Dellwood Farms, Inc. v. Cargill, Inc.

Citations: 128 F.3d 1122; 1997 WL 685415Docket: 97-2494

Court: Court of Appeals for the Seventh Circuit; December 3, 1997; Federal Appellate Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

The case involves an appeal by the United States concerning a district court order requiring the Department of Justice to release materials related to a criminal investigation to private civil plaintiffs. This raises significant issues regarding the "law enforcement investigatory privilege." The investigation, initiated by the FBI in 1992, focused on allegations that Archer Daniels Midland (ADM) and other agricultural producers engaged in price-fixing of feed and food additives, violating the Sherman Act. The FBI collected over 150 hours of audio and video recordings pertinent to the alleged conspiracy. In 1995, the Department began presenting evidence to grand juries, resulting in multiple indictments against ADM and its co-defendants, who subsequently pleaded guilty. The government shared some recordings with the law firm representing ADM's outside directors without securing a confidentiality agreement. The notes from these discussions were subsequently provided to the law firm handling class action lawsuits against ADM and alleged co-conspirators, raising concerns about the potential dissemination of sensitive information.

Some lawsuits are set for trial in August of the following year, with plaintiffs subpoenaing tapes to find evidence of illegal conspiracy. They assert that the government waived its investigatory privilege by allowing lawyers to listen to the tapes and take notes without enforcing a protective order that would limit the sharing of this information. The government does not argue that the tapes are protected due to grand jury proceedings. A judge ruled that the investigatory privilege does not apply and ordered the release of the tapes that were played for the lawyers, which will also be available to the defendants in related civil suits. Plaintiffs contend that the defendants gained an unfair advantage from the notes, and any delay in receiving the tapes could hinder their case due to potential witness issues.

The judge's ruling has been certified for immediate appeal under 28 U.S.C. 1292(b). Although plaintiffs request reconsideration of the appeal’s eligibility under this section, the court has determined that the appeal is valid through the collateral order doctrine, allowing for an immediate review since the order affects a nonparty. The court notes that discovery orders are typically not collateral unless they involve nonparties, which applies in this instance, thus enabling the court to address the merits of the case.

The law enforcement investigatory privilege, while not absolute, can be overridden when the need for the privileged materials outweighs the harm to the government. This decision is left to the discretion of the district judge, with appellate courts applying a deferential review. There exists a strong presumption against lifting this privilege to prevent excessive judicial interference in criminal investigations. In the U.S., the executive branch controls criminal investigations, with limited judicial intervention to protect legal rights of suspects and defendants, not civil plaintiffs. The plaintiffs, not being criminal suspects, lack a legal right to the FBI's confidential investigative materials and should not compel the government to disclose information that could aid criminal suspects. While the Freedom of Information Act allows access to certain governmental information, it explicitly protects law enforcement-related materials if disclosure would hinder investigations. The plaintiffs' request effectively seeks to expedite their civil litigation at the expense of the government’s criminal investigation, which is not a proper role for the judiciary. The district court's handling of the subpoena neglected significant considerations, including the nature of the tapes and notes involved, the impact of trial delays on the plaintiffs, and the principle that control of criminal investigations lies with the executive branch, where no rights of the plaintiffs were violated by the assertion of privilege.

A privilege, once waived, is permanently lost, as established in various case law. The law enforcement investigatory privilege is presumed to follow this principle, although no specific case addresses its waiver. Courts generally defer to district judges on waiver issues, but the parties have requested a decision instead of remanding the case. Waiver may occur through voluntary surrender or forfeiture, such as when the government’s actions give it an unfair advantage by keeping certain evidence secret. In this case, no voluntary waiver occurred, as the government did not publicly release the tapes but allowed select lawyers to listen to them. Although the government may have inadvertently disclosed some information, such actions do not constitute a deliberate waiver of privilege. Courts typically reject selective waivers, which allow a party to disclose privileged information to one party while claiming privilege against others; however, this case presents a selective-waiver scenario. Selective waiver differs from inadvertent disclosure, where a party unintentionally reveals privileged information. The government does not claim it inadvertently disclosed the tapes; thus, the issues of selective and partial waiver are pertinent, but inadvertent waiver is not relevant here.

Selective and inadvertent disclosures do not constitute waiver as understood in legal terms, which involves the intentional relinquishment of a right. In cases of such disclosures, waiver is deemed a consequence of punishing a party for an error rather than preventing them from retracting a previously granted benefit. Courts expect individuals to exercise caution, particularly in selective disclosures, yet a mere careless mistake does not justify stripping away privilege. The reasons for imposing sanctions for mistakes—such as a commitment to truth, concerns over strategic advantages, and questioning the intent behind disclosures—do not apply here, as the case involves delays rather than suppression of evidence, and the government is not an adversary in this context. While the failure to secure a protective order was a misstep, the severity of punishment should align with the nature of the error. There is no evidence suggesting bad faith from the government or harm to the plaintiffs, indicating that penalizing this mistake could unjustly interfere with a criminal investigation.

A potential ground for finding waiver may arise from conduct that justifies declaring forfeiture, with "selective waiver" viewed as an application of forfeiture doctrine rather than a strict waiver. The government is not portrayed as an adversary manipulating disclosures against the plaintiffs, who have not utilized their pretrial discovery rights to identify individuals who received the notes, thus failing to establish any harm from the government's actions. The relationship between ADM's counsel and co-defendants regarding the notes remains unclear. Even if the plaintiffs experienced some harm due to the absence of a confidentiality agreement, it would not be significant enough to justify forfeiture, as any potential harm could be remedied by delaying the civil trial. The likelihood of a trial delay beyond August 31, 1998, is high given the complexity of the litigation, and settlement may occur prior to trial. Although the plaintiffs highlight that three witnesses have died, this does not affect their case significantly, as deposition testimony can be utilized if further witnesses pass away. The district court's order is reversed, instructing to quash the subpoena, with Hon. Diane P. Wood not participating in this decision.