UNI TED STATES DI STRI CT COURT

F OR THE DI STRI CT OF COL UMB I A

------------------------------------------------------- : UNI TED STATES OF AMERI CA : ex rel. HARRY B ARKO, : CASE NO. 1:05-CV-1276 : Plaintiff-Relator, : : v. : OPI NI ON & ORDER : [ Resolving Docs. 151 & 152 ] : HAL L I B URTON COMPANY et al. , : : D efendants. : :

------------------------------------------------------- J AMES S. GW I

N, UNI T ED STATES DI STRI CT J UDGE: I n its March 6 , 2014 Opinion and Order, the Court g ranted Plaintiff-Relator B arko’s motion to compel the production of 89 documents. The KB R Defendants had withheld the documents on the basis of attorney -client privileg e or attorney work-product protection g rounds. 1 / I n ordering the production, the Court f

ound that these documents were o rdinary business records and were created
to satisfy United States defense contractor requirements. The Court found the d ocuments were not created to obtain or receive leg al advice. 2 / The KB R Defendants n ow ask the Court to certify this issue for interlocutory appeal pursuant
to 2 8 U.S.C. § 1292(b) and to stay the March 6 Order pending a ppellate review. 3 / I n the alternative, the KB R Defendants request that this Court stay its March 6 O rder pending the f iling and disposition of a petition for writ of mandamus to the U.S. Court of Appeals for the D i s t r i c t o f C o lumbia Circuit—or, at a minimum, until the D.C. Circuit rules on a n emerg ency motion to stay pursuant to

1 / Do c. 1 50

. 2 / Id

. 3 / Do c. 1 52

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. F ederal Rule of Appellate Pro c e d u r e 8 (a). 4 / The KB R Defendants also ask the Court to seal its March 6 Opinion and Order. 5 /
KB R’s fear of producing the documents is understandable. B efore being ordered to produce the documents for in camera review, KB R filed a motion for summary judg ment and f i l e d a
statement of f

acts that KB R represented could not be disputed. 6 / B ut KB R’s COB C business documents are replete with c ontrary evidence. I n i t s motion for summary judg ment, KB R makes factual representations directly opposite its own COB C reports. A. Motion f

or Certif ication f or Interlocutory Appeal I n g ranting a request for an interlocutory appeal, a district court must certify that the order involves “a controlling q uestion of law a s to w hich there is s u b s t a ntial g round for difference of opinion and that a

n immediate a

ppeal from the order may materially advance the u ltimate termination of the litig ation.” 7 / The Supreme Court in Mohawk Industries, Inc. v. Carpenter said that these conditions a

re “most likely to be satisfied when a privileg e ruling involves a new leg al question or is of special consequence.” 8 / The Court finds that defendants fail to satisfy the hig h standard required for an interlocutory appeal. “Mere disag r eement, even if vehement, with a court' s ruling d oes not establish a substantial
g round for difference o f opinion sufficient to satisfy the statutory requirements for an interlocutory

4 / Id

. 5 / Do c. 1 51

. 6 / Do c 13 6

. 7 / 2 8 U.S.C. § 1 2 9 2 (b ). 8 / Mo h awk In du s., In c. v. Ca rp en ter , 5 5 8 U.S. 1 0 0 , 1 1 1 (2 0 0 9 ). -2-Case No. 1:05-CV-1276

