LYDIA KAY GRIGGSBY, Judge.
Plaintiff, Marine Industrial Construction, LLC ("MIC") seeks to compel the disclosure of certain documents relevant to MIC's Contract Disputes Act claim that are within the possession of the government's expert dredging consultant, Dalton, Olmstead & Fuglevand, Inc. ("DOF"). See generally Pl. Mot. The government opposes MIC's motion to compel upon the grounds that the documents requested from DOF have been properly withheld from disclosure under the work-product privilege and the attorney-client privilege. See generally Def. Mot. In addition, the government moves to: (1) compel MIC to return or destroy certain documents related to DOF that the government inadvertently disclosed during fact discovery; (2) strike certain exhibits to MIC's motion to compel; and (3) require MIC to pay the government's reasonable expenses in connection with the parties' motions to compel. Id.; see also RCFC 26(b)(5)(B); RCFC 37(a)(5). For the reasons set forth below, the Court: (1)
The parties are currently engaged in fact discovery in this Contract Disputes Act action. MIC filed this lawsuit on October 13, 2015, and the Court subsequently stayed this action, pending the issuance of the contracting officer's final decision ("COD") on MIC's equitable adjustment claim. Order, dated Dec. 8, 2015 (docket entry no. 7); see generally Compl.
On January 15, 2016, the United States Army Corps of Engineers ("USACE") obtained approval for a limited source justification to hire DOF as an expert consultant, pursuant to Federal Acquisition Regulation 13.106-1. Yazbeck Decl. at Ex. C at 4-6; see also 48 C.F.R. § 13.106-1. On March 2, 2016—approximately five months after this litigation commenced—the government retained the services of DOF. Yazbeck Decl. at Ex. G; see generally Compl.
Subsequently, DOF provided the USACE with two reports—a dredging means and methods report and a dredged material report—to address certain aspects of MIC's claim. See generally Yazbeck Decl. at Exs. I-J. The USACE's contracting officer issued the COD on April 15, 2016. 2d Am. Compl. at ¶ 40.
During the course of discovery, the government inadvertently produced certain documents related to, among other things, DOF's work under its consulting contract with the USACE. See Yazbeck Supp. Decl. at Ex. 20; see also Def. Mot. at 1. On June 6, 2018, MIC issued a subpoena seeking 12 categories of documents from DOF related to DOF's consulting work (the "DOF Documents"). Yazbeck Decl. at Ex. A at 7-8. On June 14, 2018, the government objected to MIC's subpoena upon the grounds that the documents sought were protected from disclosure by the attorney-client privilege and the work-product privilege. See generally Yazbeck Decl. at Ex. C.
MIC filed a motion to compel compliance with the subpoena served on DOF on July 11, 2018. Pl. Mot. The government filed a response and opposition to MIC's motion and a motion to compel MIC to return or destroy certain documents and a motion to strike on August 21, 2018. Def. Mot. On September 4, 2018, MIC filed a reply in support of its motion and a response and opposition to the government's motion to compel. Pl. Resp. On September 11, 2018, the government filed a reply in support of its motion to compel. Def. Reply. The Court resolves these pending motions.
The work-product privilege protects against the discovery of documents "prepared in anticipation of litigation or for trial by or for another party or its representative (including the other party's attorney, consultant . . . or agent)." RCFC 26(b)(3)(A); see also Upjohn Co. v. United States, 449 U.S. 383, 398 (1981) ("Rule 26(b)(3) codifies the work-product doctrine. . . ."). Specifically, this privilege "shelters the mental processes of the attorney, providing a privileged area within which he can analyze and prepare his client's case." United States v. Nobles, 422 U.S. 225, 238 (1975). The party asserting the work-product privilege bears the burden of demonstrating that the privilege applies and was not waived, Evergreen Trading, LLC ex rel. Nussdorf v. United States, 80 Fed. Cl. 122, 127 (2007), and the party must do so by setting forth objective facts supporting the claim rather than mere conclusory statements, AAB Joint Venture v. United States, 75 Fed. Cl. 448, 455 (2007).
