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-238-SI

OPINION AND ORDER ON 

DEFENDANT YATES’S

MOTION FOR RELIEF REGARDING 

BANK’S PRIVILEGE LOG AND 

EMAILS

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

P. Harrington, 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.

Jeffrey Alberts and Mark Weiner, PRYOR CASHMAN, LLP, 7 Times Square, New York, NY 

10036; Caroline Harris Crowne and Michael C. Willes, TONKON TORP, LLP, 1600 Pioneer 

Tower, 888 S.W. Fifth Avenue, Portland, OR 97204. Of Attorneys for Defendant Dan Heine.

Janet Lee Hoffman, Kelsey R. Jones, Andrew T. Weiner, and Katherine Feuer, JANET HOFFMAN 

& ASSOCIATES, LLC, 1000 S.W. Broadway, Suite 1500, Portland OR 97205; Matthew J. 

Kalmanson, HART WAGNER LLP, 1000 S.W. Broadway, Suite 2000, 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.

Case 3:15-cr-00238-SI Document 473 Filed 10/21/16 Page 1 of 10
PAGE 2 – OPINION AND ORDER

Michael H. Simon, District Judge.

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

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

that they were the two most senior officers of The Bank of Oswego (the “Bank”). ECF 1. Before 

the Court is Defendant Yates’s Motion for Relief Regarding Bank’s Privilege Log and Emails

(ECF 455). For the reasons discussed below, Yates’s motion is granted in part.

BACKGROUND

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 Bank filed a Motion to Quash or Modify 

Yates’s Subpoena. ECF 124. One of the arguments raised by the Bank was that several of 

Yates’s requests seek documents that are protected from disclosure under the attorney-client 

privilege or the work product doctrine, which the Bank did not waive. On March 31, 2016, the 

Court granted in part and denied in part the Bank’s motion. ECF 201. Among other things, the 

Court directed the Bank to provide to the Court for in camera review copies of certain 

documents that the Bank sought to withhold on the ground of privilege. Id. at 29-30. 

The Bank provided to the Court 207 documents in .pdf format and five files in .wav 

format. On May 31, 2016, after conducting an in camera review, the Court identified 58 .pdf

documents that appeared to be privileged and ordered that those documents need not be 

produced. ECF 241 at 2-3. The Court also found that the remaining 149 .pdf documents 

(reflecting 72 percent of all .pdf documents withheld by the Bank and submitted to the Court for 

in camera review) and all five .wav files were not attorney-client privileged. As the Court 

explained in its Order, 

Many of these documents show that they were copied to the 

Federal Bureau of Investigation or sent to the Federal Deposit 

Insurance Corporation (including Suspicious Activity Reports). 

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Other documents appear to be ordinary business records that do not 

appear to contain any confidential communication in furtherance of 

the rendition of professional legal services or reasonably necessary 

for the transmission of any such communication. See Or. Rev. Stat. 

§ 40.225 (Oregon Evidence Code Rule 503). Other documents 

include photographs that do not appear to communicate 

confidential communication and items that were publicly filed with 

a state court (including pleadings and writs of garnishment). And 

one document sent to the Court for in camera review is just a blank 

page with a “confidential” footer (Doc. 1236).

Id. at 4.

On June 15, 2016, the Bank moved for reconsideration regarding six documents. 

ECF 262. On June 17, 2016, the Court largely denied the Bank’s motion, but allowed the Bank 

to make certain limited redactions in several of the documents. ECF 268. In its Order, the Court 

stated:

As explained in one of the leading treatises on attorney-client 

privilege:

Perhaps the most vexing legal challenge with e-mail 

communications has been the tendency of entity 

defendants to exaggerate attorney-client privilege 

claims simply because lawyers’ names appear in 

headers, either as addressees or copyees. Such 

blanket, sweeping invocations of the privilege 

obviously ignore the principle that communications 

received by an attorney are protected by the 

privilege only if the primary purpose of the 

communications (or segregable portions of them) 

was to obtain legal advice or assistance. Far too 

often, however, business e-mails are copied or 

addressed to lawyers simply to try to make it appear 

that the privilege applies when it, in fact, does not 

because the communication’s primary purpose is 

business, not legal. When this occurs, of course, the 

claims of privilege must be denied.