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. appeal.” 9 /
F irst, the KB R Defend a n ts fail to show the order involves a “new leg al question or is of special consequence.” 1 0 / The issue of whether the attorney -client privileg e or t h e w o r k p r oduct doctrine applies to documents created as part of an internal compliance investig ation is not new or novel. 1 1 / Rather, as the Supreme Court stated i n U p j o h n C o
. v. United States , the outcome in any particular c ircumstance must be determined on a “case-by -case basis” and d epends on the particular circumstances of the case. 1 2 / Moreover, the issue is not one of “special consequence.” This c ase concerns discrete issues related to a long -passed KB R c ontract and the administration of that contract. This Court’s finding that the documents were not attorney client privileg ed or work p r o duct privileg ed was not a close question. B u t even if the issue had been difficult, attorney cl i e n t p r i v i leg e d ecisions are factdependent. N othing makes review of the pr ivileg e decision especially important to other cases. Each attorney -client privileg e ruling turns on its o wn facts. That KB R may be embarrassed by what its own business records show does not make this Court’s ruling of “special importance.” Second, t h e re ar e not substantial g rounds for difference of opinion. T he most important documents are memoranda from an investig ator to members of KB R’s g eneral counsel’s office. T he investig ators p repared the documents to c omply with g o v e r nm e n t c o n t

r a c t o r r eg ulations, specifically

9 / Ju d icia l W

a tch , In c. v. N

a t'l En erg y Po licy Dev. Grp

. , 2 3 3 F

. Su p p . 2 d 1 6 , 2 0 (D.D.C. 2 0 02 ) (in tern al citatio n s an d q u o tatio n

m ark s o m itted ). 1 0 / Mo ha wk , 5 5 8 U.S. at 1 1 1. 1 1 / Up jo h n Co . v. Un i ted

S ta tes , 4 4 9 U.S. 3 8 3 (1 9 8 1 ); S olis v. Fo o d

Emp ’rs La b o r Rela tio n s Ass’n , 6 4 4 F.3 d 2 2 1 (4 th Cir. 2 0 1 1 ); Permia n Co rp
. v. Un ited S ta tes , 6 6 5 F.2 d 12 1 4 (D.C. Cir. 1 9 8 1 ); W u ltz v. Ba nk o

f Ch in a , Ltd

. ,

_ _ _ F. S u pp . 2 d

__ _ _ , 2 0 1 3 W L 5 7 9 7 11 4 (S.D.N.Y. O ct. 25 , 2 0 1 3 ); Un i ted S ta tes v. IS S Ma r in e S

ervs., In c. , 9 0 5 F. Su

p p . 2 d 1 2 1 (D.D.C. 2 0 1 2 ); Un ited S t a tes v. Dish N etwo r k, LLC , 2 8 3 F .R.D. 4 2 0 (N.D. Ill. 20 1 2 ); In re In tel Co rp
. Micro p ro cesso r

An titru st Litig

. , 2 5 8 F.R.D. 2 8 0 (D. Del. 2 0 0 8 ). 1 2 / Up jo h n , 4 4 9 U.S. at 3 9 6 (in tern al q u o t atio n m ark s o m itted ). -3-Case No. 1:05-CV-1276

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. the Department of D efense regulation requiring contractors to discover and report improper conduct

r e g a r d i n g G o v e r

nm e n t c o n t r a c t s . 1 3 / Nothing sug g ests the reports were p repared to obtain leg al advice. I nstead, the reports were p repared to try to comply with KB R’s oblig ation to report improper conduct to the Department of Defense. At the end of the investig ation, the investig ator drafted a final memorandum and submitted it to the G eneral Counsel’s office. B ut the memorandum does not request leg al advice, and it does
not identify possible leg a l issues for further review. I nstead, the memorandum was created to help KB R decide whether it needed to report kickbacks or contractor fraud to the United States. Other documents include e-mails asking for updates on investig ations of certain c ases and e-mails discussing hotline calls. I n none of the documents is leg al a dvice requested or offered. B ecause no leg al advice w as requ e s t e d or offered, the Court concluded that the primary purpose of the investig ations was to comply w ith federal d efense contractor r eg u lations, n o t t o s e cure leg a l a dvice. The Court is

c o n f i d e n t that other courts conducting a similar in camera review would come to the sam e conclusion. The KB R Defendants represent that two other federal courts f o u n d o t h e r C O B C investig ation documents were privileg ed. However, this is not the case. The F ederal Court of Claims order did not hold that COB C investig ation documents are alway s p rivileg e d

