United States Court of Appeals

for the Fifth Circuit

No. 19-20624

Harbor Healthcare System, L.P., 

Plaintiff—Appellant,

versus

United States of America, 

Defendant—Appellee.

Appeal from the United States District Court

for the Southern District of Texas

USDC No. 4:18-CV-3195

Before Higginbotham, Elrod, and Haynes, Circuit Judges.

Per Curiam:*

Harbor Healthcare System, L.P., filed a pre-indictment motion under 

Rule 41(g) of the Federal Rules of Criminal Procedure, seeking return of 

documents seized by the United States in five searches of Harbor locations 

and offices. After exercising its discretionary equitable jurisdiction for a time 

to oversee the implementation of protective processes to screen Harbor’s 

* Pursuant to 5th Circuit Rule 47.5, the court has determined that this 

opinion should not be published and is not precedent except under the limited 

circumstances set forth in 5th Circuit Rule 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

July 15, 2021

Lyle W. Cayce

Clerk

Case: 19-20624 Document: 00515939908 Page: 1 Date Filed: 07/15/2021
No. 19-20624

2

privileged information, the district court declined to exercise that equitable 

jurisdiction further and dismissed the case. Harbor appealed, seeking 

reversal of the district court’s decision to not reach the merits of Harbor’s 

motion. Because we have jurisdiction to consider this appeal and because the 

district court erred in its assessment of the pre-indictment harm resulting 

from an allegedly unlawful seizure of privileged material, we REVERSE and 

REMAND.

I.

Harbor became the subject of two qui tam lawsuits—filed in 2014 and 

2016—alleging violations of the False Claims Act, 31 U.S.C. §§ 3729–3733. 

As part of its investigation into the allegations of those qui tam lawsuits, the 

United States Department of Health and Human Services, Office of 

Inspector General issued a “Request for Information” regarding certain 

patients from Harbor.

The Civil Division of the Department of Justice then issued a Civil 

Investigative Demand to Harbor in March of 2017, seeking documents and 

answers to interrogatories. Harbor responded to the demand in April of 2017, 

producing those documents and answers to the interrogatories.

Eric Sprott, Harbor’s Director of Compliance, coordinated Harbor’s 

response to the Request for Information and the Civil Investigative Demand. 

Sprott hired Justo Mendez—a solo practitioner and former general counsel 

of Harbor—as outside counsel to assist in the response to the Civil 

Investigative Demand. Both Sprott and Mendez communicated with 

attorneys in the United States Attorney’s Office for the Eastern District of 

Texas and the Department of Justice regarding the Civil Investigative

Demand.

The Department of Justice shared the allegations in the qui tam

actions with its prosecutors to investigate possible criminal activity. 

Case: 19-20624 Document: 00515939908 Page: 2 Date Filed: 07/15/2021
No. 19-20624

3

Prosecutorsfrom the United States Attorney’s Office for the Eastern District 

of Texas sought warrants to search Harbor locations and offices. The 

warrants were signed by magistrate judges from the Western District of 

Louisiana and the Eastern and Southern Districts of Texas. The warrants 

authorized seizure of twenty-two broad categories of documents dating from 

January 1, 2010 to May 2017 as well as “[c]ellular telephones, [s]mart 

phones, iPads, tablets or other mobile electronic devices used in the course 

of business” and stored e-mail exchanges between Harbor employees, 

agents, and representatives.

The government executed those search warrants on May 18, 2017. 

The government seized twenty-nine smartphones, twenty computers and 

computer hard drives, and the e-mail accounts of seventeen employees. In 

total, the government seized 3.59 terabytes of data and hundreds of boxes of 

paper records. As part of the search, the government seized Sprott’s 

computer, e-mail account, iPhone, and all of the paper documents in his 

office. Harbor asserts that these materials contained a wealth of information 

protected by the attorney–client privilege, including recent communications 

with Mendez regarding the government’s Civil Investigative Demand.

