BILL LANN LEE

Acting Assistant Attorney General

Civil Rights Division

JOHN L. WODATCH, Chief

RENEE M. WOHLENHAUS

Acting Deputy Chief

Disability Rights Section

ALEJANDRO N. MAYORKAS

United States Attorney

LEON W. WEIDMAN

Assistant United States Attorney

Chief, Civil Division

SHIRLEY WANG

Assistant United States Attorney

California Bar No. 181669

Room 7516, Federal Building

300 North Los Angeles Street

Los Angeles, California 90012

Telephone: (213) 894-0474

Facsimile: (213) 894-7819

JEANINE M. WORDEN

JOHN A. RUSS IV

Attorneys

Disability Rights Section

Civil Rights Division

U.S. Department of Justice

Post Office Box 66738

Washington, D.C. 20035-6738

Telephone: (202) 307-6556

Counsel for Plaintiff

United States of America

IN THE UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, ) Case No.: CV-99-01034-FMC(SHx)

)

) **PLAINTIFF UNITED STATES'**

Plaintiff, ) **MEMORANDUM OF POINTS AND**

v\. ) **AUTHORITIES IN OPPOSITION TO**

) **DEFENDANTS' MOTION TO RECONSIDER**

AMC ENTERTAINMENT, INC., ) **MAGISTRATE JUDGE HILLMAN'S**

[et]{.underline} [al]{.underline}., ) **FEBRUARY 25, 2000 ORDER**

)

) **Judge:** Florence M. Cooper

Defendants. ) **Date:** April 10, 2000

) **Time:** 10:00 a.m

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_)

**TABLE OF CONTENTS**

Background 2

Argument 6

> A. Standard of Review 6
>
> B. Magistrate Judge Hillman\'s February 25th Ruling Should Be
> Affirmed. 6
>
> 1\. The Ruling Is Not Clearly Erroneous or Contrary\
> to Law. 7
>
> 2\. The Discovery Sought by AMC Is Not Relevant\
> and Does Not Warrant Intrusion into Confidential\
> Settlement Negotiations. 11
>
> C. The Magistrate Judge\'s Order Is Appropriate on Other Grounds\
> As Well. 14

Conclusion 16

**TABLE OF AUTHORITIES**

**CASES**

[Association for Women in Science v. Califano]{.underline},

566 F.2d 339 (D.C. Cir. 1977) 15

[Association of Public Agency Customers v. Bonneville Power
Admin.]{.underline},

126 F.3d 1158 (9th Cir. 1997) 4

[Bank of America National Trust & Savings Association v. Hotel
Rittenhouse Assoc.]{.underline},

800 F.3d 339 (3d Cir. 1986) 9

[Bottaro v. Hatton Associates]{.underline},

96 F.R.D. 158 (E.D. N.Y. 1982) 9

[Brocklesby v. United States]{.underline},

767 F.2d 1288 (9th Cir. 1995), [cert]{.underline} [denied]{.underline},
474 U.S. 1101 (1986) 10

[Butta-Brinkman v. FCA International, Ltd.]{.underline},

164 F.R.D. 475 (N.D. Ill. 1995) 9

[Church of Scientology v. United States Internal Revenue
Service]{.underline},

995 F.2d 916 (9th Cir. 1993) 15,16

[City of Groton v. Connecticut Light and Power]{.underline},

84 F.R.D. 420 (D. Conn. 1979) 9

[Cook v. Yellow Freight System, Inc.]{.underline},

132 F.R.D. 548 (E.D. Cal. 1990) 8,9

[Folb v. Motion Picture Indus. Pension & Health Plans]{.underline},

16 F. Supp. 2d 1164, 1168 (C.D. Cal. 1998) 6

Gallo Cattle Co. v. U.S. Department of Agriculture,

159 F.3d 1194 (9th Cir. 1998) 4

[Geophysical Systems Corp. v. Raytheon Co.]{.underline},

117 F.R.D. 646 (C.D. Cal. 1987) 6

[Hudspeth v. Commissioner]{.underline},

914 F.2d 1207 (9th Cir. 1990) 10

[In re Sealed Case]{.underline},

856 F.2d 268 (D.C. Cir. 1988) 15

[Lesal Interiors, Inc. v. Resolution Trust Corp.]{.underline},

153 F.R.D. 552 (D. N.J. 1994) 9

[Mead Data Central v. United States Department of Air
Force]{.underline},

566 F.2d 242 (D.C. Cir. 1977) 16

[National Automatic Laundry and Cleaning Council v. Shultz]{.underline},

443 F.2d 689 (D.C. Cir. 1971) 4

[Norwood v. FAA]{.underline},

993 F.2d 570 (6th Cir. 1993) 16

[Olin Corp. v. Insurance Co. of North America]{.underline},

603 F. Supp. 445 (S.D. N.Y. 1985) 9

[Oliver v. Committee for the Re-Election of the President]{.underline},

66 F.R.D. 553 (D. D.C. 1975) 10

[Pewrzinski v. Chevron Chemical Co.]{.underline},

503 F.2d 654 (7th Cir. 1974) 7

[Schachter v. United States]{.underline},

1994 WL 327696 at \*1 (N.D. Cal. Apr. 12, 1994) 14

[Serina v. Albertsons]{.underline},

128 F.R.D. 290 (M.D. Fla. 1989) 9

[St. Louis Mining & Milling v. Montana Mining Co.]{.underline},

171 U.S. 650, 19 S. Ct. 61, 43 L.Ed. 320 (1898) 7

[Stern v. FBI]{.underline},

737 F.2d 84 (D.C. Cir. 1984) 15

[Sternberger v. United States]{.underline},

401 F.2d 1012 (Ct. Cl. 1968) 7

[Tuite v. Henry]{.underline},

98 F.3d 1411 (D.C. Cir. 1996) 14,15

[UMC/Stamford, Inc. v. Allianz Underwriters Insurance Co.]{.underline},

647 A.2d 142 (N.J. Sup. 1994) 10

[United States v. Contra Costa County Water District]{.underline},

678 F.2d 90 (9th Cir. 1982) 7,11

13

[United States v. Rozet]{.underline},

183 F.R.D. 662 (N.D. Cal. 1998) 15

**STATUTES**

5 U.S.C. § 551, [et]{.underline} [seq]{.underline} 4

5 U.S.C. § 704 4

28 U.S.C. § 636(b)(1)(A) 6

42 U.S.C. § 12101, [et]{.underline} [seq]{.underline} 2

42 U.S.C. § 12183(a)(1) 2

42 U.S.C. § 12186(c) 2

**REGULATIONS**

28 C.F.R. pt 36 Appendix A, § 4.33.3 2

**RULES**

Fed. R. Civ. P. 26(b)(1) 12

Fed. R. Civ. P. 72(a) 6

Fed. R. Evid. 408 7,10

**TREATISES**

12 Fed. Proc. § 33.306 (1988) 6

**BACKGROUND**

> **A. The United States\' Claims Against AMC.**

In this action, the United States alleges that AMC has violated the
Americans with Disabilities Act (\"ADA\"), 42 U.S.C. § 12101,
[et]{.underline} [seq]{.underline}, by: (1) failing to design and
construct movie theaters so they are accessible to persons with
disabilities; (2) failing to make alterations to movie theaters so they
are accessible to persons with disabilities; and (3) operating movie
theaters in a manner that denies persons with disabilities equal access
to the goods, services, facilities, privileges, advantages, and
accommodations offered by those theaters. Under its first two claims,
the United States will show that AMC\'s theaters do not comply with
certain Justice Department regulations known as the Standards for
Accessible Design, 28 C.F.R. pt. 36, Appendix A (the \"Standards\").[^1]
The Standards set out hundreds of specific architectural requirements
applicable to movie theaters and other places of public accommodation. A
key issue in the United States\' first two claims is AMC\'s failure to
comply with Standard 4.33.3 --- a Justice Department regulation that
governs the placement of wheelchair seating in movie theaters.

Standard 4.33.3 is a regulation that was promulgated by the Justice
Department in 1991 following notice and comment rulemaking. Pursuant to
42 U.S.C. § 12183(a)(1), all theaters designed and constructed for first
occupancy after January 26, 1993, are required to comply with the
requirements of Standard 4.33.3. Among other things, Standard 4.33.3
requires movie theaters to provide wheelchair seating areas that are
\"an integral part of any fixed seating plan\" and \"provide people with
physical disabilities \... lines of sight comparable to those for
members of the general public.\"[^2] In addition, in theaters with
seating capacities greater than 300, Standard 4.33.3 requires the
theaters to provide dispersed wheelchair seating \-- [i.e.]{.underline},
seating in more than one location.

In 1997 and 1998, the Justice Department investigated six of AMC\'s
theaters with stadium-style seating that were designed, constructed,
and/or altered after January 26, 1993. The Department\'s investigations
revealed that, in almost all of AMC\'s theater auditoriums with
stadium-style seating, AMC gives persons who use wheelchairs some of the
worst seats in the house. Specifically, in the vast majority of its
theaters with stadium-style seating, AMC has placed wheelchair seating
in very close proximity to a large movie screen on a sloped floor that
is located in front of, and on a lower level than, the stadium-style
seats that are provided for members of the general public. These
wheelchair seating areas require persons who use wheelchairs to view
movies in craned-neck discomfort if they are able to use the seats at
all. The United States contends that these wheelchair seating areas
violate Standard 4.33.3 because they are not \"an integral part\" of the
stadium-style seating plan and they do not \"provide people with
physical disabilities \... lines of sight comparable to those for
members of the general public.\" That contention is based on a plain
language interpretation of Standard 4.33.3.

> **B. AMC\'s Dismissed Counterclaim and Affirmative Defense Under the\
> Administrative Procedure Act.**

In response to the United States\' lawsuit, AMC filed a counterclaim and
an affirmative defense under the Administrative Procedure Act (\"APA\"),
5 U.S.C. § 551, [et]{.underline} [seq]{.underline}., challenging the
Attorney General\'s authority to file an enforcement action against AMC.
Although Standard 4.33.3 was promulgated in 1991, AMC\'s counterclaim
and affirmative defense alleged that, by applying the plain language of
Standard 4.33.3, the Justice Department has imposed substantive new
requirements on AMC without notice and comment rulemaking.

The United States filed a motion to dismiss AMC\'s counterclaim. After
holding two hearings on the matter and after permitting AMC some limited
discovery relating to the Justice Department\'s settlement negotiations
with other movie theater owners and operators, Judge Morrow dismissed
AMC\'s counterclaim because the Justice Department had not engaged in
final agency action, which is a jurisdictional prerequisite for
APA-based challenges to agency action. December 17th Order at 7 (copy
appended as Exhibit A); [see]{.underline} [also]{.underline} 5 U.S.C. §
704, [Gallo Cattle Co. v. U.S. Dep\'t. of Agriculture]{.underline}, 159
F.3d 1194, 1198-99 (9th Cir. 1998). In her Order, Judge Morrow
specifically held that: \"Neither settlement negotiations nor threats of
suit constitute final agency action that may be judicially reviewed.\"
Order at 12. The Judge also rejected AMC\'s argument that the United
States had adopted a secret law that it was imposing theater
industry-wide through settlement negotiations:

> Here, rather than a communication intended definitively to articulate
> an industry-wide policy, DOJ has communicated privately with
> individual theater owners to negotiate and resolve its differences
> with them. These communications do not have \"the contemplation and
> likely consequence of \'expected conformity\'\" among members of the
> industry. See \[[National Automatic Laundry and Cleaning Council v.
> Shultz]{.underline}, 443 F.2d 689, 698 (D.C. Cir. 1971)\] (quoting
> [Abbott Laboratories]{.underline}, [supra]{.underline}, 387 U.S. at
> 150). See also [Association of Public Agency Customers v. Bonneville
> Power Admin.]{.underline}, 126 F.3d 1158, 1184 (9th Cir. 1997)
> (\"Negotiations, which are not final actions, therefore are not
> reviewable, and we decline to consider them\").

Order at 13-14.

> **C. AMC\'s Motion to Compel Discovery.**

On December 7, 1999, AMC filed a motion to compel discovery from
plaintiff United States. Through its motion, AMC sought discovery to
renew its APA counterclaim. The parties briefed the motion extensively,
submitting more than 135 pages of briefing for Magistrate Judge
Hillman\'s review. A hearing of the motion was held on January 11, 2000.
At the hearing, which was primarily held off the record, the Magistrate
Judge issued tentative rulings on certain issues[^3] and advised the
parties that AMC\'s discovery would be limited by Judge Morrow\'s
December 17th Order, which was the law of the case. Following the
Magistrate Judge\'s statement of his tentative rulings, the United
States voluntarily agreed to disclose most of the information that would
be responsive to Interrogatories \# 5 and \# 6. However, the United
States was unwilling to disclose were communications that occurred in
the course of settlement negotiations between the Justice Department and
persons and entities other than AMC, and (2) communications that
occurred in the course of the United States' investigation of entities
other than AMC.[^4] Following the hearing, the Magistrate Judge ordered
the parties to submit additional briefing on the issue of whether AMC
should be permitted to obtain discovery regarding the United States\'
settlement negotiations with movie theater industry members other than
AMC and the applicability of the law enforcement and investigative
privilege. The parties submitted another 20 pages of briefing for the
Magistrate Judge\'s review. On February 25, 2000, after reviewing both
sets of briefing by the parties, the Magistrate Judge issued a Minute
Order in which he required the United States to provide certain
additional discovery but denied AMC\'s requests for discovery into the
United States\' settlement negotiations with entities other than AMC.
AMC now seeks reconsideration of the Magistrate Judge\'s February 25th
Order.[^5]

**ARGUMENT**

> **A. Standard of Review.**

AMC may not obtain reversal or modification of Magistrate Judge
Hellman\'s ruling in this matter unless it was "clearly erroneous or
contrary to law." [See]{.underline} Fed. R. Civ. P. 72(a); [see
also]{.underline} 28 U.S.C. § 636(b)(1)(A) (district court may review
magistrate judge's order if it is "clearly erroneous or contrary to
law."); Local Rules, Chapter V, Rule 3.3.1. "To conclude that a
magistrate judge's decision is clearly erroneous, the district court
must arrive at a 'definite and firm conviction that a mistake has been
committed.'" [Folb v. Motion Picture Indus. Pension & Health
Plans]{.underline}, 16 F. Supp. 2d 1164, 1168 (C.D. Cal. 1998) (quoting
[Federal Sav. & Loan Ins. Corp. v. Commonwealth Land Title Ins.
Co.]{.underline}, 130 F.R.D. 507 (D. D.C. 1990)). Insofar as the
February 25th Order embodied a relevance determination, AMC must meet a
still higher standard, since district courts review such issues only for
abuse of discretion. [See]{.underline} [Folb]{.underline}, 16 F. Supp.
2d at 1168 n.2; [see also]{.underline} [Geophysical Systems Corp. v.
Raytheon Co.]{.underline}, 117 F.R.D. 646, 647 (C.D. Cal. 1987).