. R a ther, that court both g ranted in p art but also denied in part the KB R Defendants’ motion for a p ro t e c t i ve order. The F ederal Court of Claims held that the KB R Defendants failed to establish that the attorney -client privileg e o r the w ork product privileg e applied

1 3 / 4 8 C.F.R.§ 2 0 3 .7 0 0 0- 2 0 3 .7 0 0 1(a) (1 0

- 1

- 2 0 0 1 ed itio n ). -4-Case No. 1:05-CV-1276

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. to some of the d ocuments at issue. Consistent with this Court’s ruling , the F ederal Court of Claims ordered the production of documents produced for “purposes of compliance.” 1 4 /
KB R a lso mis-characteriz es the o ther c ase that it relies upon. 1 5 / Mazon w as a criminal case where a criminal defendan t s u b p o enaed KB R records. I n r esponse to the subpoena, KB R argued Maz on’s document requests: “are duplicative of material p reviously provided by KB R to the government and made available to Maz on in discovery , and are otherwise unreason a b l e a n d oppressive. Moreover, Maz on has made no showing of relevance, specificity , or admissibility of the documents he seeks.” 1 6 / K BR a dditionally argued that the b urden of production outweig hed any relevance in lig

ht of the “substantial volume of documents previously produced by

KB R and provided to [ Maz on] .” W hile KB R offe r e d an additional throwaway argument that some d ocuments mig ht be privileg ed, KB R mostly said it had already prod u c e d t h e d ocuments and the criminal defendant should ge t the documents from the prosecutor. Apparently Maz on filed no opposition to KB R’s motion to quash. T he district court’s one pag e order g ives no indication it dealt with the same issue presented to this Court. More important, attorney -client privileg e determinations rise and fall upon the specific documents and the circumstances of the documents production. F inally , the Court finds that if the interlocutory appeal is permitted, it would prolong rather than hasten the termination o f the litig ation. I f the Court of Appeals disagrees with Court’s order, it can “remedy the improper disclosure of privileg e d material in the same way they remedy a host of other erroneous evidentiary ruling s: b y vacating an adverse judg ment and remanding for a new

1 4 / Do c. 1 3 8

- 1

. 1 5 / Un ited S ta t es v. Ma zo n , No . 0 5- 4 0 0 2 4

- 0 1 (C.D. Ill. Dec. 1 4 , 2 0 0 6 ) 1 6 / Id

. Do c. 7 6 at 1

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. trial in which the protected material and its f ruits are ex cluded from evidence.” 1 7 / To pause litig ation

so c lose to the end of discovery and so near the deadline f o r summary judg ment b riefing would waste judicial resources. I I I n addition, a substantial question ex ists whether KB R waived any attorney -client privileg e claims or work-product protection when KB R put the contents of the COB C investig ation at issue. KB R filed its motion for summary judg ment before this Court ordered the COB C documents be produced for in c amera inspection. W ith the motion, KB R attached a “statement of material facts

as to which there is no ge n u i n e d ispute.” Neither the motion for summary judg ment nor the
statement of undisputed material facts fairly reflect the evidence p roduced or the finding s o f KB R’s own internal investig ation. B ut more important to the waiver issue, the KB R D efendants t h em s e l v e s p u t t h e COB C documents at issue when they argued that the COB C documents showed no evidence of improper conduct. W ith the KB R Defendants’ motion for summary judg ment, the Defendants said, W hen a COB C investig ation reveals reasonable g rounds to believe that a violation of 41 U.S.C. §§ 51-58 (the “Anti-Kickback A c t”) may have occurred requiring disclosure to the g overnment under F AR 52.203-7, KB R makes such disclosures.

