Court Opinion

ID: 2666527
Source: CourtListenerOpinion
Date Created: 2014-04-04 09:01:36.431416+00
Date Added: 2024-06-11T12:40:35.148243
License: Public Domain

UNITED STATES DISTRICT COURT
                   FOR THE DISTRICT OF COLUMBIA
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In re MICRON TECHNOLOGY, INC. )     Case No. 09-mc-00609 (GK)
SECURITIES LITIGATION          )
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                        MEMORANDUM OPINION

     Plaintiffs International Union of Operating Engineers, Local

132 Pension Plan, and Chemical Valley Pension Fund of West Virginia

bring this Motion to Compel under Federal Rule of Civil Procedure

45(c)(2)(B)(i) against the United States Department of Justice

(“DOJ" or “Government”) and Attorney General Eric J. Holder, Jr.

Plaintiffs seek the production of documents responsive to two

subpoenas duces tecum issued on September 2, 2009 and September 4,

2009 in the underlying federal securities fraud action, In re

Micron Technology, Inc. Securities Litigation, No. CV-06-085-BLW,

filed in the District of Idaho.   Upon consideration of the Motion,

Opposition, Reply, and the entire record herein, and for the

reasons set forth below, the Motion to Compel is denied.

I.   Procedural Background

     The present Motion to Compel arises out of a pending federal

securities class action in the District Court for the District of

Idaho against Micron Technology, Inc. and three of its senior

officers (“Idaho litigation”).    The defendants in that action are
alleged to have engaged in a massive price-fixing conspiracy

between 1999 and 2002 which involved the issuance of false and

misleading statements to Micron’s investors.              Mot. to Compel at 2.

In October 2002, Micron entered into a leniency program with DOJ's

Antitrust Division, which had been investigating the price-fixing

conspiracy for some time.          Micron admitted to a criminal violation

of the Sherman Antitrust Act and agreed to cooperate with the

investigation in exchange for amnesty from prosecution.               The three

senior Micron officers named as defendants in the Idaho litigation

accordingly testified under immunity about their involvement in the

price-fixing     scheme,   and     several   other    Micron   employees      were

interviewed as well.

      In the present Motion to Compel, Plaintiffs seek all records

of interviews of Micron employees in connection with the DOJ’s

investigation     for   use   in    the   Idaho   litigation.       Id.   at   9.

Plaintiffs first attempted to secure the production of these

records from the defendants in the Idaho litigation, but have come

to understand that they do not have copies of the records in their

possession. Id. at 7. Next, Plaintiffs contacted counsel for Gary

Swanson, an executive of Hynix Semiconductor who was indicted in

the   Northern    District    of     California      on   related   charges    of

price-fixing in 2008, because the DOJ had released all of the

records in question to Mr. Swanson’s counsel during his trial.

However, Mr. Swanson’s counsel informed Plaintiffs that the copies

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of the records he had received were subject to a protective order,

and that he had returned all copies to the DOJ.           Plaintiffs finally

issued two subpoenas duces tecum--one to the Office of Legal

Counsel, DOJ and one to the Attorney General--to obtain the records

of interviews on September 2, 2009 and September 4, 2009.

      On November 6, 2009, Assistant Attorney General Christine

Varney   informed    Plaintiffs’      counsel    that    the   DOJ   would    not

authorize    production    of   the   requested       documents,     citing   the

Department’s Touhy regulations, 28 C.F.R. §§ 16.21-.29.                In light

of the approaching deadline for discovery in the Idaho litigation,

Plaintiffs   filed   the   present     Motion    to   Compel   in    this   Court

pursuant to Fed. R. Civ. P. 45(c)(2)(B)(i).

      On January 6, 2010, the Court informed the parties that, due

to its busy schedule, it would be able to issue a decision but not

a memorandum order before the close of discovery in the Idaho

litigation on January 22, 2010.             The Court denied the Motion to

Compel by minute order dated January 14, 2010.                 In response to

Plaintiffs’ request that the Court issue a Memorandum Order setting

forth the basis for the January 14, 2010 Minute Order, the Court

gave notice on January 26, 2010 that it would issue this Memorandum

Order.   Order (Jan. 26, 2010) [Dkt. No. 15].