> **B. Magistrate Judge Hellman\'s February 25th Ruling Should Be\
> Affirmed.**

AMC contends that Magistrate Judge Hellman\'s ruling denying discovery
of information relating to the United States\' settlement negotiations
with members of the movie theater\
industry other than AMC should be reversed. We disagree for two reasons.
First, the February 25th Order is consistent with a large body of case
law recognizing the need to protect the confidentiality of settlement
negotiations. Second, information relating to the United States\'
settlement negotiations with entities other than AMC is simply not
relevant to this action.

**1. The Ruling Is Not Clearly Erroneous or Contrary to Law.**

AMC contends that the ruling denying discovery into settlement
negotiations is clearly erroneous and contrary to law. The United States
disagrees. The Supreme Court, the Ninth Circuit, and the Federal Rules
of Evidence have long recognized the need to encourage settlement, to
promote the resolution of disputes without litigation, and to maintain
the confidentiality of settlement negotiations. [See]{.underline} [St.
Louis Mining & Milling v. Montana Mining Co.]{.underline}, 171 U.S. 650,
656, 19 S. Ct. 61, 43 L.Ed. 320 (1898); [United States v. Contra Costa
County Water District]{.underline}, 678 F.2d 90, 91 (9^th^ Cir. 1982);
Fed. R. Evid. 408 (evidence of \"conduct or statements made in
compromise negotiations\" are not \"admissible to prove liability for or
invalidity of the claim or the amount \[of a claim\].\"). The Magistrate
Judge\'s Order is also supported by a wealth of case law.

While some courts have permitted discovery into settlement negotiations,
the Ninth Circuit and many other courts have long recognized the need to
keep settlement negotiations confidential. In [Contra
Costa]{.underline}, 678 F.2d at 91 , a municipal defendant sued by the
United States sought to introduce evidence of settlement negotiations
between the federal government and a non-party to the litigation. The
district court ruled that, under Fed. R. Evid. 408, settlement
negotiations are "'not admissible to prove liability for or invalidity
of the claim or its amount.'" [Id]{.underline}. (quoting Fed. R. Evid.
408). The Ninth Circuit affirmed, recognizing that there were two basic
principles underlying the evidentiary exclusion embodied in the rule:

> The first is that the evidence is irrelevant as being motivated by a
> desire for peace rather than from a concession of the merits of the
> claim. Second, is in promotion of the public policy favoring the
> compromise and settlement of disputes. By preventing settlement
> negotiations from being admitted as evidence, full and open disclosure
> is encouraged, thereby furthering the policy toward settlement. Here,
> we give additional importance to the fact that appellant was not a
> party to the \[litigation giving rise to the settlement
> negotiations\].

[Contra Costa]{.underline}, 678 F.2d at 92 (citing the Advisory
Committee Notes to Fed. R. Evid. 408); [Sternberger v. United
States]{.underline}, 401 F.2d 1012, 1018 (Ct. Cl. 1968); and [Pewrzinski
v. Chevron Chemical Co.]{.underline}, 503 F.2d 654, 658 (7^th^ Cir.
1974).

In [Cook v. Yellow Freight System, Inc.]{.underline}, 132 F.R.D. 548
(E.D. Cal. 1990), the court applied the ruling in [Contra
Costa]{.underline} to determine the same question that is before the
Court in this case. In [Cook]{.underline}, former employees who were
suing their employer for sexual harassment sought discovery of documents
reflecting statements made during the course of settlement negotiations
between the employer and the attorney representing a supervisor who had
been terminated in connection with activities relating to the employees'
sexual harassment claims. The employees sought to discover
correspondence between the employer and the supervisor's attorney that
occurred in the course of settlement negotiations. The employees argued
that the discovery was relevant because it was likely to contain
information regarding the veracity of the employees' claims, to show
bias by the supervisor when he testified at trial, and that it was
unfair to allow the employer to use the supervisor's termination as
evidence that the employer had acted to prevent harassment without
allowing the employees to discover the circumstances of the termination.
[Cook]{.underline}, 132 F.R.D. at 553. The District Court for the
Eastern District of California denied the discovery, holding that
statements made in settlement negotiations are entitled to protection
under a right to privacy. [Id]{.underline}. at 553. The court held that
settlement negotiations are conducted in privacy with the expectation
that they will not be disclosed to persons who are not parties to those
negotiations. [Id]{.underline}. Rejecting the employees' arguments that
the private nature of the discussions would make them more likely to
reveal information helpful to the employees' case, the court concluded
that "it would be perverse logic to hold that the more private one
expects discussions to be, the more releasable is the content of those
discussions." [Id]{.underline}.

In addition to holding that the settlement negotiations were protected
by privacy rights, the [Cook]{.underline} court also held that
information relating to settlement negotiations was protected by the
"well established privilege relating to settlement discussions."
[Id]{.underline}. The court reasoned:

> Thus, while it is true that Rule 408 is addressed to the
> inadmissibility of evidence at trial and generally pertinent to the
> inadmissibility of compromise material to prove damages or liability
> in the claim of origin, 'the same consideration of policy which
> actuates the courts to exclude an offer of compromise made by \[the
> defendant to the plaintiff\], also apply to settlement \[negotiations
> between the defendant and a third party.\] \* \* \* In this regard,
> the court finds that one consideration in precluding the discovery of
> documents generated in the course of settlement discussions lies in
> the fact that such discussions are frequently not the product of truth
> seeking. Settlement negotiations are typically punctuated with
> numerous instances of puffing and posturing since they are 'motivated
> by a desire for peace rather than from a concession of the merits of
> the claim.' \... What is stated as fact on the record could very well
> not be the sort of evidence which the parties would otherwise actually
> contend to be wholly true. That is, the parties may assume disputed
> facts to be true for the unique purpose of settlement negotiations.
> The discovery of these sort of 'facts' would be highly misleading if
> allowed to be used for purposes other than settlement.

[Id]{.underline}. at 554 (citing [Contra Costa]{.underline}, 678 F.2d at
92, and [Wyatt v. Security Inn Food & Beverage, Inc.]{.underline}, 819
F.2d 69, 71 (4^th^ Cir. 1987)). [See]{.underline} [also]{.underline}
[Bank of America Nat'l Trust & Savings Ass'n v. Hotel Rittenhouse
Assoc.]{.underline}, 800 F.3d 339, 345 (3d Cir. 1986) (noting
"confidentiality ordinarily accorded to settlement agreements" that do
not formally use the judicial process); [Butta-Brinkman v. FCA Int'l,
Ltd.]{.underline}, 164 F.R.D. 475, 477 (N.D. Ill. 1995) (holding that
the defendant is not required to turn over information relating to
settlement negotiations unless it is relevant and unless the party
seeking the information can show that it cannot be obtained by other
means); [Lesal Interiors, Inc. v. Resolution Trust Corp.]{.underline},
153 F.R.D. 552, 562 (D. N.J. 1994) (requiring a more particularized
showing that evidence is relevant and calculated to lead to the
discovery of admissible evidence in the context of settlements); [Serina
v. Albertson's]{.underline}, 128 F.R.D. 290, 293 (M.D. Fla. 1989)
(courts have long recognized Fed. R. Evid. 408\'s policy of encouraging
settlement in creating a particular standard to govern discoverability
of settlement materials); [Bottaro v. Hatton Assocs.]{.underline}, 96
F.R.D. 158, 160 (E.D. N.Y. 1982) (privilege for settlement documents is
to recognize "the strong public policy in favoring settlements"); [Olin
Corp. v. Insurance Co. of North Am.]{.underline}, 603 F. Supp. 445,
449-50 (S.D. N.Y. 1985) (same); [City of Groton v. Connecticut Light and
Power]{.underline}, 84 F.R.D. 420, 423 (D. Conn. 1979); [UMC/Stamford,
Inc. v. Allianz Underwriters Ins. Co.]{.underline}, 647 A.2d 142 (N.J.
Sup. 1994) (holding that ordering disclosure of settlements would not
only jeopardize those settlements but would chill and deter other
parties from entering into confidential discussions to settle their
disputes without a lengthy trial."). [Cf.]{.underline} [Folb v. Motion
Picture Indus. Pension & Health Plans]{.underline}, 16 F. Supp. 2d 1164,
1171 (C.D. Cal. 1998) (finding that "information exchanged in
confidential mediation, like any other information," is subject to
discovery rules, "at least where jurisdiction is premised on a federal
question and the material sought in discovery is relevant to the federal
claims presented" but allowing discovery of settlement negotiations when
they are calculated to lead to the discovery of admissible evidence);
[Oliver v. Committee for the Re-Election of the President]{.underline},
66 F.R.D. 553, 556 (D. D.C. 1975) (although declining to recognize a
settlement privilege, finding that information requested regarding
settlement was neither relevant nor reasonably calculated to lead to
admissible evidence).

AMC suggests that Fed. R. Evid. 408 and the Ninth Circuit\'s opinions in
[Brocklesby v. United States]{.underline}, 767 F.2d 1288, 1292-93 (9th
Cir. 1995), [cert]{.underline} [denied]{.underline}, 474 U.S. 1101
(1986), and [Hudspeth v. Commissioner]{.underline}, 914 F.2d 1207, 1214
(9th Cir. 1990), should be read to permit routine discovery into
settlement negotiations because they expressly recognize a few limited
instances where evidence relating to settlement agreements could be
admissible for the limited purpose of proving the bias or prejudice of a
witness. AMC Mem. at 7. However, the possible admissibility of
settlement agreements in limited circumstances for the purpose of
showing bias or prejudice does not equate to invasive discovery into all
settlement negotiations. Here, AMC does not contend and, indeed, cannot
contend that it seeks discovery into the Government\'s settlement
negotiations for the purpose of obtaining evidence of bias or prejudice
or for the purpose of obtaining any other evidence that would be
admissible under Fed. R. Evid. 408. Instead, AMC openly admits that it
seeks discovery of information for use in proving the invalidity of the
United States\' claims \-- [i.e.]{.underline}, evidence to support its
APA defense (and to renew its dismissed APA counterclaim) alleging that
the United States is allegedly applying a secret policy industry-wide
through settlement negotiations and evidence to support its reliance
defense in which it claims that, in designing its theaters, AMC
allegedly relied on statements allegedly made by the Government during
settlement negotiations with entities other than AMC. Both types of
information would be inadmissible under Fed. R. Evid. 408, since they
would offered to prove the validity or invalidity of a claim. Thus, the
evidence that AMC seeks would not be admissible under Fed. R. Evid. 408.
[Contra Costa]{.underline}, 678 F.2d at 91.

> **2. The Discovery Sought by AMC Is Not Relevant and Does Not\
> Warrant Intrusion into Confidential Settlement Negotiations.**

AMC argues that the Court should ignore all of the cases supporting
Magistrate Judge Hellman\'s ruling and instead follow the dictates of
other cases holding that discovery of settlement negotiations should be
permitted when it may lead to relevant evidence. But AMC\'s reliance on
these cases is unavailing. AMC ignores the law of the case, which has
already established that settlement negotiations and stadium cases are
simply not relevant to AMC\'s APA-based arguments in this action.

In her December 17th Order dismissing AMC\'s counterclaim, Judge Morrow
established the law of the case as to AMC\'s challenges of Justice
Department action under the APA. First, the Judge held that \"Neither
settlement negotiations nor threats of suit constitute final agency
action that may be judicially reviewed.\" Order at 12. Second, the Judge
rejected AMC\'s APA-based argument that the United States had adopted a
secret law that it was imposing on the theater industry through
settlement negotiations.[^6] Order at 13-14. Under these two rulings,
Judge Morrow made clear that AMC cannot rely on Justice Department
statements during settlement negotiations as the basis for an APA
challenge to this enforcement action. Accordingly, under the law of the
case, the United States\' settlement negotiations with other members of
the movie theater industry or any other industry are simply not
reasonably calculated to lead to the discovery of admissible evidence
and, thus, are not permitted areas of discovery under Fed. R. Civ. P.
26(b)(1).[^7]

AMC argues that it is entitled to discovery into settlement negotiations
because it may have relied on such statements when it designed its
theaters. At the January 11, 2000 hearing on AMC\'s motion to compel,
the Magistrate Judge rejected this argument for two reasons. First, AMC
did not argue good faith reliance as a basis for discovery into
settlement negotiations when it originally briefed its motion to compel.
Thus, that argument was waived. Second, the Magistrate Judge agreed with
the United States\' view that, if AMC had actually relied on statements
made by the United States during settlement negotiations, it would
necessarily know about such statements and would not need to discover
them from the United

States. Permitting AMC to discover statements that it does not know
about simply does not make sense in the context of a reliance claim,
since AMC cannot have relied upon statements unless it knew about them.
Moreover, the statements that AMC seeks to discover are statements made
in 1998 and 1999 --- statements made years after AMC decided to build
stadium-style theaters. AMC obviously could not have relied on
statements made to theater owners during settlement negotiations when
those statements were made after many of AMC\'s stadium-style theaters
were already built.

