PAGE 1 – OPINION AND ORDER

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

UNITED STATES OF AMERICA,

v.

DAN HEINE and DIANA YATES,

Defendants.

Case No. 3:15-cr-00238-SI-2

OPINION AND ORDER ON THE BANK 

OF OSWEGO’S MOTION TO QUASH

SUBPOENA FROM DIANA YATES

Billy J. Williams, United States Attorney, and Claire M. Fay and Michelle Holman Kerin, 

Assistant United States Attorneys, UNITED STATES ATTORNEY’S OFFICE FOR THE DISTRICT OF 

OREGON, 1000 S.W. Third Avenue, Suite 600, Portland, OR 97204. Of Attorneys for the United 

States of America. 

Caroline Harris Crowne, TONKON TORP, LLP, 1600 Pioneer Tower, 888 S.W. Fifth Avenue, 

Portland, OR 97204; Jeffrey Alberts, PRYOR CASHMAN, LLP, 7 Times Square, New York, NY 

10036. Of Attorneys for Defendant Dan Heine.

Janet Lee Hoffman and Andrew Weiner, JANET HOFFMAN & ASSOCIATES, LLC, 1000 S.W. 

Broadway, Suite 1500, Portland OR 97205. Of Attorneys for Defendant Diana Yates.

G. Kevin Kiely, Casey M. Nokes, and Nicole M. Swift, CABLE HUSTON, LLP, 1001 S.W. Fifth 

Avenue, Suite 2000, Portland, OR 97204. Of Attorneys for The Bank of Oswego.

Michael H. Simon, District Judge.

Defendants Diana Yates (“Yates”) and Dan Heine (“Heine”) are charged with conspiracy 

to commit bank fraud and making false bank entries, reports, and transactions during the time 

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that she was affiliated with The Bank of Oswego (the “Bank”). On January 20, 2016, Yates 

served a subpoena duces tecum pursuant to Rule 17(c) of the Federal Rules of Criminal 

Procedure on the Bank (the “Subpoena”). Before the Court is the Bank’s Motion to Quash or 

Modify Yates’s Subpoena. For the reasons that follow, the Bank’s Motion is granted in part and 

denied in part.

STANDARDS

Rule 17(c)(1) of the Federal Rules of Criminal Procedure provides, in relevant part:

A subpoena may order the witness to produce any books, papers, 

documents, data, or other objects the subpoena designates. The 

court may direct the witness to produce the designated items in 

court before trial or before they are to be offered in evidence. 

Rule 17(c) is not intended to provide a means of discovery in criminal cases; rather, its purpose 

is to expedite trial by “providing a time and place before trial for the inspection of subpoenaed 

materials.” United States v. Nixon, 418 U.S. 683, 698-99 (1974) (citing Bowman Dairy Co. v. 

United States, 341 U.S. 214, 220 (1951)); see also Weatherford v. Bursey, 429 U.S. 545, 559 

(1977) (stating that there “is no general constitutional right to discovery in criminal cases”); 

United States v. MacKey, 647 F.2d 898, 901 (9th Cir. 1981) (citation omitted) (instructing that “a 

Rule 17(c) subpoena is not intended to serve as a discovery tool, or to allow a blind fishing 

expedition seeking unknown evidence”). 

In addition, Rule 17(c)(2) provides that a district court may quash or modify a subpoena 

“if compliance would be unreasonable or oppressive.” The decision whether to quash or modify 

a subpoena is within the discretion of the district court. Nixon, 418 U.S. at 702 (“Enforcement of 

a pretrial subpoena duces tecum must necessarily be committed to the sound discretion of the 

trial court since the necessity for the subpoena most often turns upon a determination of factual 

issues”).

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The party issuing a subpoena under Rule 17(c) bears the burden of showing the 

relevancy, admissibility, and specificity of the requested materials. Id. “Even upon a showing of 

relevance, admissibility, and specificity, a court must consider whether the material is ‘otherwise 

procurable,’ whether the proponent can ‘properly prepare for trial without such production,’ and 

whether ‘the failure to obtain such inspection may tend unreasonably to delay the trial.’” United 

States v. Mason, 2008 WL 1909115, at *1 (D. Or. Apr. 25, 2008) (quoting Nixon, 418 U.S. 

at 699); see also United States v. Eden, 659 F.2d 1376, 1381 (9th Cir. 1981) (“In order to justify 

a subpoena for production before trial, the proponent must also demonstrate that the subpoenaed 

materials are not available from any other source and their examination and processing should 

not await trial in the circumstances shown”). “Further, a Rule 17(c) subpoena ‘should be quashed 

or modified if it calls for privileged matter.’” United States v. Reyes, 239 F.R.D. 591, 598 (N.D. 

Cal. 2006) (quoting 2 Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure

§ 275).

A. Relevancy

A party seeking to enforce a subpoena issued under Rule 17(c) must demonstrate “a 

sufficient likelihood” that the documents or information sought are “relevant to the offenses 

charged in the indictment.” Nixon, 418 U.S. at 700; see also Mason, 2008 WL 1909115, at *1

(quoting Nixon, 418 U.S. at 700) (restating the standard as requiring the party to demonstrate “a 

‘sufficient likelihood’ that the documents sought are material to any issue in the case.”).1“Thus, 

 

1 One treatise describes the “relevancy” requirement as follows:

Because evidence that is not relevant is not admissible, the 

“relevancy” hurdle of Rule 17(c) is really a subset of the 

“admissibility” hurdle and not an independent requirement at all. 

But reciting it as a separate requirement does serve to emphasize 

that the proponent of the subpoena must show that the requested 

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a subpoena is limited to evidentiary materials, and courts will not allow general requests for 

categories of only arguably relevant documents that indicate the subpoena falls in the category of 

the much maligned ‘fishing expedition.’” 2 Charles Alan Wright, Andrew J. Leipold, Peter J. 

Henning & Sarah N. Welling, Federal Practice and Procedure § 275 (4th ed. 2015) (hereinafter 

Federal Practice and Procedure). Further, “mere conclusory statements” of relevancy are 

insufficient to satisfy the Nixon requirement. Eden, 659 F.2d at 1381. 

For example, in United States v. Reed, 726 F.2d 570 (9th Cir. 1984), the appellants were 

convicted by a jury of charges related to two fires that occurred at a restaurant. Id. at 572. Before 

trial, the defendants issued a Rule 17(c) subpoena requesting from the third-party city the 

production of investigative reports that described other incidents of suspected arson that occurred 

in the same general time frame as the fires for which the defendants were convicted. Id. at 576. 

The defendants argued that the files from these other suspected arsons “would aid their defense 

by indicating that certain others, named as co-defendants but not on trial, might have been 

contemporaneously involved in other arson activities and thus might have had independent 

motives to burn” the restaurant. Id. at 576-77. The district court, after reviewing the files in 

camera, denied the application and quashed the Rule 17(c) subpoena. Id. at 577. The Ninth 

Circuit held that the trial court did not err in quashing the subpoena. Id. The Ninth Circuit found

that the appellants did not sufficiently demonstrate the relevancy of the city’s files from other 

suspected arsons because the appellants did not point “to any substantial foundation for believing 

that the investigative reports would furnish defense matter, or would even suggest that the fires 

 

documents are relevant to an issue that will be of consequence at 

the trial or hearing.

Robert M. Cary, Craig D. Singer & Simon A. Latcovich, Federal Criminal Discovery 226 (ABA 

Criminal Justice Section 2011) (footnotes omitted). 