While the work-product privilege protects against the discovery of documents prepared in anticipation of litigation, the fact that documents may have been created in anticipation of litigation, or for trial, does not always create an impenetrable barrier for another party seeking to obtain the materials through discovery. See Eden Isle Marina, Inc. v. United States, 89 Fed. Cl. 480, 503-04 (2009); see also RCFC 26(b)(3)(A)(i)-(ii). For example, a party can waive the work-product privilege either expressly or implicitly in generally the same manner that a party can waive the attorney-client privilege. See Eden Isle Marina, 89 Fed. Cl. at 503-04. In addition, even if there is no waiver, documents that would otherwise be protected by the workproduct privilege are discoverable in limited circumstances. RCFC 26(b)(3)(A)(i)-(ii). And so, documents prepared in anticipation of litigation may be discovered if the requesting 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. Id.
This Court has held that "[t]he threshold determination in a case involving a claim of work product privilege is whether the material sought to be protected from discovery was prepared in anticipation of litigation or was prepared in the ordinary course of business or for other purposes." Pacific Gas & Elec. Co. v. United States, 69 Fed. Cl. 784, 790 (2006) (citations omitted). The Court has also held that "there are a `variety of approaches' to determine whether a document was created in anticipation of litigation . . . rather than created in the ordinary course of business operations, or for other purposes." Northrop Grumman Corp. v. United States, 80 Fed. Cl. 651, 654 (2008) (citing Pacific Gas & Elec., 69 Fed. Cl. at 790). In this regard, the Court has recognized that:
Id. (quoting Pacific Gas & Elec., 69 Fed. Cl. at 791). Under either formulation, the crucial inquiry is whether or not the document was "`prepared in the ordinary course of business or . . . would have been created in essentially similar form irrespective of the litigation.'" Id. (quoting Pacific Gas & Elec., 69 Fed. Cl. at 798).
The purpose of the attorney-client privilege is to "encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice." Upjohn Co., 449 U.S. at 389. And so, this privilege "protects the confidentiality of communications between attorney and client made for the purpose of obtaining legal advice." Genentech, Inc. v. US. Int'l Trade Comm'n, 122 F.3d 1409, 1415 (Fed. Cir. 1997). The party asserting the privilege bears the burden of demonstrating the applicability of the privilege, and that burden is not "`discharged by mere conclusory or ipse dixit assertions.' Evergreen Trading, 80 Fed. Cl. at 127 (quoting In re Bonanno, 344 F.2d 830, 833 (2d Cir. 1965)); see also In re Grand Jury Investigation No. 83-2-35, 723 F.2d 447, 450-51 (6th Cir. 1983) (reviewing decisions from various appellate courts on which party bears the burden).
Because "the privilege has the effect of withholding relevant information from the factfinder, [the privilege] applies only where necessary to achieve its purpose." Fisher v. United States, 425 U.S. 391, 403 (1976); see also Energy Capital Corp. v. United States, 45 Fed. Cl. 481, 484 (2000) ("The assertion of privileges is strictly construed. . . ."). And so, the assertion of attorney-client privilege is only proper when:
Energy Capital Corp., 45 Fed. Cl. at 484-85 (quoting United States v. United Shoe Mach. Corp., 89 F.Supp. 357, 358-59 (D. Mass. 1950)).
Similar to the work-product privilege, the party holding the privilege may waive it with regard to specific information when the privilege would otherwise be applicable. In re Seagate Tech., LLC, 497 F.3d 1360, 1372 (Fed. Cir. 2007) (en banc), abrogated on other grounds by Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S.Ct. 1926 (2016). "If a court determines that a party has waived the privilege with respect to a particular communication, that waiver generally extends to all communications `relating to the same subject matter.' Oasis Int'l Waters, Inc. v. United States, 110 Fed. Cl. 87, 109 (2013) (quoting Fort James Corp. v. Solo Cup Co., 412 F.3d 1340, 1349 (Fed. Cir. 2005)).