Public policy considerations also support affirmance of the Magistrate
Judge\'s ruling. Whenever possible, the Civil Rights Division attempts
to resolve matters through informal settlement negotiations before
instituting litigation to compel compliance with ADA requirements. As a
result of this policy, most ADA violations uncovered through Justice
Department investigations do not require recourse to litigation.
Balanced against the public policy favoring the protection of the
confidentiality of settlement negotiations and the Civil Rights
Division's policy of pursuing alternate dispute resolution before filing
suit to enforce its claims is AMC's alleged \"need\" for the discovery
it seeks --- a need that AMC has not shown. First, as the Court noted in
its December 17th Order, the Department's statements in private
communications with other members of the motion picture theater industry
are "are not the kind of actions that are subject to judicial review
under the APA," December 17, 1999 Order at 14, 9, and 8. Thus, these
communications are not discoverable under AMC's APA-based affirmative
defense and/or counterclaim. Second, under Fed. R. Evid. 408,
communications that occurred during settlement negotiations (such as the
Department's offers to compromise its claims by allowing a theater owner
to provide certain lines of sight for wheelchair seating locations)
"'are 'not admissible to prove liability for or invalidity of the
claim.'" [Contra Costa]{.underline}, 678 F.2d at 92 (quoting Fed. R.
Evid. 408). Thus, even if AMC obtained discovery regarding settlement
negotiations, it could not use them to prove or disprove the validity of
any claim. [Id]{.underline}. Third, the communications at issue occurred
long after AMC designed the theaters at issue in this case. Thus,
notwithstanding AMC's arguments to the contrary, AMC simply cannot argue
that it relied on such communications when it made design decisions
about its theaters or that these communications bear any relevance to
AMC's understanding of the requirements of Standard 4.33.3. Fourth, the
identity of the persons who participated in settlement negotiations is
not relevant either, since naming such persons would simply be a
predicate to AMC's efforts to seek information about those settlement
negotiations from the persons named --- again, evidence that is not
relevant. Fifth, the evidence that AMC seeks --- evidence about the
Department's interpretation of Standard 4.33.3 is available from other
sources that have already been disclosed to AMC. The Department has
provided AMC with all briefs it has filed discussing the application of
Standard 4.33.3 to movie theaters, copies of all technical assistance
materials it has prepared on the subject, copies of all settlement
agreements it has reached with any movie theater owners and operators,
and copies of all correspondence to members of Congress and other
members of the public inquiring about the application of Standard 4.33.3
to movie theaters. Thus, AMC has no need to know what negotiating
positions the Justice Department has taken in its settlement
negotiations with other theater operators. [See also]{.underline}
[Schachter v. United States]{.underline}, 1994 WL 327696 at \*1 (N.D.
Cal. Apr. 12, 1994) (holding that, in determining whether the
interpretation of a statute is correct, "the court need only look to the
face of the statute and the regulation").

> **C. The Magistrate Judge\'s Order Is Appropriate on Other\
> Grounds As Well.**

While the Magistrate Judge denied AMC the discovery it seeks because it
involves confidential settlement negotiations that are not admissible
under Fed. R. Evid. 408, the discovery could have been denied on other
grounds as well.

In addition to asserting the confidentiality of settlement negotiations,
the United States was also unwilling to disclose the information sought
by AMC because it is protected by the law enforcement and investigative
privilege.[^8] The law enforcement and investigative privilege protects
the government from the disclosure of information that would harm an
agency's law enforcement efforts. [In re Sealed Case]{.underline}, 856
F.2d 268, 272 (D.C. Cir. 1988); [Assoc. for Women in Science v.
Califano]{.underline}, 566 F.2d 339, 343 (D.C. Cir. 1977). The privilege
protects not only investigative files themselves but also the testimony
about the contents of those files,[^9] [see]{.underline} [In re Sealed
Case]{.underline}, 856 F.2d at 271, the identity of law enforcement
sources of information, [see]{.underline} [Tuite v. Henry]{.underline},
98 F.3d 1411, 1414 (D.C. Cir. 1996), and the identity of individuals
under investigation, [see]{.underline} [Church of Scientology v. United
States Internal Revenue Serv.]{.underline}, 995 F.2d 916, 920 (9^th^
Cir. 1993) (noting that the courts are to consider invasion of privacy
in evaluating claim of investigative privilege).[^10]

Since the Justice Department does not have subpoena power in its
investigations under the ADA, it must rely on the cooperation of persons
and entities under investigation when it is gathering evidence to
determine if they are in compliance with ADA requirements. To encourage
such cooperation, it is the Justice Department\'s policy to maintain the
confidentiality of persons and entities under investigation for ADA
violations unless it is necessary to file a lawsuit to enforce ADA
compliance. Declaration of Acting Assisting Attorney General Bill Lann
Lee at ¶ 21 (appended hereto as Exhibit B). The discovery that AMC seeks
would require the Justice Department to reveal the identities of movie
theater owners and operators that are currently under investigation,
exposing these entities to public scrutiny as investigative targets and
impairing the Department\'s ability to obtain cooperation from them.
[See]{.underline} [Church of Scientology]{.underline}, 995 F.2d at 920.
Accordingly, under the law enforcement and investigative privilege, the
United States should not be compelled to disclose this information.[^11]

**CONCLUSION**

For these reasons, the United States respectfully requests that
Magistrate Judge Hellman\'s discovery order be affirmed and that AMC be
denied discovery into the United States\' settlement negotiations with
other entities.

> **Respectfully submitted,**
>
> BILL LANN LEE
>
> Acting Assistant Attorney General
>
> Civil Rights Division
>
> JOHN L. WODATCH, Chief
>
> RENEE M. WOHLENHAUS, Deputy Chief
>
> Disability Rights Section
>
> Civil Rights Division
>
> [                                                  ]{.underline}
>
> JEANINE M. WORDEN
>
> JOHN ALBERT RUSS IV
>
> Trial Attorneys
>
> Disability Rights Section
>
> Civil Rights Section
>
> U.S. Department of Justice
>
> Post Office Box 66738
>
> Washington, D.C. 20035-6738
>
> Telephone: (202) 307-6556
>
> Facsimile: (202) 307-1198
>
> Counsel for Plaintiff
>
> United States of America

Dated: March 26, 2000

**PROOF OF SERVICE**

I, Jeanine M. Worden, declare:

I am over the age of 18 and not a party to the within action. I am
employed by the U.S. Department of Justice, Civil Rights Division,
Disability Rights Section. My business address is P.O. Box 66738,
Washington, D.C. 20035-6738.

On March 27, 2000, I served **PLAINTIFF UNITED STATES' MEMORANDUM OF
POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS' MOTION TO RECONSIDER
MAGISTRATE JUDGE HELLMAN'S** **FEBRUARY 25, 2000 ORDER** on each person
or entity named below by enclosing a copy in an envelope addressed as
shown below and depositing the same with common carrier Federal Express
for overnight delivery.

Date and Place of service: March 27, 2000, Washington, D.C.

Person(s) and/or Entity(ies) to Whom mailed:

Robert J. Harrop, Esq. Gregory F. Hurley, Esq.

Lathrop & Gage Kutak Rock

Suite 2500 620 Newport Ctr. Drive

2345 Grand Boulevard Suite 450

Kansas City, Missouri 64108-2684 Newport Beach, CA 92660

I declare under penalty of perjury under the laws of the United States
of America that the foregoing is true and correct.

Executed on: March 27, 2000 at Washington, D..C.

> [                                            ]{.underline}
>
> Jeanine M. Worden

**United States\' Opposition**

**to Defendants\' Motion to Reconsider**

**Exhibit A**

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, ) CASE NO. CV 99-1034 MMM (ShX)

)

Plaintiff, )

) ORDER GRANTING PLAINTIFF\'S

vs. ) MOTION TO DISMISS DEFENDANTS\'

) COUNTERCLAIM

AMC ENTERTAINMENT, INC.; et. al., )

)

Defendants. )

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_)

The Department of Justice (\"DOJ\") filed this action against defendants
AMC Entertainment, Inc. and American Multi-Cinema, Ltd. (collectively
\"AMC\") on January 29, 1999, charging that AMC theaters with
stadium-style seating violate Title III of the Americans with
Disabilities Act, 42 U.S.C. §§ 12181-12189. DOJ alleges, *inter alia,*
that the theaters violate a 1991 Department regulation requiring that
public facilities, including movie theaters, offer wheelchair users
\"lines of sight comparable to those for members of the general
public.\" 28 C.F.R., Pt. 36, Appendix A, § 4.33.3. Specifically, it
asserts that in AMC\'s Norwalk,\
Promenade 16 and other theaters, there are two types of
seating--\"traditional-style\" and \"stadium-style\" seats.
Traditional-style seats are located in close proximity to the screen and
afford viewers lines of sight less desirable than those found in other
parts of the auditorium.[^12] Stadium-style seats, by contrast, are
located throughout the theater, and provide \"comfortable unobstructed
lines of sight to the screen.\"[^13] Because stadium-style seats can
only be accessed by climbing stairs, DOJ alleges that wheelchair users
cannot use them, and thus that they are relegated to traditional-style
seats near the screen -- the \"worst seats in the house.\"[^14] It
further asserts that the theaters do not provide companion seating as
mandated by Standard 4.33.3.

On April 13, 1999, AMC filed a counterclaim against DOJ. It alleges
that, under the guise of interpreting the ADA, DOJ \"has impermissibly
and without notice\" adopted a new rule of law in violation of the
Administrative Procedure Act (\"APA\"), 5 U.S.C. §§ 5522, 553.
Specifically, AMC contends that \"\[t\]he claims asserted by the DOJ in
this lawsuit constitute substantive changes in the regulations
promulgated under the ADA and are therefore null and void due to the
DOJ\'s failure to comply with the APA..\"[^15]

Standard 4.33.3 provides:

> \"Wheel chair areas shall be an integral part of any fixed seating
> plan and shall be provided so as to provide people with physical
> disabilities a choice of admission prices and lines of sight
> comparable to those for members of the general public. They shall
> adjoin an accessible route that also serves as a means of egress in
> case of emergency. At least one companion fixed seat shall be provided
> next to each wheelchair seating area. When the seating capacity
> exceeds 300, wheelchair spaces shall be provided in more than one
> location.\" 28 C.R.F. pt. 36, Appendix A. § 4.33.3.

AMC contends that in the motion picture industry, \"line of sight\"
refers to the vertical clearance between rows.[^16] It asserts that DOJ
initially adopted the industry\'s understanding of the term when it
promulgated Standard 4.33.3,[^17] and that AMC constructed its theaters
in reliance on this interpretation, clustering wheelchair spaces so they
had an unobstructed view of the screen and providing at least one
companion seat for each wheelchair area.[^18]

Thereafter, in March 1996, AMC alleges that DOJ intervened in litigation
between private individuals and United Artists Theater Circuit, Inc.
(\"UA\") in order to become a party to the consent decree settling that
action. AMC contends that DOJ used the consent decree to change the
requirements of Standard 4.33.3 in two significant respects.[^19] First,
the settlement decree purportedly increased the number of companion
seats mandated by requiring one seat per wheelchair *space*, rather than
one for each area.[^20] Second, the settlement decree allegedly mandated
that future theaters provide wheelchair spaces in two separate
locations,[^21] with at least two of the five spaces provided located
\"one-quarter to three-quarters of the way back from the screen,. . . no
closer to the screen than the fourth row, and no farther from the screen
than four rows from the back of the auditorium.[^22]

Although AMC was not a party to the UA suit, it alleges it relied on the
decree, and both modified and built theaters to ensure compliance with
its terms.[^23] In August 1997, DOJ began investigating AMC\'s Norwalk
and Promenade 16 theaters, facilities constructed prior to the UA
consent decree. AMC asserts that, after completing its investigation,
DOJ declined to provide any indication of its findings[^24]. In January
1998, DOJ inspected three AMC theaters in Kansas City that had been
constructed after the UA consent decree, and featured wheelchair spaces
no closer than the fourth row in all auditoria. Again, AMC alleges, DOJ
declined to state its findings.[^25]

In June 1998, DOJ advised AMC that its theaters were in violation of the
ADA and threatened a lawsuit if it did not agree to design criteria for
future facilities.[^26] Between June 1998 and January 1999, the parties
met and exchanged correspondence in an attempt to resolve the matter.
AMC asserts that DOJ continually declined to articulate its view of what
Standard 4.33.3 mandated in theaters with stadium-style seats. Rather,
the Department purportedly continued to redefine and expand the
requirements of the section.[^27] Consequently, AMC alleges that DOJ\'s
current interpretation of Standard 4.33.3 constitutes a new rule that
agency can adopt and enforce only after it has complied with the notice
and comment provisions of the APA.[^28] AMC seeks, *inter alia,* a
declaration that DOJ\'s interpretation of the phrase \"comparable lines
of sight\" in theaters containing 300 seats or less, and its
requirements for auditoria having sight lines that require slopes of
greater than 5%, constitute substantive rulemaking, and are null and
void because of the Department\'s failure to comply with the procedural
requirements of the APA[^29].

DOJ has moved to dismiss AMC\'s counterclaim, asserting that the
interpretation of Standard 4.33.3 it seeks to enforce in this action
does not constitute \"final agency action\" subject to judicial review
under the APA. See 5 U.S.C. § 702. It also asserts that review is
improper because AMC cannot show that it has \"no other adequate remedy
in a court.\" See 5 U.S.C. § 704.

DOJ asserts there is no final agency action because it has not issued
any orders embodying its present interpretation of Standard 4.33.3., and
has not imposed penalties on any party for failure to comply with the
interpretation. DOJ acknowledges that it took a position regarding the
application of Standard 4.33.3 to movie theaters in an amicus brief
filed in *Lara v. Cinemark USA, Inc.,* United States District Court for
the Western District of Texas, Case No. EP-97-CA-502H. It contends,
however, that neither that brief, its pre-litigation communications with
AMC, nor its filing of the present enforcement action constitute final
agency action for purposes of APA review.

AMC counters that DOJ has taken final agency action respecting its
interpretation of Standard 4.33.3 by filing the *Lara* brief, sending
correspondence to theater owners in which it seeks compliance with the
standard set forth in the brief, and initiating litigation against
theaters when they fail to comply. It contends that, assessed
pragmatically and flexibly, this activity constitutes the adoption of a
new substantive rule in violation of the procedural protections of the
APA.

**I. DISCUSSION**

> **A.** **Legal Standard Governing Motions To Dismiss Under Rule
> 12(b)(1)**

A plaintiff bears the burden of demonstrating that the court has subject
matter justification over an action. See *Kokkonen v. Guardian Life Ins.
Co.,* 511 U.S. 375, 377, (1994); *Stock West, Inc. v. Confederated
Tribes,* 873 F.2d 1221, 1225, (9th Cir. 1989). The party mounting a Rule
12(b)(1) challenge to the court\'s jurisdiction may do so either on the
fact of the pleadings or by presenting extrinsic evidence for the
court\'s consideration. See *Thornhill Publishing co v. General Tel. &
Electronics,* 594 F.2d 730, 733 (9th Cir. 1979) (facial attack);
*Meliezer v. Resolution Trust Co.,* 952 F.2d 879, 881 (5th Cir. 1992)
(challenge based on extrinsic evidence). There is an important
difference between Rule 12(b)(1) motions attacking a complaint or
counterclaim on its face and those replying on extrinsic evidence. In
ruling on the former, courts must accept the allegations of the claim as
true. See *Valdez, United States*, 837 F. Supp. 1065, 1067 (E.D.Cal.
1993), aff\'d., 56 F.3d 1177 (9th Cir. 1995). In deciding the latter,
courts may weigh the evidence presented, and determine the facts in
order to evaluate whether they have the power to hear the case. See
*Roberts v. Corrothers,* 812 F.2d 1173, 1177 (9th Cir. 1987).

