FAIRHOLME FUNDS, INC. et al v. USA

Filing 392

REPORTED OPINION and ORDER reissuing for publication OPINION and ORDER 390 . Signed by Judge Margaret M. Sweeney. (sp)

In the United States Court of Federal Claims
No. 13-465C
(Filed Under Seal: October 4, 2017)
(Reissued for Publication: October 23, 2017) 1
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FAIRHOLME FUNDS, INC. et al.,
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Plaintiffs,
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v.
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THE UNITED STATES,
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Defendant.
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FRE 502(d); Quick Peek Procedure;
Clawback Order; RCFC 26; Discovery

Charles J. Cooper, Washington, DC, for plaintiffs.
Kenneth M. Dintzer, United States Department of Justice, Washington, DC, for defendant.
OPINION AND ORDER
SWEENEY, Judge
Before the court is plaintiffs’ second motion to compel the production of approximately
1500 documents defendant is currently withholding pursuant to the deliberative process and bank
examination privileges. Plaintiffs seek access to these documents pursuant to the “quick peek”
procedure authorized by Rule 502(d) of the Federal Rules of Evidence (“FRE”). The court
deems oral argument unnecessary and, for the reasons stated below, grants plaintiffs’ motion.
I. BACKGROUND 2
In their most recent status report, filed on June 30, 2017, the parties indicated that (1)
defendant produced an additional 3500 documents in response to the court’s March 7, 2017
order; (2) as a result of that production, plaintiffs identified thirty-eight documents they contend
should not be withheld for privilege; (3) defendant stated that it was in the process of reviewing
1

Pursuant to the parties’ joint status report submitted on October 17, 2017, this reissued
Opinion and Order contains no redactions.
2

For additional background information on the nature of the case and the parties’
positions with respect to the instant discovery dispute, see Fairholme Funds, Inc. v. United
States, 128 Fed. Cl. 410 (2016), the redacted version of the court’s September 20, 2016 Opinion
and Order.

the thirty-eight documents and would respond to plaintiffs by July 12, 2017; and (4) absent any
additional motions practice, discovery would be completed by August 3, 2017. June 30, 2017
Joint Status Report 1-2. Following its review of the thirty-eight documents, defendant produced
an additional twenty-two documents. Pls.’ Mot. 2. In response to the release of these additional
documents, plaintiffs proposed that the parties use the quick peek procedure authorized by FRE
502(d). Id. Defendant did not agree to the use of the procedure. Id. at 3. On August 3, 2017,
plaintiffs filed a second motion to compel—the motion currently before the court. Briefing on
the motion was completed on August 24, 2017.
As they did in the February 24, 2017 joint status report, plaintiffs again seek a court order
directing the parties to utilize the quick peek procedure authorized by FRE 502(d) in their second
motion to compel. Pls.’ Mot. 1. Specifically, plaintiffs seek to review the approximately 1500
documents dated May 2012 and later, which defendant is withholding pursuant to the
deliberative process and bank examination privileges. Id. Plaintiffs contend that although the
court declined their previous request to use the procedure, its use is now appropriate. Id.
II. DISCUSSION
A. The Parties’ Positions
In support of their motion, plaintiffs state:
While we do not suggest that Government counsel has failed to
make a good faith effort to comply with this Court’s orders, the
rate at which another review led the Government to abandon its
privilege assertions is troubling and highlights the inherent
difficulty of advocates for the Government determining which
information Plaintiffs most need in this important and factually
complex case.
Pls.’ Mot. 3. Plaintiffs further contend that portions of the belatedly produced documents, such
as portions of FHFA00070607, were not privileged in the first instance because they contained
segregable factual information. Id. at 3-4. In addition, plaintiffs claim that documents such as
FHFA00038592 and FHFA00077771 demonstrate that plaintiffs’ need for the information “was
clearly sufficient to overcome the Government’s qualified deliberative process and bank
examination privileges.” Id. at 4. According to plaintiffs, FHFA00038592, an electronic-mail
message sent by an official of the Federal Housing Finance Agency (“FHFA”) “three days before
the Net Worth Sweep was announced that acknowledged that the Companies’ Boards had
discussed re-recording certain deferred tax assets that had been written off based on the view that
they were going to be profitable going forward,” disproves a December 17, 2013 sworn
declaration by Mario Ugoletti, Special Advisor to the Office of the Director of the FHFA. 3 Id.
(internal quotation marks omitted). In his declaration, Mr. Ugoletti stated: “‘At the time of the
3

