Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-05-05129/USCOURTS-caDC-05-05129-0/pdf.json

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 January 17, 2006 Decided February 17, 2006

No. 04-5358

UNITED STATES OF AMERICA,

APPELLEE

v.

BRITISH AMERICAN TOBACCO AUSTRALIA SERVICES, LTD,

BATAS,

APPELLANT

No. 05-5129

UNITED STATES OF AMERICA, UNITED STATES DEPARTMENT

OF JUSTICE,

APPELLEE

v.

BRITISH AMERICAN TOBACCO AUSTRALIA SERVICES, LTD,

BATAS,

APPELLANT

Appeals from the United States District Court

for the District of Columbia

(No. 99cv02496)

USCA Case #05-5129 Document #950246 Filed: 02/17/2006 Page 1 of 9
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Jack McKay argued the cause for appellant. With him on

the briefs were Barry H. Gottfried and Alvin Dunn.

Mark R. Freeman, Attorney, U.S. Department of Justice,

argued the cause for appellee. With him on the briefs were

Peter D. Keisler, Assistant Attorney General, Mark B. Stern and

Alisa B. Klein, Attorneys, Sharon Y. Eubanks, Director, Stephen

D. Brody, Deputy Director, and Frank J. Marine, Senior

Litigation Counsel.

Before: SENTELLE, RANDOLPH and GRIFFITH, Circuit

Judges.

Opinion for the Court filed by Circuit Judge SENTELLE.

 

SENTELLE, Circuit Judge: Intervenor British American

Tobacco Australia Services, Ltd. (“BATAS”) appeals from two

orders of the United States District Court for the District of

Columbia. First, BATAS appeals from Order #670, which

denied its motion for expanded intervention as untimely.

Second, BATAS appeals from Order #896, which overruled

certain trial testimony objections made by British American

Tobacco (Investments) Ltd. (“BATCo”). Because the District

Court did not abuse its discretion by finding BATAS’s motion

for intervention untimely, we affirm Order #670; consequently,

we also dismiss BATAS’s appeal of Order #896 for lack of

standing.

I.

These interlocutory appeals are the latest in a series of

appeals to this court arising out of a civil RICO action filed in

1999 by the United States against several tobacco companies,

including BATCo. See United States v. Philip Morris USA, Inc.,

396 F.3d 1190 (D.C. Cir. 2005); United States v. British Am.

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Tobacco (Invs.) Ltd., 387 F.3d 884 (D.C. Cir. 2004); United

States v. Philip Morris Inc., 347 F.3d 951 (D.C. Cir. 2003)

(“Philip Morris II”); United States v. Philip Morris Inc., 314

F.3d 612 (D.C. Cir. 2003) (“Philip Morris I”). In the underlying

suit, the government did not sue appellant BATAS, which prior

to 1999 was a wholly owned subsidiary of BATCo. British Am.

Tobacco, 387 F.3d at 886. At that time, BATAS was known as

W.D. & H.O. Wills (“Wills”). Id.

BATAS’s appeals concern its attempts to protect its claims

of Australian legal professional privilege, American

attorney–client privilege, and work-product privilege in Willsera information. In particular, BATAS regards two documents

as especially important: the Foyle Memorandum and the Gulson

Affidavit. As outside counsel for BATCo and its subsidiary

Wills, Andrew Foyle authored the Foyle Memorandum in 1990.

The Memorandum provided the companies with advice

regarding “Wills’s document-retention polic[ies]” in preparation

for potential litigation. Id. The Gulson Affidavit recounts

confidential legal advice and describes Wills’s document

retention policies. Frederick Gulson, in-house counsel to Wills

in 1989 and 1990, executed the Affidavit as part of a 2003

Australian legal proceeding involving BATAS.

Seeing the documents as relevant to its case against BATCo,

the government sought to use them in its RICO action. To

protect its own privilege interests, BATAS moved in 2003 to

intervene in the underlying suit “for the limited purpose of

asserting and, if necessary, litigating privileges it holds in” the

Foyle Amendment and Gulson Affidavit, among other

documents. The District Court granted BATAS’s limited,

documentary intervention in Order #449, issued on December 5,

2003. Under the terms of the intervention and at BATAS’s

request, therefore, BATAS is not a full party to the suit.

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In March 2004, the government filed its expected witness

list, naming Gulson as a potential trial witness. The witness list

summarized Gulson’s expected testimony as follows:

Fred Gulson is expected to testify regarding BATCo’s . . .

document management and control policies and conduct

including efforts to suppress information by, among other

things, destroying and concealing documents to keep them

from introduction into judicial proceedings and to prevent

their publication in the United States and abroad.