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charged in the indictment were probably set by others.” Id. Additionally, the Ninth Circuit’s 

independent review of the files “support[ed] the trial court’s finding that the incidents described 

in the arson reports were different in nature from those in [the defendants’] case, and g[a]ve no 

indication that others were involved.” Id.

Similarly, in United States v. Mason, the court quashed a Rule 17(c) subpoena that sought 

tax records, financial documents, and email and telephone records from a third party because the 

defendants failed to establish the relevancy of the requested documents. 2008 WL 1909115, 

at *2. The court characterized the defendants’ arguments that the third party’s “records ‘may’ or 

‘might’ help impeach [the third party’s] credibility, or demonstrate bias or motive” as “nothing 

more than speculation.” Id. at *3. The court reasoned that the subpoena sought “numerous 

documents that pre-date or post-date the FBI’s investigation, which are clearly not relevant to 

any issue at trial.” Id. at *2. The court explained that “[w]hatever marginal relevance the other 

documents might have as to [the third party’s] credibility, motive, and bias would likely be 

outweighed by the substantial risk [of] confusing the issues, misleading the jury, and needless 

presentation of cumulative evidence.” Id. Further, the court found that discovery provided by the 

government was “sufficient to appraise [sic] the jury of [the third party’s] potential biases and 

motivations.” Id.

B. Admissibility

A party seeking to enforce a subpoena issued under Rule 17(c) also must make “a 

sufficient preliminary showing that each of the subpoenaed [materials] contains evidence 

admissible with respect to the offenses charged in the indictment.” Nixon, 418 U.S. at 700. A 

district court “must seek to predict whether the materials will be admissible as evidence based on 

the best information before the court at the time the subpoena is evaluated.” Robert M. Cary, 

Craig D. Singer & Simon A. Latcovich, Federal Criminal Discovery 227 (ABA Criminal Justice 

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Section 2011) (hereinafter Federal Criminal Discovery); see also id. at 228 (footnote omitted) 

(“the ‘admissibility’ requirement obliges the proponent of a subpoena to articulate what 

admissible evidence the subpoena is likely to produce”). In Reed, the Ninth Circuit upheld the 

district court’s decision to quash the Rule 17(c) subpoena for the city’s arson files in part because 

the “appellants did not demonstrate that the reports would have been admissible under the 

limitations of Federal Rule of Evidence 803(8)(B).” 726 F.2d at 577; see also Reyes, 239 F.R.D. 

at 599-600 (quashing two Rule 17(c) subpoenas for failure to meet the admissibility requirement 

where the documents sought were hearsay and not subject to any exception to the hearsay rule).

“Generally, the need for evidence to impeach witnesses is insufficient to require its 

production in advance of trial.” Nixon, 418 U.S. at 701. For example, in United States v. Fields, 

663 F.2d 880 (9th Cir. 1981), the Ninth Circuit reversed the district court’s order denying a

third-party bank’s motion to quash a Rule 17(c) subpoena because the “only evidentiary use that 

defendants have been able to advance is that the statements and transcribed interviews of 

witnesses could be used for impeachment purposes.” Id. at 881. The Ninth Circuit, relying on 

Nixon, stated that such “use is generally insufficient to justify the pretrial production of 

documents, and held that “requiring [the bank] to produce the documents before any witnesses 

had testified was an abuse of discretion.” Id.

In United States v. Schinderman, 432 F. Supp. 2d 157 (D. Me. 2006), however, Judge 

Hornby rejected the government’s argument that Fields stood for “an absolute prohibition on the 

use of a Rule 17(c) subpoena to obtain documents solely for impeachment purposes.” Id. at 160 

(quotation marks omitted). Judge Hornby explained that the government’s reading of Fields was 

“too broad” because that case “held only that impeachment documents under Rule 17 need not 

be produced until the relevant witness testified.” Id. (emphasis in original) (citing Fields, 

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663 F.2d at 881); see also Federal Practice and Procedure § 275 n.24 (citing United States v. 

Cuthbertson, 630 F.2d 139, 144 (3d Cir. 1980)) (“Although material usable for impeachment is 

evidentiary, and within Rule 17(c), it does not become evidentiary until the witness has testified 

at trial. Thus, prior inconsistent statements of a witness are not subject to production and 

inspection prior to trial . . . .”).

C. Specificity

In addition, when a party seeks to enforce a subpoena under Rule 17(c), the “subpoena 

must refer to specific documents or, at least, to specific kinds of documents.” United States v. 

Venecia, 1997 WL 325328, at *3 (D. Or. May 16, 1997); see also Federal Criminal 

Discovery 232 (stating that a Rule 17(c) subpoena “must seek particular documents, or narrow 

categories of documents, that the proponent reasonably believes exist and are likely to satisfy the 

relevancy and admissibility requirements”). Although “the proponent of a subpoena cannot be 

expected to identify the materials he seeks in exacting detail, when (as demonstrated by the fact 

he must employ a subpoena) he does not have access to them,” a party must “provide details 

sufficient to establish that the subpoena’s proponent has made a good-faith effort to obtain 

evidentiary material and is not engaged in the proverbial ‘fishing expedition.’” Reyes, 239 F.R.D. 

at 599 (quoting Nixon, 418 U.S. at 699-700); see also Federal Practice and Procedure § 275 

(footnotes omitted) (“A subpoena that fails to describe any specific documents is too broad, but it 

is not necessary that the subpoena designate each particular paper desired. It is sufficient if kinds 

of documents are designated with reasonable particularity.”). 

Within the Ninth Circuit, “requesting entire files instead of specific documents indicates 

a fishing expedition.” Venecia, 1997 WL 325328, at *3 (citing Reed, 726 F.2d at 577). For 

example, in Reed, the Ninth Circuit upheld the district court’s decision to quash a Rule 17(c) 

subpoena for the city’s arson files in part because the appellants “did not request specific 

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documents, but sought entire arson investigation files.” 726 F.2d at 577. The Ninth Circuit 

explained that “Rule 17(c) was not intended as a discovery device, or to ‘allow a blind fishing 

expedition seeking unknown evidence.’” Id. (quoting MacKey, 647 F.2d at 901). 

Similarly, in United States v. Venecia, the court refused to reauthorize a Rule 17(c) 

subpoena directed to the Klickitat County District Attorney and quashed a Rule 17(c) subpoena 

directed to the Washington State Patrol because they failed the specificity requirement. 

1997 WL 325328 at *3. The subpoena served on the district attorney sought the “[c]omplete file 

and all log notes and work product” from the defendant’s case. Id. (alteration in original) 

(quotation marks omitted). The subpoena served on the Washington State Patrol also sought the 

defendant’s complete case file as well as all accompanying case notes. Id. The court found that 

the “subpoenas do not refer to specific documents or specific kinds of documents,” and thus did 

“not meet the requirements of Rule 17(c).” Id.

The case United States v. Reyes illustrates two ends of the specificity spectrum. In Reyes, 

the defendant, a former chief executive officer of a publicly traded company, issued Rule 17(c) 

subpoenas on two law firms that assisted with the company’s internal investigation as well as on 

a third-party company. 239 F.R.D. at 596-97. Each of the three entities moved to quash the 

respective subpoenas for failure to comply with Rule 17(c). Id. at 597. The court found that the 

subpoenas issued to the two law firms—which referred to particular summaries, notes, 

memoranda, and reports—satisfied the specificity requirement. Id. at 599-600. The court 

explained that the requests were “neither improperly broad, nor overly vague; instead, [the 

defendant] demands access to a discrete set of existing written materials, within the possession of 

the subpoenaed parties, that pertain to events and conversations that actually occurred and relate 

to specific subject matter.” Id. at 599. 

