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Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 8, 1997 Decided October 10, 1997 

No. 96-5341

DIRECTOR, OFFICE OF THRIFT SUPERVISION,

APPELLANT

v.

VINSON & ELKINS, LLP, ET AL.,

APPELLEES

Appeal from the United States District Court 

for the District of Columbia 

(96ms0196)

Kenneth J. Guido, Jr., Special Enforcement Counsel, Office 

of Thrift Supervision, argued the cause for appellant, with 

whom Bryan T. Veis, Special Counsel, was on the briefs.

Charles D. Tetrault argued the cause for appellees, with 

whom John K. Villa, Mary G. Clark, and J. Andrew Keyes

were on the brief.

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Before: SILBERMAN, ROGERS, and TATEL, Circuit Judges.

Opinion for the Court filed by Circuit Judge SILBERMAN.

SILBERMAN, Circuit Judge: Appellant Office of Thrift Supervision (OTS) asked the district court to enforce administrative subpoenas issued to the law firm of Vinson & Elkins 

and two lawyers of that firm. The district court denied 

enforcement. We affirm.

I.

Barry Munitz sat on the boards of both the United Savings 

Association of Texas (Association) and its parent company, 

United Financial Group. After the Association declared 

bankruptcy, the Federal Deposit Insurance Corporation interviewed Munitz about his role in the failed savings and loan. 

C. Michael Buxton and Timothy A. Nelson, two lawyers from 

Vinson & Elkins, represented Munitz at the interview. Munitz's testimony, which was neither transcribed nor under oath, 

was recorded only in the notes taken by Buxton, Nelson, and 

three FDIC lawyers.

Several years later, OTS began formally investigating the 

Association.1 OTS deposed Munitz, this time under oath and 

with a court reporter. One of OTS' main concerns was the 

relationship between the Association and its direct and indirect shareholders, including MCO Holdings (later MAXXAM), 

Federated Development Company, and The Drexel Burnham 

Lambert Group. Charles Hurwitz was Chairman and CEO of 

both MCO and Federated, which, combined, owned the larg-

__________

1 FDIC and OTS are not interchangeable agencies, but this is a 

situation where their power overlaps a bit. As receiver, FDIC 

stands in the shoes of the insolvent institution and can sue officers 

or directors for damages under state law. 12 U.S.C. 

§ 1821(d)(13)(B)(i) and § 1821(k) (1994). OTS, on the other hand, 

has independent authority to bring enforcement actions and can 

require restitution if it proves unjust enrichment or reckless disregard for the law. 12 U.S.C. § 1818(b)(6)(A) (1994). Here, because 

of the overlap of authority, the two agencies were cooperating, and 

FDIC let OTS take the lead.

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est block of stock in the Association's parent company. OTS 

suspected that Hurwitz might have pressured the Association 

to buy "junk bonds" to benefit his own business interests 

rather than those of the Association. The following interchange took place between OTS and Munitz:

Q: Did Hurwitz ever mention to you that [the Association's] purchase of junk bonds from Drexel was helpful to 

MCO's relationships with Drexel?

A: No.

Q: Did anyone ever tell you that?

A: No one ever told me that. People have asked me 

that, but no one has ever told me that.

Before the deposition, OTS obtained notes of Munitz's prior 

testimony from two of the three FDIC lawyers who had been 

present at the FDIC interview. The FDIC attorney notes 

suggest that Munitz may have answered the same question 

somewhat differently in his FDIC interview:

Hurwitz Motivations

1. Peer group pressure"who was going down & who 

was still alive."

2. Did not want to hurt his reputation among peers and 

Milken [a former officer of Drexel].

3. Concern about net worth maint. riskto MAXXAM.

4. [Association] was "ticket to ride" with Drexel.

Because of the purported inconsistency, OTS ordered Buxton, 

Nelson, and Vinson & Elkins to produce all documents relating to the FDIC interview.

