many documents for more than one
privilege assertion. Production of some of those documents was ordered, either in
whole or in part.
The United States asserts that three errors require mandamus relief. First, the
United States asserts that the Court of Federal Claims incorrectly allowed documents
related to alleged ex parte communications to be excepted from the attorney-client
privilege. Second, concerning documents asserted to be protected by the work-product
doctrine, the United States asserts that the Court of Federal Claims (1) improperly
required disclosure of factual material in such documents, and (2) improperly allowed
Chevron to obtain documents that contained attorney thought processes based upon
Chevron's demonstration of substantial need for the documents and that an undue
hardship existed because the documents could not be obtained from another source.
Third, the United States asserts that, contrary to the deliberative-process privilege, the
Court of Federal Claims improperly required disclosure of factual material that was
included in draft decisions, draft letters, or comments concerning those documents.
The remedy of mandamus is available only in extraordinary situations to correct a
clear abuse of discretion or usurpation of judicial power. In re Calmar, Inc., 854 F.2d 461,
464 (Fed. Cir. 1988). A party seeking a writ bears the burden of proving that it has no
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other means of attaining the relief desired Mallard v. U.S. Dist. Court for S. Dist. of Iowa,
490 U.S. 296, 309 (1989), and that the right to issuance of the writ is "clear and
indisputable," Allied Chemical Corp. v. Daiflon, Inc., 449 U.S. 33, 35 (1980). In an
appropriate case, a writ of mandamus may issue "to prevent the wrongful exposure of
privileged communications." In re Seagate Tech. Inc. 497 F.3d 1360, 1367 (Fed. Cir.
2007) (citing In re Regents of the Univ. of Cal., 101 F.3d 1386, 1387 (Fed. Cir. 1996)).
1. Attorney-Client Privilege
The attorney-client privilege protects the giving of professional legal advice to
those who can act on it and the giving of information to a lawyer to enable the lawyer to
give sound and informed advice. Upiohn Co. v. United States, 449 U.S. 383, 390
(1981); In re Spalding Sports Worldwide, Inc. 203 F.3d 800, 805 (Fed. Cir. 2000). The
crime-fraud exception to that privilege nonetheless requires disclosure of documents
otherwise privileged if the documents were created in the furtherance of a crime or
fraud. Spalding, 203 F.3d at 807. To invoke the crime-fraud exception, a party
challenging the attorney-client privilege must make a prima facie showing that the
communication was made in furtherance of a crime or fraud. Id.The Court of Federal Claims held that if communications were made that were
prohibited by the Agreement and the Administrative Order, those communications
constituted misconduct that should not enjoy the protection of the attorney-client
privilege. The Court of Federal Claims expressly stated that the exception to the
privilege applied to any documents showing "a breach of an essential term in a high-
profile government contract." We agree with the United States that that test, as stated
by the Court of Federal Claims, could be applied too broadly and could result in the
disclosure of many documents that should remain privileged. Nonetheless, we
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determine that the Court of Federal Claims properly held that the particular documents
at issue in this case should be produced, because the documents were incident to
alleged misconduct. The misconduct in this case includes the "ex parte" contacts that
are alleged to be prohibited by the Agreement or the Administrative Order. For the
same reasons the attorney-client privilege does not protect documents made in
furtherance of an asserted crime or fraud, the attorney-client privilege should not protect
the documents found to be incident to asserted misconduct in the context of this specific
agreement.
An exception to the attorney-client privilege "comes into play when a privileged
relationship is used to further a crime, fraud, or other fundamental misconduct." In re
Sealed Case, 676 F.2d 793, 807 (D.C. Cir. 1982). 'Whereas confidentiality of
communications and work product facilitates the rendering of sound legal advice, advice
in furtherance of a fraudulent or unlawful goal cannot be considered 'sound.' Rather,
advice in furtherance of such goals is socially perverse, and the client's communications
seeking such advice are not worthy of protection." In re Grand Jury Subpoena Duces
Tecum Dated Sept. 15, 1983, 731 F.2d 1032, 1038 (2d Cir. 1984). "A privilege
surviving until the relation is abused and vanishing when abuse is shown to the
satisfaction of the judge has been found to be a workable technique for the protection of
the confidences of client and attorney." Clark v. United States, 289 U.S. 1, 16 (1933).
We determine that the attorney-client privilege does not protect the documents or
communications that the trial judge has determined to be incident to asserted
misconduct involving "ex parte communications" prohibited by the agreement in this
case.
