Tohono O'odham Nation v. Ducey et al

Filing 230

ORDER re: 227 Brief (Non Appeal) filed by Tohono O'odham Nation, 228 Brief (Non Appeal) filed by Daniel Bergin. Signed by Judge David G Campbell on 7/25/2016. (DGC, nvo)

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Case 2:15-cv-01135-DGC Document 230 Filed 07/25/16 Page 1 of 5 1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Tohono O'odham Nation, Plaintiff, 10 11 ORDER v. 12 No. CV-15-01135-PHX-DGC Douglas A Ducey, et al., 13 Defendants. 14 15 This discovery dispute involves the propriety of Director Bergin’s assertion of the 16 common interest privilege. After a telephonic discovery conference, the Court ordered 17 Director Bergin to submit for in camera review Entry 102 on his privilege log. After 18 reviewing the document, the Court requested additional briefing. The Court has reviewed 19 the briefing (Docs. 227, 228), and concludes that the common interest privilege does not 20 protect Entry 102 from disclosure. 21 The common interest privilege was first adopted in the criminal defense context. 22 In Continental Oil Co. v. United States, 330 F.2d 347 (9th Cir. 1964), two defendants 23 were summoned to testify before a grand jury. They retained separate attorneys, each of 24 whom interviewed his or her client, prepared a summary of the interview, and exchanged 25 the summary with the other defense lawyer. Id. at 348. The purpose of this exchange 26 was to make “representation of their clients in connection with the Grand Jury 27 investigation and any resulting litigation, more effective.” 28 government subsequently sought to discover these summaries, and the trial court held Id. at 348-49. The Case 2:15-cv-01135-DGC Document 230 Filed 07/25/16 Page 2 of 5 1 that they were not privileged. Id. The Ninth Circuit reversed, finding that the attorney- 2 client privilege had not been waived when the summaries were shared. 3 recognized a “joint-defendant exception” to the ordinary rule that privileges are waived 4 when privileged material is shared with third parties. Id. at 350; see also Hunydee v. 5 United States, 355 F.2d 183, 185 (9th Cir. 1965) (“[W]here two or more persons who are 6 subject to possible indictment in connection with the same transactions make confidential 7 statements to their attorneys, these statements, even though they are exchanged between 8 attorneys, should be privileged to the extent that they concern common issues and are 9 intended to facilitate representation in possible subsequent proceedings.”). The court 10 The joint defense privilege has been extended to civil cases. In United States v. 11 Gonzalez, 669 F.3d 974 (9th Cir. 2012), a husband and wife were convicted in separate 12 trials for fraud arising from an insurance scam. The wife subsequently filed a petition for 13 habeas corpus – technically, a civil proceeding – arguing that her trial counsel had been 14 ineffective for failing to call as an exculpatory witness the husband, who had given a 15 statement that the wife had nothing to do with the crime before ultimately claiming at 16 trial that the wife was responsible. Id. at 976. When the government subpoenaed the 17 wife’s trial counsel about communications received from the husband’s lawyer, the 18 husband moved to quash the subpoena on the basis of the joint defense privilege. Id. at 19 976-77. 20 The Ninth Circuit acknowledged that it “has long recognized that the joint defense 21 privilege is ‘an extension of the attorney-client privilege.’” Id. at 978 (citations omitted). 22 The court explained: 23 24 25 26 27 28 [w]hether the jointly interested persons are defendants or plaintiffs, and whether the litigation or potential litigation is civil or criminal, the rationale for the joint defense rule remains unchanged: persons who share a common interest in litigation should be able to communicate with their respective attorneys and with each other to more effectively prosecute or defend their claims. Id. at 978 (citing In re Grand Jury Subpoenas, 902 F.2d 244, 249 (4th Cir. 1990) -2- Case 2:15-cv-01135-DGC Document 230 Filed 07/25/16 Page 3 of 5 1 (emphasis added)). The court also made clear that parties invoking the privilege “need 2 not have identical interests and may even have some adverse motives,” but they must at 3 least “be engaged in maintaining substantially the same cause on behalf of other parties in 4 the same litigation.” Id. at 980-81 (quotation marks and citations omitted). The Ninth 5 Circuit found that a joint defense agreement existed between the husband and wife prior 6 to the trials, but found that the arrangement may have ended before the trials and 7 therefore remanded for further proceedings. Id. at 983. 8 From these cases we learn that the joint defense privilege, or, more broadly, the 9 common interest privilege, is essentially an extension of the attorney-client privilege. 