United States District Court, N.D. Alabama, Southern Division
MEMORANDUM OPINION AND ORDER
R.
DAVID PROCTOR, UNITED STATES DISTRICT JUDGE
The
court held a telephone conference in this case on October 2,
2019 at the request of Drummond Company, Inc.
(“Drummond”). Drummond seeks expedited review of
234 documents subject to now-pending objections to the
Special Master's Reports and Recommendations (Docs. #
569-2, 572-2, 590-2). Of those 234 documents, the court has
agreed to review the four documents which Plaintiffs have
highlighted on an expedited basis. For the reasons set forth
herein, the court finds that those four documents are due to
be produced pursuant to the crime-fraud exception.
As set
out by the court in its earlier Memorandum Opinion and Order
(Doc. #417) dealing with the crime-fraud exception, the
Special Master is tasked with “carefully
scrutiniz[ing]” in camera documents “to
determine whether they are due to be produced to Plaintiff
because they were in furtherance of, or closely related
to, the unrebutted first prong of the Schroeder
test.” (Doc. #417 at 45) (emphasis added). On
interlocutory appeal, the Eleventh Circuit agreed with this
court that the Special Master is to assess on a
document-by-document basis whether the item at issue
“(1) reflects a communication used to further a crime
or fraud or was closely related to it or (2) was created to
further a crime or fraud or was closely related to it.”
Drummond Co., Inc. v. Conrad & Scherer, LLP, 885
F.3d 1324, 1339 n. 14 (11th Cir. 2018) (citing Cox,
17 F.3d at 1422; In re Grand Jury Investigation
(Schroeder), 842 F.2d 1223, 1227 (11th Cir. 1987)).
Defendants
argue that although the Special Master has articulated the
correct standard in his Amended Reports and Recommendations,
the application of that standard is flawed. (Doc. #593 at 2;
Doc. # 594 at 2). Defendants maintain that information which
may constitute evidence of a witness bribery scandal and
cover up (such as documents related to payments to witnesses
or discussions about discovery requests concerning such
payments) is not discoverable under the crime-fraud
exception. (Doc. #593 at 5). In support thereof, Defendants
cite non-binding authority from the Second Circuit, not the
law of this case. (Doc. #593 at 4-5) (quoting United
States v. Jacobs, 117 F.3d 82, 88 (2d. Cir. 1997)
(“the crime fraud exception has a narrow and precise
application: It applies only when the communications between
the client and his lawyer further a crime, fraud, or other
misconduct. It does not suffice that the communications may
be related to a crime.”)). In fact, Defendants
recognize that the Eleventh Circuit's “closely
related to” iteration of the crime-fraud standard
“may be inconsistent with the proposition that a
document is not discoverable under the crime-fraud exception
simply because it reflects evidence of a crime, ” but
maintain that the purpose of the crime-fraud exception trumps
the articulation of the standard. (Doc. #593 at 4)
(“C&S adhered to the Eleventh Circuit's
repeated observations that the ‘purpose' of the
crime fraud exception is to ‘identify communications
that should not be privileged because they were used to
further a crime or fraud.'”).
The
Eleventh Circuit has clearly articulated the standard to be
applied to the review of documents under the crime-fraud
exception, and that is the standard that will be applied
here.[1]
The
Special Master has reviewed the four documents at issue, and
has determined that they are due to be produced with certain
redactions. The court agrees in part.
• The Special Master recommended that portions of
document CSPRIV410282 be produced under the
crime-fraud exception, but that other portions be redacted
before production. Defendants agree that paragraph 2 of the
document is arguably “closely related to” the
alleged crimes or frauds at issue. (Doc. #593 at 7).
Defendants object to the production of the remaining portions
of the document. The court finds that the document is due to
be produced in its entirety, without redactions because its
provisions are “closely related to” the alleged
crimes or frauds related to witness bribery and suborning
perjury. For example, in the document, permissions for
depositions are discussed, expenses are authorized,
“costs to JBM, ” “JBM's impatience,
” and security payments are referenced.
• Document CSPRIV441407 is an email
discussing a draft declaration of “ET” with the
draft declaration attached at
CSPRIV441408-441412. The Special Master has
recommended that these documents be produced with a single
redaction. The court agrees with the Special Master's
recommendation, but finds again that the redacted portion is
due to be produced as it is “closely related to”
the alleged crimes or frauds of witness bribery and suborning
perjury. In the document, there is mention made of
“security and relocation funds.” Attorney
comments on the draft declarations are necessary to compare
how the declarations changed over time.
• Document CSPRIV479561 is an email
discussing rates paid to Ivan Otero for “work on
JBM.” Document CSPRIV479562 is a time
sheet drafted by Lorraine Leete reflecting hours spent by
Ivan Otero meeting and following up with Jaime Blanco. The
court finds that these documents are due to be produced
because the provisions in the documents are “closely
related to” the alleged crimes or frauds of witness
bribery and suborning perjury.
The
parties are DIRECTED to create a protocol
for production of these documents in connection with ongoing
investigations in Colombia such that Defendants'
appellate rights are preserved.
DONE
and ORDERED.
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Notes:
[1] Defendants' argument related to
the application of the standard was considered in the
crime-fraud hearing. Counsel for Defendants argued that an
agreement between Otero and Collingsworth “did not say
anything about quid pro quo” and therefore could not be
subject to the crime-fraud exception. (Doc. #391 at 783). The
court responded: “Well, it would be pretty stupid if it
did, wouldn't it? You know, a signed receipt; this is for
a bribe for a witness, please sign this. Is that how the
world works these days?” (Id.). The point was
also addressed by the court's Memorandum Opinion of
December 7, 2015 (Doc. #417 at 30, n. 20) (“It's
almost Alice in Wonderland. First the verdict, don't
worry about the trial. We don't - we don't want to
share any information that may conflict with what our
position is. We're asking you to just accept our
position.”). Specific intent is rarely proven by direct
evidence - most likely no documents would be due to
be produced if a smoking gun standard were applied.
United States v. White, 663 F.3d 1207, 1214 (11th
Cir. 2011) (affirming a federal bribery conviction while
rejecting the appellant's argument regarding a lack of
direct evidence explaining that “[t]he corrupt usually
don't advertise their corrupt ways … [and] the
extent to which the parties … conceal their bribes is
powerful evidence of the corrupt intent.”); United
...