The APA does not provide an independent basis for federal subject matter
jurisdiction. Rather, a federal court has jurisdiction over challenges
to federal agency action because they are claims arising under federal
law. See 28 U.S.C. § 1331. While the APA does not confer subject matter
jurisdiction on the district court, \"it does provide a waiver of
sovereign immunity in suits seeking judicial review of a federal agency
action under § 1331. *Gallo Cattle Co. v. U.S. Dep\'t. of Agriculture,*
159 F3.d 1194, 1198 (9th Cir. 1998). This waiver is subject to certain
\"limitations.\" however. *Id.* The agency action must be \"final.\'\"
and the complainant must have no other adequate remedy in a court. 5
U.S.C. §§ 702, 704.[^30] To the extent these conditions are not
satisfied, the court lacks jurisdiction to hear the claim. See *Powelson
v. United States,* 150 F.3d 1103, 1104 (9th Cir. 1998) (\"\[s\]overeign
immunity is not merely a defense to an action against the United States,
but a jurisdictional bar,\" quoting 16 J. Moor et al., MOORE\'S FEDERAL
PRACTICE ¶ 105.21 (3rd ed. 1998)); *Marshall Leasing, Inc. v. United
States*, 893 F.2d 1096, 1098 (9th Cir. 1990) (\"The United States is
immune from suit unless it has consented to be sued, and the terms of
its consent to be sued in any court define the jurisdiction of that
court to entertain the suit\"); *Dow Chemical v. United States E.P.A.,*
832 F.2d 319, 323 (5th Cir. 1987) (\"we must now decide whether Dow has
identified \'final\' EPA action over which we have jurisdiction\"). In
determining whether it has jurisdiction over AMC\'s counterclaim, the
court has considered the declarations and other evidence filed by the
parties.

> **B.** **The Administrative Procedures Act**

Under the APA, agencies must give notice and seek comment before
formulating substantive regulations. See 5 U.S.C. §§ 553(b), (c)
(\"General notice of proposed rule making shall be published in the
Federal Register. . . . After notice required by this section, the
agency shall give interested persons an opportunity to participate in
the rule making through submission of written data, views, or arguments
with or without opportunity for oral presentation\"). See also
*Paralyzed Veterans of America v. D.C. Arena, L.P.,* 117 F.3d 579, 586
(D.C.Cir. 1997). These notice and comment requirements apply only to
\"legislative\" or \"substantive\" rules; they do not apply to
\"interpretative rules, general statement of policy, or rules of agency
organization, procedure, or practice.\" 5 U.S.C. § 553(b). See *McLouth
Steel Products Corp. v. Thomas,* 838 F.2d 1317, 1320 (1988); *Community
Nutrition Institute v, Young*, 818 F.2d 943, 945-46 (1987) (per curium).

What constitutes a \"substantive rule\" is not defined in the APA. The
Supreme Court has noted, however, that one characteristic inherent in
the concept is that the regulation must \"affect\[\] individual rights
and obligations.\" *Morton v. Ruiz,* 415 U.S. 199, 232 (1974). \"This
characteristic is an important touchstone for distinguishing those rules
that may be \'binding \' or have the \'force of law.\'\" *Chrysler Corp.
v. Brown*, 441 U.S. 281, 301 (1979) (quoting *Morton, supra*, 415 U.S.
at 235). Substantive rules \"effect a change in existing law or
policy.\" Powderly v. Schweiker, 704 F.2d 1092, 1098 (9th Cir. 1983).
Interpretive rules, by contract, \"merely clarify or explain existing
law or regulations.\" *Id.* AMC\'s counterclaim charges that DOJ\'s new
interpretation of Standard 4.33.3 constitutes substantive rulemaking.
Because DOJ did not give notice or seek comment prior to adopting the
alleged new rule, AMC asserts the APA has been violated.

> **C. Final Agency Action**

Whether AMC\'s claim in this regard can be heard depends in the first
instance on whether DOJ\'s interpretation constitutes \"final agency
action.\" See 5 U.S.C. § 704; *Gallo, supra,* 159 F.3d at 1198-99. The
Ninth Circuit has directed that this finality requirement be interpreted
in a \"pragmatic\" and \"flexible\" way. *Dietary Supplemental
Coalition, Inc. v. Sullivan,* 978 F.2d 560, 562 (9th Cir. 1992). See
*Abbott Laboratories v. Gardner*, 387 U.S. 136, 149 (1967); *Acura of
Bellevue v. Reich*, 90 F.3d 1403, 1408 (9th Cir. 1996). Generally,
administrative orders are not final and reviewable \"unless and until
they impose an obligation, deny a right, or fix some legal relationship
as a consummation of the administrative process.\" *Ukiah Valley Medical
Center v. FTC*, 911 F.2d 261, 264 (9th Cir. 1990) (quoting *Chicago &
Southern Air Lines, Inc. v. Waterman S.S. Corp.,* 333 U.S. 103, 113
(1948)); *Air California v. United States Dep\'t of Transportation*, 654
F.2d 616, 621 (9th Cir. 1981) (same). Thus, when an action is not a
\"definitive\" statement of the agency\'s position and does not have a
\"direct and immediate . . . effect on the day-to-day business\" of a
party, it is not \"final.\" *Air California, supra*. See also
*Williamson County Regional Planning Comm\'n v. Hamilton Bank,* 473 U.S.
172, 193 (1985) (\"the finality requirement is concerned with whether
the initial decision-maker has arrived at a definitive position on the
issue that inflicts an actual, concrete injury. . .\").

Other relevant factors in assessing finality include whether the action
has the status of law or comparable legal force, and whether immediate
compliance with its terms is expected. See *FTC v. Standard Oil Co,* 449
U.S. 232, 239-40 (1980); *Assiniboine v. Board of Oil and Gas
Conservation*, 792 F.2d 782, 788 (9th Cir. 1986) (applying the *Abbott
Laboratories* factors). DOJ\'s amicus brief in *Lara*, its private
correspondence with theater owners around the country, and its
initiation of litigation against certain of them do not have these
indicia of finality.

> **1.** **The 1994 TAM Supplement Cases**

In arguing that DOJ\'s interpretation of Standard 4.33.3 constitutes
final agency action subject to review, AMC relies heavily on two cases
that examined the Department\'s interpretation of the line of sight
requirement in connection with seating arenas and stadia. In each case,
a private stadium owner challenger the agency\'s attempt to enforce a
requirement that wheelchair locations be sufficiently elevated that
their occupants could see over spectators standing in front of them.
This requirement was set forth in the 1994 Supplement to the DOJ\'s
Technical Assistance Manual (\"1994 TAM Supplement\"). Because the
interpretation constituted a fundamental change in the agency\'s prior
interpretation of Standard 4.33.3, and because DOJ had adopted the 1994
TAM Supplement without notice and comment, both decisions cited by AMC
held it was invalid. See *Caruso v. Blockbuster-Sony Music*, 174 F.3d
166, 177 (3rd Cir. 1998); *Independent Living Resources v. Oregon Arena
Corp.,* 982 F.Supp. 698, 758 (D.Or. 1997). But see *Paralyzed Veterans,
supra*, 117 F.3d at 587 (holding that DOJ had not previously adopted an
authoritative positive on the issue, and thus that the 1994 TAM
Supplement was an interpretative rule that could be adopted without
notice and comment).

Neither *Caruso* nor *Independent Living* addressed the issue presently
before the court, i.e., whether DOJ\'s interpretation of Standard 4.33.3
was final agency action that could be judicially reviewed under the APA.
All parties apparently agreed that the Department\'s issuance of the
1994 TAM Supplement constituted final agency action; their disagreement
concerned whether requiring a line of sight over standing spectators
constituted a substantive or interpretative rule. See *Caruso, supra*,
174 F.3d at 174 (finding that DOJ violated the APA because the \"agency
\[knew\] it \[was\] promulgating a rule \[Standard 4.33.3\] that \[was\]
ambiguous on a substantive issue of concern to commentators \[whether
lines of sight over standing spectators were required\], and later
trie\[d\] to resolve the issue through an interpretive rule \[the 1994
TAM Supplement\]\"); *Independent Living, supra*, 982 F.Supp. at 737
(holding that \"the interpretation of Standard 4.33.3 expressed in the
1994 TAM Supplement is an attempt to impose a new substantive
obligation, which may not be accomplished under the rubric of an
\'interpretive regulation\'\"). Unlike the Department\'s interpretation
of the line of sight requirement at issue in *Caruso* and *Independent
Living*, the interpretation it seeks to enforce in this action has not
been the subject of any official statement of policy or position
equivalent to the TAM Supplement. Rather, AMC contends that DOJ has
taken final agency action by filing an amicus brief, sending private
communications to theater owners, and threatening to initiate and in
fact initiating litigation against some of them. Consequently, the 1994
TAM Supplement cases do not control decision of the issues raised in
DOJ\'s motion to dismiss.

> **2. The *Lara* Amicus Brief**

In its brief in *Lara*, the Department noted that it was \"participating
as *Amicus curiae* . . . to provide the Court with the United States\'
interpretation of the American with Disabilities Act . . . and its
implementing regulations.\"[^31] After asserting that its views were
entitled to deference,[^32] DOJ argued:

> \"Once measured, the lines of sight provided to wheelchair users must
> be comparable to those provided to members of the general public.
> \"Comparable\" is an ordinary word used in everyday parlance. . . .
> Consistent with this practical definition, the Department of Justice
> interprets the language in the Standards requiring \'lines of sight
> comparable to those for members of the general public\' to mean that
> in stadium style seating, wheelchair locations must be provided lines
> of sight in the stadium style seats within the range of viewing angles
> as those offered to most of the general public in the stadium style
> seats, adjusted for seat tilt. Wheelchair locations should not be
> relegated to the worst sight lines in the building, but neither do
> they categorically have to be the best. . . . In other words, to
> ensure that wheelchair users are provided lines of sight that are
> comparable to the viewing angles offered to the general public, the
> lines of sight provided to wheelchair users should not be on the
> extremes of the range offered in the stadium. As described in industry
> guidelines, \'viewing angles\' refers to vertical viewing angles,
> horizontal viewing angles and to other components that affect \'lines
> of sight.\'\"[^33]

Advocacy in the context of a judicial proceeding does not constitute
final agency action. See *Mt. Adams Veneer Co. v. United States*, 896
F.2d 339, 343 (9th Cir. 1990) (\"Agency advocacy in a judicial
proceeding is obviously not such agency action as would be subject to
judicial review under the Administrative Procedure Act. . . . . Judicial
review of administrative action under the Administrative Procedure Act
is limited to orders of definitive character dealing with the merits of
proceedings before an administrative agency\"). See also *National Labor
Relations Bd. v. Sears, Roebuck & Co*., 421 U.S. 132, 160 (1975) (noting
that an agency\'s decision to file a complaint does not constitute a
final agency decision since it does not effect a final disposition, but
merely permits litigation); *Board of Trade of the City of Chicago v.*
SEC, *883 F.2d 525, 529-30 (7th Cir. 1989) (*agency\'s discretionary
decision to prosecute a complaint is not reviewable under the APA). This
is because an agency\'s statement of position in litigation with a
private party imposes no legal obligation, denies no existing rights and
fixes no legal relationships. See *Ukiah Valley Medical Center, supra*,
911 F.2d at 264.

In an analogous context, the Supreme Court held in *FTC v. Standard Oil
Co. of California,* 449 U.S.232, 241 (1980), that the Federal Trade
Commission\'s issuance of an administrative complaint did not constitute
a reviewable final action. The Court explained that \"the Commission\'s
averment of \'reason to believe\' that \[defendant\] was violating the
act \[was\] not a definitive statement of position.\" *Id.* at 241. See
also *USAA Fed. Sav. Bank v. McLaughlin*, 849 F2.d 1505, 1508 (D.C.Cir.
1988) (\"the mere issuance of an administrative complaint does not
constitute final agency action\"); *Dow Chemical, supra*, 832 F.2d at
323-24 (the interpretation of an agency regulation, coupled with a
request for data and amendment of a complaint in an enforcement action,
was not final action subject to judicial review).

In *Lara*, DOJ articulated its view or belief concerning the meaning of
Standard 4.33.3. Like the filing of the administrative complaint in
Standard Oil, the amicus brief in *Lara* \"ha\[d\] no legal force
comparable to that of the \[published\] regulation at issue in *Abbott
Laboratories* \[requiring that manufacturers print certain information
on drug labels and advertisements\], nor any comparable effect upon
\[defendant\'s\] daily business.\" *Standard Oil, supra*, 449 U.S. at
242. See also *Ukiah Valley Medical Center, supra*, 911 F.2d at 264 (the
burden of having to defend administrative suits has \"consistently been
held not to constitute a \'direct and immediate . . . effect on the
day-to-day business\' of charged parties\"). This is particularly true
since the *Lara* court declined to adopt the interpretation of Standard
4.33.3 espouse in DOJ\'s amicus brief. The filing of the brief and
articulation of an interpretation of Standard 4.33.3, therefore, did not
constitute final agency action subject to judicial review.

> **3. Settlement Communications And Threats of Litigation**

As further evidence of final agency action, AMC points to DOJ\'s
correspondence with theater owners since *Lara*. It asserts that in
these private communications DOJ has advanced the interpretation of
Standard 4.33.3 it articulated in *Lara*, and has threatened to sue
theater owners who decline to abide by it. Neither settlement
negotiations nor threats of suit constitute final agency action that may
be judicially reviewed. See *New Jersey Hospital Ass\'n. v. United
States*, 23 F.Supp.2d 497 (D.N.J. 1998) (\"The question then becomes
whether the actions of the DOJ in providing settlement letters to
plaintiff\'s member hospitals constitute final agency action, for which
there is no other adequate remedy in a court. . . . .This Court finds
that the DOJ\'s actions are not final, \[and\] that plaintiff has
available to it other adequate remedies in a court. . .\") *Duval
Ranching Co. v. Glickman,* 965 F.Supp. 1427, 1440 (D.Nev. 1997)
(\"Finally, there is no evidence that Defendants have ever attempted to
enforce any regulations against any of the named Plaintiffs. . . . Mere
threats are not final action. In *Ukiah Valley Medical Center* the Ninth
Circuit held that the filing of a complaint by an administrative agency
is not \'final\' for purposes of judicial review. . . . A fortiori,
threatening to file a complaint, threatening to initiate criminal
proceedings, or threatening to sue, are also not final\").