Buxton, Nelson, and Vinson & Elkins moved to quash the 

administrative subpoena, claiming the protection of both the 

attorney-client privilege and the work-product doctrine. In 

accordance with its internal procedures, OTS designated a 

Regional Enforcement Counsel to rule on the motion to 

quash. After reviewing the documents in camera, the Regional Enforcement Counsel determined that the majority of 

the documents were protected, but ordered Vinson & Elkins 

to produce portions of the notes Buxton and Nelson took of 

Munitz's testimony during the FDIC interview. Vinson & 

Elkins declined to produce the notes based on the workproduct privilege, and OTS filed a subpoena enforcement 

action in district court. The district court refused to enforce 

the subpoena.

Appellant argues that the district court erred in characterizing the interview notes as "opinion work product." In 

appellant's view, the district court owed deference to the 

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Regional Enforcement Counsel's determinations that the 

notes were "fact work product" and that OTS had demonstrated sufficient need to obtain them. Appellees counter 

that, regardless of whether the notes represent facts or 

opinions, OTS has failed to show sufficient need.

II.

Appellant's basic position is that the district court misapplied administrative law in not deferring to OTS' determination that the notes were only factual work product and that 

the agency needed the notes. If that were so then we, in 

turn, would owe no deference to the district court because its 

error would be one of law. The difficulty with appellant's 

theory is that it simply is using the wrong model.2 This is 

not a case in which appellees have challenged agency action. 

The agency instead has come to court in a subpoena enforcement proceeding. To be sure, even in a subpoena enforcement proceeding the district court is sometimes obliged, in 

effect, to defer to an agency's determination even if it is only 

a litigating position. If the dispute turns on the relevance of 

the information sought by a government agency, we have said 

that the district court should not reject the agency's position 

unless it is "obviously wrong," and that the burden, as a 

practical matter, is on the defendant to meet that test. FTC 

v. Invention Submission Corp., 965 F.2d 1086, 1089 (D.C. Cir. 

1992) (relying on United States v. Morton Salt Co., 338 U.S. 

__________

2 For similar reasons the district court properly ignored, despite appellant's objection, the Regional Enforcement Counsel's 

"conclusion" after reviewing the notes in camera. The agency's 

internal procedures in this situation simply do not bear on its case 

in district court. The district court properly treated OTS' "ruling" 

on the work-product doctrine as no more than a litigating position.

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632 (1950)).3 We give the agency a wide berth as to relevance 

because it need establish only that the information is relevant 

to its investigation not to a hypothetical adjudication, and as 

we have explained, the boundary of an investigation need 

only, indeed can only, be defined in general terms. RTC v. 

Walde, 18 F.3d 943, 946 (D.C. Cir. 1994); Invention Submission Corp., 965 F.2d at 1089. The scope of the investigation, 

moreover, is very much dependent on the agency's interpretation and administration of its authorizing substantive legislation concerning which the agency may enjoy interpretative 

deference. Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).

This case, however, does not turn on the relevance of the 

information sought, but rather on the question whether under 

FED. R. CIV. P. 26(b)(3) the work-product privilege must yield 

to OTS' "showing of substantial need of the materials in the 

preparation of [its] case and that [it] is unable, without undue 

hardship, to obtain the substantial equivalent of the materials 

by other means." Appellant does not claim that the scope of 

the work-product privilege is somehow reduced if a government agency seeks information. Therefore, it is not apparent 

why a district judge should afford a government agency's 

articulation of its need greater weight than it would a private 

litigant.

III.

The parties do not dispute that the interview notes are 

attorney work product, but they argue at length about whether the notes represent facts or opinions. Appellant argues 

that the notes are merely an historical account of Munitz's 

testimony; appellees maintain that they also reveal the lawyers' mental impressions and legal theories. A party can 

__________

3 We have said that a district court's determination of relevance 

is reviewable by us under the clearly erroneous test, FTC v. 

Anderson, 631 F.2d 741, 746 (D.C. Cir. 1979) (quoting FTC v. 