The government assembled a “filter team” from “another division of 

the Eastern District” to review the seized documents for privileged 

materials. At the government’s request, Harbor provided a list of the names 

of lawyers and law-firms “who might have emailed with Harbor employees.” 

According to Harbor, the government did not inform the magistrate judges 

who authorized the search warrants that the government had seized 

privileged material from Harbor.

Harbor repeatedly attempted, but ultimately failed, to meet with the 

head of the government’s taint team to discuss the return of privileged 

documents. On September 7, 2018, Harbor filed a motion under Federal 

Case: 19-20624 Document: 00515939908 Page: 3 Date Filed: 07/15/2021
No. 19-20624

4

Rule of Criminal Procedure 41(g) in the United States District Court for the 

Southern District of Texas. Because there was not yet any criminal 

proceeding against Harbor, the motion was filed as its own civil case. See

Fed. R. Crim. P. 41(g); Bailey v. United States, 508 F.3d 736, 738 (5th Cir. 

2007).

The government did not timely respond to Harbor’s motion, so 

Harbor moved first for an entry of default and then for default judgment 

against the government. The district court scheduled a hearing on the 

motions. The government responded by filing a motion to transfer to the 

Beaumont Division of the Eastern District of Texas, where the government’s 

criminal investigation originated and where Harbor’s corporate offices are

located. At the December 4, 2017 hearing, the district court denied the 

motions for entry of default and default judgment and declined to rule on the 

motion to transfer.

The district court also declined to enter a scheduling order or set 

deadlines for the government to screen and return privileged information. 

Instead, the district court encouraged the parties to test a proposed privilegescreening plan: first, the government would give Harbor information about 

documents seized from Sprott; second, Harbor would produce a privilege 

log; and third, the government would file any objections to assertions of 

privilege. Once this screening process was complete, the district court would 

review the privilege log and objections and determine how to proceed. As a 

test run, this screening process would be conducted only on Sprott’s e-mail

account but not yet on the sixteen other e-mail accounts, nor on the 

information from the twenty-nine smartphones and twenty computers, nor 

on the physical documents seized.

On February 8, 2019, the government moved to dismiss Harbor’s civil 

case for lack of equitable jurisdiction. The government argued that Harbor 

Case: 19-20624 Document: 00515939908 Page: 4 Date Filed: 07/15/2021
No. 19-20624

5

had not “demonstrate[d] any irreparable harm to its legitimate property 

interests” and that the Rule 41(g) motion was mooted by the privilegescreening plan. The government characterized the Rule 41(g) motion as an 

“improper suppression motion.”

Meanwhile, Harbor identified 3,843 e-mails from Sprott’s account as 

privileged. Harbor also received from the government a list of documents 

that had already been transferred from the government’s filter team to its 

civil and criminal investigators. Based on this list, Harbor asserted in an April 

2, 2019 letter to the district court that “a significant number of privileged 

documents” had already made their way into the hands of investigators. 

Harbor thus requested that the district court rule in its favor on its Rule 41(g) 

motion and order the government to return all seized documents to Harbor.

The district court granted the government’s motion to dismiss on 

August 19, 2019. The district court explained that it would no longer exercise 

its equitable jurisdiction over Harbor’s Rule 41(g) motion because it was 

assured that processes were in place to protect Harbor’s privileged 

information. In its order, the district court emphasized two aspects of the 

government’s investigation that it considered adequate to protect Harbor. 

First, the parties “reached a working agreement to reasonably address 

Harbor’s assertions of privilege” through the joint privilege-screening plan. 

Second, “Harbor may make its arguments in a post-indictment motion to 

suppress, if an indictment is ultimately returned” against Harbor.

