Court: District Court, District of Columbia; December 1, 2014; Federal District Court
Plaintiffs' Motion to Compel Compliance with a subpoena duces tecum served on the Office of the Comptroller of Currency (OCC) has been denied by the Court. The plaintiffs initially sought documents referenced in a U.S. Senate report on the 2007-2008 financial crisis, which were previously provided to the Senate by the Office of Thrift Supervision (OTS). The OCC objected, citing potential privileges over many requested documents, leading to a narrowing of the request to 15 specific Bates-stamped documents. After the OCC claimed it could not locate these documents, the plaintiffs filed their motion in October 2013. Following court directives, the OCC ultimately retrieved the documents but withheld three based on attorney-client privilege, attorney work product doctrine, and deliberative process privilege. The Court's review focuses on these three withheld documents.
Legal standards for the attorney-client privilege and work product protection are outlined. The attorney-client privilege safeguards confidential communications made for legal advice or assistance, applicable in government contexts where the agency acts as the client. Work product protection applies to materials created in anticipation of litigation, requiring a subjective belief in the likelihood of litigation at the time of document creation and that the documents were prepared to assist legal counsel.
Deliberative process privilege protects advisory opinions, recommendations, and deliberations that inform governmental decisions. For a document to qualify for this privilege, it must be both "predecisional" (created before a policy is adopted) and part of the deliberative process (reflecting consultative exchanges). A document is considered deliberative if it embodies the author's personal opinions rather than the agency's policy.
The OCC has withheld three documents, asserting that they are protected under various privileges, including the attorney-client privilege and the deliberative process privilege. The first document is a memorandum from OTS attorneys containing legal analysis and recommendations related to potential enforcement action against Washington Mutual Bank, marked "CONFIDENTIAL" and "PREDECISIONAL." The second document consists of notes by an OTS enforcement attorney outlining her factual and legal analyses for the investigation of Washington Mutual Bank. The final document is a memorandum from an OTS Regional Appraiser to an OTS Regional Enforcement Counsel, discussing a complaint from the New York State Attorney General and providing insights for legal advice.
Plaintiffs argue that the OCC waived these privileges by disclosing documents to the Senate PSI, claiming that voluntary disclosure to a third party waives the attorney-client privilege, especially if substantive conclusions are made public. They reference a case where privilege was waived due to public disclosures by the DOJ. However, the court in the current matter distinguishes the facts, noting that the OCC, as the successor to the OTS, is seeking to assert privilege over documents, while the Senate PSI is merely the entity that disclosed the substantive conclusions, which does not amount to a waiver of privilege.
Documents produced under a subpoena are considered involuntary disclosures, lacking the self-interest present in voluntary disclosures. In this case, the Office of Thrift Supervision (OTS) provided documents under seal to the Senate Permanent Subcommittee on Investigations (PSI), which diminishes the likelihood of a waiver of privileges. The plaintiffs argue that this disclosure waives attorney work product privilege, referencing U.S. v. Deloitte LLP, which indicates that while voluntary disclosure can waive attorney-client privilege, it does not necessarily waive work product protection unless it undermines the adversary process. Since the OTS’s documents were submitted under seal, the court finds that their disclosure does not compromise the maintenance of secrecy, thus preserving the work product privilege.
Plaintiffs also contend that the deliberative process privilege was waived due to the OTS's disclosure. However, the cited cases highlight that public disclosure waives privilege only for the information that is publicly disclosed. The OTS’s sealed subpoena disclosure does not equate to public disclosure, so the deliberative process privilege remains intact. Additionally, plaintiffs assert that all privileges related to the documents were waived because the Office of the Comptroller of the Currency (OCC) failed to sufficiently object to the subpoena on privilege grounds. The court disagrees, noting that generalized objections are not waivers when the OCC did not possess the documents in question and could not specify which privileges applied. The plaintiffs’ cited cases involved parties that had access to the documents and failed to assert detailed objections, unlike the OCC in this instance.
The OCC provided detailed reasoning regarding the privileges applicable to the documents requested by the plaintiffs. The Court concluded that the OCC's general references to privilege were adequate to prevent any waiver of those claims. The plaintiffs argued that maintaining these privileges did not serve their intended purpose. However, the Court found that the need to encourage candid attorney-client communications remains relevant, especially since the OTS had previously disclosed the documents under seal to the Senate PSI. The OCC aims to retain that confidentiality. Additionally, the plaintiffs failed to demonstrate a substantial need for the specific documents necessary for their case, which weakened their position against the application of the work product privilege. The Court also noted that upholding the deliberative process privilege promotes open discussions among agency members in future decisions. Consequently, the plaintiffs' Motion to Compel Compliance with the Subpoena Duces Tecum was denied. The Court affirmed that the documents are privileged, the privileges remain intact, and there are no compelling policy reasons to disregard these privileges in this instance. A separate order will be issued in line with this Memorandum Opinion.