II.   Standard of Review

      Fed. R. .Civ. P. 45 governs the issuance of subpoenas and,

relatedly, motions to compel.         Fed. R. Civ. P. 45 (2010).        This is

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true even when the object of the subpoena is a federal agency.

Watts v. Sec. Exchange Comm., 482 F.3d 501, 508 (D.C. Cir. 2007)

(explaining that “a challenge to an agency’s refusal to comply with

a Rule 45 subpoena should proceed and be treated not as an APA

action but as a Rule 45 motion to compel”).

       Rule      45(c)(2)(B)(i)    provides      that    a    person    commanded    to

produce documents may object to the subpoena, but that the serving

party may then move the Court for an order compelling production.

When a motion to compel is filed, Fed. R. Civ. P. 45 “requires that

district courts quash subpoenas that call for privileged matter or

would cause an undue burden.”             Watts, 482 F.3d at 509.           The burden

lies on the party resisting discovery to show that the documents

requested        are   either    unduly    burdensome        or    privileged.      See

Alexander v. Fed. Bureau of Investigation, 192 F.R.D. 42, 46

(D.D.C. 2000).

III.       Analysis

       The DOJ first argues that production of the records sought by

Plaintiffs would be unduly burdensome, both because Plaintiffs’

request is duplicative and cumulative and because production would

place a considerable burden on the agency.                        The DOJ next argues

that       the   records   are   subject    to   the    federal      law   enforcement

privilege.1

       1
          The DOJ also argues that the records contain attorney
work-product, and so are subject to the attorney work-product
                                                 (continued...)

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     A.    Plaintiffs’ Request Is Unduly Burdensome

     The    DOJ   objects   to   the    subpoenas   on   the   grounds   that

production of the interview memoranda would be unduly burdensome.

The “undue burden” test requires district courts to be “generally

sensitive” to the costs imposed on third parties by subpoenas duces

tecum.     Watts, 482 F.3d at 509.           Fed. R. Civ. P. 26(b)(2)(C)

further requires the court to limit discovery where “(i) the

discovery sought is unreasonably cumulative or duplicative, or can

be obtained from some other source that is more convenient, less

burdensome, or less expensive; (ii) the party seeking discovery has

had ample opportunity to obtain the information by discovery in the

action; or (iii) the burden or expense of the proposed discovery

outweighs its likely benefit, considering the needs of the case,

the amount in controversy, the parties’ resources, the importance

of the issues at stake in the action, and the importance of the

discovery in resolving the issues.”           Fed. R. Civ. P. 26(b)(2)(C)

(2010).

     The Government argues that Plaintiffs “already have in their

possession the exact information they seek to obtain from the

interview memoranda,” namely that Micron, as well as defendants

Sadler and Appleton, have admitted to criminal violations of

     1
      (...continued)
privilege.    Because this Court agrees that the federal law
enforcement privilege applies to the materials sought by
Plaintiffs, the question of whether the attorney work-product
privilege applies as well is not reached.

                                       -5-
antitrust laws.      Opp’n at 16, 21.   Yet, in the very same brief, the

Government also argues that the materials Plaintiffs seek are

confidential precisely because only a very narrow portion of them

have   been   released   or   disclosed.     Id.     at   9   (“[T]here     is   a

substantial amount of information contained in the Micron interview

memoranda which has not been publicly disclosed.”).                      In fact,

Plaintiffs    have   attempted--and     failed--to    obtain       the   complete

records of interviews through discovery of other parties.

       While it might be true that what information is currently

available to Plaintiffs establishes the basic fact that Micron

admitted to criminal antitrust law violations, it is not for the

Government to limit Plaintiffs’ case in this way.                    Indeed, as

Plaintiffs point out, one of the central reasons they seek the

records of interviews is to support their claim of scienter and

claims for damages.      Reply at 1.    Thus, the information sought is

not    entirely   cumulative    or   duplicative,     and     is    of    central

importance to Plaintiffs’ case.