Mr. Ugoletti’s sworn declaration was submitted in the case of Perry Capital LLC v.
Lew, Civil Action No. 13-cv-1025, which is currently pending in the United States District Court
for the District of Columbia. Pl.’s Mot. 4.
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negotiation and execution of the Third Amendment, the Conservator and the Enterprises had not
yet begun to discuss whether or when the Enterprises would be able to recognize any value to
their deferred tax assets.’” Id. (quoting Declaration of Mario Ugoletti ¶ 20, Appendix (“A”) 38).
With respect to FHFA00077771, “an internal FHFA [electronic-mail message] summarizing a
June 13, 2012 meeting between FHFA officials and [Fannie Mae’s Chief Financial Officer
(“CFO”)], Susan McFarland,” plaintiffs argue it should have been produced earlier because it
“speaks directly to the Companies’ profitability and the anticipated effect of the Net Worth
Sweep.” Id. at 4-5. In the electronic-mail message, Ms. McFarland states: “‘[I]t is possible that
[Fannie Mae] may take a negative provision of $1 to $2 billion in the reserves (this would
increase income) due to lower than expected credit losses.’” Id. at 4 (quoting A40).
In its response to plaintiffs’ motion, defendant argues that the use of the quick peek
procedure was not appropriate when plaintiffs first suggested it and is even less appropriate now.
Def.’s Resp. 1. Defendant notes that following its production of the additional twenty-two
documents, defendant reconsidered its position “regarding certain documents concerning the
Companies’ loan loss reserves and/or deferred tax assets” and produced a total of fifteen more
documents. Id. at 4-5. Defendant further notes its continued objection to the use of the quick
peek procedure with respect to the documents currently being withheld on the basis of the
deliberative process and bank examination privileges. Id. at 5.
In support of its opposition to the use of FRE 502’s quick peek procedure, defendant
contends that the use of the procedure is inappropriate in this case because it does not consent
and because it has already conducted a comprehensive review of the privileged materials. Id. at
6. According to defendant, the purpose of the procedure is “to lessen the producing party’s
burden to review voluminous electronically stored information (ESI) for privilege and invest the
resources necessary to comply with the strictures of Rule 26(b)(5)” of the Rules of the United
States Court of Federal Claims (“RCFC”), id. at 7, the general rule governing a producing party’s
obligation to identify privileged documents, id. at 6. When the procedure is used, defendant
adds, courts enter a “clawback” order to ensure that the producing party does not waive any
privileges by virtue of it allowing its opponent to review the documents. Id. at 7. Quoting a note
published by The Sedona Conference from its eponymous journal, defendant avers:
“[FRE] 502(d) does not authorize a court to require parties to
engage in ‘quick peek’ . . . productions and should not be used
directly or indirectly to do so. . . . Rule 502 was designed to
protect producing parties, not to be used as a weapon impeding a
producing parties’ right to protect privileged material. Compelled
disclosure of privileged information, even with a right to later claw
back the information, forces a producing party to ring a bell that
cannot be un-rung.”
Id. (quoting The Sedona Conference, Commentary on Protection of Privileged ESI, 17 Sedona
Conf. J. 99, 140 (2016)).
Further, defendant argues that it is aware of only one case in which a court ordered the
use of the quick peek procedure over a producing party’s objections. Id. at 9. According to
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defendant, in that case—Summerville v. Moran, No. 14-cv-2099, 2016 WL 233627 (S.D. Ind.
Jan. 20, 2016)—the court permitted the use of the procedure because the defendant’s privilege
log was inadequate and because the defendant refused to cooperate with plaintiff during
discovery. Id. The procedure was used in Summerville, defendant opines, “as an alternative to
imposing wholesale privilege waiver as a sanction.” Id. In this case, defendant notes, no such
conduct has been alleged. Id. Defendant also suggests that the use of the procedure is
unnecessary because defendant has already invested the time and resources required by RCFC
26(f). 4 Id.
In its response, defendant also addresses plaintiffs’ claim that they need two particular
documents: FHFA00077771 and FHFA00038592. Id. at 10-11. According to defendant,
“substantively similar information” is available from other sources. Id. at 10. First, defendant
states that although “FHFA00077771 briefly mentions Fannie Mae’s expected profitability for
the quarter ending June 30, 2012, [its] actual earnings for that quarter are publicly available in its
SEC filings.” Id. Second, defendant states that although “plaintiffs erroneously contend that
they need FHFA00038592 because it allegedly contradicts a statement contained in a declaration
submitted by a former FHFA official in a separate litigation . . . plaintiffs obtained substantively
similar information from [their] deposition of Fannie Mae’s former [CFO].” Id. Defendant
further notes that it provided plaintiffs with a copy of FHFA00038592 during the parties’ meetand-confer. Id. at 11. Finally, defendant argues that plaintiffs’ suggestion that the use of the
quick peek procedure is warranted because defendant failed to produce “three pages of
segregable, factual information from a Fannie Mae presentation prepared for FHFA,” until after
the meet-and-confer is an insufficient reason to allow plaintiffs to review approximately 1500
additional privileged documents. Id. Instead, defendant contends that the parties should resume
briefing on defendant’s motion to dismiss. Id. at 12.
In their reply, plaintiffs suggest that the quick peek review they propose could be
completed in approximately one month and would ensure plaintiffs receive all of the documents
to which they are entitled. Pls.’ Reply 1. First, plaintiffs argue that the court has the authority to
order the use of the procedure absent the producing party’s consent. Id. at 1-2. In support of
their argument, plaintiffs reference the advisory committee note to FRE 502(d), which states that
“[u]nder the rule, a confidentiality order is enforceable whether or not it memorializes an
agreement among the parties to the litigation [and that p]arty agreement should not be a
condition of enforceability of a federal court order.” Id. at 1 (quoting FRE 502(d) advisory
committee note (internal quotation marks omitted)). Plaintiffs also reference the Congressional
Record, which states that FRE 502(d) “is designed to enable a court to enter an order, whether on
motion of one or more parties or on its own motion.” Id. at 1-2 (quoting 154 Cong. Rec. H781819 (Sept. 8, 2008) (internal quotation marks omitted)).
4