AMC asserts that \"agency \'interpretations\' and other informal
announcements \[may\] constitute\[\] final agency action subject to
review \[under\] the APA.\"[^34] The cases it cites for this
proposition, however, are inapposite. In *Independent Broker-Dealers\'
Trade Association v. Securities & Exchange Comm\'n*, 442 F.2d 132,
139-40 (D.C.Cir. 1970), for example, the court found that the SEC\'s
statement of policy respecting customer-direct give-ups of brokerage
fees had led the stock exchange to abolish the give-ups. The court noted
that the

> \"elimination of \[the\] give-ups . . .confront\[ing\] appellants with
> pecuniary harm was accomplished, not merely threatened. There was no
> means within the administrative framework by which appellants could
> force the Commission to hold further hearings on give-ups. As to them
> the Commission\'s action was effective and final.\" *Id.*

The court contrasted this situation with one in which the stock exchange
had \"refused to follow the Commission\'s polities.\" Had the exchange
elected to follow such a course, it stated, the brokers \"action would
likely have been premature.\" *Id*. at 141. Here, unlike the plaintiffs
in *Independent Broker-Dealers*, AMC is \"merely threatened\" with harm.
While AMC faces the burden and cost of litigation, DOJ cannot force
compliance with its interpretation of Standard 4.33.3 unless and until
the court endorses that interpretation by issuing a final judgment in
DOJ\'s favor.

In another case cited by AMC, *National Automatic Laundry and Cleaning
Council v. Shultz*, 443 F.2d. 689, 692 (D.C.Cir. 1971), the federal
Wage-Hour Administrator issued an opnion letter to an association of
laundry and cleaning businesses stating that coin-operated launderettes
and dry-cleaning services were \"engaged in laundering or cleaning
clothing or fabrics within the meaning of the act.\" The District of
Columbia Circuit held that this was final agency action subject to
judicial review. *Id* at 702. The court found that the opnion letter
constituted final agency action because it had been issued in response
to a specific inquiry, and the administrator intended it to be a
\"deliberative determination of the agency\'s position at the highest
available level on a question of importance. . .\" that affected the
entire industry. *Id*. at 701-02.

Here, rather than a communication intended definitively to articulate an
industry-wide policy, DOJ has communicated privately with individual
theater owners to negotiate and resolve its differences with them.[^35]
These communications do no have \"the contemplation and likely
consequence of \'expected conformity\'\" among members of the industry.
See *id*. at 698 (quoting *Abbott Laboratories, supra*, 387 U.S. at
150). See also *Association of Public Agency Customers v. Bonneville
Power Admin*., 126 F.3d 1158, 1184 (9th Cir. 1997) (\"Negotiations,
which are not final actions, therefore are not reviewable, and we
decline to consider them.\")[^36]

Thus, viewed separately or in combination, the matters AMC characterizes
as final agency action are not the kind of actions that are subject to
judicial review under the APA.

> **D. No Other Adequate Remedy In A Court**

Even if it is assumed that DOJ\'s amicus brief, correspondence with
theater owners, and threats of enforcement action are final agency
action, AMC has an adequate remedy in that it may assert violation of
the APA as a defense to DOJ\'s enforcement action against it. See *Jerry
T. O\'Brien, Inc. v. Sec*, 704 F.2d 1065, 1066 (9th Cir. 1983), rev\'d
on other grounds, 467 U.S. 735 (1984) (dismissing suit seeking to enjoin
an administrative investigation by the SEC on the grounds that it was
being conducted improperly, since plaintiffs\' ability to assert their
defenses in a future action by the agency to enforce the subpoena was
\"an adequate legal remedy\"). See also *Christensen, supra* 549 F.2d at
1323 (\"Litigation expenses, however substantial and nonrecoverable,
which are normal incidents of participation in the agency process do not
constitute irreparable injury\" and therefore do not \"permit judicial
intervention in the agency process\").

AMC argues that such a view \"ignores the practical consequences\" of
DOJ\'s conduct. It asserts that DOJ\'s press releases regarding this
litigation threaten to harm its business reputation irreparably and
leaves the entire theater industry in a state of uncertainty as to the
applicable law. AMC has proffered no evidence that it has suffered
actual harm to its business reputation as a result of publicity
surrounding the filing of this action. Compare *San Antonio Community
Hospital v. Southern California District Council of Carpenters,* 125
F.3d 1230, 1237 (9th Cir. 1997) (\"The Hospital also introduced evidence
that its reputation and, consequently, its fund-raising ability had been
impaired since the Union began displaying the fraudulent banner\")[^37]
Nor has it demonstrated in any other fashion that litigating the matter
of APA compliance as an affirmative defense to DOJ\'s enforcement action
will not suffice to protect its interests.

> **E.** **AMC\'s Request for Discovery**

In its opposition to DOJ\'s motion, AMC argues that if the court
determines there is a \"legitimate issue\" regarding final action, the
motion to dismiss should be denied, and AMC should be given time to
conduct discovery. AMC contends discovery is warranted \"\[b}ecause the
resolution of factual issues is inappropriate on a motion to dismiss.\"
This overlooks the fact that in deciding Rule 12(b)(1) motions asserting
lack of subject matter jurisdiction, the court may consider extrinsic
evidence and resolve factual issues. See *Roberts, supra*, 812 F.2d at
1177. Thus, the present motion to dismiss is a proper vehicle for
determining whether final agency action exists. See, *e.g., Air
California, supra*, 654 F.2d at 622 (\"the district court entered
judgment dismissing this action for lack of jurisdiction on the grounds
that the issues were not ripe for review and that no case or controversy
had been presented\").

Perhaps for this reason, courts resolving Rule 12(b)(1) jurisdictional
challenges have frequently handled requests for discovery in a manner
similar to that prescribed in Rule 56(f): they have required that the
party asserting jurisdiction be permitted to conduct discovery to obtain
facts supporting its position, at least where such facts are peculiarly
within the knowledge of the opposing party. See, e.g., *Investment
Properties International, Ltd. v. IOS, Ltd*, 459 F.2d 705, 707-08 (2d
Cir. 1972); *Williamson v. Tucker*, 645 F.2d 404, 414 (5th Cir.), cert.
denied, 454 U.S. 897, (1981); *Timberlane Lumber Co. v. Bank of
America,* 574 F.Supp. 1453, 1461 (N.D.Cal. 1983), aff\'d, 749 F.2d 1378
(9th Cir. 1984). At the August 9, 1999, hearing on this motion, the
court determined that AMC should have an opportunity to conduct further
discovery on the issue of final agency action[^38] Accordingly, it
continued the hearing to September 8, 1999.

On August 27, 1999, AMC filed a supplemental declaration proffering the
additional evidence it had been able to obtain concerning DOJ\'s action.
AMC asserted that DOJ had refused to produce the majority of the
documents it had requested, had raised a work product privilege in
response to numerous requests, and had objected on the basis that
discovery was stayed.[^39] DOJ countered that it had certified to AMC
that it had had communications with less than ten of the fifty largest
theater owners in North America.[^40] DOJ also certified that none of
the ten was the largest theater owner.[^41] With three exceptions, the
information provided by DOJ did not specify which theater owners had
been contracted. The three owners identified include AMC and Cinemark
USA, who are among the ten largest theater owners in the nation, and
SoCal Cinemas, which ranks 38 of 50.[^42]

The additional evidence proffered by AMC is not sufficient to
demonstrate that DOJ has taken an industry-wide position like that the
agency in *National Union Automatic Laundry* took by sending an opinion
letter to an industry trade association. See *National Union Automatic
Laundry, supra*, 443 F.2d at 701-02. To the contrary, the evidence
before the court suggests that, at most, DOJ has communicated with ten
members of the theater industry nationwide, and has not sought to press
its interpretation of Standard 4.33.3 uniformly even among the largest
owners. Consequently, the court concludes the evidence does not
establish that DOJ has engaged in final agency action.

It is clear, however, that the parties dispute the proper scope of
discovery on this issue and that multiple discovery matters remain to be
resolved. As a result, while DOJ\'s motion to dismiss AMC\'s
counterclaim must be granted, the order of dismissal is without
prejudice to AMC\'s right to seek leave to reassert the counterclaim at
a later time should it develop, through discovery or otherwise, evidence
of final agency action that satisfies the legal standards discussed
herein.

**II. CONCLUSION**

AMC\'s counterclaim is dismissed on the basis that the court lacks
subject matter jurisdiction over it. This dismissal is without prejudice
to AMC\'s right to seek leave to reassert the counterclaim should it
develop evidence of final agency action meeting the standards set forth
in this order.

DATED: September 8, 1999
[                                                                  ]{.underline}

MARGARET M. MORROW

UNITED STATES DISTRICT JUDGE

**United States\' Opposition**

**to Defendants\' Motion to Reconsider**

**Exhibit B**

JANET RENO

Attorney General

of the United States

BILL LANN LEE

Acting Assistant Attorney General

Civil Rights Division

JOHN L. WODATCH, Chief

RENEE M. WOHLENHAUS

Acting Deputy Chief

Disability Rights Section

Civil Rights Division

JEANINE M. WORDEN

Attorney

Disability Rights Section

Civil Rights Division

U.S. Department of Justice

Post Office Box 66738

Telephone: (202) 307-6556

Counsel for Plaintiff

United States of America

IN THE UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, ) Civil Case No: 99-01034 MMM (SHx)

)

Plaintiff )

) **DECLARATION AND FORMAL**

) **ASSERTION OF PRIVILEGES**

v\. ) **IN OPPOSITION TO DEFENDANT**

) **AMC\'S MOTION TO COMPEL**

) **DISCOVERY**

AMC ENTERTAINMENT, INC., )

et al. )

)

Defendants. )

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ )

I, Bill Lann Lee, hereby state and declare, as follows:

1\. I am the Acting Assistant Attorney General of the Civil Rights
Division of the United States Department of Justice (the
\"Department\"). I was appointed to that position on December 15, 1997.

2\. The Attorney General of the United States is responsible for
enforcement of the nation\'s civil rights laws, and has primary
responsibility for enforcement of the Americans With Disabilities Act of
1990 (the \"ADA\"), 42 U.S.C. §§ 12101 through 12213. I have been
delegated the authority of the Attorney General to enforce the ADA under
28 C.F.R. § 0.50(1). Pursuant to my authority, the Disability Rights
Section of the Civil Rights Division is charged with enforcing Title I,
II, and III of the ADA as it relates to both public and private
entities.

3\. The Attorney General has the authority and the duty to investigate
alleged violations of Title III of the ADA and to conduct compliance
reviews of covered entities. 42 U.S.C. § 12188(b)(1)(A)(i). The Attorney
General also has the authority to promulgate regulations under Title III
of the ADA. 42 U.S.C. § 12186. In addition, the Attorney General has the
authority to file a civil action in United States District Court if she
believes that an entity has violated Title III of the ADA by engaging in
a pattern or practice of discrimination or to vindicate the public
interest. 42 U.S.C. § 12188(b)(1)(B)

4\. I am generally familiar with the history and nature of the
above-captioned action before the United States District Court for the
Central District of California. Members of my staff have reviewed a
representative sampling of the hundreds of pages of privileged documents
already identified, and I have reviewed a representative sample of the
privileged documents.

5\. On January 31, 1999, the Attorney General filed a lawsuit in the
Central District of California alleging, among other things, that
American Multi-Cinema, Inc. (\"AMC\"), and its parent company AMC
Entertainment (\"AMCE\"), violated Title III of the ADA by failing to
design, construct, and operate certain motion picture theaters in the
Los Angeles area and elsewhere in accordance with the ADA Standards for
Accessible Design, 28 C.F.R. Part 36, Appendix A (the \"Standards\"),
including but not limited to § 4.33.3 (\"Standard 4.33.3\"). The
Attorney General considers this failure to comply with the Standards to
constitute a pattern or practice of discrimination and to constitute
unlawful discrimination raising an issue of general public importance.
[See]{.underline} Complaint at ¶ 3.

6\. On September 8, 1999, the District Court in this case dismissed,
without prejudice, AMC\'s counterclaim alleging that the Department
violated the Administrative Procedure Act (APA), 5 U.S.C. § 551, et
seq., in its interpretation of Standard 4.33.3

7\. The United States has provided hundreds of documents and over one
hundred pages of answers to interrogatories, request for production, and
requests for admission in response to AMC\'s discovery requests. Among
the documents and information that the United States has produced to AMC
are preliminary list of the ADA Violations at the Norwalk Theater, the
Promenade 16 Theater, the Olathe Theater, the Bari Woods Theater, and
the Leawood Theater; all Department of Justice technical assistance
documents relating to the ADA; all Department press releases relating to
the ADA,; all Department policy letters relating to Standard 4.33.3
and/or movie theaters; all pleadings, exhibits, and affidavits filed by
the Department in lawsuits involving movie theaters; all settlement
agreements involving movie theaters entered into by the Department; and
all Departmental records of public statements by the Department about
movie theaters and/or the application of Standard 4.33.3 to movie
theaters.

8\. During the course of discovery, the United States advised AMC that
several of its requests for production and interrogatories sought
documents and information protected by the governmental deliberative
process privilege, the work product doctrine, the attorney-client
privilege, and the law enforcement and investigative privilege. The
United States also advised AMC that many of its request sought documents
and information that are not reasonably calculated to lead to the
discovery of admissible evidence and that AMC\'s discovery requests were
imposing an extreme burden on the Justice Department. The Department
asked AMC to limit its discovery requests so that they did not seek
clearly privileged materials, so that they sought materials that were
relevant to movie theaters, and so that they did not pose an undue
burden of Departmental resources. AMC refused these requests and
insisted that Department attorneys prepare a privilege log itemizing
each of the hundreds of documents for which the United States is
claiming privilege.

9\. AMC\'s discovery requests have imposed a major burden on the Justice
Department. To date, although the Department has limited its search for
documents to those directly relevant to movie theaters, Jeanine Worden,
the lead attorney on this case, advises me that Department attorneys
have spent over 800 hours responding to AMC\'s discovery requests \--

i.e, reviewing files to locate documents and information responsive to
AMC\'s requests; preparing answers to AMC\'s two sets of
interrogatories, request for production of documents, and request for
admission; and reviewing documents for privilege and preparing a
privilege log. Because the review required by AMC\'s request is so
extensive, covering the time period from 1991 to the present, and
because AMC\'s discovery request require the review of tens of thousands
of Departmental documents, it is difficult to determine how much
additional time will be required to complete the Department\'s response
to AMC\'s discovery requests. The Department\'s search for responsive
documents and information is not yet complete. Ms. Worden advises me
that she believes Department attorneys will spend at least another 500
hours completing the review for nonprivileged documents relating to
movie theaters that are responsive to AMC\'s request. If the Court were
to order the Department to produce all nonprivileged documents and
information sought by AMC, Ms. Worden advises me that the process of
reviewing files to locate such documents and information is likely to
take at least an additional 2,000 hours of attorney time, including not
only attorney time in the Civil Rights Division\'s Disability Rights
Section, but also attorney time in United States Attorney\'s offices
nationwide. Requiring the Justice Department to devote such large
amounts of attorney time to responding to AMC\'s discovery requests
would impose a tremendous burden on the Department and would severely
limit the Department\'s ability to continue ADA enforcement efforts in
other matters.