. . . [ W ]ith respect to the alleg ations raised by Mr. B arko, KBR represents that KBR did perform COBC investigations related to D& P and Mr. Gerlach, and made no reports to the Government following those investigations. 1 8 / “Courts need not allow a claim of [ attorney -client or work-product] privileg e when the party claiming the privileg e seeks to use it in a way that is n ot consistent w ith the purpose of t he

1 7 / Mo ha wk , 5 5 8 U.S. at 1 0 9. 1 8 / Do c. 1 3 6 at 1 0 n .5 ; s ee a lso id

. at 4 4 ¶ 2 7 (statem en t o f

m aterial f

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. privileg e.” 1 9 / The KB R Defendants represented that 1) as a matter of p olicy , KB R reports p oss ible violations of law w hen a COBC investig ation discovers reasonable g rounds to believe a v iolation occurred; 2) KB R conducted a COB C investig ation of the facts underly ing th i s c a s e ; a n d 3) a fter conducting a COB C investig ation of the issues in this case, the KB R Defendants d id not report any violation t o t h e U n ited States. KB R asks this Court to draw the inference that the COB C investig ation documents showed nothing

. W hen a party represents facts drawn f r om argued privileg ed communications, it cannot hide behind attorney -client privileg e claims to avoid allowing the other side to test those facts. “In other words, a party cannot partially disclos e p r i v i l e g ed c ommunications or affirmatively rely on privileg ed communications to support its claim o r d e fe n s e and then shield the underlying communications from scrutiny by the opposing party .” 2 0 /
B y making that assertion, the KB R Defendants may have waived any

claim of privileg e to the investig ation documents that they represented as suppo r t i n g their decision n ot to report this matter to the federal g overnment. Althoug h this Court makes no final conclusion whether KB R waiv e d any attorney -client privileg e, it g ives a

nother reason to find no substantial g round to a ppeal t h e o r d e r to produce the COB C documents. T h e KB R Defendants c annot show that a decision in Defendants’ favor at the Court of Appeals would be “controlling ” as to whether the documents must be produced.

1 9 / In re S ea led Ca se , 6 7 6 F.2 d 7 93 , 8 1 8 (D.C. Cir. 19 8 2); see a lso Jo h n Do e C o
. v. Un ited S ta tes , 3 5 0 F.3 d 2 9 9 , 3 0 2 (2 d Cir. 2 0 0 3 ) (“ It is w ell estab lish ed d o ctrin e th at in certain circu m stan ces a p arty ’ s assertio n o f f actu al claim s can , o u t o f co n sid eratio n s of f airn ess to th e p arty ’ s ad v ersary , resu lt in th e in v o lun tary f o r fe i t u r e o f p riv ileg es f

o r m atters p ertin en t to th e claim s asserted .”).

2 0 / Ch evro n Co rp
. v. Do n zig er , 2 0 1 3 W L 6 1 8 2 7 4 4 * 2 (S.D.N.Y. No v . 2 1 , 2 0 1 3) , q u o tin g In re Gra nd Ju ry Pro ceed in g

s , 2 1 9 F.3 d 1 7 5, 1 8 2 (2 d Cir.2 0 0 0 )

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. F or the foreg oing r easons, the Court DENIES the KB R Defendants’ motion for certification of an interlocutory

appeal. B. Motion to Stay the March 6 Order P ending Appellate Review “The factors to be considered in determining whether a stay is wa rranted are: (1) the likelihood that the party seeking the stay will prevail on the merits of the appeal; (2) the likelihood that the moving party

will be irreparably harmed absent a stay ; (3) the prospect that others will be harmed if the court g

rants the stay ; and (4) the public interest in gr a nting the stay .” 2 1 /
“A stay is not a matter of rig ht, even if irreparable injury mig ht otherwise result.” 2 2 / I nstead, it is “an e x ercise of judicial discretion,” an d “ t h e propriety of its issue is dependent upon the circumstances of the particular case.” 2 3 / The party