10 Director Bergin argues that the privilege applies in the absence of pending litigation. 11 Doc. 228 at 2-4. He is correct; pending litigation is not a prerequisite. Gonzalez, 669 12 F.3d at 978 (citing In re Grand Jury Subpoenas, 902 F.2d at 249). 13 Director Bergin next argues that the privilege may apply in the regulatory context. 14 Doc. 228 at 4. The Director cites cases involving the regulatory context, but none is 15 particularly helpful. This case is unlike United States v. Bergonzi, 216 F.R.D. 487 (N.D. 16 Cal. 2003), which involved a direct adversity between the regulator and the regulated 17 party that is absent here. Nor is this case like Broessel v. Triad Guaranty Insurance Co., 18 238 F.R.D. 215 (W.D. Ky. 2006), which recognized a common legal interest “that 19 extends to legislative and regulatory matters, as well as in matters in litigation or could 20 lead to litigation.” Id. at 220. Broessel does not shed light on whether a regulator like 21 the Arizona Department of Gaming may enter into a common interest agreement with an 22 entity it regulates for the purpose of opposing the actions of another entity it regulates. 23 The closest case to this dispute appears to be In re Lidoderm Antitrust Litigation, 24 MDL No. 2521, 2016 WL 861019 (N.D. Cal. 2016), which involved the denial of the 25 common interest privilege to parties that shared only a common commercial or business 26 interest, rather than a common legal interest. Id. at *4. As the court in Lidoderm 27 explained: “the common interest privilege protects documents shared between parties 28 who have a common legal interest; it does not extend to and cannot protect disclosure of -3- Case 2:15-cv-01135-DGC Document 230 Filed 07/25/16 Page 4 of 5 1 communications regarding a common business interest.” Id. (emphasis in original); see 2 also In re Pac. Pictures Corp., 679 F.3d 1121, 1129 (9th Cir. 2012) (“a shared desire to 3 see the same outcome in a legal matter is insufficient to bring a communication between 4 two parties within this exception”); Nidec Corp. v. Victor Co. of Japan, 249 F.R.D. 575, 5 578 (N.D. Cal. 2007) (“that legal assistance must pertain to the matter in which the 6 parties have a joint legal interest, and the communication must be designed to further that 7 specific legal interest”). 8 Director Bergin has not identified a common legal interest between the Arizona 9 Department of Gaming and Gila River. True, they share a common goal of stopping the 10 West Valley Resort, but this common interest is not akin to those shared by parties faced 11 with or seeking to assert the same criminal or civil claims. Gila River has a strong 12 commercial incentive to stop the West Valley Casino. Director Bergin’s interest is not 13 commercial. As a state regulator, he seeks to bar what he views as a fraudulently 14 procured casino operation. Despite multiple opportunities to do so, Director Bergin has 15 been unable to locate, and the Court has not found, a single case recognizing a common 16 interest privilege in similar circumstances. 17 The Nation notes, correctly, that recognition of a common interest privilege in this 18 case would constitute a significant extension of the doctrine. Doc. 227 at 4-5. The Court 19 cannot find in the roots of the joint defense privilege a reasonable basis for extending the 20 doctrine to parties who merely share a common goal with no common legal interests. 21 The Court also finds troubling the notion that a state regulatory body could join in 22 a privilege-protected partnership with one of the entities it regulates to thwart expansion 23 efforts of another entity it regulates, whether or not the regulatory body has a valid basis 24 for opposing the expansion. That appears to be what is happening here. The Nation 25 identifies several relevant circumstances surrounding Entry 102, including the timing 26 with respect to the vendor letters, the involvement of a lobbyist for Gila River, and 27 additional letters to the Congressional Budget Office and the Arizona Department of 28 Liquor Licenses and Control. -4- Case 2:15-cv-01135-DGC Document 230 Filed 07/25/16 Page 5 of 5 1 Whether it is appropriate for the Director to partner with a regulated entity in such 2 actions is a question beyond the scope of this order or the jurisdiction of this Court, but to 3 say that their communications in such an endeavor are privileged and immune from 4 discovery is quite another matter. The Court can find no basis for such an expansive 5 privilege in the case law, and sees ample reasons for caution before recognizing it. The 6 Court therefore declines to recognize the common interest privilege asserted by the 7 Director. 8 9 10 IT IS ORDERED that Director Bergin shall produce Entry 102 to the Nation within three business days of this order. Dated this 25th day of July, 2016. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -5-

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