10\. To date, the Department has completed a partial privilege log
listing approximately 500 documents for which privilege is being
asserted in this action. (A copy of the partial privilege log has been
submitted together with the Joint Stipulation regarding this discovery
dispute. Department attorneys have asked AMC to relieve them of the
burden of listing each and every document for which any privilege was
claimed, but AMC refused this request. Ms. Worden advises me that
compilation of a privilege log that listed each document for which the
Department is asserting privilege ([i.e.,]{.underline} the
attorney-client privilege, work product doctrine, the law enforcement
and investigative privilege or the deliberative process privilege) would
require hundreds of additional hours of attorney and paralegal time,
particularly if the

Department were required to log each page of attorney notes and other
attorney work product, each document contained in active and closed
investigative files, and each document for which the Department is
asserting the deliberative process privilege. For this reason, I am
asking the Court to relieve the Department of the burden of preparing a
privilege log listing each document for which the Department is
asserting privilege --- for example, relieving the Department of the
obligation to list each work product document and/or allowing the
Department to log categories of documents, instead of individual
documents.

11\. In its portion of the joint stipulation regarding discovery
disputes, AMC has moved to compel the United States to produce documents
and information that are not relevant to a defense arising under the
Administrative Procedure Act or any other claim or defense in this
action and documents and information for which the Department is
asserting privilege.

12\. As part of my official duties, I am familiar with the government\'s
deliberative process privilege, the attorney-client privilege, the work
product doctrine, and the law enforcement and investigative privilege.

13\. I have executed this Declaration for the purpose of making formal
claims of privilege as to documents and information sought by AMC in its
Joint Stipulation. The statements and conclusions stated in this
Declaration are based upon information made available to me in my
official capacity. After consulting with the Disability Rights Section
attorneys involved in the instant case and members of my staff who have
reviewed a representative sampling of the documents and provided me with
a representative sampling of the documents that I have reviewed, I have
determined that the documents and information sought by AMC are
protected by the deliberative process privilege, the attorney-client
privilege, the work product doctrine, and the law enforcement ad
investigative privilege.

14\. Specifically, I am making a formal claim of the deliberative
process privilege with respect to the following documents and with
respect to all oral and written communications relating to deliberations
reflected in, or otherwise relating to these documents: the memorandum
written by Jeanine M. Worden, Trial Attorney, to John L. Wodatch, Chief,
Disability Rights Section, recommending this litigation against AMC,
including all attachments to the memorandum and the executive summary
for the memorandum; all drafts of that memorandum and the executive
summary and notes and comments about them; all drafts of the complaint
and other documents filed in this action; the memorandum from Daniel
Werfel, Trail Attorney, to John L. Wodatch, Chief, Disability Rights
Section, recommending amendment of the complaint in this action, drafts
of that memorandum, and notes and comments relating to those drafts; the
memorandum from John L. Wodatch to me recommending amendment of the
complaint in this action, all drafts thereof, and notes reflecting
comments on the drafts thereof, all memoranda, drafts of memoranda,
notes, written communications, and meeting notes regarding the memoranda
recommending [amicus]{.underline} participation in [Lara v Cinemark USA,
Inc (W.D. Tex)]{.underline}, including all attachments to such
memoranda; all memoranda, drafts of memoranda, and notes, comments and
communications about the memoranda recommending the potential filing of
a lawsuit or recommending participating in the [Lonberg v Sanborn
Theaters Action]{.underline}, the [Olympic Stadium Action]{.underline},
[The Oregon Arena Action]{.underline}, the [Ellerbe-Becket
Action]{.underline}, [Arnold v United Artists]{.underline}, [Fiedler v
America Multi-Cinema]{.underline}, the [Paralyzed Veterans
Action]{.underline}, the [Caruso Action]{.underline}, and all other
actual or potential litigation or actual or potential
[amicus]{.underline} participation in lawsuits at the trial or appellate
level: all memoranda and drafts of memoranda recommending investigation
and/or lawsuit against Cinemark USA, Inc., including all attachments to
the memorandum; all emails, handwritten and typewritten notes, records
of meetings, and memoranda discussing any of the foregoing memoranda,
all memoranda recommending the promulgation or revision of regulations
under the ADA; all nonpublic drafts of notices of proposed rulemaking
and all nonpublic drafts of proposed regulations under the ADA, all
internal Departmental and internal Architectural and Transportation
Barriers Compliance Board (\"Access Board\")[^43] memoranda, notes, and
other written and oral communications regarding drafts of notices of
proposed rulemaking and/or nonpublic drafts of proposed regulations; all
internal Departmental and Access Board communications relating to
proposed revisions to regulations under the ADA; all memoranda prepared
by Department attorneys or staff working at the direction of Department
attorneys proposing litigation strategy or litigation positions in this
case, [Lonberg v Sanborn Theaters, Inc]{.underline}., [Lara V Cinemark
USA, Inc]{.underline}., [United States v. Cinemark USA,
Inc]{.underline}., [Cinemark USA, Inc. v. United]{.underline} States,
the [Olympic Stadium Action]{.underline}, the [Oregon Arena
Action]{.underline}, the [Ellerbe-Becket Action]{.underline}, [Arnold v.
United Artists]{.underline}, [Fiedler v American
Multi-Cinema]{.underline}, the [Paralyzed Veterans Action]{.underline},
the [Caruso Action]{.underline}, and any other actual or proposed
litigation that falls within the scope of AMC\'s discovery requests; all
nonpublic documents, consultant\'s reports, and communications relating
to internal Departmental deliberations regarding potential settlement
terms, and potential settlement agreements, or potential consent decrees
in this case, [Lonberg v Sanborn Theaters, Inc.]{.underline}, [Lara V
Cinemark USA, Inc]{.underline}., [United States v Cinemark USA,
Inc]{.underline}., [Cinemark USA, Inc. v United]{.underline} States, the
[Olympic Stadium Action]{.underline}, the [Oregon Arena
Action]{.underline}, the [Ellerbe-Becket Action]{.underline}, [Arnold v
United Artists]{.underline}, [Fiedler v American Multi-Cinema
Inc]{.underline}., the [Paralyzed Veterans Action]{.underline}, the
[Caruso Action]{.underline}, and any other actual or proposed litigation
that falls within the scope of AMC\'s discovery requests. Since the
review of files for all potentially responsive documents and information
relating to AMC\'s discovery requests is not yet complete, this list is
not exclusive. As review for additional documents and information
responsive to AMC\'s requests continues, I reserve the right to claim
the deliberative process privilege for additional privileged documents
that are not identified in the Declaration. In addition, I am also
claiming the deliberative process privilege with respect to the
identities of the persons who have participated in the deliberations
described above.

15\. In making this formal claim of the deliberative process privilege
on behalf of the Department of Justice, I make the following statements
that provide the legal foundation for invoking the privilege. I have
control over the requested information and documents for which privilege
is being asserted. My assertion of the privilege is based on actual
personal review and consideration of a representative sample of the type
of documents for which the privilege is being asserted. The
representative sample of documents provided to me for my review was
selected by my personal staff \-- not the attorneys responsible for
litigating this case. All of the documents, communications, and
information for which I am claiming the deliberative process privilege
are pre-decisional and deliberative. I am asserting the privilege to
prevent disclosure of the deliberations of Justice Department personnel
regarding the following: decisions whether to file lawsuits or whether
to engage in [amicus]{.underline} participating in lawsuits; decisions
regarding which legal strategies to pursue and which legal positions to
assert in lawsuits filed by the Department and during the Department\'s
appearances as [amicus]{.underline} [curiae]{.underline} in lawsuits;
decisions regarding the potential promulgation of regulations under the
ADA; decisions regarding the potential revision of regulations under the
ADA; decisions regarding what technical assistance materials to issue
and regarding potential revisions to technical assistance materials;
decisions regarding what negotiating positions to take during settlement
negotiations and decisions regarding what terms the Department\'s might
accept during settlement negotiations; and decisions regarding what
terms to include in proposed settlement agreements and proposed consent
decrees.

16\. Disclosure of the documents and information for which I am claiming
the deliberative process privilege would chill the discussion within the
Department and, specifically, within the Civil Rights Division and
Disability Rights Section with respect to decisions whether to conduct
investigations, decisions whether to file lawsuits, decisions whether to
participate as [amicus]{.underline} [curiae]{.underline} in lawsuits,
decisions whether to adopt litigation strategies or legal positions
during litigation or [amicus]{.underline} participation in litigation,
decisions whether to issue or revise technical assistance materials,
decisions regarding what positions to take in settlement negotiations
and regarding what terms the Department will accept in settlement
negotiations and consent decrees, decisions whether to promulgate or
revise regulations, decisions whether to propose amendments to the ADA,
and a variety of other decisions that are crucial to ADA enforcement
efforts. The Attorney General, Civil Rights Division managers, and I
maintain an atmosphere within the Department that permits free and open
discussion in order to ensure that we hear all factors relevant to
decisionmaking. If the Court ordered the Department to turn over the
documents and information for which I am claiming the deliberative
process privilege, attorneys and other staff members would be reluctant
to advise me and other Department officials candidly of the reasons why
actions should or should not be taken, why lawsuits or
[amicus]{.underline} participation should or should not go forward, why
a legal position may or may not be appropriate, why a regulation should
or should not be promulgated or revised, and the potential downsides of
other decision for fear that their frank discussion of these issues
would later be used to the Department\'s disadvantage in lawsuits and in
other public forums. Without hearing the positives and negatives on
issues about which I and other Justice Department mangers must make
decisions, we cannot make reliable, well-informed decisions, and
decisionmaking regarding the Department\'s ADA enforcement efforts would
be seriously impaired.

17\. In addition to asserting the deliberative process privilege with
respect to the litigation-related documents described above, I am also
claiming protection of many of the same documents and much of the same
information under the work product doctrine. Specifically, all of the
memoranda and other documents and oral communications relating to the
potential filing of lawsuits, decisions regarding the pursuit of
litigation strategies, decisions regarding the assertion of specific
legal positions in lawsuits filed by the Department or
[amicus]{.underline} participating by the Department in lawsuits,
decisions regarding positions to take in settlement negotiations and
decisions regarding the terms the Department would accept in settlement
agreements or consent decrees, draft pleadings and comments regarding
such drafts, documents and notes relating to attorney thought processes
relating to actual or potential litigation, nonpublic reports prepared
by consultants to the Department in anticipating of litigation, and
internal Departmental documents and communications that were prepared
during the course of investigations where the Department anticipated
that the investigation might result in litigation, including documents
and consultant\'s reports prepared during the investigation of AMC\'s
theaters, Cinemark\'s theaters, United Artists\' theaters and other
theaters, sports arenas, and assembly areas that are currently under
investigations and for which the Department anticipates engaging in
litigation to redress ADA violations.

18\. The documents for which I am claiming work product protection
contain the mental impressions, conclusions, opinions, and/or legal
theories of Department attorneys with respect to ongoing litigation or
anticipated litigation. Their disclosure would reveal the Department\'s
litigation strategy to AMC and give an unfair litigation advantage to
AMC. These documents contain the essence of the Department\'s work
product and should not be disclosed.

19\. As review for additional documents and information responsive to
AMC\'s requests continues, I reserve the right to claim the protection
of the work product doctrine for additional privileged documents that
are not identified in this Declaration.

20\. I am hereby claiming the attorney-client privilege with respect to
one category of documents, oral communications, and information:
confidential written and oral communications between Department
attorneys and high level Department officials in which legal advise is
sought or provided and communications in which facts are conveyed for
the purpose of obtaining legal advice. These communications involving
instances where Department officials are seeking legal information from
Department attorneys in their capacity as attorneys (not in their
capacity as administrators) and in instances where attorneys are
providing legal advice in their capacity as attorneys (not in the
capacity of administrators). It is the policy of the Department to
maintain the strict confidentiality of such documents, communications,
and information, and the Department has not waived its right to assert
this privilege. As review for additional documents and information
responsive to AMC\'s requests continues, I reserve the right to claim
the attorney-client privilege for additional privileged documents that
are not identified in this Declaration.

21\. I am also hereby asserting a claim of the law enforcement and
investigative privilege with respect to documents that have been
prepared, collected, and complied in the course of investigations
undertaken for the purpose of ADA enforcement relating to movie
theaters, sports arenas, an other assembly areas and in the course of
settlement negotiations that occurred during the course of those
investigations. It is the Department\'s policy to keep the names of
persons or entities being investigated and materials gathered during the
course of investigations confidential unless and until a lawsuit is
filed. It is also the Department\'s policy to maintain the
confidentiality of the documents and information contained in the
Department\'s files of open investigations. The Department does not
disclose this information to the public because it is often of a private
or proprietary nature. In particular, in the investigations of movie
theaters that the Department has undertaken, a number of AMC\'s
competitors have provided the Department with materials, including
materials of a proprietary nature, responsive to investigators\'
requests on the condition that the Department maintain the
confidentiality of these materials and not disclose them to the public.
Requiring the Department to disclose this information to AMC would
violate assurances of confidentiality that the Department provided to
the entities under investigation. In addition, disclosure of any of the
Department\'s investigative files would reveal the Department\'s
investigative methods and procedures, impairing ADA enforcement efforts.
The Department of Justice does not have subpoena power in its ADA
enforcement efforts and must rely on the cooperation of persons and
entities charged with discrimination in order to obtain the information
needed to make a determination as to whether ADA violations have
occurred. If all information voluntarily provided to the Department in
the course of investigations were subject to disclosure to an entity\'s
business competitors and the public during litigation, the Department
would face a severed reduction in the amount of cooperation its receives
during its ADA-related investigations and the effectiveness of ADA
investigations would be severely impaired. As review for additional
documents and information responsive to AMC\'s requests continues, I
reserve the right to claim the law enforcement and investigative
privilege for additional privileged documents that are not identified in
this Declaration.