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2. Work-Product Protection
Work-product protection is provided to documents and tangible things that are
prepared in anticipation of litigation or for trial by or for another party or its
representative. RCFC 26(b)(3)(A).1 However, some materials may be discovered if the
party shows that it has substantial need for the materials to prepare its case and cannot
without undue hardship obtain their substantial equivalent by other means. RCFC
26(b)(3)(A)(i). Nonetheless, if the court orders discovery of such materials, "it must
protect against disclosure of the mental impressions, conclusions, opinions, or legal
theories of a party's attorney or other representative concerning the litigation." RCFC
26(b)(3)(A)(ii).
A. Factual Work Product
Factual work product can be discovered based upon a showing of substantial
need and undue hardship. Seagate 497 F.3d at 1375. The Court of Federal Claims
discussed substantial need and undue hardship in its review of many of the documents
asserted to contain factual work product. Additionally, in its August 28, 2008 order the
court stated that when it determined that work product contained factual material, it had
also determined that Chevron had established a substantial need for the documents
and that Chevron would face undue hardship to otherwise obtain the information. Thus,
the United States has not shown clear error regarding the rulings related to factual work
product.
For purposes of this petition, the language of the Rules of the Court of
Federal Claims and the Federal Rules of Civil Procedure are identical.
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B. Opinion Work Product
As noted above, RCFC 26 allows a party to obtain certain work product prepared
in anticipation of litigation or for trial if, inter alia, the party seeking the documents shows
that it has a substantial need for the materials and cannot, without undue hardship,
obtain their substantial equivalent by other means. Nonetheless, the United States
argues that any documents containing opinion work product cannot be required to be
produced.
RCFC 26(b)(3)(B) provides that work product is protected from disclosure if it
includes the mental impressions, conclusions, opinions, or legal theories of a party's
attorney concerning the litigation. For portions of two documents, the Court of Federal
Claims held that the redacted text contained attorney thought processes and that the
documents were subject to the work-product privilege. Nonetheless, the Court of
Federal Claims held that Chevron had shown a substantial need for the documents and
that Chevron would bear an undue hardship in obtaining the information by other
means.
The United States argues that the substantial need and undue hardship factors
do not apply to opinion work product. We agree with the United States that, once the
Court of Federal Claims held that the documents were shown to contain opinion work
product prepared in anticipation of litigation or concerning the litigation, then the Court
of Federal Claims should not have required their disclosure pursuant to RCFC
26(b)(3)(B) based upon a mere showing of substantial need and undue hardship.
Instead, the court must "protect from disclosure" opinion work product even if it requires
disclosure of other work product in general.
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We note that the Supreme Court of the United States has expressly declined to
decide whether documents including opinion work product can ever be ordered to be
produced. In Upiohn Co. v. United States, 449 U.S. 383, 400-01 (1981), the Court
discussed the "special protection" given to documents revealing an attorney's mental
processes and noted that while some courts have held that no showing of necessity can
overcome the protection of work product, other courts have indicated such documents
might be discoverable in rare situations. The Court held that "[w]hile we are not
prepared at this juncture to say that such material is always protected by the work-
product rule, we think a far stronger showing of necessity and unavailability by other
means ... would be necessary to compel disclosure." U pjohn 449 U.S. at 401-02.
The Court remanded the case so that the lower courts could, if appropriate, apply a
standard other than substantial need and undue hardship.
We follow a similar course in this case. We agree with the United States that the
substantial need and undue hardship standards are not sufficient to overcome the
protection given to opinion work product. Thus, for the two documents held by the
Court of Federal Claims to contain opinion work product but nonetheless ordered to be
produced, the United States has met its burden of establishing clear error. Thus, we
grant the United States' petition for a writ of mandamus concerning these two
documents and we direct that the Court of Federal Claims vacate its order that required
disclosure of those two documents based on a showing of substantial need and undue
hardship.2
2
The United States and the Court of Federal Claims refer to these two
documents as 889(1914) and 1384.
Misc. 885 -8-
3. Deliberative-Process Privilege
Some of the documents at issue in this mandamus petition concern drafts of
decisions or letters documents and comments related to the draft decisions and letters.
The Court of Federal Claims directed production of portions of some of those
documents. The United States challenges the Court of Federal Claims' determinations
regarding documents that it identifies as including factual content that falls under the
government's deliberative-process privilege.