seekinga stay

bears the burden of justify ing the

ex ercise of that discretion 2 4 /
F irst, the KBR D e f

e n d ants have not shown a likelihood of success on the merits. As discussed above, the question of whether the COB C documents were subject to the attorney -client privileg e or the work-product doctrine was not close. None of the documents r equest leg a l advice. None of the d o cuments g ive leg al advice. I n vestig ators, n ot attorney s, conducted the interviews and
wrote the reports. The investig ators w rote the reports when n o l i t ig ation had been filed. KB R investig ators wrote the reports and conducted the intervi e w s t o c o m ply with federal d e fense contracting

regulations, not to secure leg al advice. F urther, KB R enjoy s no rig ht to appeal a d iscovery ruling

. I nstead, KB R say s it will ask the

2 1 / Cu o mo v. U.S . Nu clea r Reg u la to ry Co mm'n , 7 7 2 F.2 d 9 7 2 , 9 7 4 (D.C. Cir. 1 98 5 ). 2 2 / Nken v. Ho ld

er , 5 5 6 U.S. 4 1 8 , 4 1 9 (2 0 0 9 ) (in tern al q u o tatio n m ark s o m i tted ). 2 3 / Id

. at 4 3 3 (citatio n

an d in tern al q u o tatio n

an d alteratio n

m ark s o m itted ). 2 4 / Id

. at 4 3 3

- 3 4

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. Court of Appeals to allow a discretionary r eview of a discovery r uling

. Presumptively , the Court of Appeals has more important issues to spend its time on. F or g ood reason, Cong ress adopted the final judg me n t r u l e t o s t o p t

h e inefficiencies attending sequential appeals of interim ruling s. Even where Constitutional protections are involved, parties
g enerally receive no rig ht to avoid discovery

. 2 5 / I n seekingdiscretionary review, KB R would need convi n c e the court of appeals that b u sinesses should never be required to disclose internal investig ations that the businesses perform to c omply w i t h go vernment contracting requirements. KB R’s hope that the Court of Appeals will take this case for interlocutory appeal is fanciful. The Court therefore c oncludes the KB R Defendants have not shown a likelihood of success on the merits of its mandamus petition. Second, the Court f

ind s a s tay is unnecessary to prevent irreparable harm. The KB R Defendants claim that irreparable harm will result if they f orced now to produce the documents. B u t,

as the Supreme Court stated in Mohawk , any subsequent review that somehow finds the documents protected could be e asily remedied. The Court o f Appeals could simply vacate and remand for a new trial where the p rotected material and its fruits are ex cluded from evidence. 2 6 / The KB R D efendants have not demonstrated that irreparable harm will occur. Third, a stay may harm the Plaintiff-Relator. As the K BR Defendants mention, PlaintiffRelator B arko filed his amended complaint on J une 13, 2007, a nd more than six y e ars have passed during preliminary

proceeding s and initial discovery

. 2 7 / I f the stay is g r anted, the Plaintiff-Relator

2 5 / Mo ha wk In d

us., In c. v. Ca rp en ter , 5 5 8 U.S. 1 0 0 (2 0 0 9 ) ; M a n ess v. Meyers , 4 1 9 U.S. 4 49 , 4 5 8

– 4 6 1 (1 97 5 ) (n o in terlo cu t o ry ap peal o f o rd er ref u s in g to q u ash su

b p o en a f o r m aterials th at arg u ab l y v i olated su bp o en aed p arty ' s Fif

th A m en d m en t p riv ileg e ag ain st self

- in crim in atio n ). 2 6 / Mo ha wk , 5 5 8 U.S. at 1 0 8- 1 2

. 2 7 / Do c. 1 5 2 at 1 5

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. B arko will suffer another delay , resulting in a postponement of the scheduled trial. This Court does not consider such harm to be neg lig ible. F inall y , t h e public interest lies in denying the stay