RCFC 26(f), which is captioned “Conference of the Parties; Planning for Discovery,”
directs the reader to Appendix A ¶ 3 of the RCFC, which is captioned “Early Meeting of
Counsel,” and provides a list of topics for counsel to consider prior to filing their Joint
Preliminary Status Report. One topic is “any issues relating to claims of privilege or of
protection as trial-preparation material, including—if the parties agree on a procedure to assert
such claims after production—whether to ask the court to include their agreement in an order
under Federal Rule of Evidence 502.” RCFC App. A ¶ 3(d)(4).
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Next, plaintiffs argue that none of the decisions referenced by defendant in its response
stands for the proposition that a court cannot order the use of the quick peek procedure absent the
producing party’s consent. Id. at 2. In addition, plaintiffs discount defendant’s reliance on the
position taken by The Sedona Conference, arguing instead that The Sedona Conference “fails to
reconcile its position with Rule 502’s Advisory Committee Note and the legislative history” and
that concern over the ramifications of forcing a producing party to “ring a bell that cannot be unrung” is unwarranted with respect to the qualified deliberative process and bank examination
privileges “in a case in which the Court has already determined that Plaintiffs’ need for certain
materials is sufficient to overcome the Government’s interest in concealing them.” Id. at 3.
Furthermore, plaintiffs counter defendant’s argument that the use of the procedure is only
appropriate if done at the beginning of the discovery process, noting that in Salem Financial, Inc.
v. United States, 102 Fed. Cl. 793, 800 (2012), this court utilized the procedure after the
producing party had reviewed and withheld approximately 390 documents as privileged. Id.
Finally, plaintiffs suggest that the use of the quick peek procedure is the only way to
ensure that they receive all of the documents to which they are entitled. Id. at 3-4. In plaintiffs’
view, the fact that defendant released additional documents each time plaintiffs challenged its
privilege claims remains troubling and can only be remedied through the use of the quick peek
procedure, irrespective of whether it is viewed by the court as “an alternative to imposing
wholesale privilege waiver as a sanction.” Id. at 4.
B. Analysis
RCFC 26, captioned “Duty to Disclose; General Provisions Governing Discovery,” is
comprised of six major subsections: subsection (a) addresses “Required Disclosures,” subsection
(b) addresses “Discovery Scope and Limits,” subsection (c) addresses “Protective Orders,”
subsection (d) addresses the “Timing and Sequence of Discovery,” subsection (e) addresses
“Supplemental Disclosures and Responses,” and subsection (g) addresses “Signing Disclosures
and Discovery Requests, Responses, and Objections.” 5 Various provisions within the
subsections govern the parties’ handling of privileged or protected materials. For example,
RCFC 26(b)(5)(A) describes the steps that a party must take if seeks to withhold “information
otherwise discoverable by claiming that the information is privileged or subject to protection as
trial-preparation material.” Next, RCFC 26(b)(5)(B) identifies the steps that a party must take if
it has inadvertently produced such information. Lastly, RCFC 26(c) establishes the parameters
of court-ordered protective orders:
(1) In General. A party or any person from whom discovery is
sought may move for a protective order. The motion must include
a certification that the movant has in good faith conferred or
attempted to confer with other affected parties in an effort to
resolve the dispute without court action. The court may, for good
cause, issue an order to protect a party or person from annoyance,
embarrassment, oppression, or undue burden or expense, including
one or more of the following:
5