RCFC 26 addresses the duty to disclose in connection with civil discovery and this rule provides, in relevant part, the following regarding claims of privilege:
RCFC 26(b)(5)(B). RCFC 26 also explicitly prevents disclosure of communications between an attorney and expert witness, unless they: (1) relate to compensation for the expert's study or testimony; (2) identify facts or data the attorney provided and that the expert considered in forming his opinions; or (3) identify assumptions upon which the expert relied. RCFC 26(b)(4)(C). In addition, this rule also provides that "[o]rdinarily, a party may not discover documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent)." RCFC 26(b)(3)(A).
Lastly, RCFC 37 governs motions to compel and this rule specifically addresses the payment of expenses following the resolution of such motions. The rule provides that:
RCFC 37(a)(5)(A)-(C).
As an initial matter, the government persuasively argues that the DOF Documents are covered by the work-product privilege. Evergreen Trading, 80 Fed. Cl. at 127 (explaining that the party asserting the work-product privilege bears the burden of demonstrating that the privilege applies and was not waived); see also AAB Joint Venture, 75 Fed. Cl. at 455 (explaining that the party asserting privilege must do so by setting forth objective facts supporting the claim rather than mere conclusory statements). And so, the Court must DENY MIC's motion to compel.
This Court has held that "[t]he threshold determination in a case involving a claim of work product privilege is whether the material sought to be protected from discovery was prepared in anticipation of litigation or was prepared in the ordinary course of business or for other purposes." Pacific Gas & Elec., 69 Fed. Cl. at 790 (citations omitted). To make this determination, the Court may "inquire into the `primary motivational purpose behind the creation of the document,'" or "whether a document was created because of anticipated litigation, and would not have been prepared, `but for the prospect of that litigation.'" Northrop Grumman, 80 Fed. Cl. at 654 (quoting Pacific Gas & Elec., 69 Fed. Cl. at 791). And so, the crucial inquiry for the Court here is whether the DOF Documents sought in MIC's subpoena have been prepared in the ordinary course of business, or would have been created in essentially similar form irrespective of this litigation. Id.
The facts in this case show that the documents at issue have been created primarily for the purpose of assisting the government with this litigation for several reasons. First, the timeline of this litigation makes clear that the USACE decided to retain DOF as an expert consultant in this matter several months after MIC commenced this litigation. In this regard, it is undisputed that the government issued the justification to hire an expert consultant to review MIC's claim in January 2016, three months after this case was filed. Yazbeck Decl. at Ex. C, pages 5-6.
Second, the government's source justification for DOF's consulting contract states that the reason for the authority granted to hire DOF as a consultant is that "this matter is urgent,
In addition, the documents provided to the Court also show that any work that DOF may have performed to assist with the preparation of the COD issued on April 15, 2016, was connected to the ongoing litigation of this case. In its motion to compel, MIC correctly argues that the solicitation for DOF's consulting contract and other documents attached as exhibits to MIC's motion to compel state that the scope of DOF's consulting work includes assisting the government in evaluating information pertinent to the COD. Pl. Mot. at 10-13; see, e.g., Yazbeck Supp. Decl. at Ex. 15, page 8 ("[T]he purpose of this [Performance Work Statement] is to assist the Government in evaluating information pertinent to the [COD] request."); Yazbeck Supp. Decl. at Ex. 18, page 4; Yazbeck Supp. Decl. at Ex. 19, page 4 ("[DOF] was hired by the USACE on March 2, 2016, to provide technical reports on specified topics in support of the COD preparation."); Yazbeck Decl. at Ex. H, page 2 ("DOF['s] report is part of the Contracting Officer Decision"). But, these documents must be read within the context of the government's justification to hire DOF and the timeline for this litigation.