The deliberative-process privilege is a subset of the executive privilege and was
created to encourage "open, frank discussion between subordinate and chief
concerning administrative action " Kaiser Aluminum & Chem. Corp. v. United States,
141 Ct. Cl. 38, 48 (1958), and to "prevent injury to the quality of agency decisions,"
NLRB v. Sears, Roebuck & Co. 421 U.S. 132, 150-51 (1975). Generally, to be exempt
from disclosure under the deliberative-process privilege, the government must show
that the information is pre-decisional and deliberative. In re Sealed Case, 121 F.3d 729,
737 (D.C. Cir. 1997). Pre-decisional documents "may include recommendations, draft
documents, proposals, suggestions, and other subjective documents which reflect the
personal opinions of the writer rather than the policy of the agency." Move, O'Brien,
O'Rourke, Hogan & Pickert v. National R.R. Passenger Corp., 376 F.3d 1270, 1277
(11th Cir. 2004). Such documents are deliberative "to the extent that they reveal the
mental processes of decisionmakers." Id. at 1278 (quoting Assembly of State of Cal. v.
United States Dept of Commerce, 968 F.2d 916, 921 (9th Cir. 1992).
The United States argues that by requiring disclosure of factual information in
draft decisions or in communications related to draft decisions, the Court of Federal
Claims improperly required disclosure of deliberative information, because those
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documents when viewed with the final decision would indicate deliberations regarding
the facts that were added to or removed from the draft. As indicated below, the United
States' position is supported by substantial caselaw indicating that draft decisions,
including factual material, should be protected by the deliberative-process privitege.3
The Court of Federal Claims recognized that factual information asserted to be
deliberative "should be disclosed ... but only it if 'does not reveal the deliberative
process and [is] not intertwined with the policy-making process."' Chevron U.S.A., Inc.
v. United States, 80 Fed. Cl. 340, 361 (2008) (quoting Ryan v. Department of Justice,
617 F.2d 781, 791 (D.C. Cir. 1980)). The Court of Federal Claims proceeded to dissect
documents between factual and deliberative content. However, the division between
factual and deliberative content is not exact, and merely because the content of a
particular document involves factual information, that does not mean that the
deliberative-process privilege does not apply. Instead, factual information that itself
reveals the deliberative process and cannot be severed from the deliberative context is
protected. Environmental Prot. Agency v. Mink, 410 U.S. 73, 87-88 (1973). The
Supreme Court stated that courts have recognized that the determination "requires
different treatment for materials reflecting deliberative or policy-making processes on
the one hand, and purely factual, investigative matters on the other." Id. at 88.
The distinction between whether the nature of the material is factual or opinion is
thus not dispositive of whether the material is deliberative. City of Virginia Beach. Va. v.
United States Dep't of Commerce, 995 F.2d 1247, 1253 (4th Cir. 1993) (district court
3 Most of the cases concern the deliberative process exemption to a
Freedom of Information Act request, see 5 U.S.C. § 552(b)(5). That exemption is "co-
extensive with the common law deliberative process privilege," CACI Field Servs.. Inc.
v. United States 12 Cl. Ct. 680, 686 n.7 (1987), aff'd 854 F.2d 464 (Fed. Cir. 1988).
Misc. 885 - 10 -
was "deflected from the proper mode of analysis by its concern to categorize the
disputed papers in light of the Mink fact/opinion dichotomy"). Courts "focus less on the
nature of the materials sought and more on the effect of the materials' release: the key
question in [such] cases became whether the disclosure of materials would expose an
agency's decisionmaking process in such a way as to discourage candid discussion
within the agency and thereby undermine the agency's ability to perform its functions."
Dudman Commc'ns v. Department of the Air Force, 815 F.2d 1565, 1568 (D.C. Cir.
1987). See also Quarles v. Department of the Navy, 893 F.2d 390, 392 (D.C. Cir. 1990)
(noting that courts hold exempt from disclosure factual material such as factual
summaries by decisionmakers or factual material about the inner workings of the
deliberative process itself). Thus, "facts contained in such documents must be
considered within the context of the document as a whole, and within the context of the
document as part of the agency's overall decision-making process." Rein v. United
States Patent & Trademark Office, 553 F.3d 353, 375 (4th Cir. 2009).
For example, in Russell v. Department of the Air Force, 682 F.2d 1045, 1049
(D.C. Ur. 1982), the court held that twenty pages of historical factual information in a
draft manuscript was protected by the deliberative-process privilege because "a simple
comparison between the pages sought and the official document would reveal what
material supplied by subordinates senior officials judged appropriate for the history and
what material they judged inappropriate." See also Rein, 553 F.3d at 375 ("[i]nformation
reasonably described as 'facts' when looked at in the vacuum ... are nonetheless
protected from disclosure when -- as revealed when examining the information's context
-- disclosing that information as part of a larger document would reveal the very
predecisional and deliberative material" that is protected by the privilege); City of
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Virginia Beach, 995 F.2d at 1253, 1256 ("draft material, ... particularly when presented
by a subordinate to a superior for revision, is likely to receive deliberative process
protection"; factual and deliberative matters were not reasonably segregable and
disclosure of the material would necessarily reveal the opinions of personnel on the
credibility and probity of the evidence related to allegations); Petroleum Info. Corp. v.