As noted above, subsection (f) refers the reader to Appendix A ¶ 3 of the RCFC.
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(A) forbidding the disclosure or discovery;
(B) specifying terms, including time and place or the allocation of
expenses, for the disclosure or discovery;
(C) prescribing a discovery method other than the one selected by
the party seeking discovery;
(D) forbidding inquiry into certain matters, or limiting the scope
of disclosure or discovery to certain matters;
(E) designating the persons who may be present while the
discovery is conducted;
(F) requiring that a deposition be sealed and opened only on court
order;
(G) requiring that a trade secret or other confidential research,
development, or commercial information not be revealed or be
revealed only in a specified way; and
(H) requiring that the parties simultaneously file specified
documents or information in sealed envelopes, to be opened as
the court directs.
In 2008, 6 the court’s general authority to manage discovery and resolve discovery
disputes was augmented with an addition, not to the Federal Rules of Civil Procedure
(“FRCP”)—and therefore by extension to the RCFC—but to the FRE. 7 According to FRE 502’s
advisory committee note, the general purpose of the rule, captioned “Attorney-Client Privilege
and Work Product; Limitations on Waiver,” was twofold. First, the advisory committee sought
to resolve “longstanding disputes in the courts about the effect of certain disclosures of
communications or information protected by the attorney-client privilege or as work product—
specifically those disputes involving inadvertent disclosure and subject matter waiver.” FRE
502’s advisory committee note. Second, the advisory committee sought to respond “to the
widespread complaint that litigation costs necessary to protect against waiver of attorney-client
privilege or work product have become prohibitive due to the concern that any disclosure
(however innocent or minimal) will operate as a subject matter waiver of all protected
6

FRE 502 was enacted in 2008. See Pub. L. No. 110-322, § 1(a), 122 Stat. 3537 (2008).