       However, the DOJ also argues that Plaintiffs could simply

depose the individuals interviewed by the Antitrust Division.

Plaintiffs do not disagree, although they contend that Micron

employees “are unlikely to be as forthcoming” with their own

counsel as they were when interviewed by the DOJ.              Mot. to Compel

at 12.   Further, the DOJ interviews were taken more than six years

ago, and witnesses’ memories have likely faded.                     Given these

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circumstances, the Court is not convinced that Plaintiffs could

obtain the same information by deposing those witnesses whose

identities are known.

      The remaining question, then, is whether the burden placed on

the   DOJ   in   producing   these   documents   outweighs   their   value.

Because the documents have been identified, as the Government

concedes, there is no burden involved in searching for them.

Instead, the Government argues that a substantial burden would

result from a “threat to the integrity of the leniency program, and

because the government would become a de facto party to the

plaintiffs’ underlying litigation to protect against unwarranted

disclosure.”     Opp’n at 22.

      As discussed further below, these are significant concerns

that justify a finding of undue burden.            Still, even when the

demand for subpoenaed material is unduly burdensome, the Court is

authorized to impose reasonable conditions and restrictions with

respect to the subpoenaed material’s production.        Fed. Trade Comm.

v. Invention Submission Corp., 965 F.2d 1086, 1090 (D.C. Cir.

1992). Plaintiffs have given little guidance on what conditions or

restrictions would be found acceptable, and the DOJ has indicated

a general opposition to a protective order.          See Opp’n at 17-18.

In any event, the Court’s conclusion that the law enforcement

privilege applies to the subpoenaed material defeats any interest

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in   finding    reasonable    conditions      and    restrictions    for     its

production.

     B.   The Federal Law Enforcement Privilege Applies

     The DOJ next asserts the federal law enforcement privilege, a

qualified privilege “designed to prevent disclosure of information

that would be contrary to the public interest in the effective

functioning of law enforcement.”           Tuite v. Henry, 181 F.R.D. 175,

176 (D.D.C. 1998).

     In Tuite, the Court of Appeals listed ten factors to be

considered in determining whether the law enforcement privilege

favors maintaining the confidentiality of materials sought in

discovery.     These factors, which are not exhaustive, include: “(1)

the extent to which disclosure will thwart governmental processes

by discouraging citizens from giving the government information;

(2) the impact upon persons who have given information of having

their identities disclosed; (3) the degree to which governmental

self-evaluation and consequent program improvement will be chilled

by disclosure; (4) whether the information sought is factual data

or evaluative summary; (5) whether the party seeking discovery is

an actual or potential defendant in any criminal proceeding either

pending   or   reasonably    likely   to    follow   from   the   incident   in

question; (6) whether the investigation has been completed; (7)

whether any interdepartmental disciplinary proceedings have arisen

or may arise from the investigation; (8) whether the plaintiff’s

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suit is nonfrivolous and brought in good faith; (9) whether the

information sought is available through other discovery or from

other sources; and (10) the importance of the information sought to

the plaintiff’s case.”         Id. at 177.

     As has been discussed, factors eight (whether the plaintiff’s

suit is nonfrivolous and brought in good faith), nine (whether the

information sought is available through other discovery or from

other sources), and ten (the importance of the information sought

to the plaintiff’s case) weigh in favor of Plaintiffs.                            The

information sought does not appear to be available through other

discovery,    but    is    important      to    Plaintiffs’      case,    which    is

nonfrivolous and brought in good faith.                 The remaining relevant

factors,2    however,     weigh      heavily   in   favor   of   recognizing      the

privilege here.

     With    regards      to   the    first    factor   (the     extent   to   which

disclosure    will   thwart       governmental      processes    by   discouraging

citizens from giving the government information), it is readily

apparent that a refusal to recognize the law enforcement privilege

for information obtained through the DOJ Antitrust Division’s

leniency program would chill future informants from coming forward.