Paul R. Rice, 1 ATTORNEY-CLIENT PRIVILEGE IN THE UNITED

STATES § 5:20 at 882 (2015) (emphasis added) (footnotes omitted). 

See also Phillips v. C.R. Bard, Inc., 290 F.R.D. 615, 630 (D. Nev. 

2013) (“the court agrees that merely copying or “cc-ing” legal 

counsel, in and of itself, is not enough to trigger the attorney-client 

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privilege. Instead, each element of the privilege must be met when 

the attorney-client privilege is being asserted, and the court will 

review each communication at issue with this in mind.”).

ECF 268 at 2-3.

In June 2016, the Bank began to produce responsive documents to Yates. On 

September 6, 2016, the Bank provided a privilege log to Yates that contains 5,120 separate 

entries for documents withheld by the Bank under a claim of privilege. ECF 455 at 5. As 

explained by Yates in her pending motion, the Bank’s privilege log

contains categories that identify who sent, received, and were copied 

on each email. There are categories called “datesent” “docdate” and 

“createdate.” The “datesent” category appears to be the date the email 

was sent but the other two are mostly blank and their significance is 

unknown. There is a category called “subject” and another called 

“name,” however, the content of these field[s] is inconsistent. The 

“subject” category appears to identify the subject or “re:” line of the 

email. The “name” line is mostly blank throughout the log, although 

at times it may identify an attachment. Around entry 695, what 

presumably is the “re:” line of the email now appears in the “name” 

category, and the “subject” category is blank—this pattern reverses 

around entry 2475 and again around entry 3989.

The privilege log does not contain sufficient information to determine 

the bases for the claims of privilege. In some cases it is selfexplanatory because it is an email “from” a lawyer, but in many 

others it is not.Indeed, many of the entries reflect communications 

that were not sent to, received by, or even copied to an attorney. (See, 

e.g., entries 5, 46, 86, 91, 92, 95, 96, 97, 98, 106, 113, 116, 117, 118, 

121, 122, 130, 227). Others “cc:” an attorney, but based on the 

“subject” or “name,” it is difficult to understand the basis for 

privilege. For example, the Bank withheld emails that attach drafts of 

Board minutes, which are key documents in this case. (See, e.g., 

entries 1, 2, 3, 4, 5, 87). Other emails were sent by the FDIC, and thus 

cannot be privileged under any theory. (See, e.g., entries 911, 1122, 

2448, 3390). Finally, it appears that every document for which the 

Bank asserts privilege was wholly withheld—based on a review of 

documents the Bank did produce, it does not appear that there is a 

single redacted document except for those produced pursuant to this 

Court’s order after in camera review of the TAS documents.

ECF 455 at 5-6 (footnote omitted).

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DISCUSSION

Yates and the Bank continue to disagree over the Bank’s responses to Yates’s subpoena. 

On October 14, 2016, Yates filed Defendant Yates’s Motion for Relief Regarding Bank’s 

Privilege Log and Bank’s Purportedly Privileged Emails. ECF 455. Yates asks the Court

(1) to require the Bank to certify that it has authority to assert 

privilege; (2) conduct in camera review of the emails on the 

Bank’s privilege log, or appoint a Special Master to do so; (3) 

require the Government to produce all privileged documents from 

the Bank’s emails that qualify as Brady or Giglio material; and (4) 

conduct in camera review of all privileged documents that relate in 

any way to the Bank’s investigation of Geoff Walsh or Diana 

Yates, so the Court can determine whether they are subject to the 

crime-fraud exception.