By referring to BATCo’s document management, the summary

directly implicates the subject matter of both the Foyle

Memorandum and the Gulson Affidavit. Though aware that

Gulson’s expected testimony concerned subjects in which it

claimed privilege, BATAS waited until September 1, 2004—a

matter of days before the scheduled start of trial—to file a

“Motion to Protect Its Privilege Rights in Deposition and Trial

Testimony.” On September 30, 2004, the District Court issued

Order #670, denying this motion for expanded intervention as

untimely.

The government subsequently produced Gulson for

deposition and trial testimony. During Gulson’s February 17,

2005, trial appearance, the government read publicly available

portions of the Foyle Amendment to him and asked him to

confirm the statements. BATCo objected on privilege grounds

to parts of Gulson’s testimony. BATAS did not join BATCo’s

objections, nor did it raise its own objections. In Order #896, the

District Court overruled most of the objections, thus allowing

much of Gulson’s testimony into the record.

Trial began in September 2004 and ended on June 9, 2005.

The District Court has not yet issued a final judgment. BATAS

timely filed its notice of appeal of Order #670 on October 5,

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2004. It timely appealed Order #896 on March 30, 2005.

II.

In Order #670, the District Court denied BATAS’s motion

for expanded intervention as “clearly untimely” under Federal

Rule of Civil Procedure 24(a). A prospective intervenor

“claim[ing] an interest relating to the property or transaction

which is the subject of the action” may intervene as of right if

“the disposition of the action may as a practical matter impair or

impede [its] ability to protect that interest, unless [its] interest is

adequately represented by existing parties.” FED. R. CIV. P.

24(a)(2). As a threshold matter, though, Rule 24 requires

prospective intervenors to file a “timely application.” We have

previously stated that 

timeliness is to be judged in consideration of all the

circumstances, especially weighing the factors of time

elapsed since the inception of the suit, the purpose for which

intervention is sought, the need for intervention as a means

of preserving the applicant’s rights, and the probability of

prejudice to those already parties in the case.

United States v. Am. Tel. & Tel. Co., 642 F.2d 1285, 1295 (D.C.

Cir. 1980). We review the District Court’s denial of intervention

for untimeliness under the abuse of discretion standard. NAACP

v. New York, 413 U.S. 345, 366 (1973); Building & Const.

Trades Dept. v. Reich, 40 F.3d 1275, 1282 (D.C. Cir. 1994).

Having considered “all the circumstances,” we hold that the

District Court did not abuse its discretion.

The District Court first found that BATAS had adequate

notice of the possible testimony concerning matters in which it

claimed privilege almost six months—and possibly as much as

a year—before moving to expand its intervention. Specifically,

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the District Court noted that the Gulson Affidavit had become

public information by September 12, 2003, and that the

government had listed Gulson as a witness by March 15, 2004.

BATAS, though, did not act until September 1, 2004. Second,

the District Court found that a late intervention “would further

delay and complicate the massive trial” scheduled to begin only

weeks after BATAS filed its motion.

In its abbreviated timeliness argument, BATAS contends

that it could not have objected on privilege grounds until

Gulson’s testimony occurred either at deposition or trial and

therefore need not have intervened earlier. Furthermore, BATAS

claims that SEC v. Lavin, 111 F.3d 921, 931 (D.C. Cir. 1997),

required it to wait until Gulson’s testimony provided a “concrete

threat” to its privileges. The issue, though, is not the timeliness

of potential objections but the timeliness of its intervention.

Lavin, therefore, is not germane to the issue of intervention.

Furthermore, BATAS misreads Lavin, which merely states the

unremarkable proposition that privilege holders need not

prematurely assert privilege. Id. (“[W]e know of no case . . . that

requires a privilege holder to engage in a preemptive strike to

prevent further disclosure of involuntarily disclosed, privileged

materials . . . .”). Our cases do not require privilege holders to

forego intervention or sit on their rights as BATAS suggests.

See, e.g., In re Sealed Case, 877 F.2d 976, 980 (D.C. Cir. 1989)

(stating “privilege must be jealously guarded”).