United States Dep't of the Interior, 976 F.2d 1429, 1435, 1438 (D.C. Cir. 1992)
(predecisional materials, even if factual in form, are protected if they reflect an agency's
preliminary positions or ruminations about how to exercise discretion on some policy
matter; disclosure of file would not reveal deliberative process because agency was
merely compiling all facts from public sources and was not winnowing information into a
small set of facts which would, if revealed, unveil the agency's reasoning by showing
what it considered relevant); National Wildlife Fed'n v. United States Forest Serv., 861
F.2d 1114, 1118-19 (9th Cir. 1988) (opinions or recommendations regarding facts or
consequences of facts are not automatically ineligible for exemption from disclosure;
courts have interpreted the exemption "to protect documents that would reveal the
process by which agency officials make these determinations, whether or not the
documents themselves contain facts or non-binding recommendations"); Wolfe v.
Department of Health and Human Servs., 839 F.2d 768, 774-76 (D.C. Cir. 1988)
(factual material describing inner workings of the agency's process protected from
disclosure).
Thus, "whenever the unveiling of factual materials would be tantamount to the
'publication of the evaluation and analysis of the multitudinous facts' conducted by the
agency, the deliberative process privilege applies." National Wildlife 861 F.2d at 1119.
"Before arriving at a final decision, the policymaker may alter his or her opinion
Misc. 885 - 12 -
regarding which facts are relevant or the likely consequences of these facts, or both,"
and this is what the deliberative-process privilege is intended to protect. Id. at 1120. As
these cases demonstrate, it is well-recognized that factual matter contained in
government documents can expose deliberations in certain circumstances, and
requiring production of the factual information in or related to draft decisions or letters
would reveal the government officials' deliberations concerning what factual matter was
or was not appropriate for inclusion in the final agency decision or letter.
Thus, the Court of Federal Claims erred when it determined that factual
information in draft decisions or letters, including comments related to those draft
documents, is not protected by the deliberative-process privilege. We grant the United
States' petition for a writ of mandamus concerning the identified documents and we
direct that the Court of Federal Claims vacate its order that required disclosure of
portions of those documents based on a determination that they were factual and did
not fall within the deliberative-process privilege. 4 The Court of Federal Claims did not
address whether a misconduct exception to the deliberative-process privilege might
apply to any of the documents, and thus we do not address that issue herein.
Accordingly,
IT IS ORDERED THAT:
4 Thus, we determine that the deliberative process privilege applies to the
portions of the following documents found by the Court of Federal Claims as containing
factual matter: documents 278, 281, 298, 526, 548, 572, 577, 816, 819, 975, 979, 980,
983, 997, 1002, 1060, 1127, 1472, 1486, 1497, 1505, 1507, 3819, and 3946. The
United States also listed document 2286 as a document asserted to involve the Court of
Federal Claims' determination that it contained factual matter not protected by the
deliberative process privilege. However, the Court of Federal Claims did not expressly
base its determination regarding document 2286 on that ground, but determined that
document 2286 was protected by the privilege and instead required that only a header
of the document be produced. Thus, we do not direct that the Court of Federal Claims
vacate its order regarding document 2286.
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The petition for a writ of mandamus is granted to the following extent: the Court
of Federal Claims is directed to vacate the portions of its order that required the United
States to produce documents 889(1914) and 1384; and the Court of Federal Claims is
directed to vacate the portions of its order that required the United States to produce
documents 278, 281, 298, 526, 548, 572, 577, 816, 819, 975, 979, 980, 983, 997, 1002,
1060, 1127, 1472, 1486, 1497, 1505, 1507, 3819, and 3946. In all other respects, the
petition for a writ of mandamus is denied.
FOR THE COURT
MAR 0 5 2009 /s/ Jan Horbalv
Date Jan Horbaly
Clerk FILED
U.S. COURT OF APPEALS FOR
THE FEDERAL CIRCUIT
cc: Leslie Cayer Ohta, Esq.
Lawrence D. Rosenberg, Esq. MAR 05 2009
Court of Federal Claims, Judge
JMF siukosu•
s8 CLERK
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