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In contrast, the court held in Reyes that the subpoena issued to the third-party company 

failed the specificity requirement where the requests sought “all documents” relating to a number 

of policy and practices of the company as well as documents relating to a former employee of the 

company. Id. at 605-06. The defendant asserted that the documents were necessary to his defense 

because they would help him gather evidence that the former employee and not the defendant 

was responsible for the crimes alleged. The court, however, characterized the request as

“enormous in scope” and “the quintessential fishing expedition,” and noted that the subpoena 

“adopts a particular theory of defense and then casts a wide net with the goal of reeling in 

something to support it.” Id. The court explained: 

A demand for “any and all documents relating to several categories 

of subject matter . . . rather than specific evidentiary items,” 

suggests that the subpoena’s proponent “seeks to obtain 

information helpful to the defense by examining large quantities of 

documents, rather than to use Rule 17 for its intended purpose—to 

secure the production for a court proceeding of specific admissible 

evidence.”

Id. at 606 (quoting United States v. Louis, 2005 WL 180885, at *5 (S.D.N.Y. Jan. 27, 2005)). 

The court also noted that “[a] specific theory of defense . . . is not the same thing as a request for 

specific information,” and that while Rule 17(c) “demands the latter,” the defendant’s “subpoena 

provides only the former.” Id. Accordingly, the court granted the third-party company’s motion 

to quash the defendant’s Rule 17(c) subpoena. Id.

BACKGROUND

A. The Indictment

In 2004, Yates and Heine co-founded the Bank, a financial institution engaged in the 

business of personal and commercial banking and lending. The Bank is headquartered in Lake 

Oswego, Oregon. Heine served as the Bank’s President and Chief Executive Officer. As 

President and Chief Executive Officer (“CEO”), Heine supervised and managed the Bank’s 

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affairs and operations. Heine was also a member of the Bank’s Board of Directors (the “Board”). 

Heine left the Bank in 2014. Yates, a certified public accountant, served as the Bank’s Executive 

Vice President and Chief Financial Officer (“CFO”). As CFO, Yates was responsible for 

ensuring the Bank’s compliance with state and federal regulations. Yates was also the Secretary 

of the Board. She resigned from the Bank in March 2012.

Both Yates and Heine were responsible for ensuring that the Bank operated in a sound 

and safe manner and for keeping the Board informed about the Bank’s financial condition and 

the adequacy of the Bank’s policies, procedures, and internal controls. Additionally, Yates and 

Heine were members of the Bank’s Internal Loan Committee (the “ILC”). The duties of the ILC 

included approving loans that were outside the authority of individual Bank loan officers, 

ensuring the quality of the Bank’s loan portfolio, and minimizing risks in that portfolio. 

On June 24, 2015, a federal grand jury issued a twenty-seven count indictment (the 

“Indictment”) against both Yates and Heine for alleged conduct related to their time with the 

Bank. The Indictment charges Yates and Heine with one count of conspiracy to commit bank 

fraud, in violation of 18 U.S.C. § 1349, and twenty-six counts of making false bank entries,

reports, and transactions, in violation of 18 U.S.C. § 1005. The Indictment alleges that beginning 

in about September 2009 and continuing through at least September 2014, Yates and Heine 

conspired to defraud the Bank by means of materially false representations and promises. The 

Indictment further alleges that the purpose of the conspiracy was to conceal the true financial 

condition of the Bank from the Board, the Bank’s shareholders, regulators, and the public. 

According to the Indictment, Yates and Heine reported false and misleading information about 

loan performance, concealed information about the status of foreclosed properties, made 

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unauthorized transfers of Bank proceeds, and failed to disclose material facts about loans to the 

Board, shareholders, and regulators, all in an effort to conceal the Bank’s financial condition.

The Indictment also names Geoffrey Walsh (“Walsh”) as a person who played a role in 

the alleged conspiracy. Walsh was the former Senior Vice President of Lending at the Bank. 

Yates was Walsh’s manager. In May 2012, the Bank, acting through Heine, terminated the 

employment of Walsh for cause, in part based on Walsh’s alleged misconduct concerning 

lending practices. Walsh was later indicted and charged in a separate case, United States v. 

Walsh, 3:13-cr-00332-SI-1 (D. Or. 2013), for conspiracy to commit wire fraud, wire fraud, and 

conspiracy to make false entries in bank records, among other charges. On July 22, 2015, Walsh 

pleaded guilty to certain charges alleged in a superseding indictment and a second superseding 

information. In Walsh’s plea agreement, he accepted responsibility for acts related to those 

described in the Indictment against Yates and Heine. Walsh is currently awaiting sentencing. 

The Indictment against Yates and Heine alleges five schemes that purportedly advanced 

the alleged conspiracy’s purpose of creating a healthier appearance of the Bank’s finances than 

actually existed:

1. Payments Made on Delinquent Loans. The Indictment alleges that Yates and 

Heine made payments, using Bank proceeds, on behalf of Bank customers who 

were delinquent on their loans. The payments were sometimes made without the 

knowledge or consent of the Bank customer. The payments were made so that the 

delinquent loans would not appear in the “Call Reports.”2 Between approximately 

September 2009 and May 2012, Yates and Heine directed Walsh to make 

payments from his personal banking account to the accounts of Bank customers 

who were delinquent on their loans. On March 31, 2011, Yates transferred funds 

from a Bank customer’s business checking account to the customer’s personal 

loan account, which was delinquent, without the customer’s consent. Yates and 

 

2

Federal regulations required the Bank to file with the Federal Deposit Insurance 

Corporation (“FDIC”) on a quarterly basis what are commonly known as “Call Reports.” A Call 

Report contains data about the Bank’s financial position and is divided into a number of 

schedules. One of the schedules, known as “Schedule RC-N,” requires disclosure of the full 

value of outstanding loans.

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Heine’s alleged practice of paying delinquent loans with Bank or other proceeds 

hid delinquent loans that would have otherwise been included in the “Call 

Reports” and reported to the Board. 

2. Wire Transfer and Loan to Bank Customer M.K. The Indictment alleges that 

between July 2010 and September 2010, Yates and Heine “permitted an 

unsecured draw for Bank customer M.K. to be made and then approved a $1.7 

million loan for the benefit of M.K. in order to conceal the unsecured draw and to 

pay other Bank borrowers’ delinquent loans.” Dkt. 1 at 5. Yates approved the 

$675,000 unsecured draw. 

3. Straw Buyer Purchase. The Indictment alleges that from October 2010 through 

May 2011, Yates and Heine recruited a Bank employee, D.W., “to facilitate a 

straw buyer purchase of real property located at 952 A Avenue, Lake Oswego, 

Oregon 97034” (the “A Avenue Property”) with the purpose of concealing a loss 

to the Bank. Dkt. 1 at 7. Yates and Heine gave D.W. two checks totaling 

$267,727.89 from the Bank’s cash account to purchase the A Avenue Property. 

The Indictment alleges that Yates falsely represented in transactional documents 

that D.W. funded the purchase personally. 

4. Other Real Estate Owned (“OREO”) Properties Sold to Bank Customer R.C. The 

Indictment alleges that from March 2010 through June 2013, Yates and Heine 

removed two properties from the Bank’s OREO account after the properties were 

sold to a Bank borrower, R.C., “even though the sales did not meet the 

requirements to remove the properties from the account.” Dkt. 1 at 9. Yates and 

Heine did not require R.C. to make any down payment and provided R.C. with 

full financing from the Bank for both properties. As a result of the transactions, 

the properties were no longer reported on the “Call Reports” as OREO assets. On 

January 24, 2011, FDIC examiners questioned the validity of the removal of the 

properties from the Bank’s OREO account and advised Yates and Heine that the 

purchases did not meet the minimum equity requirements needed to remove the 

properties. Yates advised the FDIC examiners that R.C. was going to make down 

payments for the two homes, which would then permit the Bank properly to 

remove the properties from the OREO account. On January 31, 2011, Yates 

prepared two memos to each of the R.C. loan files that falsely stated R.C. was 

willing to make a 15 percent down payment on the properties. Yates and Heine 

represented that R.C. paid down payments for the properties, when in fact no 

payment was received by the Bank. 