22\. For the foregoing reasons, I hereby assert a formal claim of the
deliberative process privilege (as to Defendants\' Issues Nos. 1, 2, 8,
11, 12, 14, 19, and 22), the attorney-client privilege (Issues No. 14,
19, 20, 21, and 22), the work product doctrine (Issues Nos. 1, 2,, 4, 5,
6, 7, 8, 11, 12, 14, 19, 20, and 22), and the law enforcement and
investigative privilege (Issues Nos. 1, 2, 8, 13 and 15).

23\. In addition to making the formal claims of privilege asserted
herein, I am also making the following statements to support the
Department\'s request for a protective order and to address certain
\"Issues\" identified in AMC\'s portion of the Joint Stipulation.

24\. The Department has not produced documents wholly unrelated to movie
theaters for several reasons. First, this case is about movie theaters
--- not sports arenas or other assembly areas. Second, review of Justice
Department records for all documents unrelated to movie theaters that
are sought by AMC would take hundreds of additional hours of attorney
time, would have a severe adverse impact on ADA enforcement efforts, and
would severely disrupt operations in the Disability Rights Section of
the Civil Rights Division. Third, many of the documents and much of the
information that AMC seeks relate to confidential investigations and
confidential settlement negotiations that can have no possible bearing
on the outcome of this case and that would unfairly disclose proprietary
information about AMC\'s competitors to AMC.

25\. Request for Production #20 (Issue No. 11) seeks any and all
documents supporting ¶ 19 of the Complaint, that AMC has failed to
comply with Standard 4.33.3. This request is objectionable only to the
extent that it seeks documents and information covered by the
deliberative process privilege and work product doctrines. As stated
above, exposing the mental process of Departmental decision makers and
the work product and mental impressions of the Department attorneys
litigating this case to public scrutiny would have a chilling effect on
the decisionmaking process in the Civil Rights Division and would give
AMC unfair advantages in this litigation. AMC is not disclosing its
attorneys\' work product to Department attorneys; Department attorneys
should not be required to disclose their work product to AMC.

26\. AMC Interrogatory #5 (Issue No. 14\] asks the Department to
\"\[d\]escribe in detail all efforts made to communicate the current
interpretation of the Phase to the public or motion picture
exhibitors.\" This request is extremely burdensome. The Justice
Department operates an ADA Information Line that answers questions from
the public has about the ADA. The Department keeps no records of these
calls. It would be impossible for the Department to respond to AMC\'s
interrogatory by describing all communications that Department personnel
have had with members of the public or the movie theater industry
regarding Standard 4.33.3 without expending hundreds or thousands of
hours of attorney time. The Department has produced all documents
located to date that relate to efforts made by the Department to convey
to movie theater industry members the requirements of Standard 4.33.3.
Department attorneys and staff will continue their efforts to locate any
such additional documents. We believe this is a reasonable response to
AMC\'s interrogatory.

27\. AMC Interrogatory #10 (Issue No. 19) seeks the identity of \"all
persons or organization whom you have consulted with, interviewed or
deposed relating to lines of sight in movie theaters after the adoption
of the ADAAG.\" First, the Department has not deposed anyone relating to
lines of sight in movie theaters. Second, the only person that the
United States has consulted with or interviewed regarding lines of sight
in movie theaters are experts who will testify in this litigation.
Information about these experts will be disclosed as part of expert
discovery in this action, which Judge Morrow has scheduled to occur
following fact discovery in this case. Thus, the Department is not
required to disclose this information at this time. Accordingly, it is
the Department\'s position that its response to this interrogatory is
sufficient for this stage of discovery.

28\. In Interrogatory #11, AMC requested that the Department describe
the criteria it uses to determine whether sight lines are comparable.
The Department responded that it did not use criteria but rather used
the approach described in its [amicus]{.underline} briefs in [Lara v
Cinemark U.S.A., Inc]{.underline}, No. 97-CV-502(W.D. Tex.) and [Lonberg
v Sanborn Theaters Inc.]{.underline} No. CV97-6598AHM (BQRx). Despite
this response, AMC now seeks to compel the Department to answer
Interrogatories #12 and 13 (Issues No. 20 and 21), which seeks the dates
on which these criteria from Interrogatory #11 were adopted and the
efforts made to communicate these criteria to the public or motion
picture exhibitors. Obviously, the Department cannot disclose the dates
on which \"criteria\" were adopted when \"criteria\" were not, in fact,
adopted and cannot describe efforts to communicate \"criteria\" when
such criteria do not exist.

29\. For the reasons stated herein and in the Department\'s portion of
the Joint Stipulation, I respectfully request that the Court uphold my
formal claims of privilege, deny AMC\'s request for an order compelling
discovery, and grant the protective order request in the Department\'s
portion of the Joint Stipulation

30\. In Request \# 36 of AMC\'s First Set of Requests for Production of
Documents, AMC requests that the United States \"\[p\]roduce any and all
documents relating to the ADAAG.\" This request would entail the
production of tens of thousands of page of materials, most of which bear
no arguable relevance to this action. Many of the documents sought by
this request are, in fact, documents that are subject to the Access
Board\'s responsibility. For any documents that are in the Department\'s
possession as a result of the Department\'s service as a voting member
of the Access Board, I hereby exercise the relevant privileges. In
addition, the requests seeks production of many of the privileged
materials described above. Justice Department attorneys have asked AMC
to limit this request, and AMC has refused to place any reasonable
limits on it. The Department, therefore, asks the Court to issue a
protective order excusing the Department from providing any further
response to this request.

31\. Except as stated herein, this Declaration is based upon personal
knowledge.

32\. I am over eighteen years of age and competent to make this
Declaration.

33\. I declare under penalty of perjury that the foregoing is true and
correct to the best of my knowledge, information, and belief.

Executed on December 2, 1999.

[                                                       ]{.underline}

Bill Lann Lee

Acting Assistant Attorney General

General for Civil Rights

United States\' Opposition

to Defendant\'s Motion to Reconsider

Exhibit C

JOHN L. WODATCH, Chief

RENEE M. WOHLENHAUS, Deputy Chief

Disability Rights Section

Civil Rights Division

JEANINE M. WORDEN

JOSEPH C. RUSSO

Attorneys

Disability Rights Section

Civil Rights Division

U.S. Department of Justice

1425 New York Avenue, N.W.

Room 4073

Post Office Box 66738

Washington, D.C. 20035-6738

Telephone: (202) 307-6556

Telephone: (202) 307-2229

Facsimile: (202) 307-1198

ALEJANDRO N. MAYORKAS

United States Attorney

LEON W. WEIDMAN

Assistant United States Attorney

Chief, Civil Division

SHIRLEY WANG

Assistant United States Attorney

California Bar No. 181669

Room 7516, Federal Building

300 North Los Angeles Street

Los Angeles, California 90012

Telephone: (213) 894-0474

Facsimile: (213) 894-7819

Counsel for Plaintiff

IN THE UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, ) Case No: 99-01034 - MMM (SHx)

)

Plaintiff )

) **PLAINTIFF UNITED STATES\'**

**v.** ) **RESPONSES AND OBJECTIONS TO**

) **DEFENDANT AMC ENTERTAINMENT,**

AMC ENTERTAINMENT, INC., **) INC. \'S FIRST SET OF INTERROGATORIES**

)

> Defendants )

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ )

Plaintiff United States of America (\"United States\") objects and
responds to defendant American Multi-Cinema, Inc. \'s (\"AMC\")
interrogatories, as follows:

General Objections

The following General Objections are hereby incorporated into the United
States\' response to each of the following interrogatories.

The United States objects to these contention interrogatories on the
grounds that they are premature, that they require the United States to
state opinions with respect to facts and/or to respond regarding the
application of law to facts, and that the United States cannot respond
to them fully and fairly at this time given the early stage of discovery
in this case and the extensive factual and expert discovery that remains
to be completed in this case. As the United States has advised the Court
and as the Court has acknowledged, the United States will not be in a
position to respond fully and fairly to defendants\' contention
interrogatories until such time as it has conducted reviews of AMC\'s
architectural plans, conducted on-site inspections of certain of AMC\'s
theaters, and completed certain expert discovery. At the Court\'s
direction, AMC first made certain of its architectural plans available
to the United States for preliminary review and copying on August 10 and
11, 1999, and AMC advises the United States that the remaining
architectural plans and construction drawings will not be available
until early September, 1999. Moreover, AMC has advised the United States
that the architectural plans it is making available are not \"as built\"
plans and that they may not reflect the building as it was actually
constructed or as it exists today. Because defendants are not providing
the United States with access to \"as built\" plans, the United States
will be unable to confirm actual conditions at the theaters without
on-site inspections of the theaters. To date, the United States and AMC
have not scheduled on-site inspections of any theaters, since the United
States\' selection of the theaters it will inspect cannot be made until
it has had a reasonable opportunity to review in detail the
architectural plans for AMC\'s theaters. Thus, the United States can
only provide preliminary responses to AMC\'s contention interrogatories
at this time, which responses are subject to later supplementation
and/or revision based on discovery yet to be completed in this case.

This United States objects to these interrogatories to the extent that
they seek to impose meanings to words or terms that are other than the
ordinary meanings. The United States also objects to these
interrogatories to the extent that they seek to incorporate instructions
that expand the obligation for responding to the interrogatories beyond
the obligations set forth in Rules 26 and 33 of the Federal Rules of
Civil Procedure.

The United States further objects to these interrogatories to the extent
that they seek information that is not calculated to lead to the
discovery of admissible evidence and to the extent that they seek
discovery that has been stayed by the Court pending a ruling on the
United States\' motion to dismiss defendants\' counterclaim.

In addition, the United states object to these interrogatories to the
extent that they seek discovery of information and/or documents
protected from disclosure pursuant to the attorney-client privilege, the
work product doctrine, the deliberative process privilege, the law
enforcement and investigative privilege, and any other applicable
privilege and/or doctrine.

JOHN L. WODATCH, Chief

RENEE M. WOHLENHAUS, Deputy Chief

Disability Rights Section

Civil Rights Division

JEANINE M. WORDEN

JOSEPH C. RUSSO

Attorneys

Disability Rights Section

Civil Rights Division

U.S. Department of Justice

1425 New York Avenue, N.W.

Room 4073

Post Office Box 66738

Washington, D.C. 20035-6738

Telephone: (202) 307-6556

Telephone: (202) 307-2229

Facsimile: (202) 307-1198

ALEJANDRO N. MAYORKAS

United States Attorney

LEON W. WEIDMAN

Assistant United States Attorney

Chief, Civil Division

SHIRLEY WANG

Assistant United States Attorney

California Bar No. 181669

Room 7516, Federal Building

300 North Los Angeles Street

Los Angeles, California 90012

Telephone: (213) 894-0474

Facsimile: (213) 894-7819

Counsel for Plaintiff

IN THE UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, ) Case No: 99-01034 MMM (SHx)

)

Plaintiff, )

v\. ) PLAINTIFF UNITED STATES\'

) RESPONSES AND OBJECTIONS TO

AMC ENTERTAINMENT, INC. ) DEFENDANT AMC ENTERTAINMENT,

et al., ) INC. \'S FIRST SET OF REQUESTS

) FOR PRODUCTION OF DOCUMENTS

Defendants. )

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ )

The United States hereby responds and objects to Defendant AMC
Entertainment, Inc.\'S First Set of Requests for Production of
Documents. In accordance with the responses to individual request set
out below, the United States agrees to make documents available for
inspection and copying on a date that is mutually agreeable to the
parties.

[General Objections]{.underline}

The following General Objections are hereby incorporated into the United
States\' response to each of the following requests for production.

The United States objects to these requests to the extent that they seek
to impose meanings to words or terms that are other than the ordinary
meanings. The United States also object to these requests to the extent
that they seek to incorporate instructions that expand the obligation
for responding to the requests beyond the obligations set forth in Rules
26 and 34 of the Federal Rules of Civil Procedure.

The United States further objects to these requests to the extent that
they seek documents and information that are not calculated to lead to
the discovery of admissible evidence and to the extent that they seek
discovery that has been stayed by the Court pending a ruling on the
United States\' motion to dismiss defendants\' counterclaim. The United
States additionally objects to these requests to the extent that they
seek discovery related to their counterclaim or defense under the
Administrative Procedure Act (\"APA\"), since discovery of the sort
sought is not legally permissible on APA-related issues. The United
States also objects to the requests to the extent that they seek
documents or information that is protected by the attorney-client
privilege, the work product doctrine, the deliberative process
privilege, the investigative privilege, and any other applicable
privilege and/or doctrine.

United States\' Opposition

to Defendant\'s Motion to Reconsider

Exhibit D

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA-WESTERN DIVISION

CIVIL MINUTES\--GENERAL

Case No. CV 99-01034-FMC (SHx) Date: February 25, 2000

Title [U.S.A. v. AMC Entertainment, Inc.]{.underline}

= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
= = = = = = = = = = =

DOCKET ENTRY

= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
= = = = = = = = = = =

PRESENT:

Hon. [STEPHEN J HELLMAN]{.underline}, MAGISTRATE JUDGE

[SANDRA BUTLER]{.underline} [     N/A     ]{.underline}

Deputy Clerk Court Reporter

ATTORNEYS PRESENT FOR PLAINTIFFS: ATTORNEYS PRESENT FOR DEFENDANTS:

N/A N/A

PROCEEDINGS: (IN CHAMBERS)

Pursuant to FRCP 37(a), Defendants move to compel answers to AMC\'s
Interrogatories Nos. 6 and 7. See FRCP 37(a). Interrogatories 6 and 7
request information regarding meetings and discussions between
representatives of Plaintiff and representatives of movie theater owners
and operators relating to ADAAG section 4.33.3.

Defendants are entitled to discovery pursuant to Interrogatories 6 and
7, subject to Plaintiff\'s Settlement Negotiation Privilege. [See Cook
v. Yellow Freight System, Inc]{.underline}., 132 F.R.D. 548 (E.D. Cal.
1990) (finding Fed. R Evid. 408 applicable to discovery).

Defendants are not entitled to information regarding communications
between Plaintiff and movie theater representatives which would reveal
Plaintiff\'s negotiating positions and statements made during settlement
negotiations.

To the extent that there may be documents which are not protected by the
Settlement Negotiation Privilege, but that arguably may fall under the
Law Enforcement.

Minute Order

February 25, 2000

Page Two

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Investigative Privilege, Plaintiff has not persuaded the court that such
privilege should be invoked to deny Defendants\' Motion to Compel. If
Plaintiff seeks protection from discovery pursuant to the Law
Enforcement Investigative Privilege, supplemental briefing is required
sufficient to warrant the applicability of the doctrine to the
Department of Justice in this civil matter.