Lonning, 539 F.2d 202, 210 n.14 (D.C. Cir. 1976)). Applying a 

deferential standard on appellate review does not mean that the 

district court has authority to determine relevancy in the first 

instance. To the contrary, we apply that standard in light of the 

great deference the district court owes the agency.

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discover fact work product upon showing a substantial need 

for the materials and an undue hardship in acquiring the 

information any other way. Opinion work product, on the 

other hand, is virtually undiscoverable. FED. R. CIV. P. 

26(b)(3); Upjohn Co. v. United States, 449 U.S. 383, 401-02 

(1981). Appellees argue, and the district court agreed, that a 

lawyer's interview notes are always opinion work product, 

undiscoverable without "extraordinary justification." But 

this proposition goes too far. We recently observed that 

under certain circumstances purely factual material embedded in attorney notes may not deserve the super-protection 

afforded to a lawyer's mental impressions. See In re Sealed 

Case, No. 97-3006, slip op. at 13 (D.C. Cir. Aug. 29, 1997). At 

some point, however, a lawyer's factual selection reflects his 

focus; in deciding what to include and what to omit, the 

lawyer reveals his view of the case. Id. Articulating the 

degree of selection necessary to transform facts into opinions 

and the standard of review we should employ of a district 

court determination are difficult matters that we save for 

another day. We affirm the district court's alternate holding, 

that appellant has not shown sufficient need for the notes 

under either standard.

Appellees argue and we agree that the district court's 

assessment of appellant's "need" and "hardship" is reviewable 

under the lenient abuse-of-discretion standard. That is so 

because it calls for a judgment along a range on which 

reasonable judges could differ. Therefore, the even more 

deferential standard of review than "clearly erroneous" would 

normally apply. Appellant urges, however, that in this case 

de novo review is appropriate, at least insofar as the district 

court's judgment is infected by the legal error of declaring 

that attorney's notes are necessarily opinion work product, 

see, e.g., FTC v. Texaco, 555 F.2d 862 (D.C. Cir. 1977) (en 

banc). But that point does not bear at all on the question of 

OTS' need. Appellant also suggestsand this argument 

seems particularly strainedthat it satisfies the need test as 

a matter of law because the notes would be admissible at 

trial. The government relies on dicta in a concurring opinion 

in United States v. Nobles, 422 U.S. 225, 242-54 (1975). 

Justice White observed that "even in the pretrial discovery 

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area ... work-product notions have been thought insufficient 

to prevent discovery of evidentiary and impeachment material." Id. at 249. It might be that the party seeking a 

subpoena in a particular case could show greater need for 

material that would be introduced into evidence at trial than 

for material that would provide investigative leads. But we 

can imagine situations where the purely investigative material 

would be thought more important. No matter. No court has 

held that the party seeking the subpoena can brush aside the 

work-product privilegeeven one based only on factual mattersmerely by establishing that the material would be 

admissible in a hypothetical trial.

That brings us to appellant's claimed need. The government explains that it needs the notes to explore the inconsistencies in Munitz's FDIC and OTS interviews. But two of 

the three government lawyers present at the FDIC interview 

have already given their notes to OTS, and therefore the 

Vinson & Elkins notes would serve only to reinforce supposed 

inconsistencies about which OTS already knows. The government also tells us that it needs to discover the facts surrounding the debacle of the Association, yet it has not identified 

any new information that it hopes to find in the Vinson & 

Elkins notes. Appellant's need, as we understand its position, reduces to nothing more than its desire to find corroborating evidence. It is the rare case where corroborative 

evidence can be thought "necessary." It is often thought 

cumulative and, as such, a trial judge has wide discretion to 

exclude it. If corroboration were sufficient need to overcome 

the work-product protection, what would be left of the second 

part of the standard, undue hardship? Undue hardship asks 

whether the moving party can acquire the information any 

other way; by definition, a party seeking corroborative evidence has already found a way to get the same information. 

In sum, we can hardly say that the district court's determination of insufficient need was "arbitrary, fanciful, or clearly 

unreasonable."

* * *

The judgment of the district court is affirmed.

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