5. Misrepresentation to Shareholders. The Indictment alleges that from 

September 2009 through September 2014, Yates and Heine caused the Bank to 

misrepresent to the Bank’s shareholders the Bank’s Texas Ratio, which is a 

measure of the Bank’s credit troubles, thus misrepresenting the true extent of 

delinquent loans.

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The Indictment further alleges that Yates and Heine knowingly made twenty-six false 

entries in the books, reports, and statements of the Bank with the intent to injure and defraud the 

Bank. According to the Indictment, Yates and Heine did so by omitting material information 

about the true status of loans and assets from the “Call Reports” and reports to the Board.

The jury trial on the charges against both Yates and Heine is scheduled to begin on 

November 1, 2016. Thus, seven months remain before trial.

B. Yates’s Theory of the Case

In her publicly-filed memorandum in opposition to the Bank’s motion to quash, Yates 

describes her theory of the case. See Dkt. 169 at 9-10. According to Yates, she left the Bank in 

March 2012 in the wake of a contentious FDIC investigation that was critical of Bank 

management. Before resigning, Yates compiled a list of Heine’s misconduct as Bank President 

and presented the information to the Board. Because the Board was not receptive to this 

information, Yates asserts, she had no choice but to resign. The Bank terminated Walsh two 

months later and subsequently filed a civil lawsuit against Walsh in Clackamas County Circuit 

Court. The Bank also submitted a bond claim with its insurer in an attempt to recoup losses 

allegedly caused by Walsh and Yates (the “Bond Claim”). 

In June 2012, the FDIC and the FBI began to investigate Walsh and the Bank. While 

cooperating with authorities, Heine, still the Bank’s CEO, asserted that Walsh and Yates were 

exclusively responsible for any misconduct at the Bank. Heine disclaimed all personal 

responsibility for any inappropriate lending activities. He contended that Yates was responsible 

for supervising Walsh and that she had knowledge of Walsh’s misconduct. In September 2013, 

the Bank entered into a settlement with the FDIC and the Oregon Division of Finance and 

Corporate Securities (the “DFCS”). The Consent Order required the Bank to, among other 

things, conduct detailed internal studies of management, compensation, and its loan portfolio. 

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Yates asserts her innocence and that she never knowingly or intentionally acted with a 

fraudulent purpose. She states that at all times she was a conscientious but overworked employee 

who was forced to take on responsibilities outside of her expertise. According to Yates, the

information sought by the subpoena to the Bank will show that she communicated consistently 

and honestly with Bank employees, outside auditors, and the Board; that she diligently sought 

advice and assistance from the Bank’s accounting firm, Moss Adams, LLP; that Heine and 

Walsh together, and without the knowledge of Yates, engaged in unlawful conduct; and that 

Heine shifted the blame for any misconduct onto Yates after she resigned from the Bank.

DISCUSSION

Yates’s Subpoena to the Bank contains the following nine separate requests:

Request No. One: All documents generated by the Bank or 

received from the Bank pertaining to the FDIC and DFCS

examinations from 2004 through present, including but not limited 

to working papers, final reports, correspondence, notes, and 

memoranda between Bank employees and state and federal 

examiners.

Request No. Two: All documents pertaining to internal audits and 

internal investigations from 2004 through present, including but 

not limited to internal audits and investigations by Moss Adams, 

including but not limited to working papers, final reports, 

correspondence, notes, and memoranda between Bank employees 

and auditors, including any reports, minutes, or communications 

pertaining to any internal audit committee.

Request No. Three: All documents pertaining to Bank of Oswego v. 

Geoffrey S. Walsh, Clackamas County Circuit Court Case No. 

CV1206-0128, including but not limited to all discovery and 

depositions provided or received.

Request No. Four: All documents pertaining to the Bank's Bond 

Claim with Everest Insurance following Walsh's departure from 

the Bank, including but not limited to all correspondence with the 

insurer regarding the Bond Claim.

Request No. Five: All documents pertaining to litigation between 

the Bank and current or former employees of the Bank and current 

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or former customers of the Bank, who are witnesses to the 

underlying conduct in this case, including but not limited to all 

discovery and depositions provided or received, settlement 

documents, and details of settlements entered into.

Request No. Six: All documents pertaining to In the Matter of The 

Bank of Oswego, FDIC-13-0295b, including but not limited to all 

documents pertaining to internal investigations, including 

documents concerning advice the Bank received concerning efforts 

to shift blame to Yates for conduct for which the Bank or Heine 

was accused, communications with FDIC and DFCS 

representatives, any and all documents prepared in anticipation of 

settlement, either internal or provided to the FDIC or DFCS, and 

any and all documents pertaining to the September 20, 2013, 

Consent Order in this matter.

Request No. Seven: All ILC minutes from 2004 through 2013.

Request No. Eight: All minutes of Board meetings, all Board 

reports, all audit committee minutes, reports, or communications, 

and any and all communications between the members of the 

Board and Yates, Walsh, and Heine from 2004 through present.

Request No. Nine: Copies of the Bank's server containing email 

and calendar information for Heine, Walsh, and Yates in .pst 

format.

The Bank makes several arguments that pertain to several overlapping categories of 

documents. First, the Bank argues that many of Yates’s requests fall outside the relevant time 

period as outlined in the Indictment. Second, the Bank argues that many of the requested 

documents are subject to the “bank examiner’s privilege” or are protected by the attorney-client 

privilege or the work product doctrine and thus cannot be compelled. The Court first addresses 

the relevant time period. The Court next addresses whether any privilege applies to the requested 

documents. The Court then separately addresses each of the Subpoena’s nine requests.

A. Relevant Time Period

The Bank states that many of Yates’s requests, such those seeking documents pertaining 

to the Bank’s civil lawsuit against Walsh, the Bank’s Bond Claim, and the FDIC’s investigation 

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and settlement with the Bank, either pre-date or post-date the relevant time period as outlined in 

the Indictment. The Bank argues that because the entirety of Yates’s alleged criminal conduct is 

limited to November 2009 through March 2012, Yates cannot show the relevance of documents 

that do not fall within this time period of two years and four months. 

The Court finds this argument unavailing. Yates’s defense theory is that after her 

departure from the Bank, Heine was motivated to minimize his own fault and sought to shift the 

blame to Yates for his own misconduct as well as Walsh’s. Thus, documents generated after 

Yates’s resignation in 2012 may reveal exculpatory information. Also, documents generated 

before the events alleged in the Indictment may be relevant to show Yates’s diligent, honest, and 

conscientious attempts to fulfill her duties at the Bank, and thus aid in establishing her defense.

Accordingly, Yates has demonstrated “a ‘sufficient likelihood’” that documents that pre-date or 

post-date the time period of the Indictment, at least within a certain window or timeframe, may 

be “material to any issue in the case.” Mason, 2008 WL 1909115, at *1 (D. Or. Apr. 25, 2008) 

(quoting Nixon, 418 U.S. at 700). Cf. id. at *2 (finding that the defendant did not meet the 

relevancy requirement in part where discovery provided by the government was sufficient for the 

defendant’s purposes).