Harbor filed an emergency motion for reconsideration on August 29, 

2019. The district court held a telephone conference on the motion on 

September 3, 2019. In that conference, Harbor expressed three main 

concerns about how the screening process was playing out. First, the 

government had not responded to Harbor’s privilege designations or 

confirmed that it had deleted or returned privileged material. Second, 

Case: 19-20624 Document: 00515939908 Page: 5 Date Filed: 07/15/2021
No. 19-20624

6

Harbor objected to the government’s filter team viewing e-mails that had 

been flagged as privileged. Third, Harbor was concerned that the 

government’s litigation team had already gotten access to privileged 

materials.

In response, the district court stated its intent to allow the 

government’s filter team to continue reviewing material designated as 

privileged. The district court then denied Harbor’s emergency motion for 

reconsideration in a written order on September 10, 2019. Harbor timely 

appealed.

II.

As an initial matter, we have jurisdiction over this appeal under 28 

U.S.C. § 1291. A motions panel of this court previously denied the 

government’s motion to dismiss for lack of appellate jurisdiction. While we 

are not bound by the motions panel’s ruling, we agree with its necessary 

conclusions that Harbor’s motion is solely for the return of property and that 

a grand jury proceeding—which the government cannot even say exists1

—is 

not a “prosecution in esse.” See DiBella v. United States, 369 U.S. 121, 131–

1 The government asserts several times in its brief that “Harbor is a subject of a 

grand jury proceeding.” Under Rule 6 of the Federal Rules of Criminal Procedure, the 

government’s attorneys “must not disclose a matter occurring before the grand jury.” 

Fed. R. Crim. P. 6(e)(2)(B)(vi); see also In re Grand Jury Investigation, 610 F.2d 202, 213, 

219 (5th Cir. 1980) (“Punishment for contempt of court is the sanction specifically 

authorized by Rule 6(e)(1) for violations of its provisions, and a contempt citation will 

generally provide an adequate remedy for such violation.”); Wayne R. LaFave et al., Secrecy 

Requirements, 4 Crim. Proc. § 15.2(i) (4th ed. 2020) (discussing the need to “keep secret 

the subject of the grand jury’s inquiry while it is considering the possible issuance of an 

indictment” (citing United States v. Proctor & Gamble Co., 356 U.S. 677, 681 n.6 (1958))). 

An exception exists for “[t]he court [to] authorize disclosure—at a time, in a manner, and 

subject to any other conditions that it directs—of a grand-jury matter preliminarily to or in 

connection with a judicial proceeding.” Fed. R. Crim. P. 6(e)(3)(E)(i). The government 

has not pointed to such authorization by this or another court.

Case: 19-20624 Document: 00515939908 Page: 6 Date Filed: 07/15/2021
No. 19-20624

7

32 (1962). The district court’s dismissal of Harbor’s pre-indictment Rule 

41(g) motion constitutes a final appealable decision of the district court. See 

DiBella, 360 U.S. at 131–32; see also Richey v. Smith, 515 F.2d 1239, 1242–43 

(5th Cir. 1975) (“Notwithstanding that the DiBella test would seem to be 

satisfied in the instant case . . . , we note that the order appealed from rested 

solely on jurisdictional grounds and was not a ruling on the merits of the 

motion as was the case in DiBella.”).

2

III.

The district court erred in dismissing Harbor’s Rule 41(g) motion. 

We review the district court’s decision to no longer exercise equitable 

jurisdiction for abuse of discretion. See Richey, 515 F.d at 1243. “A district 

court would necessarily abuse its discretion if it based its ruling on an 

erroneous view of the law or on a clearly erroneous assessment of the 

evidence.” Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405 (1990); accord 

United States v. Gomez-Herrera, 523 F.3d 554, 563 n.4 (5th Cir. 2008) (“A 

district court abuses its discretion if its ruling rests on an erroneous view of 

the law.” (citing Cooter, 496 U.S. at 405)).

In its dismissal order, the district court said that it initially exercised 

its equitable jurisdiction “to ensure that there were processes in place to 

protect Harbor’s privileged information.” Sealed Order at 2–3, Harbor 

2 The government relies on an inapplicable case, Mohawk Indus. v. Carpenter, to 

argue that the district court’s order was not immediately appealable. 558 U.S. 100 (2009). 