In this regard, there is no dispute that the USACE's contracting officer issued the COD after the Court stayed this litigation for the purpose of obtaining a final decision on MIC's equitable adjustment claim. Order, dated Dec. 8, 2015 (docket entry no. 7). The government also correctly argues that the fact that DOF may have worked on the COD does not preclude the government from asserting the work-product privilege with respect to the DOF Documents, if the primary motivational purpose for creating those documents was to assist the government in this litigation. Def. Mot. at 11-12.
Because the Court finds that the primary motivational purpose for creating the DOF Documents was to assist the government in this litigation, the Court concludes that the government appropriately invoked the work-product privilege with respect to the DOF meeting minutes, DOF reports, and the other DOF Documents that MIC now seeks. And so, the Court
The Court also agrees with the government that MIC has not met its obligations under RCFC 26 to return, destroy, or file under seal, any documents that the government inadvertently disclosed, once MIC received notice of the government's privilege assertions. RCFC 26 provides, in relevant part, that:
RCFC 26(b)(5)(B) (emphasis supplied). It is undisputed that, after the government inadvertently produced certain documents related to DOF's consulting work, the government notified MIC of its objection to the disclosure of these documents. Def. Mot. at 5-6; Pl. Resp. at 11-13; Def. Reply at 2. A letter to MIC's counsel dated June 14, 2018, also states that the government objects to MIC's subpoena to DOF upon multiple grounds, including attorney-client privilege and work-product privilege. See generally Yazbeck Decl. at Ex. C.
MIC acknowledges that, after being notified of the government's privilege assertions, it did not return or destroy the documents that the government inadvertently disclosed. Pl. Resp. at 11-13. MIC, nonetheless, argues that it had no obligation to do so because the parties stipulated to other arrangements regarding the treatment of these documents. Id.; see also RCFC 29. But, even if true, MIC does not explain why it failed to file these documents under seal when MIC filed its motion to compel, as required by RCFC 26. Pl. Resp. at 11-13; see also RCFC 26(b)(5)(B). Given this, the Court finds that MIC has not fully complied with its obligations under RCFC 26. And so, the Court GRANTS the government's motion to compel and GRANTS the government's motion to strike Exhibits H, I, J, and K to the Yazbeck Declaration.
As a final matter, the government has requested that the Court order MIC to pay its reasonable expenses in connection with preparing a response to MIC's motion to compel and the government's cross-motion, pursuant to RCFC 37. See Def. Mot. at 16. RCFC 37(a)(5) provides that, if a motion to compel is granted, the Court must, after giving an opportunity to be heard, require the party or deponent whose conduct necessitated the motion, the party or attorney advising that conduct, or both, to pay the movant's reasonable expenses incurred in making the motion, including attorney's fees. RCFC 37(a)(5)(A). This rule similarly provides that, if the motion to compel is denied, the Court must, after giving an opportunity to be heard, require the movant, the attorney filing the motion, or both, to pay the party or deponent who opposed the motion its reasonable expenses incurred in opposing the motion, including attorney's fees. RCFC 37(a)(5)(B). But, RCFC 37(a)(5) also requires that, if a motion to compel is granted, the Court must not order such a payment if: (1) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action; (2) the opposing party's position was substantially justified; or (3) other circumstances make an award of expenses unjust. RCFC 26(a)(5)(A)(i)-(iii). Similarly, if a motion to compel is denied, the Court must not order such a payment if the motion was substantially justified, or other circumstances make an award of expenses unjust. RCFC 37(a)(5)(B).
During the September 13, 2018, hearing on the parties' motions, MIC requested the opportunity to further brief the issue of whether it should be required to pay the government's reasonable expenses under RCFC 37. And so, the Court
In sum, the government has shown that it appropriately invoked the work-product privilege with respect to the documents requested in MIC's subpoena to DOF. The undisputed facts in this case also show that MIC did not fully comply with RCFC 26, when it failed to file certain exhibits attached to its motion to compel under seal. And so, for the foregoing reasons, the Court:
It is
Each party to bear its own costs.