B. Privileges

1. Bank Examiner’s Privilege

According to the Bank, the documents that it generated, gathered, and sent to the FDIC 

and DFCS in response to the regulatory review of the Bank are subject to what is known as the 

“bank examiner’s privilege,” and the Bank cannot waive this privilege. The bank examiner’s 

privilege protects agency opinions and recommendations, as well as banks’ responses to those 

opinions and recommendations, from disclosure. In re Bankers Trust Co., 61 F.3d 465, 471 (6th 

Cir. 1995) (citing Schreiber v. Soc’y for Sav. Bancorp, Inc., 11 F.3d 217, 220 (D.C. Cir. 1993)). 

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The bank examiner’s privilege belongs to the agency and must be asserted by it; “‘it can neither 

be claimed nor waived by a private party.’” Overby v. U.S. Fid. & Guar. Co., 224 F.2d 158, 163 

(5th Cir. 1995) (quoting United States v. Reynolds, 345 U.S. 1, 7 (1953)). Thus, the Bank cannot 

assert the privilege on behalf of the relevant agencies. 

Yates has already served a Rule 17(c) subpoena on the FDIC (the “FDIC Subpoena”). 

Dkt. 188-1 at 2. In the FDIC Subpoena, Yates made the following requests:

1. Documents pertaining to the FDIC’s regulatory examinations of 

Bank from 2004 through the present, including but not limited to, 

working papers, final reports, correspondence, notes and 

memoranda, confidentiality agreements and settlement agreements 

between the FDIC examiners and the Bank, its employees, agents, 

or representatives.

2. Copies of the email accounts and electronic calendars (in 

searchable .pst format) for Heine, Walsh, and Yates, which are 

stored on the Bank’s server, a copy of which was provided to the 

FDIC by the Bank.

3. Documents pertaining to FDIC investigations of the Bank, 

which investigations were undertaken pursuant to its statutory 

authority under 12 U.S.C. § 1820(c) and 12 C.F.R. § 308.144, et 

seq.

Id. at 5. The FDIC has already produced to Yates non-privileged materials responsive to the first 

and third requests.3The FDIC did not refuse to produce responsive documents based on the bank 

examiner’s privilege, although the FDIC did require that its production be subject to a protective 

order entered by the Court that provides, among other things, that disclosure shall not constitute 

a waiver of any privileges. Dkt. 187 ¶ 11. 

In addition, counsel for the FDIC was present at the March 30, 2016 hearing on the 

Bank’s motion to quash. Counsel for the FDIC did not assert the bank examiner’s privilege with 

 

3

The second request of the FDIC Subpoena is virtually identical to Request Number 

Nine of the Yates Subpoena to the Bank.

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regard to any of the Subpoena’s requests for production from the Bank. Thus, because the FDIC 

has not asserted the bank examiner’s privilege, and the Bank cannot assert the privilege on behalf 

of the FDIC, the Court does not reach the question of whether that privilege applies to any of the 

documents requested by Yates in her Subpoena directed to the Bank. 

2. Attorney-Client Privilege and Work Product Doctrine

The Bank also asserts that several of Yates’s requests seek large amounts of documents 

that are protected by the attorney-client privilege or the work product doctrine, which the Bank 

does not waive. Yates responds that with respect to Request Numbers One and Six, the Bank 

already has waived the attorney-client privilege when it shared its otherwise privileged

information with the FDIC and the FBI. Yates also argues that even if the attorney-client 

privilege applies to the subpoenaed documents, her constitutional right to due process outweighs

the Bank’s interest in maintaining confidentiality under its attorney-client privilege.

As the party asserting the attorney-client privilege, the Bank bears the burden of proving 

that the attorney-client privilege applies and has not been waived. United States v. Ruehle, 

583 F.3d 600, 607-08 (9th Cir. 2009). Yates asserts that as part of its cooperation with the FDIC 

and the FBI, the Bank commenced an internal investigation, and that the Bank’s outside counsel 

provided interviews to the FBI in which he shared information regarding that investigation.

Yates argues that in light of the Bank counsel’s direct involvement in providing information to 

the government, and because of the Bank’s efforts to compromise with the FDIC and avoid 

litigation, the results of the Bank’s internal investigation and the documents it prepared to 

facilitate a settlement of its own case are not protected by the attorney-client privilege. 

Yates cites United States v. Bergonzi, 216 F.R.D. 487 (N.D. Cal. 2003), in support of her 

argument that disclosure to government investigators waives the attorney-client privilege. In 

Bergonzi, the defendants, former corporate executives charged with fraud, sought production of a 

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“Report and Back-up Materials” prepared by their former company’s outside counsel. Id.

at 490-91. After the company’s auditors discovered accounting irregularities, the company hired 

outside counsel to provide legal advice and review the accounting. Id. at 490. The company and 

the Securities and Exchange Commission (“SEC”) entered into a confidentiality agreement 

stating that the company was conducting an internal investigation, likely culminating in the 

preparation of a report, and that the company would provide the report to the SEC when it was 

completed. Id. at 491. The agreement recited that the parties did not intend to waive either the 

attorney-client privilege or protection of work product. Id.

Later that month, the company’s outside counsel and the U.S. Attorney’s Office 

(“USAO”) entered into a separate, but similar, confidentiality agreement that the USAO would 

receive a copy of the Report and Back-up Materials. Id. The agreement with the USAO provided 

that the USAO could use any document produced in any criminal proceeding. Id. The company’s 

outside counsel prepared the Report and Back-up Materials, presented it to the company, and 

provided the Report and Back-up Materials to both the SEC and the USAO. Id.

The Bergonzi court considered “whether the attorney-client privilege attaches to the 

documents where [the company] agrees, prior to the creation of the documents, to disclose them 

to the Government on condition that the Government acknowledge and make efforts to maintain 

the confidential nature of the documents unless it determines, in its discretion, that it must 

disclose them.” Id. at 493. The court explained that “communications between client and 

attorney for the purpose of relaying communication to a third party is not confidential and not 

protected by the attorney-client privilege” and found that “[t]he communication between [outside 

counsel] and the Company . . . was made with the intent to relay the communication to the 

Government.” Id. Additionally, the court reasoned that the company’s authorization of the SEC 

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and the USAO to disclose the Report and Back-up Materials in certain circumstances ran

“counter to the Company’s assertion the communication was intended to remain confidential.” 

Id. Accordingly, the court held that the company failed to meet its burden of proving that the 

attorney-client privilege applied to the documents. Id.; see also Ruehle, 583 F.3d at 612 (holding 

that statements made to counsel for the purpose of outside disclosure were not protected 

attorney-client communications).

a. The Bank’s Disclosures to the FBI or the Grand Jury

The pending case is distinguishable from the facts in Bergonzi. Here, the Bank asserts 

that it retained outside counsel in order to obtain legal advice regarding the submission of its

Bond Claim to its insurer. Although the Bank contends that some of its communications with its 

own counsel regarding the Bond Claim are protected under the attorney-client privilege, the 

Bank agrees that the Bond Claim submission itself is not privileged, and the Bank represents that 

it has provided a copy of those materials to Yates. The Bank also represents that it has never 

produced confidential attorney-client communications or work product related to the Bond Claim 

to any third party. 

Unlike the voluntary disclosure of the Report and Back-up Materials in Bergonzi, the 

Bank produced to the FBI, or in response to grand jury subpoenas, only non-privileged 

information.