Mohawk addressed interlocutory appeal of a district court’s discovery order in a pending 

civil case, and the Court noted that “several potential avenues of review apart from 

collateral order appeal” were available to the appellant. Id. at 104–05, 110–11. Here, 

however, Harbor is not involved in any pending case—civil or criminal—other than its Rule 

41(g) civil case, in which return of Harbor’s property is the single dispositive issue. The 

“avenues of review” available in Mohawk are thus not available to Harbor. The only 

available review of an adverse ruling on Harbor’s preindictment Rule 41(g) motion is direct 

appeal of the district court’s final judgment in this independent civil case.

Case: 19-20624 Document: 00515939908 Page: 7 Date Filed: 07/15/2021
No. 19-20624

8

Healthcare Sys. v. United States, No. 4:18-CV-3195 (S.D. Tex. Aug. 19, 2019), 

ECF No. 35. The district court declined to further exercise its equitable 

jurisdiction because it was satisfied that sufficient protective measures were 

in place and because of its assessment of the factors articulated in Richey v. 

Smith. Id. at 3.

Under Richey v. Smith, a district court must consider four factors when 

deciding whether to grant a pre-indictment motion for return of property: 

(1) “[W]hether the motion for return of property accurately 

alleges that the government agents . . . displayed ‘a callous 

disregard for the rights of [the plaintiff]’”;

(2) “[W]hether the plaintiff has an individual interest in and 

need for the material whose return he seeks;”

(3) “[W]hether the plaintiff would be irreparably injured by the 

denial of the return of the property; and”

(4) “[W]hether the plaintiff has an adequate remedy at law for 

the redress of his grievance.”

515 F.2d at 1243–44 (internal footnotes omitted) (quoting Hunsucker v. 

Phinney, 497 F.2d 29, 34 (5th Cir. 1974)). The district court erred in its 

understanding of these factors and thus abused its discretion by declining to 

further exercise its equitable jurisdiction.

The district court incorrectly concluded that the government did not 

show a “callous disregard” for Harbor’s rights simply because it obtained 

search warrants prior to seizing Harbor’s privileged materials. But it is a 

stipulated fact in this case that “the government did not seek express prior 

authorization from the issuing Magistrate Judge for the seizure of attorneyclient privileged materials.” Stipulations of Fact at 4, Harbor Healthcare Syst. 

v. United States, No. 4:18-CV-3195 (S.D. Tex. Dec. 4, 2018), ECF No. 17. It 

is further stipulated that the government knew that Sprott’s “office and 

computer contained attorney-client privileged documents and attorney work 

Case: 19-20624 Document: 00515939908 Page: 8 Date Filed: 07/15/2021
No. 19-20624

9

product” when it executed one of the search warrants. Id. at 3–4. The 

stipulated facts show that the government made no attempt to respect 

Harbor’s right to attorney–client privilege in the initial search. Cf. United 

States v. Zolin, 491 U.S. 554, 571 (1989) (“There is no reason to permit 

opponents of the privilege to engage in groundless fishing expeditions, with 

the district courts as their unwitting (and perhaps unwilling) agents.”); 

Taylor Lohmeyer Law Firm P.L.L.C. v. United States, 982 F.3d 409, 411 (5th 

Cir. 2020) (Elrod, J., dissenting from denial of rehearing en banc) (“Although 

the privilege may at times prevent the government from obtaining useful 

information, ‘this is the price we pay for a system that encourages individuals 

to seek legal advice and to make full disclosure to the attorney so that the 

attorney can render informed advice.’” (quoting In re Grand Jury Subpoena 

for Att’y Representing Crim. Defendant Reyes-Requena, 926 F.2d 1423, 1432 

(5th Cir. 1991))).

