Acosta v. Saakvitne et al

Filing 214

ORDER Affirming Discovery Order Regarding Documents 16, 27, 28d, 29, 30, 31, 35, 36, and 38.The court affirms the Magistrate Judge's orders allowing the Government to provide Defendants with redacted versions of items 16, 27, 28d, 29, 30, 31, 35, 36, and 38. Signed by JUDGE SUSAN OKI MOLLWAY on 6/1/2020. (cib)

Case 1:18-cv-00155-SOM-WRP Document 214 Filed 06/01/20 Page 1 of 19
4354

PageID #:

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
EUGENE SCALIA, Secretary of
Labor, United States
Department of Labor,

)
)
)
)
Plaintiff,
)
)
vs.
)
)
NICHOLAS L. SAAKVITNE, an
)
individual; NICHOLAS L.
)
SAAVITNE, A LAW CORPORATION, )
a California Corporation;
)
BRIAN BOWERS, an individual; )
DEXTER C. KUBOTA, an
)
individual; BOWERS + KUBOTA
)
CONSULTING, INC., a
)
corporation; BOWERS + KUBOTA )
CONSULTING, INC. EMPLOYEE
)
STOCK OWNERSHIP PLAN,
)
)
Defendants.
)
_____________________________ )

CIVIL NO. 18-00155 SOM-WRP
ORDER AFFIRMING DISCOVERY
ORDER REGARDING DOCUMENTS 16,
27, 28d, 29, 30, 31, 35, 36,
AND 38

ORDER AFFIRMING DISCOVERY ORDER REGARDING
DOCUMENTS 16, 27, 28d, 29, 30, 31, 35, 36, AND 38
I.

INTRODUCTION.
Before the court is a discovery dispute relating to

documents allegedly relevant to an ERISA plan.

Brian Bowers and

Dexter C. Kubota created a company, Bowers + Kubota Consulting,
Inc., through which they provided consulting, architectural, and
engineering services.

According to the Complaint in this matter,

the two men then created an Employee Stock Ownership Plan
(“ESOP”) called Bowers + Kubota Consulting, Inc. Employee Stock
Ownership Plan, and sold their 100% ownership interest in their
consulting firm to the ESOP.

The consulting company was

Case 1:18-cv-00155-SOM-WRP Document 214 Filed 06/01/20 Page 2 of 19
4355

PageID #:

allegedly overvalued based on faulty data, which meant that the
the ESOP paid the two individuals more money than the consulting
company was worth.

The Secretary of Labor, Eugene Scalia (the

“Government”), proceeding under ERISA, is suing the two
individuals, the consulting company, the ESOP, the trustee of the
ESOP, and the trustee’s company, alleging that the sale to the
ESOP improperly benefitted Bowers and Kubota individually to the
detriment of the ESOP.

The Government also claims that the

ESOP’s trustee, Nicholas L. Saakvitne, breached his duties as the
ESOP’s trustee.
Discovery in the case has been very contentious.
Currently on appeal is whether the Magistrate Judge clearly erred
or acted contrary to law in allowing redactions to items 16, 27,
28d, 29, 30, 31, 35, 36, and 38 based on the deliberative process
privilege asserted by the Government.

On appeal, Bowers and

Kubota argue that the Magistrate Judge should have considered and
analyzed factors announced in North Pacifica v. City of Pacifica,
274 F. Supp. 2d 1118 (N.D. Ca. 2003), that allow discovery when a
party’s need for the discovery outweighs the Government’s
interest in preserving the privilege.

In light of the factors

that are binding on this court, Bowers and Kubota fail to
demonstrate that their need for the material outweighs the
Government’s interest in preserving the privilege.

The

Magistrate Judge’s order was not clearly erroneous or contrary to

2

Case 1:18-cv-00155-SOM-WRP Document 214 Filed 06/01/20 Page 3 of 19
4356

PageID #:

law, and the court affirms the discovery order allowing
redactions to items 16, 27, 28d, 29, 30, 31, 35, 36, and 38.
II.

BACKGROUND.
According to the Complaint, Bowers and Kubota

controlled their respective trusts, which owned Bowers + Kubota
Consulting, Inc.

See Complaint ¶ 6, ECF No. 1, PageID # 4.