7

“[T]o the extent permitted by this court’s jurisdiction,” the RCFC “shall be consistent
with the FRCP . . . .” RCFC 83(a). Interpretation of the RCFC “will be guided by case law and
the Advisory Committee Notes that accompany the [FRCP].” RCFC rules committee’s note
(2002); see also Zoltek Corp. v. United States, 71 Fed. Cl. 160, 167 (2006) (noting that
interpretation of the FRCP “informs the Court’s analysis” of the corresponding RCFC).
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communications or information,” especially in cases involving ESI. Id. Subsection (d) of the
rule provides that “[a] federal court may order that the privilege or protection is not waived by
disclosure connected with the litigation pending before the court—in which event the disclosure
is also not a waiver in any other federal or state proceeding.” FRE 502(d). With respect to
subsection (d), the advisory committee stated:
Confidentiality orders are becoming increasingly important
in limiting the costs of privilege review and retention, especially in
cases involving electronic discovery. But the utility of a
confidentiality order in reducing discovery costs is substantially
diminished if it provides no protection outside the particular
litigation in which the order is entered. Parties are unlikely to be
able to reduce the costs of pre-production review for privilege and
work product if the consequence of disclosure is that the
communications or information could be used by non-parties to the
litigation.
FRE 502(d)’s advisory committee note. The advisory committee further noted that “when a
confidentiality order governing the consequences of disclosure in that case is entered in a federal
proceeding, its terms are enforceable against non-parties in any federal or state proceeding,” thus
providing producing parties with “predictable protection from a court order—predictability that
is needed to allow the party to plan in advance to limit the prohibitive costs of privilege and work
product review and retention.” Id. Further, the advisory committee confirmed that, as is the case
with all federal court orders, “a confidentiality order is enforceable whether or not it
memorializes an agreement among the parties to the litigation.” Id. Finally, with respect to
subsection (d), the advisory committee cautioned that FRE 502(d) “does not allow the federal
court to enter an order determining the waiver effects of a separate disclosure of the same
information in other proceedings, state or federal.” Id.; see also 6 James Wm. Moore, Moore’s
Federal Practice § 26.49[5][h][v] (3d ed. 2012) (footnotes omitted) (“Federal courts may enter
confidentiality orders providing that disclosure of privileged or protected material in a litigation
pending before the court does not constitute waiver in other state or federal proceedings. In
suggesting this provision, the Advisory Committee acknowledged that the utility of a
confidentiality order in reducing discovery costs is substantially diminished if it provides no
protection outside the particular litigation in which the order is entered. Entry of a
confidentiality order will prevent nonparties to the litigation from obtaining privileged material
produced pursuant to such a confidentiality order. The rule also encompasses situations in which
the parties are ordered to provide documents under a ‘claw-back’ or ‘quick peek’ arrangement.
These types of arrangements allow the parties to produce documents for review and return
without engaging in a privilege review, but without waiver of privilege or work product
protection, as a way to avoid the excessive costs of full privilege review and disclosure when
large numbers of documents are involved. The rule provides the parties with predictable
protection from waiver when responding to a court order for production of documents pursuant
to such an arrangement.”).
As noted above, the narrow issue before the court is whether, absent defendant’s consent,
the court should grant plaintiffs’ request and enter an FRE 502(d) order allowing plaintiffs to
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review the 1500 documents being withheld by defendant pursuant to the deliberative process and
bank examination privileges. In this case, the answer is yes.
Discovery in this case began on April 7, 2014, see April 4, 2014 Order, and is ongoing.
On July 16, 2014, the court entered a protective order, which was subsequently modified on
August 8, 2014. See July 16, 2014 Protective Order (modified August 8, 2014). The protective
order specifically stated that it was “not intended to address or govern claims of privilege that
may otherwise be asserted by any of the parties.” Id. at 1. Rather, the express purpose of the
protective order was to protect “proprietary, confidential, trade secret, or market-sensitive
information, as well as information that is otherwise protected from public disclosure under
applicable law.” Id. ¶ 2. Further, the protective order provided that such information
may be used solely for the purposes of Fairholme Funds, Inc. v.
United States (No. 13-465, Fed. Cl.), including any appellate
proceedings, and may not be given, shown, made available,
discussed, or otherwise conveyed in any form, except as otherwise
agreed by the parties or as otherwise provided in this Protective
Order or in any subsequent orders issued by the court in this
action.
Id. ¶ 3. In the case of inadvertently disclosed privileged material, the protective order contained
a clawback provision:
The inadvertent disclosure of any information or document that is
subject to privilege will not be deemed to waive a party’s claim of
privilege for that document or the subject matter of the document,
to its privileged or protected nature, or estop that party or the
privilege holder from designating the information or document as
privileged at a later date.
Id. ¶ 13. Significantly, the protective order further stated that the “clawback provision shall be
governed by Federal Rule of Evidence 502(d).” Id. Lastly, the protective order provided that
any “[i]nadvertent failure to designate any information pursuant to this Protective Order shall not
constitute a waiver of any otherwise valid claim for protection,” id. ¶ 14, and “shall survive and
remain in full force and effect after termination of this action,” id. ¶ 28.
Although plaintiff does not allege and the court does not find that the government has
failed to satisfy its discovery obligations, the court notes that, as plaintiff points out and the
government concedes, the government’s production of documents in this case has been
piecemeal. Therefore, in an effort to facilitate the speedy and efficient conclusion of
jurisdictional discovery in this case, the court hereby allows the use of FRE 502(d)’s quick peek
procedure for the 1500 documents at issue. Specifically, the court orders defendant to provide
plaintiffs with access to, at a location of defendant’s choosing, the approximately 1500
documents plaintiffs seek to review. Upon reviewing the documents, plaintiff shall identify
those documents it seeks to be produced. Defendant will then be given one last opportunity to
review the documents identified by plaintiffs. If defendant still maintains that the documents are
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privileged, defendant shall so indicate. If, however, defendant no longer seeks to assert either
the deliberative process or bank examination privilege over the documents, it shall produce the
documents to plaintiffs. As to those documents over which defendant continues to assert a
privilege, plaintiffs may file a motion to compel their production if they believe that those
documents are not privileged. Defendant will then provide the documents to the court for an in
camera review.
In response to defendant’s argument that use of FRE 502(d)’s quick peek procedure is
inappropriate because (1) defendant has already conducted a comprehensive review of its
documents, (2) once plaintiffs have viewed privileged information, defendant has no way to
unring the bell, and (3) defendant does not consent to use of the procedure, the court adds the
following.
First and foremost, it is “axiomatic that a trial court has broad discretion to fashion
discovery orders[.]” White Mountain Apache Tribe of Ariz. v. United States, 4 Cl. Ct. 575, 583
(1984); accord Schism v. United States, 316 F.3d 1259, 1300 (Fed. Cir. 2002) (“A trial court ‘has
wide discretion in setting the limits of discovery.’” (quoting Moore v. Armour Pharm. Co., 927
F.2d 1194, 1197 (11th Cir. 1991))); Florsheim Shoe Co., Div. of Interco, Inc. v. United States,
744 F.2d 787, 797 (Fed. Cir. 1984) (“Questions of the scope and conduct of discovery are, of
course, committed to the discretion of the trial court.”). Although discovery rules “are to be
accorded a broad and liberal treatment,” Hickman v. Taylor, 329 U.S. 495, 507 (1947), the court
must, “[i]n deciding either to compel or quash discovery, . . . balance potentially conflicting
goals,” Evergreen Trading, LLC ex rel. Nussdorf v. United States, 80 Fed. Cl. 122, 126 (2007).
Second, if the court were to deny plaintiffs’ request, the court has every reason to believe
that plaintiffs would file another motion seeking the court’s in camera review of all of the
remaining 1500 documents. Given the court’s heavy caseload and limited resources, the use of
the quick peek procedure is a much more viable and attractive option. Not only will the court
not have to expend its time and resources on a task that should be performed by the parties, but
both parties will benefit from the prompt (or at least more prompt) resolution of outstanding
discovery disputes. Thus, even though defendant has already reviewed the subject material
multiple times, plaintiffs will continue to seek production of these materials, which will, in turn,
continue to place a burden on the court—one which could be alleviated through the parties’ use
of the quick peek procedure.
Third, even though it is clear from the advisory committee note to FRE 502(d) that the
purpose of the rule was to address two issues not relevant to the current dispute—the need to
provide protection for inadvertently disclosed materials and the need to address the high cost of
discovery in cases involving large quantities of ESI—the procedure it sets forth is nevertheless
helpful in the instant case. Not only is the procedure useful in this case because it allows both
sides to resume briefing on defendant’s motion to dismiss so that the court may finally address
the viability and merits of plaintiffs’ complaint, but a confidentiality order entered in federal
court pursuant to FRE 502(d) provides both parties with greater protections than it would
necessarily have under an RCFC 26(c) protective order since, as noted above, Rule 502(d)’s
terms apply to nonparties in any other federal or state proceeding.