     2
          Neither Plaintiffs nor the DOJ relied on factors three
(the degree to which governmental self-evaluation and consequent
program improvement will be chilled by disclosure), five (whether
the party seeking discovery is an actual or potential defendant in
any criminal proceeding), or seven (whether any interdepartmental
disciplinary proceedings have arisen or may arise from the
investigation) in their briefs.

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The Antitrust Division’s investigations depend heavily on the

willingness of insiders to voluntarily provide information.                  Such

information is, of course, given in great part as a result of the

DOJ’s assurance of confidentiality.           Decl. of Scott D. Hammond at

¶¶ 9-16 [Dkt. No. 9-3]. When confidential information is disclosed

to criminal defendants at trial, it is virtually always through a

protective order that--as Plaintiffs themselves are aware--prevents

broad   disclosure   of   the   information.         If   insiders    like   the

defendants in the Idaho litigation were put on notice that any

information they give could be subpoenaed and used against them in

a   civil   suit    for   damages,     then    the    Antitrust      Division’s

investigative capacity would surely suffer.

     Although this conclusion alone might justify recognizing the

privilege   here,     factors    two    (the     impact     on    confidential

informants), four (whether the information is factual or evaluative

data), and six (whether the investigation is closed) also support

application of the privilege.          First, the identities of several

Micron employees who cooperated with the Government were never

disclosed, and other undisclosed information could “reveal personal

background information, the identities of unindicted coconspirators

and individuals only peripherally involved or completely uninvolved

in the price-fixing conspiracy.”        Decl. of Niall E. Lynch ¶¶ 12-14

(“Lynch Decl.”) [Dkt. No. 9-4]. Second, the records sought are not

verbatim transcripts of interviews, which would be factual in

                                     -10-
nature, but rather summaries of those interviews prepared by DOJ

paralegals    that   could   “reveal    the       investigators’    interviewing

techniques     and   evaluative       process,       as   well     as   what     the

investigators found to be significant.”              Tuite, 181 F.R.D. at 180.

Thus, factors two and four also weigh against disclosure. Finally,

the   DOJ’s   investigation    has     not    concluded,     as    there   is    one

indictment outstanding for a foreign national for his participation

in the price-fixing conspiracy.         Lynch Decl. ¶ 5.

      The Court thus agrees with the DOJ that “the government’s

disclosure of its investigative memoranda will strongly damage the

integrity     of   the   Division’s    leniency         program,   current      open

investigations, and the ability to pursue investigations in the

future.”      Opp’n at 17.      Given the strong public interest in

maintaining    the   confidentiality         of   the   information     sought    by

Plaintiffs, the law enforcement privilege applies.

      Plaintiffs respond that the privilege has been waived because

the DOJ released all material sought to Mr. Swanson’s counsel in

the course of his criminal trial. However, as the above discussion

makes clear, the law enforcement privilege is subject to a fact-

specific balancing test in each case.              While the Tuit factors may

call for disclosure in a criminal trial--if, somehow, the Jencks

Act, 18 U.S.C. § 3500, did not already require disclosure--the same

need not be true in a civil suit for damages.                 See, e.g., In re

Sealed Case, 856 F.2d 268 (D.C. Cir. 1988) (for purposes of law

                                      -11-
enforcement privilege, “[t]he public interest in nondisclosure must

be balanced against the need of a particular litigant for access to

the privileged information”) (emphasis added); Bigelow v. District

of Columbia, 122 F.R.D. 111, 114-15 (D.D.C. 1998) (recognizing that

government’s disclosure of information under protective order to

private party in civil suit did not waive law enforcement privilege

with respect to intervenor because “[t]he fact that the Government

sought to protect the public’s interest in nondisclosure, but,

nonetheless,   recognized   the   plaintiffs    [sic]   need   for   this

information and voluntarily agreed to disclosure . . . should not

inure to the detriment of the Government”).             Thus, the Court

concludes that the DOJ has not waived the federal law enforcement

privilege.

IV.   CONCLUSION

      For the reasons set forth above, Plaintiffs’ Motion to Compel

is denied.

                                          /s/
February 1, 2010                         Gladys Kessler
                                         United States District Judge

Copies to: attorneys on record via ECF

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