Id. at 2. On October 18, 2016, the Bank responded to Yates’s motion. ECF 465.1

A. Conference of Counsel

In her motion, Yates represents that “Counsel for Ms. Yates sent emails to counsel for the 

Bank of Oswego ( the ‘Bank’) raising concerns about discovery, including about the privilege 

log, and requesting to confer. The Bank did not respond.” ECF 455 at 1. In its response to the 

pending motion, the Bank opposes Yates’s motion solely on the ground that Yates failed to

comply with her obligation to confer before filing a motion. ECF 465 at 1, citing ECF 213 

(Order dated April 5, 2016, directing that “all parties are ordered to confer with opposing counsel 

before filing any further motions in this case and shall certify in the first paragraph of any future 

motions that the required conference has occurred”). The Bank added in a footnote: “To the 

extent the Court declines to deny Yates’s motion at this time, the Bank reserves all rights to file a 

response in opposition to the substance of Yates’s motion.” ECF 465 at 1 n.1. The Bank, 

 

1

The Government’s response to points (3) and (4) of Yates’s motion is due on 

October 28, 2016. Accordingly, the Court in this Order only addresses points (1) and (2), which 

apply to the Bank.

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PAGE 6 – OPINION AND ORDER

however, had no such right to reserve. The Bank never sought, let alone received, permission 

from the Court to split its arguments and file a second response if the Court did not accept the 

Bank’s first response. Thus, the Court considers as the Bank’s only response its argument that 

Yates did not adequately confer before filing her motion on October 14, 2016.

On the merits of this response, the Court rules against the Bank. On September 22, 2016, 

at 4:53 p.m., counsel for Yates sent an email to counsel for the Bank. The subject line states: 

“Bank of Oswego Privilege Log.” The entirety of the body of that email reads:

I am writing you concerning the privilege log the Bank produced 

on September 6, 2016. We have gone through a portion of the 

5000+ entries, and we cannot tell the bases for your claims of 

privilege. Many of the entries reflect communications that were not 

sent to or received from an attorney. (See, e.g., # 5, 46, 86, 91, 92, 

95, 96, 97, 98, 106, 113, 116, 117, 118, 121, 122, 130, 227, etc.). 

Other entries have an attorney copied on the email, but based on 

the subject line, it is difficult to see how the entire document could 

be privileged. (See, e.g., # 1, 2, 3, 4, 5, 87, etc.).

We refer you to Judge Simon's Order on the Bank of Oswego’s 

Motion for Reconsideration (Dkt. 268), where he noted that simply 

because an attorney is copied on a communication does not make 

the communication privileged. For the attorney-client privilege to 

apply, the primary purpose of the communication must be to give 

or receive legal advice, or communicate the results of legal advice. 

It is apparent from our review of the documents the Bank produced 

following the Court's in camera review that this is why Judge 

Simon previously rejected most of your claims of privilege 

regarding the TAS documents. Furthermore, the presence of an 

attorney-client privileged communication in what is otherwise a 

non-privileged document is not a basis to withhold the entire 

document. See again the Court's Order on the Bank’s Motion for 

Reconsideration, in which Judge Simon ordered production of 

documents containing privileged passages subject only to redaction 

of those passages.

We did not go through every one of the 5120 entries because we 

cannot evaluate your claims given the information you provided. 

Please give me a call to discuss.

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ECF 469 at 17. According to Yates’s counsel, the Bank did not respond to that email. ECF 455 

at 1. In its response to Yates’s pending motion, the Bank did not deny that assertion. ECF 465.

The Court considers Yates’s email sent on September 22, 2016, to be a sufficient 

(although not preferred) conference of counsel, especially in light of the history of discovery 

disputes concerning the Bank’s assertion of privilege in this case. Thus, because the only 

argument advanced by the Bank is that Yates failed to confer and the Court finds the Bank’s 

argument on that point to be insufficient, the Court grants Yates’s motion to the extent that it 

applies to the Bank.

B. Order to the Bank

The Court recognizes that the Bank is a third-party in this criminal case. Further, the 

Court recognizes that, at least according to the Indictment and the Government’s theory of the 

case, the Bank is a victim of criminal conduct alleged to have been committed by Heine and 

Yates. Thus, in this Order, the Court will attempt to reduce the burden and expense on the Bank 

of complying with Yates’s motion, at least to the extent that it reasonably can be done consistent 

with Yates’s rights.