. L ittle sug g ests that the attorney -client privileg e and the w ork product doctrine will be impact e d b y t h e disclosure of eig ht y ear old investig ator interview notes a nd reports. T h e public has an interest in the pr o m p t a n d final determination of this litig ation. Thus, after considering

the factors, the Court D ENIES the KB R Defendants’ motion for a stay of the Court’s March 6 Order. W ith the obv i o u s r e l e vance of the documents to the Relator’s ability to respond to the pending summary judg ment motions, the Court orders KB R to produce the documents b y March 17, 2014. KB R say s it may seek mandamus relief w ith the Court of Appeals. Thi s C o u r t orders Plaintiff-Relator and Relat o r’s counsel to k eep the produced d ocuments confidential. U ntil otherwise ordered by

this Court, Plaintiff-Relator and Relator’s counsel may share the documents only with e x p e r t w i tness and o nly after those ex p ert witnesses confirm in w riting their ag reement
not to d isclose the documents. Relator may use any of the documents to oppose summary judg ment but must file any

opposition that uses the documents under seal. Similarly , Plaintiff-Relator must file any other pleading that uses the produced documents under seal unless o therwise ordered by this Court. C. Motion to Seal the March 6 Opinion and Order The KB R Defendants a lso move to seal the Court’s order compelling the production o f the

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. 89 COB C investig ation documents. 2 8 / Essentially , t he KB R Defendants argue that because they still think the documents are protected by the attorney

- client privileg e a nd attorney w ork-product protection and that they believe “‘sensitive information’” is exposed to the public, the Court should seal the order. 2 9 / This Court operates a s a public f orum “ tha t b e s t serve[ s] the public when [ it] do[ es] [ its] business openly and in full view.” 3 0 / Althoug h the Court may seal documents, it must do so in lig ht of certain factors, incl u ding “the streng th of the property and privacy interests involved.” 3 1 / A “strong presumption in favor of public access to judicial proceeding s” ex ists. 3 2 / The Court finds that the KB R Defendants have not shown any privacy interest that should close the public’s rig ht to o pen courts. F irst, there are no r equests for leg al a dvice or communications o f leg al advice in the materials. The only information r evealed in the March 6, 2014, Opinion and Order and in this order is the result of a factual investig ation made for the KB R Defendants’ records. Second, the investig ation took place over seven y ears ag o. The KB R Defendants do not p oint
to any continuing business relationships that may be harmed or any trade secrets that may be disclosed. The only privacy interests at issue appear to be an interest in secrecy for secrecy ’s sake or KB R’s embarrassment that its internal investig ation raised major sug g estions of bribery , raised

m a j o r q u estions whether KB R employ ees were steering contracts to favored c o n t r a c t o r s , r a i s e d m a

j o r questions whether KB R improperly approved c h a n ge orders that sometimes doubled the cost of

2 8 / Do c. 1 5 1

. 2 9 / Id

. at 1

- 2 (q u o tin g Mo h a wk , 5 5 8 U.S. at 1 1 2 ). 3 0 / E.E.O.C. v. Na t ’l Ch ild

ren ’s Cen ter, In c. , 9 8 F.3 d 1 4 0 6 , 1 4 0 8 (D.C. Cir. 1 9 96 ). 3 1 / Jo h n so n v. Grea ter S

e. Co mty. Ho sp . Co rp
. , 9 51 F.2 d 1 2 68 , 1 2 7 7 n .1 4 (D.C. Cir. 1 9 9 1 ). 3 2 / Id

. at 1 2 7 7

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. ag reed contracts, and raised major questions why additional contracts were g iven to contractors who had miserably

failed to complete earlier work. Therefore, the Court DENIES the KB R Defendants’ motion to seal the Cou r t ’ s M arch 6 Opinion and Order. I T I S SO ORDERED

Dated: March 11, 2014 s/ James S. Gwin J AMES S. GW I

N UNI TED STATES DI STRI CT J UDGE

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