Moreover, the government, by its treatment of Harbor’s privileged 

materials after the search, further disregarded Harbor’s rights. When asked 

at oral argument why the government had not already destroyed or returned

copies of documents that it agreed were privileged, the government said: 

“The only reason they haven’t been destroyed is for the potential for a future 

filter team, if the criminal team looks at the privilege logs and disagrees for 

some reason.” A taint team serves no practical effect if the government 

refuses to destroy or return the copies of documents that the taint team has 

identified as privileged. The government has thus conceded that it has no 

intent to respect Harbor’s interest in the privacy of its privileged materials as 

the investigation unfolds. 

The district court was wrong to overlook the government’s continued 

retention of privileged documents as an aspect of its “callous disregard,” and 

it was simply mistaken in its belief that there were “processes in place to 

protect Harbor’s privileged information.”

Case: 19-20624 Document: 00515939908 Page: 9 Date Filed: 07/15/2021
No. 19-20624

10

The district court likewise erred in its assessment of Harbor’s need 

for the documents and information the government seized. In the view of the 

district court, Harbor’s lack of a practical need for access to the copies of the 

documents retained by the government “weigh[ed] against granting Rule 

41(g) relief.” Sealed Order at 5, Harbor Healthcare Sys. v. United States, No. 

4:18-CV-3195 (S.D. Tex. Aug. 19, 2019), ECF No. 35. But Harbor’s need 

does not lie in accessing the government’s copies. Rather, it lies in protecting 

the privacy of the privileged material in the documents. Cf. Richey, 515 F.2d 

at 1242 n.5 (“We have indicated previously that a plaintiff in a civil action for 

the return of property has a sufficient proprietary interest in copies of 

documents which have been seized to demand their return as well as the 

return of the originals.”). The whole point of privilege is privacy. Cf. Fisher 

v. United States, 425 U.S. 391, 399 (1976) (“[T]he Court has often stated that 

one of the several purposes served by the constitutional privilege against 

compelled testimonial self-incrimination is that of protecting personal 

privacy. . . . Within the limits imposed by the language of the Fifth

Amendment, which we necessarily observe, the privilege truly serves privacy 

interests . . . .”); Nixon v. Adm’r of Gen. Servs., 433 U.S. 425, 545 n.1 (1977) 

(Rehnquist, J., dissenting) (“The invocation of such privileges has the effect 

of protecting the privacy of a communication made confidentially . . . by a 

client to an attorney; the purpose of the privilege, in each case, is to assure 

free communication on the part of the confidant and of the client, 

respectively.”). Despite Harbor’s great privacy interest, the government has 

held its attorney–client privileged documents since May 18, 2017—the 

government has deliberately held on to Harbor’s privileged material for over 

four years. The district court erred by failing to account for Harbor’s privacy

need, which weighs heavily in favor of granting Rule 41(g) relief.

The government’s reliance on United States v. Search of Law Office, 

Residence, and Storage Unit Alan Brown, 341 F.3d 404 (5th Cir. 2003) is 

Case: 19-20624 Document: 00515939908 Page: 10 Date Filed: 07/15/2021
No. 19-20624

11

unavailing. In that case, the Rule 41 movant argued that he would suffer 

irreparable reputational harm from a grand-jury indictment. Id. at 414–15. 

Here, however, Harbor has not alleged any harm arising from a possible 

grand jury—it alleges a harm from the ongoing intrusion into its privacy and 

the continued possession of attorney–client privileged documents. 

Importantly, in Alan Brown, the movant failed “to identify specific privileged 

documents in the hands of the government or provide a legal basis for 

asserting a particular privilege.” Id. at 414. Here, Harbor has identified 

thousands of privileged documents, and the government has conceded the 

basis for the privilege for many of those. Harbor has done far more than assert 

“vague allegations,” id., but has alleged a privacy harm arising from the 

seizure and retention of specific attorney–client privileged documents.

The government’s ongoing intrusion on Harbor’s privacy constitutes 

an irreparable injury that can be cured only by Rule 41(g) relief. Harbor 

remains injured as long as the government retains its privileged documents. 