It is hereby Ordered that not later than Monday, October 31, 2016, the Bank (and, 

where applicable, Yates) shall comply with the following:

1. Within the next four calendar days, the Bank and Yates shall promptly confer to 

determine whether they can agree upon which of the 5,120 entries in the Bank’s privilege log 

concern documents that are “unrelated to the government’s case or Ms. Yates’s defense.” See

ECF 470 at 2, ¶ 6. To the extent that the Bank and Yates agree, but only to that extent, any such 

irrelevant documents need not—and should not—be provided to the Court for in camera

inspection pursuant to this Order.

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2. After reducing the 5,120 entries pursuant to ¶ 1 above (if any such reduction is 

possible), the Bank may elect to comply with this Order by delivering to Yates copies of some or 

all of the 5,120 documents previously withheld as privileged, and, because such a production 

would be pursuant to Court Order, the Court further expressly Orders that any such document 

produced pursuant to this Order will not constitute either a waiver of the attorney-client privilege 

for any such document produced or a subject matter waiver for the subject matter of any such 

document. In other words, in order to reduce the burden and expense on the Bank, the Bank may 

elect under this Order simply to produce all (or most) of the withheld relevant and responsive 

documents and such a production will not constitute a waiver of any privilege, either for the 

produced document or its subject matter.

3. For all withheld documents, if any, that are not produced pursuant to ¶ 2 above 

and that have not been excluded pursuant to ¶ 1 above, the Bank shall prepare and file a revised 

privilege log that clearly and separately states, for each such document still being withheld,

sufficient information for the Court to determine whether the document is being properly 

withheld. For each specific document still being withheld by the Bank under a claim of attorneyclient privilege, the Bank in its revised privilege log must provide sufficient information to show 

that: (1) legal advice has been sought from a professional legal adviser acting in his or her 

capacity as such; (2) the document being withheld is a communication relating to that purpose; 

and (3) the document reflects a communication that either was made in confidence by the client 

or reveals a communication made in confidence by the client. Further, no attorney-client 

privilege may be claimed for any communication when the privilege has been waived by 

disclosure to a third-party. In addition, if only a portion of a document being withheld is 

privileged, the Bank must provide to Yates redacted copies of that document and must indicate in 

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its revised privilege log precisely what portion of the document has been redacted in a manner 

that will facilitate efficient in camera inspection by the Court.

4. The Bank shall provide to the Court for in camera inspection copies (either 

electronic or paper, at the Bank’s election) of all documents still being withheld, if any, that are 

listed in the Bank’s revised privilege log described in ¶ 3 above. The Court will carefully review 

in camera each such submitted document (or redacted portion of such document) being withheld 

by the Bank, along with the Bank’s revised privilege log, to determine whether a document (or 

redaction) has been properly withheld by the Bank.

5. Only documents (or redactions) that are proper to be withheld under the attorneyclient privilege or work product doctrine may be withheld by the Bank on those bases. If the 

Court finds that this Order (including this ¶ 5) has not been complied with concerning any of the 

documents submitted to the Court for in camera inspection pursuant to this Order, the Court may 

enter an order sua sponte directing the Bank, its counsel, or both to show cause why sanctions, 

including contempt, should not issue.

6. Finally, to the extent that any documents are being submitted to the Court for in 

camera review, because the Bank’s assets have been sold to a third-party (as stated by Yates in 

her motion), the Bank must file, along with the Bank’s revised privilege log, a declaration 

certifying that the Bank continues to have the legal authority to assert the attorney-client 

privilege. See United States v. Chen, 99 F.3d 1495, 1502 (9th Cir. 1996) (“[W]hen control of a 

corporation passes to new management, the authority to assert and waive the corporation’s 

attorney-client privilege passes as well.”) (brackets in original) (quotation marks and citation 

omitted).

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CONCLUSION

Defendant Yates’s Motion for Relief Regarding Bank’s Privilege Log and Emails

(ECF 455), is granted in part against the Bank; Yates’s motion remains pending as against the 

United States.

IT IS SO ORDERED.

DATED this 21st day of October, 2016.

/s/ Michael H. Simon

Michael H. Simon

United States District Judge

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