4 Because the information provided to the FBI or the grand jury did not contain the 

 

4 At the March 30, 2016 hearing, Yates submitted, and the Court received, Defendant’s 

Exhibit 1. Defendant’s Exhibit 1 includes several FBI FD-302 reports, or interview summaries, 

that report statements made by the Bank’s counsel to government investigators. Yates argues that 

counsel’s statements constitute a subject-matter waiver of the attorney-client privilege. See Weil 

v. Inv./Indicators, Research & Mgmt., Inc., 647 F.2d 18, 24 (9th Cir. 1981). The Bank responds 

that its counsel did not disclose any privileged information to the government and thus no waiver 

occurred. The Court has reviewed Defendant’s Exhibit 1, and does not find any subject-matter 

waiver of the attorney-client privilege. 

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Bank’s confidential attorney-client communications, the Bank has not waived its attorney-client 

privilege.

b. The Bank’s Disclosures to the FDIC

Yates also identifies a deposition of a Bank Board member taken by the FDIC during 

which the Board member mentioned the Bond Claim and Bank counsel’s advice regarding the 

Bond Claim. Yates argues that the Bank waived its attorney-client privilege with regard to all 

documents relating to its Bond Claim by disclosing to the FDIC advice that the Bank received 

from its counsel. See Weil v. Inv./Indicators, Research & Mgmt., Inc., 647 F.2d 18, 24 (9th Cir. 

1981) (stating that “it has been widely held that voluntary disclosure of the content of a 

privileged attorney communication constitutes waiver of the privilege as to all other such 

communications on the same subject.”). The Bank responds that any disclosures made to the 

FDIC do not waive the attorney-client privilege because such disclosures are statutorily 

protected. The Court agrees based on 12 U.S.C. § 1828. That statute provides, in relevant part:

The submission by any person of any information to the Bureau of 

Consumer Financial Protection, any Federal banking agency, State 

bank supervisor, or foreign banking authority for any purpose in 

the course of any supervisory or regulatory process of such 

Bureau, agency, supervisor, or authority shall not be construed as 

waiving, destroying, or otherwise affecting any privilege such 

person may claim with respect to such information under Federal 

or State law as to any person or entity other than such Bureau, 

agency, supervisor, or authority.

12 U.S.C. § 1828(x)(1) (emphasis added). In addition, the FDIC may share otherwise privileged 

information with other federal government agencies without waiving any applicable privilege. 

12 U.S.C. § 1828(t). Thus, any statements made by the Bank to the FDIC or any documents 

provided by the Bank to the FDIC cannot constitute a waiver of the Bank’s attorney-client 

privilege.

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c. Yates’s Right to Due Process

Finally, Yates argues that even if the Bank can establish that the documents she requests 

under her Subpoena are protected under the attorney-client privilege, Yates’s constitutional due 

process rights outweigh the Bank’s interest in maintaining confidentiality. Yates relies upon 

Pennsylvania v. Ritchie, 480 U.S. 39 (1987), in support of her argument. In Pennsylvania, the 

Supreme Court considered “whether and to what extent a State’s interest in the confidentiality of 

its investigative files concerning child abuse must yield to a criminal defendant’s Sixth and 

Fourteenth Amendment right to discover favorable evidence.” Id. at 42-43. Although the Court 

found that the state’s withholding of its investigative files did not violate the defendant’s Sixth 

Amendment rights, the Court held that the defendant was entitled, under due process, to have the 

files reviewed by the trial court. Id. at 56-58. The Court explained that while “the public interest 

in protecting this type of sensitive information is strong, we do not agree that this interest 

necessarily prevents disclosure in all circumstances.” Id. at 57. The Court noted that the state law 

protecting the confidentiality of such files “provides that the information shall be disclosed in 

certain circumstances, including when . . . directed to do so by court order.” Id. at 58. The Court 

held, however, that defense counsel was not allowed to examine the files, rejecting the argument 

that “whenever a defendant alleges that protected evidence might be material, the appropriate 

method of assessing this claim is to grant full access to the disputed information, regardless of 

the State’s interest in confidentiality.” Id. at 59. 

The facts in Pennsylvania are distinguishable from the pending case, and Pennsylvania

does not support Yates’s due process argument. Pennsylvania concerns the government’s 

obligations to provide a defendant with favorable evidence that is material to guilt or 

punishment, and not whether a third party can be compelled through a Rule 17(c) subpoena to 

disclose otherwise privileged material to a defendant on the grounds that the information may 

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prove exculpatory. The Pennsylvania Court did not discuss the interaction between a defendant’s 

right to due process and a third party’s assertion of its own attorney-client privilege. Thus, 

Yates’s reliance on Pennsylvania to argue that her due process right outweighs the Bank’s 

interest in confidentiality is not well-taken.5

C. The Subpoena’s Requests

1. Request No. One

In Request No. One, Yates seeks production of the following:

All documents generated by the Bank or received from the Bank 

pertaining to the FDIC and DFCS examinations from 2004 through 

present, including but not limited to working papers, final reports, 

correspondence, notes, and memoranda between Bank employees 

and state and federal examiners.

Yates argues that Request No. One meets Nixon’s relevancy requirement because she 

needs the requested information in order to demonstrate a consistent pattern and history of 

transparent and honest communication with bank examiners about all issues and to demonstrate 

that she worked diligently to correct identified problems and concerns. Yates also argues that the 

information will provide exculpatory information regarding Heine’s mismanagement of the 

Bank. Yates asserts that information that post-dates her employment at the Bank is relevant 

because it will show that Heine blamed Yates for his own misconduct. Finally, Yates argues that 

documents relating to regulatory compliance review are likely admissible under the hearsay 

exception for business records. 

 

5 Yates also cites an unpublished case from this District, United States v. Stringer, Case 

No. 3:03-cr-00432-HA (D. Or. Mar. 4, 2005) (Dkt.133), in support of her argument. Relying in 

part on Pennsylvania, the Stringer court ordered the production of a prior litigation file because 

“[a]ccording to the defendant, he made statements during the course of the . . . litigation that 

show he was unaware of any accounting fraud . . . and will be used as prior consistent statements 

at trial.” Dkt. 133 at 5. Unlike in Stringer, Yates has not made a similar showing that specific

evidence would be favorable to her defense. Additionally, Stringer is not binding authority.

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Among other arguments, the Bank responds that it cannot waive the regulators’ bank 

examiner’s privilege. The Bank assrtes that the request should be propounded to the FDIC and 

DFCS, consistent with their regulations. The Bank additionally argues that under Nixon, Yates 

may not seek these documents from the Bank when they are available with reasonable diligence 

from the regulators.

Ruling on Request No. One: The FDIC has not asserted the bank examiner’s privilege, 

and the Bank cannot assert that privilege on behalf of the FDIC. This request, however, as 

framed, is unreasonably broad and does not satisfy the “specificity” requirement of Nixon. It also 

appears to be an inappropriate “fishing expedition.” In addition, to the extent that Yates seeks 

documents protected under the Bank’s attorney-client privilege, the Bank has not waived that 

privilege. Further, the FDIC has already produced to Yates documents that are responsive to 

Yates’s first and third requests to the FDIC, which appear to cover many of the documents 

sought by Yates in this request to the Bank. Accordingly, the Bank need not produce any 

documents in response to Request No. One.

2. Request No. Two

In Request No. Two, Yates seeks production of the following:

All documents pertaining to internal audits and internal 

investigations from 2004 through present, including but not limited 

to internal audits and investigations by Moss Adams, including but 

not limited to working papers, final reports, correspondence, notes, 

and memoranda between Bank employees and auditors, including 

any reports, minutes, or communications pertaining to any internal 

audit committee.