Plaintiff is not excused from production of information pursuant to
interrogatories 6 and 7 insofar as they relate to the A.D.A.
\"Information Line.\" Defendants are entitled to discovery of the
content and identities of persons participating in all discussions
\"with any movie theater company or operator, or industry
representative, or any agents of the foregoing, in which ADAAG section
4.33.3 and/or lines of sight were discussed\".

However, plaintiff need not interview Information Line personnel in
order to comply with this Order. Any extant documents shall be produced.

Defendants\' motion to compel is granted subject to Plaintiff\'s
Settlement Negotiation Privilege.

cc: Judge Hellman

Parties of Record

[^1]: AMC erroneously refers to the Standards as the \"ADAAG.\" However,
    the term \"ADAAG\" properly refers to the Americans with
    Disabilities Act Accessibility Guidelines for Buildings and
    Facilities, a regulation promulgated by the Architectural and
    Transportation Barriers Compliance Board (the \"Access Board\"). 36
    C.F.R. pt. 1191. Under the ADA, the regulations promulgated by the
    Justice Department must be consistent with, but are not required to
    be identical to, the regulations promulgated by the Access Board.
    [See]{.underline} 42 U.S.C. § 12186(c). In 1991, the Department
    adopted the ADAAG as the Department\'s Standards. The distinction
    between the ADAAG and the Standards is important because the Justice
    Department adopted only the plain language of the ADAAG --- not the
    Access Board\'s Preamble to or interpretations of the ADAAG.

[^2]: Standard 4.33.3 states:

    > Wheelchair areas shall be an integral part of any fixed seating
    > plan and shall be provided so as to provide people with physical
    > disabilities a choice of admission prices and lines of sight
    > comparable to those for members of the general public. They shall
    > adjoin an accessible route that also serves as a means of egress
    > in case of emergency. At least one companion fixed seat shall be
    > provided next to each wheelchair seating area. When the seating
    > capacity exceeds 300, wheelchair spaces shall be provided in more
    > than one location. Readily removable seats may be installed in
    > wheelchair spaces when the spaces are not required to accommodate
    > wheelchair users.
    >
    > EXCEPTION: Accessible viewing positions may be clustered for
    > bleachers, balconies, and other areas having sight lines that
    > require slopes of greater than 5 percent. Equivalent accessible
    > viewing positions may be located on levels having accessible
    > egress.

[^3]: Among other things, the Magistrate Judge indicated that his
    tentative position was that AMC was not entitled to discovery into
    issues relating to stadiums as opposed to issues relating to
    stadium-style theaters. Although that ruling has not been finalized
    and, thus, is not yet ripe for review, AMC attempts to raise it in
    its motion for reconsideration.

[^4]: The Department did not agree to reveal attorney's notes or
    thoughts about such communications, since those notes and thoughts
    are plainly protected by the work product doctrine.

[^5]: A copy of the Order is appended hereto as Exh. D.

[^6]: AMC cites to an oral ruling by Judge Morrow during the August 9,
    1999 hearing on the United States\' motion to dismiss AMC\'s
    counterclaim to suggest that adopting an industry wide position in
    settlement negotiations could be final agency action. AMC Mem. at 8.
    However, AMC ignores Judge Morrow\'s later written order, which
    reverses her August 9 oral ruling. December 17th Order at 17 (\"On
    August 27, 1999, AMC filed a supplemental declaration proffering the
    additional evidence it had been able to obtain concerning DOJ's
    action. . . .\"); [Id]{.underline}. at 16-17 (\"The additional
    evidence proffered by AMC is not sufficient to demonstrate that DOJ

    has taken an industry-wide position like that the agency in
    [National Union Automatic Laundry]{.underline} took by sending an
    opinion letter to an industry trade association. [See]{.underline}
    [National Union Automatic Laundry]{.underline}, [supra]{.underline},
    443 F.2d at 701-02. To the contrary, the evidence before the court
    suggests that, at most, DOJ has communicated with ten members of the
    theater industry nationwide, and has not sought to press its
    interpretation of Standard 4.33.3 uniformly even among the largest
    owners. Consequently, the court concludes the evidence does not
    establish that DOJ has engaged in final agency action.").

[^7]: Judge Hillman\'s Minute Order denied AMC discovery relating to the
    United States\' communications (and settlement negotiations) with
    stadium owners and operators and with architects relating to issues
    involving lines of sight in stadiums --- not lines of sight in movie
    theaters. Judge Hillman\'s ruling is consistent with Judge Morrow\'s
    December 17th Order, which held that "\[u\]nlike the Department's
    interpretation of the line of sight requirement at issue in
    [Caruso]{.underline} and [Independent Living]{.underline} \[two
    cases involving stadiums\], the interpretation it seeks to enforce
    in this action has not been the subject of any official statement of
    policy or position equivalent to the \[Technical Assistance Manual\]
    Supplement \[struck down in those two cases\]. Rather, AMC contends
    that DOJ has taken final agency action by filing an amicus brief,
    sending private communications to theater owners, and threatening to
    initiate and in fact initiating litigation against some of them.
    Consequently, the 1994 TAM Supplement cases do not control decision
    of the issues raised in DOJ's motion to dismiss." Dec. 17^th^ Order
    at 9.

[^8]: The Department invoked the law enforcement investigative privilege
    in answers to interrogatories, in answers to requests for production
    of documents, and by filing the Declaration of Acting Assistant
    Attorney General Bill Lann Lee. [See]{.underline} Declaration of
    Bill Lann Lee at ¶ 21 (appended hereto as Exh. B); [see]{.underline}
    excerpts from Pl.'s Resps. and Objections to Def.'s First Set of
    Interrog. at 3 and excerpts from Pl.'s Resps. and Objections to
    Def.'s First Set of Requests for Produc. of Docs. at 2 (appended as
    Exh. C). Acting Assistant Attorney General for the Civil Rights
    Division Bill Lann Lee is the appropriate person to assert this
    privilege, as he is "the head of the department \[here, the Civil
    Rights Division\] having control over the requested information."
    [See]{.underline} [Tuite v. Henry]{.underline}, 98 F.3d 1411, 1417
    (D.C. Cir. 1996). In [Tuite]{.underline}, the Court found the law
    enforcement privilege had been properly invoked by Michael Shaheen,
    counsel for the Office of Professional Responsibility (OPR), a
    component of the Department of Justice. [See]{.underline}
    [id.]{.underline} at 1413, 1414, 1417. [See also]{.underline}
    [United States v. Rozet]{.underline}, 183 F.R.D. 662, 666 (N.D. Cal.
    1998) (finding that the acting head of an agency "is precisely the
    appropriate person to invoke the privilege, and has full authority
    to do so"). At the January 11th hearing, Magistrate Judge Hellman
    stated his tentative ruling that the Department had properly invoked
    the privileges it was asserting.

[^9]: "It makes little sense to protect the actual files from disclosure
    while forcing the government to testify about their contents." [In
    re Sealed Case]{.underline}, 856 F.2d at 271.

[^10]: The law enforcement and investigative privilege applies in civil
    cases as well as criminal cases. [In re Sealed Case]{.underline},
    856 F.2d at 271 (the law enforcement and investigative privilege
    protects "the public interest in safeguarding the integrity of
    ongoing [civil and criminal]{.underline} investigations"); see also
    12 Fed. Proc. § 33.306 (1988) (treatise observing that "\[t\]he
    \[common-law\]privilege is most often invoked as to investigative
    materials compiled in connection with the civil or criminal law
    enforcement efforts of the Justice Department and FBI"). In the FOIA
    context, the Ninth Circuit has held that the investigative files
    exemption applied to "civil as well as criminal law enforcement
    activities." [Church of Scientology]{.underline}, 995 F.2d at 919
    (9^th^ Cir. 1993) (quoting [National Policy Review on Race & Urban
    Issues v. Weinberger]{.underline}, 502 F.2d 370, 373 (D.C. Cir.
    1974)); [see also]{.underline} [Stern v. FBI]{.underline}, 737 F.2d
    84, 88 (D.C. Cir. 1984) (FOIA's law enforcement exemption applies to
    "enforcement of both civil and criminal federal law").

[^11]: Recommendations and proposals regarding settlement negotiations
    are protected by the deliberative process privilege.
    [See]{.underline} [Norwood v. FAA]{.underline}, 993 F.2d 570, 577
    (6^th^ Cir. 1993); [Mead Data Cent. v. United States Dep't of Air
    Force]{.underline}, 566 F.2d 242, 257 (D.C. Cir. 1977).

[^12]: Complaint, ¶¶ 3, 13, 19.

[^13]: Id., ¶ 3.

[^14]: Id., ¶¶ 3, 13.

[^15]: Counterclaim, ¶ 6.

[^16]: *Id., ¶ 9.*

[^17]: *Id.*

[^18]: *Id.*, ¶ 10.

[^19]: *Id.*, ¶ ¶ 13, 14.

[^20]: *Id.*, ¶ 14.

[^21]: *Id.*

[^22]: *Id.*.

[^23]: *Id.*., ¶ 15.

[^24]: *Id.*, ¶ 16.

[^25]: *Id.*, ¶ 17.

[^26]: *Id.*, ¶ 18.

[^27]: *Id.*, ¶ 19.

[^28]: *Id.*, ¶ 21.

[^29]: *Id.*, ¶ 24, Prayer, ¶¶ 1, 2.

[^30]: Section 704 provides for review of \"\[a\]gency action made
    reviewable by statute and final agency action for which there is no
    other adequate remedy in a court . . .\" See 5 U.S.C., §704. Here,
    neither party contends that a specific statute authorizes review of
    DOJ\'s interpretative and enforcement activities.

[^31]: Declaration of Gregory F. Hurley in Opposition to Motion to
    Dismiss Counterclaim (\"Hurley Decl.\"), Ex. E at 2.

[^32]: ^21^*Id.*

[^33]: *Id. at 8-9.* Earlier in the brief, DOJ discussed a publication
    of the Society of Motion Picture and Television Engineers
    (\"SMPTE\") titled Engineering Guideline Design of Effective Cine
    Theaters, EG 18-1994 (\"the SMPTE Guideline\"). (*Id*. at 3-3.) It
    is this industry standard to which the last quoted sentence
    apparently makes reference. DOJ asserts that it did not adopt the
    SMPTE Guideline in the *Lara* brief, and that it has not adopted it
    as the Department\'s interpretation of Standard 4.33.3.

[^34]: Memorandum of Points and Authorities in Opposition to Motion to
    Dismiss at 26:13-16

[^35]: See Hurley Decl., Exs. G, H. Exhibit G, a letter directed to AMS,
    invites it to submit new drawings and indicates that DOJ\'s counsel
    is willing to schedule a meeting to discuss the matter further. The
    letter concludes \"If you do no contact me immediately to schedule a
    meeting time and to commit to submitting such drawings by a date
    certain next week, the Department will assume that you are unwilling
    to resolve the investigation through settlement at this time.\"
    (Id., Ex. G.)

[^36]: The remaining cases cited by AMC are similarly distinguishable.
    See National Union Resources Defense Council, Inc. v. Environmental
    Protection Agency, 22 F.3d 1125, 1133 *(D.C.Cir. 1994)* (the fact
    that a memorandum to regional EPA directors, a letter to the
    National Resources Defense Council and a \"Nitrogen Oxides
    Supplement to the General Preamble\" published in the Federal
    Register \"constitute\[d\] final agency action \[was\] clear from
    the EPA\'s subsequent conditional approval of non-I/M committal SIPs
    . . . *under authority of those documents*\" (emphasis added));
    *Southern California Aerial Advertisers\' Ass\'n v. Federal Aviation
    Administration, 881, F.2d 672, 676 (9th Cir. 1989) (*a letter issued
    by an FAA official was \"a definitive statement of the FAA\'s
    position that had a direct and immediate effect on petitioner\'s
    members and that carried an expectation of immediate compliance with
    its terms. . . . Given that petitioner\'s members were expected to
    obey the rule set fort in the . . . letter as if it were law, the
    informality of the letter does not undermine\[it\]. ..\"): *Brown &
    Williamson Tobacco Corp. v. Federal Trade Commission*, 710 F.2d
    1165, 1170 (6th Cir. 1983), cert. denied, 465 U.S. 110 (1984) (court
    held that the FTC\'s announcement of the results of a year-long
    study of tar and nicotine levels in Barclay cigarettes constituted
    final agency action, since \"the FTC also halted the testing of
    Barclay cigarettes, stated that it would refuse to publish any
    \'tar\' or nicotine content figures for Barclay, and amended the
    1981 Report which lists Barclay as a 1 mg. \'tar\' cigarette. As a
    result, it would now appear to be inappropriate for Brown &
    Williamson to continue to cite the figures in the 1981 Report in its
    Barclay advertisements. Although the FTC did not order Brown &
    Williamson to desist from making the \'ultra-tow tar\' claim in its
    advertisements for Barclay, that is the effect of the action
    taken\...\").

[^37]: *Abbott Laboratories* is similarly distinguishable. There, the
    FDA published regulations that required the plaintiff manufacturer
    to \"change all \[of its\] labels, advertisements and promotional
    materials\" immediately. *Abbott Laboratories, supra*, 387 U.S. at
    1517. Here, by contract, DOJ\'s position respecting Standard 4.33.3
    has no legal effect unless and until the court enters a judgment
    enforcing it.

[^38]: Because one aspect of the parties\' dispute centered on the
    number of theaters to whom DOJ had communicated a demand that it
    comply with the interpretation of Standard 4.33.3 set forth in the
    *Lara* brief, the court suggested that DOJ identify the theaters
    that were currently under investigation or that had been sent such a
    communication. Counsel for DOJ responded that she would do provide
    this information if AMC specifically requested it and if the
    disclosure would not waive the Department\'s investigative process
    privilege. (See August 9, 1999 Hearing Transcript of Plaintiff\'s
    Motion to Dismiss Defendant\'s Counterclaim, 34:21-35:1.) The court
    then stated:

    > \"At a *minimum*, . . . the Department could certify under oath in
    > some fashion, whether in response to an interrogatory or
    > otherwise, that it had communicated with \[some number of\]
    > theater owners across the country with respect to the issues that
    > are involved in this litigation.\" (*Id.* at 35:5-9 (emphasis
    > added).)

    This latter approach was apparently that the department ultimately
    adopted.

[^39]: Supplemental Declaration of Gregory F. Hurley Regarding United
    States\' Responses To Discovery, 6-8.

[^40]: Supplemental Declaration in Support of the United States\' Motion
    to Dismiss Defendants\' Counterclaim, ¶ 6.

[^41]: *Id.*

[^42]: *Id.*

[^43]: The Department is in possession of these documents because it is
    a member of the Access Board.