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Fourth, although defendant claims that allowing plaintiffs to review the documents would
be akin to ringing a bell that cannot be unrung, the court reminds both parties that, pursuant to
the protective order that has already been entered in this case, only those individuals who have
complied with the process set forth therein will be given access to protected information:
Persons seeking access to Protected Information must read this
Protective Order, complete the appropriate application form
(attached to this Protective Order as Attachment A), and file the
executed application with the court. The applicant must consult
with opposing counsel and set forth in the application whether
opposing counsel agrees to or opposes the applicant’s admission.
If there is no opposition, the applicant will automatically be
granted access to Protected Information. If there is opposition,
opposing counsel will file a submission describing such opposition
within three (3) days of the application being filed. The other
party will then have three (3) days to file a response. The
obligation to complete and file such an application does not apply
to persons identified in Paragraph 5 or to counsel who have entered
an appearance in this action.
July 16, 2014 Protective Order (modified August 8, 2014) ¶ 7. Furthermore, as noted above,
with respect to privileged material, the protective order already contains an FRE 502(d)
clawback agreement. Id. ¶ 13 (“This clawback provision shall be governed by Federal Rule of
Evidence 502(d).”). Thus, although there is no way to unring a bell that has already been rung,
both parties can be assured of the fact that pursuant to the protective order already in place,
protected information—which includes both confidential and privileged information—is just
that.
Finally, the court is not convinced that it lacks the authority to order the use of the quick
peek procedure absent defendant’s consent. In its response to plaintiffs’ motion, defendant
identified only one case, Summerville, in which a court “compelled a quick peek over a
producing party’s objection.” Def.’s Resp. 9. In Summerville, as defendant notes, the District
Court for the Southern District of Indiana—absent any reference to FRE 502(d)—ordered the use
of the quick peek procedure as an alternative to imposing sanctions on the defendant for failing
to provide the plaintiff with an adequate privilege log and for refusing to cooperate with plaintiff
during discovery. See 2016 WL 233627, at *5-6. In the case at bar, the court has already stated
that its use of the quick peek procedure is not intended as a sanction for any behavior on
defendant’s part but rather as a means of expediting the completion of jurisdictional discovery in
this case and conserving the court’s limited resources. Thus, not only is Summerville not
controlling, it is distinguishable. See also Thermal Sols., Inc. v. Imura Int’l USA, Inc., No. 2:08cv-2220 (JWL/DJW), 2010 WL 11431562, at *13-14 (D. Kan. Apr. 28, 2010) (allowing the
defendants to conduct a quick peek review of certain files belonging to the plaintiff as a sanction
for the plaintiff’s failure to comply with FRCP 26(g)(1) and noting that the parties previously
agreed to the use of the quick peek procedure; no reference made to FRE 502(d)).