That injury can only be made whole by the government returning and 

destroying its copies of the privileged material. See Richey, 515 F.2d at 1242 

n.5

Finally, Harbor does not have an adequate remedy at law. A motion 

to suppress in a possible criminal proceeding does not redress Harbor’s 

injury for two primary reasons. First, it is not certain that there ever will be 

criminal charges brought against Harbor. If no charges are brought but a 

suppression motion is Harbor’s only means of redress, Harbor would never 

have an opportunity to challenge the government’s seizure of its privileged 

materials. Second, suppression motions vindicate an interest entirely 

different from Rule 41(g) motions. Suppression merely prevents the 

government from using certain materials as evidence in a judicial 

proceeding—suppression does not force the government to return those 

materials to the criminal defendant. Cf. Hunt v. U.S. Dep’t of Just., 2 F.3d 

Case: 19-20624 Document: 00515939908 Page: 11 Date Filed: 07/15/2021
No. 19-20624

12

96, 97 (5th Cir. 1993) (determining that a Louisiana forfeiture proceeding was 

not an adequate remedy because it would not help the movant recover 

wrongfully seized funds). Rule 41(g), by contrast, says nothing about the 

admissibility of evidence. Instead, it is concerned solely with the return of 

property to the Rule 41(g) movant. Suppression and Rule 41(g) occupy two 

entirely distinct spheres within the universe of unlawful searches and 

seizures. 3

The government unconvincingly argues that suppression is an

adequate remedy because Rule 41(g), like suppression, is concerned with 

unlawful searches and seizures. That argument overlooks the distinction 

explained above. Suppression protects criminal defendants from the 

procedural harm arising from the introduction of unlawfully seized evidence. 

Rule 41(g) protects persons from the “deprivation of property” by an 

unlawful search and seizure. It makes little sense to say that the Fourth 

Amendment can be litigated only in a suppression motion when there are 

other types of harm arising from unlawful searches and seizures. This is 

particularly true since Rule 41(g) expressly contemplates such a harm and 

offers a remedy.

In short, the district court erred by misunderstanding the harm alleged 

by Harbor and by equating return of property with suppression of evidence. 

3 The government relies on In re Sealed Case, 716 F.3d 603 (D.C. Cir. 2013)to argue 

that Harbor’s Rule 41(g) motion is really about suppression, not return of property. In 

Sealed Case, however, “the movant ha[d] already recovered the property from the 

government,” so the Rule 41(g) motion could not be “‘solely’ for its return.” 716 F.3d 

603, 607–08 (D.C. Cir. 2013). Indeed, the court determined that “the attorney–client 

privilege [dispute was] moot.” Id. at 609; accord id. at 612 (Kavanaugh, J., concurring). 

Here, by contrast, the government has not yet returned Harbor’s property and is instead 

refusing to do so.

Case: 19-20624 Document: 00515939908 Page: 12 Date Filed: 07/15/2021
No. 19-20624

13

It therefore abused its discretion by refusing jurisdiction over Harbor’s Rule 

41(g) motion.4

* * *

For the reasons set forth above, the judgment of the district court is 

REVERSED, and the case is REMANDED for further proceedings 

consistent with this opinion.

4 The district court expressed concern about the practicality of it parsing through 

reems of Harbor documents to rule of claims of privilege. The district court’s concern can 

be assuaged by the array of document-review options. For starters, the government could

simply be ordered to return the documents for which it does not dispute the asserted basis 

for the privilege. For the balance, the court could engage a magistrate judge or special 

master to review the potentially privileged documents. Even this will not entail reviewing 

each and every document; Harbor’s privilege logs should allow for recommendations or 

rulings based on categories of documents. See In re Terra Int’l., Inc., 134 F.3d 302, 304–05, 

307 (5th Cir. 1998).

Case: 19-20624 Document: 00515939908 Page: 13 Date Filed: 07/15/2021