Yates argues that Request No. Two meets Nixon’s relevancy requirement because the 

requested documents will “show that she conferred regularly with Moss Adams and routinely 

sought its guidance and advice.” Dkt. 169 at 29. Additionally, Yates asserts that the audit records 

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will reveal the nature and extent of advice that the Bank received regarding appropriate 

accounting practices and compliance. 

The Bank responds that the request is overbroad and that it is not limited by the relevant 

time frame of the transactions identified in the Indictment. The Bank additionally argues that 

Yates makes only conclusory arguments regarding relevancy. The Bank asserts that it has 

satisfied its obligations by producing to Yates responsive records with connections to 

transactions identified in the Indictment, as well as the audited financial statements for 2009 

through 2012—the years coinciding with Yates’s alleged misconduct. 

Ruling on Request No. Two: This request, as framed, is unreasonably broad and does not 

satisfy the “specificity” requirement of Nixon. It also appears to be an inappropriate “fishing 

expedition.” Notwithstanding these concerns, the Court narrows the request and directs the Bank 

to provide copies of all audited financial statements of the Bank, including any notes, exhibits, or 

appendices thereto, as well as all Management Letters to the Bank from its auditors at Moss 

Adams, LLP, for the period of 2007 through 2013. The Court has selected 2007 in order to 

provide two years’ worth of “baseline” information.

3. Request No. Three

In Request No. Three, Yates seeks production of the following:

All documents pertaining to Bank of Oswego v. Geoffrey S. Walsh, 

Clackamas County Circuit Court Case No. CV1206-0128, 

including but not limited to all discovery and depositions provided 

or received.

Yates argues that Request No. Three meets the relevancy requirement because the 

requested documents will reveal exculpatory evidence and will tend to show that Walsh reported

directed directly to Heine, rather than to Yates. Additionally, Yates argues that the requested 

documents are expected to show the extent to which Heine and Walsh conferred about 

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delinquent loans without the knowledge of Yates. Yates asserts that she seeks the following 

specific litigation documents: (1) interrogatories; (2) requests for admissions; (3) depositions; 

and (4) documents produced in discovery. 

The Bank responds that it acknowledges that in the course of the Walsh litigation, it took 

the deposition of Yates that included questions related to transactions identified in the 

Indictment. The Bank agrees to produce a copy of that deposition and its accompanying exhibits. 

The Bank argues that the remainder the litigation file is not relevant, admissible, or sufficiently 

identified, and that the Walsh case post-dates both Yates’s alleged misconduct as well as her 

departure from the Bank. The Bank additionally argues that the case file contains principally 

privileged communications and attorney work product, and that the effort in segregating 

privileged from non-privileged information is unduly burdensome. 

Ruling on Request No. Three: This request, as framed, is unreasonably broad and does 

not satisfy the “specificity” requirement of Nixon. It also appears to be an inappropriate “fishing 

expedition.” Notwithstanding these concerns, the Court narrows the request and directs the Bank 

to provide copies of all written discovery exchanged and transcripts of all depositions taken, 

including exhibits, in the referenced civil lawsuit. 

4. Request No. Four

In Request No. Four, Yates seeks production of the following:

All documents pertaining to the Bank's Bond Claim with Everest 

Insurance following Walsh's departure from the Bank, including 

but not limited to all correspondence with the insurer regarding the 

Bond Claim.

Yates argues that Request No. Four meet Nixon’s relevancy requirement because, as with 

Request No. One, the requested information will demonstrate the Bank’s pattern of shifting 

blame away from Heine and the Bank and onto Yates. Yates argues that the Bank’s records 

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regarding the Bond Claim will show the extent to which Heine and the Bank sought to direct 

responsibility for the losses exclusively at Yates and Walsh. Yates asserts that information that 

post-dates her employment at the Bank is relevant because it will show that Heine blamed Yates 

for his own misconduct. Finally, Yates argues that these documents are admissible because they 

go to Heine’s motive, bias, and opportunity to shift blame from his and Walsh’s wrongdoing 

onto Yates. Yates additionally argues that the documents are admissible because they will show 

that Heine engaged in insurance fraud by presenting false and misleading facts to the insurer 

with the intent to obtain money for losses caused by his own wrongdoing. The Bank has 

produced the Bond Claim to Yates. The Bank, however, responds that it need not produce “all 

documents pertaining” to the Bond Claim as the request is overbroad and would capture 

attorney-client and attorney work product information.6

Ruling on Request No. Four: This request, as framed, is unreasonably broad and does not 

satisfy the “specificity” requirement of Nixon. It also appears to be an inappropriate “fishing 

expedition.” Notwithstanding these concerns, the Court narrows the request and directs the Bank 

to provide, to the extent not already provided, a complete copy of the entire Bond Claim that the 

Bank submitted to its insurer, along with all correspondence and other documents relating to the 

Bond Claim that the Bank or its counsel exchanged with the Bank’s insurer or its counsel. 

 

6 Yates replies that the crime-fraud exception to the attorney-client privilege voids the 

Bank’s assertion of privilege as to the Bond Claim documents. The Ninth Circuit instructs that 

“[u]nder the crime-fraud exception, communications are not privileged when the client ‘consults 

an attorney for advice that will serve him in the commission of a fraud’ or crime.” In re Grand 

Jury Investigation, 810 F.3d 1110, 1113 (9th Cir. 2016) (quoting In re Napster, Inc. Copyright 

Litig., 479 F.3d 1078, 1090 (9th Cir. 2007), abrogated in part on other grounds by Mohawk 

Indus., Inc. v. Carpenter, 558 U.S. 100 (2009)). Because the Court quashes Request No. Four for 

lack of specificity, with the exception of the Bond Claim itself, the Court need not reach the 

question of whether the crime-fraud exception to the attorney-client privilege applies.

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5. Request No. Five

In Request No. Five, Yates seeks production of the following:

All documents pertaining to litigation between the Bank and 

current or former employees of the Bank and current or former 

customers of the Bank, who are witnesses to the underlying 

conduct in this case, including but not limited to all discovery and 

depositions provided or received, settlement documents, and 

details of settlements entered into.

Yates argues that Request No. Five meets Nixon’s relevancy requirement because it 

relates to the concerns that Yates raised with the Board regarding Heine’s misconduct, and will 

corroborate Yates’s allegations of Heine’s mismanagement of the Bank. The Bank responds that 

the request targets entire files that contain principally privileged communications and attorney 

work product, and that Yates cannot identify the files with any specificity or even state whether 

they exist. The Bank points out that without specifically identifying the documents, Yates cannot 

meaningfully address their admissibility. The Bank additionally argues that the effort in 

segregating privileged from non-privileged information is unduly burdensome.

Ruling on Request No. Five: This request, as framed, is unreasonably broad and does not 

satisfy the “specificity” requirement of Nixon. It also appears to be an inappropriate “fishing 

expedition.” Accordingly, the Bank need not produce any documents in response to Request 

No. Five.

6. Request No. Six

In Request No. Six, Yates seeks production of the following:

All documents pertaining to In the Matter of The Bank of Oswego, 

FDIC-13-0295b, including but not limited to all documents 

pertaining to internal investigations, including documents 

concerning advice the Bank received concerning efforts to shift 

blame to Yates for conduct for which the Bank or Heine was 

accused, communications with FDIC and DFCS representatives, 

any and all documents prepared in anticipation of settlement, either 

internal or provided to the FDIC or DFCS, and any and all 

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PAGE 29 – OPINION AND ORDER

documents pertaining to the September 20, 2013, Consent Order in 

this matter.