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Similarly, the court is unpersuaded by defendant’s reference to the position taken by The
Sedona Conference. As stated above, the court’s use of the quick peek procedure in the case at
bar is not motivated by a need to (1) protect inadvertently disclosed materials, (2) address the
high cost of discovery in cases involving large quantities of ESI, or (3) punish defendant. The
court’s sole purpose in utilizing the procedure is to bring jurisdictional discovery to an end so
that the case may move forward. Given the court’s wide discretion to manage discovery
pursuant to RCFC 26, and given the mutually agreed-to protective order already entered in this
case, the court’s use of the quick peek procedure is eminently appropriate. 8
III. CONCLUSION
In accordance with the court’s conclusions:
(1)

Defendant shall provide plaintiffs with the opportunity to review the
approximately 1500 documents at issue—which are currently being withheld by
defendant as privileged pursuant to the deliberative process and bank examination
privileges—at a time and place to be determined by defendant. In so doing,
defendant shall not be deemed to have waived any privileges as to these
documents.

(2)

Plaintiffs shall then identify those documents that they believe are relevant to the
case and that they believe should be produced in light of this court’s September
20, 2016 Opinion and Order on plaintiffs’ motion to compel and the United States
Court of Appeals for the Federal Circuit’s subsequent ruling on January 30, 2017.

(3)

The parties shall then meet and confer in an effort to resolve their differences
without further court involvement. If they are unable to do so, plaintiffs may file
a renewed motion to compel those documents they contend are both relevant and
not privileged. In conjunction with the filing of its response to plaintiffs’ motion,
defendant shall provide the court with copies of the documents sought by
plaintiffs for an in camera review.

IT IS SO ORDERED.

s/ Margaret M. Sweeney
MARGARET M. SWEENEY
Judge

8

Because the court is directing the parties to utilize FRE 502(d)’s quick peek procedure,
it need not address the arguments made by the parties with respect to FHFA00077771 and
FHFA00038592.
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