In lieu of further argument on timeliness, BATAS directs an

inordinate amount of attention at a different issue—whether it

has waived its privileges. Claiming the issue is before this court,

BATAS singles out one sentence in the District Court’s opinion:

“BATAS has clearly waived its right to assert any privilege over

the subject matter covered in [Gulson’s] affidavit.” By

vehemently contending that it has not waived its privileges,

BATAS tilts at windmills: The issue before us is not waiver, nor

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even privilege itself. All we have before us is the timeliness of

BATAS’s motion to intervene. The validity of privilege goes

only to the prospective intervenor’s “interest,” as required by

Rule 24(a)(2). Courts reach the other elements of Rule 24(a)

only after the threshold question of timeliness. Hodgson v.

United Mine Workers of Am., 473 F.2d 118, 129 (D.C. Cir. 1972)

(“[T]imeliness is a prerequisite to any claim for intervention

under Rule 24 . . . .”). Having resolved its analysis without

passing that threshold, the District Court mentioned waiver only

in the context of its broader discussion of timeliness. Therefore,

we do not address whether BATAS waived its privileges because

we affirm the District Court’s ruling on timeliness.

As to the actual question before us, we agree with the

District Court’s findings on timeliness. The District Court

correctly noted that before moving to expand its intervention

BATAS allowed nearly six months to pass after receiving the

government’s witness list. Furthermore, BATAS’s motion came

almost a year after the contents of the Gulson Affidavit became

publicly available. Consequently, BATAS received multiple

early warnings of danger to its privilege. It knew the contents of

the documents—and therefore what privileged information might

be disclosed—and it knew the government’s plans to call Gulson

to the stand, along with the subject matter of his expected

testimony. On these facts, BATAS had a reasonable expectation

of potential disclosure of information in which it claims privilege

well before it filed its motion for expanded intervention. 

Although elapsed time alone may not make a motion for

intervention untimely, see United Mine Workers, 473 F.2d at

129, other facts support the District Court’s ruling. BATAS had

already intervened once in the suit. Unquestionably, it could

have requested a broader intervention initially or upon receiving

the government’s witness list (or any time in between or

thereafter). BATAS’s dilatory conduct is, therefore, all the more

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inexcusable considering that its motion to intervene came

virtually on the eve of trial. The District Court’s forecast of a

complicated trial, spanning nearly nine months, has been borne

out; neither it, nor the parties to the suit, should be hindered by

BATAS’s delay. On such facts, it is impossible to say the

District Court abused its discretion.

III.

BATAS also appeals Order #896, in which the District Court

overruled most of BATCo’s objections to Gulson’s trial

testimony. We begin our inquiry with the issue of standing.

Wyoming Outdoor Council v. U.S. Forest Serv., 165 F.3d 43, 47

(D.C. Cir. 1999) (“Because Article III courts are courts of

limited jurisdiction, we must examine our authority to hear a

case before we can determine the merits.”). Because the District

Court properly denied BATAS’s motion for expanded

intervention, BATAS lacks standing to appeal Order #896. 

We have stated many times that failed intervenors may not

appeal District Court actions to which they are not a party. See,

e.g., Alternative Research & Dev. Found. v. Veneman, 262 F.3d

406, 411 (D.C. Cir. 2001) (“[B]ecause the district court correctly

denied intervention, NABR is not a party to the action and lacks

standing to appeal . . . .”). As we have already held, the District

Court did not abuse its discretion by denying BATAS’s motion

to expand its intervention to testimonial evidence. Necessarily,

then, BATAS is not a party to the orders concerning Gulson’s

testimony and cannot appeal them. Moten v. Bricklayers,

Masons & Plasterers Int’l Union of Am., 543 F.2d 224, 227

(D.C. Cir. 1976).

BATAS argues that its initial intervention, granted in Order

#449, provides it with an alternative basis to bring this appeal.

We disagree. BATAS requested intervention only as to its

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possible privilege in documents and emphasized to the District

Court the limited nature of its intervention. The District Court

accordingly granted only a limited intervention, which did not

extend to testimonial evidence. BATAS’s attempt to expand its

intervention demonstrates that it too believed it could not assert

privilege over testimonial evidence without a broader

intervention. Furthermore, BATAS did not join BATCo’s

objections to Gulson’s testimony, nor did it attempt to raise its

own. Cf. Willoughby v. Potomac Elec. Power Co., 100 F.3d 999,

1002 (D.C. Cir. 1996) (failure to object waives right to raise

objection on appeal). BATAS cannot now—as a nonparty who

did not object—appeal Order #896 overruling BATCo’s

objections.

IV.

For the above reasons, we affirm the District Court’s Order

#670 and dismiss BATAS’s appeal of Order #896 for lack of

standing.

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