Yates argues that Request No. Six meets Nixon’s relevancy requirement because the 

requested documents will show the extent to which the Bank was able to direct the focus of the 

investigation away from Heine and toward Yates. Yates asserts that the Bank and Heine were 

highly motivated to minimize their own fault, and that the requested information will provide 

Yates with exculpatory evidence regarding this motivation. Finally, Yates argues that documents 

relating to regulatory compliance review are likely admissible under the hearsay exception for 

business records. The Bank responds that it cannot waive the regulators’ bank examiner’s 

privilege. The Bank argues that the request should be propounded upon the FDIC and DFCS, 

consistent with their regulations. The Bank additionally argues that under Nixon, Yates may not 

seek these documents from the Bank when they are available with reasonable diligence from the 

regulators.

Ruling on Request No. Six: The FDIC has not asserted the bank examiner’s privilege, 

and the Bank cannot assert that privilege on behalf of the FDIC. This request, however, as 

framed, is unreasonably broad and does not satisfy the “specificity” requirement of Nixon. It also 

appears to be an inappropriate “fishing expedition.” In addition, to the extent that Yates seeks 

documents protected under the Bank’s attorney-client privilege, the Bank has not waived that 

privilege. Further, the FDIC has already produced to Yates documents that are responsive to 

Yates’s first and third requests to the FDIC, which appear to cover many of the documents 

sought by Yates in this request to the Bank. There are four categories of documents responsive to 

Request No. 6 that are not likely to be contained in the FDIC’s production to Yates, that may 

satisfy Nixon, and that might not be privileged. Accordingly, the Bank is directed to provide to 

the Court within two weeks for the Court’s in camera review copies of the following: (1) any 

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PAGE 30 – OPINION AND ORDER

reports, presentations, or correspondence sent or provided to the Bank by Troubled Assets 

Solution between 2009 and 2013; (2) any reports, presentations, or correspondence sent or 

provided to the Bank by Mr. Richard Tine, relating to any forensic accounting work that he 

performed for the Bank, between 2009 and 2013; and (3) any reports, presentations, or 

correspondence sent or provided to the Bank that constitute “internal investigations” of any of 

the matters alleged in the Indictment, to the extent that such documents were not already 

provided to the FDIC and thus already likely included in that agency’s response to Yates’s 

subpoena; and (4) any reports, presentations, or correspondence sent or provided to the Bank 

related to the Bank’s settlement agreement with the FDIC or the September 20, 2013 Consent 

Order, to the extent that such documents would not already be in the possession of the FDIC and 

likely included in that agency’s response to Yates’s subpoena.

7. Request No. Seven

In Request No. Seven, Yates seeks production of the following:

All ILC minutes from 2004 through 2013.

Yates argues that Request No. Seven meets Nixon’s relevancy requirement because the 

requested documents will show that Heine was centrally involved in loan-making decisions, 

although he now claims that he knew little or nothing about delinquent loans and had minimal 

involvement in loan approvals. Thus, Yates argues, the requested information will disprove 

Heine’s claim of lack of knowledge regarding fraudulent loan reporting. Additionally, Yates 

asserts that the requested information will establish that she played a minimal role in the Bank’s 

lending practices and was more focused on Bank operations. The Bank responds that the 

Indictment does not relate to activity prior to 2009, and that thus pre-2009 documents are 

irrelevant. The Bank agrees to produce its ILC minutes for 2009 through 2013, subject to 

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PAGE 31 – OPINION AND ORDER

redactions for attorney-client privilege or work product, bank examiner’s privilege, and 

statutorily required non-disclosure of certain Bank activity. 

Ruling on Request No. Seven: The Bank has already agreed to produce its ILC minutes 

from 2009 through 2013. The Bank is directed to begin that production two years earlier, starting 

with ILC minutes prepared in 2007, in order to provide “baseline” information. The Bank may 

redact information protected against disclosure under the attorney-client privilege. 

8. Request No. Eight

In Request No. Eight, Yates seeks production of the following:

All minutes of Board meetings, all Board reports, all audit 

committee minutes, reports, or communications, and any and all 

communications between the members of the Board and Yates, 

Walsh, and Heine from 2004 through present.

Yates argues that Request No. Eight meets Nixon’s relevancy requirement because the 

requested documents are necessary to establish that Yates’s communicated with the Board from 

the time of the Bank’s founding until her departure with full transparency. The Bank responds 

that the request is overly broad because the Indictment does not relate to activity prior to 2009. 

The Bank agrees to produce Board meeting minutes, Board reports, and audit committee minutes 

for 2009 through 2013, subject to redactions for attorney-client privilege or work product, bank 

examiner’s privilege, and statutorily required non-disclosure of certain Bank activity. 

Ruling on Request No. Eight: The Bank has already agreed to produce its Board meeting 

minutes, Board reports, and audit committee minutes for 2009 through 2013. The Bank is 

directed to begin that production two years earlier, starting with responsive document prepared in 

2007, in order to provide “baseline” information. The Bank may redact information protected 

against disclosure under the attorney-client privilege.

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9. Request No. Nine

In Request No. Nine, Yates seeks production of the following:

Copies of the Bank's server containing email and calendar 

information for Heine, Walsh, and Yates in .pst format.7

Yates argues that Request No. Nine meets Nixon’s relevancy requirement because the 

requested documents will demonstrate the extent to which Heine and Walsh communicated about 

the loans and transactions at issue in the Indictment. Additionally, Yates argues that she requires 

a complete set of her email to demonstrate that she diligently relied on the advice of auditor 

Moss Adams. Yates asserts that her electronic calendar information is necessary to demonstrate 

that she was overworked and overextended, and thus had neither the time nor the expertise to be 

involved in the details of the fraudulent transactions the Indictment describes. The Bank 

responds that this request is overly broad because it would capture sensitive Bank customer 

records and a large amount of attorney-client privileged communications, as well as information 

irrelevant to the charges in the Indictment. The Bank proposes that Yates provide search terms 

that target the transactions at issue in the Indictment. 

Ruling on Request No. Nine: The Bank is directed to provide, in .pst format, a copy of all 

emails and calendar information from 2007 through 2013 from its server for custodians Dan 

Heine, Diana Yates, and Geoffrey Walsh, although the Bank may exclude or redact information 

protected against disclosure by the attorney-client privilege. In order to reduce its burden, the 

Bank may consider searching for all emails sent to, copied to, or received from a named attorney 

for the Bank or that contain words or phrases such as “attorney,” “legal advice,” or “legal 

counsel,” before conducting its privilege review. In addition, the Bank’s production may be 

 

7

The FDIC, as well as the Bank, possesses copies of the server in .pst format. The 

prosecution has provided Yates with some emails it obtained from the FDIC in .pdf format; 

however, according to Yates, the email set the prosecution provided her with is incomplete. 

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PAGE 33 – OPINION AND ORDER

placed under a suitable protective order that contains, among other provisions, a “claw-back” for 

inadvertently produced privileged information and a requirement that any recipient of documents 

produced by the Bank pursuant to this Request No. Nine provide reasonable advance notice to 

the Bank before submitting any such document under this request not under seal or seeking to 

introduce any such document under this request as a trial exhibit. In addition, if these procedures 

prove to be unreasonably burdensome to the Bank, it has leave to seek further assistance from 

the Court on this issue. 

CONCLUSION

The Bank’s Motion to Quash or Modify Defendant Yates’s Rule 17(c) Subpoena 

(Dkt. 124) is GRANTED IN PART and DENIED IN PART as described in this Opinion and 

Order.

IT IS SO ORDERED.

DATED this 31st day of March, 2016.

/s/ Michael H. Simon

Michael H. Simon

United States District Judge

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