On

December 14, 2012, Bowers and Kubota allegedly sold their shares
of the consulting company’s stock to the Bowers + Kubota
Consulting, Inc. ESOP for more than those shares were worth.
¶¶ 7-8.

Id.

Saakvitne, the trustee of the plan, allegedly relied on

a flawed appraisal of those shares despite obvious problems with
it.

Id. ¶ 8, PageID # 5.

The Complaint alleges that this

transaction violated ERISA by benefitting Bowers and Kubota
individually to the detriment of the ESOP.
In January 2019, Bowers and Kubota sought discovery in
this case from the Government.

See ECF No. 50 (Certificate of

Service for Requests for Production of Documents).

Unhappy with

the Government’s response, Bowers and Kubota, on September 14,
2019, filed a Motion to Compel Discovery from the Acting
Secretary of Labor, including items 16, 27, 28d, 29, 30, 31, 35,
36, and 38, the items that are the subject of this appeal.
ECF No. 113.

3

See

Case 1:18-cv-00155-SOM-WRP Document 214 Filed 06/01/20 Page 4 of 19
4357

PageID #:

On November 22, 2029, the Magistrate Judge held a
hearing on the motion to compel.

See ECF No. 137.

The minutes

of the hearing indicate that the Magistrate Judge ordered:
No later than December 6, 2019, [the
Government] shall:
(1) reconsider whether all documents fit
within the privileges asserted;
(2) reconsider its withholding of entire
documents on the basis of privilege instead
of producing the documents in redacted form.
See, e.g., Hugler v. Wedbush Sec. Inc., 2018
WL 1162912, at *2 (C.D. Cal. Jan. 8, 2018)
(noting that the Secretary “has already
produced redacted versions of the case
opening documents that show when each
investigation was opened and the source of
that information” and produced several
additional documents in redacted [form] from
the investigative files); Hugler v. Bat
Masonry Co., No. 6:15-CV-28, 2017 WL 722069,
at *3 (W.D. Va. Feb. 22, 2017) (noting that
the Secretary had produced a redacted version
of the report of investigation);
(3) produce to Defendants any documents
previously withheld that Plaintiff determines
can be produced in redacted form;
(4) produce to Defendants, with a copy to the
Court, a supplemental privilege log that
fully complies with Local Rule 26.2(d)
including (a) greater detail in all columns,
e.g., the date the documents was created, the
specific subject matter of the document or
communication, the names and titles of all
authors and recipients, including attorneys,
etc.; and (b) and separately lists each
document previously grouped together in Items
41, 42, and 43; and
(5) produce to the Court for in camera review
a chart that lists each investigation
involving Defendant Saakvitne related to an
4

Case 1:18-cv-00155-SOM-WRP Document 214 Filed 06/01/20 Page 5 of 19
4358

PageID #:

ESOP or other stock transaction that (a)
summarizes the matter investigated, (b) lists
the date the investigation began, (c) lists
the date the investigation concluded or
states that the investigation is ongoing, and
(c) states the result of the investigation.
The parties shall meet and confer either in
person or by telephone to narrow the issues
that remain regarding the withheld documents
and the supplemental privilege log to be
produced by Plaintiff on December 6, 2019.
A Further Discovery Hearing on Defendants'
Motion to Compel is set for December 13, 2019
at 9:00 a.m.
ECF No. 137.
On December 12, 2019, the Magistrate Judge asked for
supplemental briefing and continued the hearing on the motion to
February 7, 2020.

See ECF No. 145.

After the continued hearing,

the Government submitted the disputed materials for in camera
review, and the parties submitted further briefing regarding that
discovery.

See ECF Nos. 163-65, 168.
On April 3, 2020, the Magistrate Judge issued the order

that is the subject of the current appeal, relying in relevant
part on the deliberative process privilege.

That privilege

allows the Government to withhold documents that reveal the
deliberative analysis that precedes an agency decision.

The

Magistrate Judge said that the Government did not have to produce
unredacted versions of items 16, 27, 28d, 29, 30, 31, 35, 36, and
38.

See ECF No. 184.

5

Case 1:18-cv-00155-SOM-WRP Document 214 Filed 06/01/20 Page 6 of 19
4359

PageID #:

The Magistrate Judge discussed the standard for
determining whether the deliberative process privilege shielded
documents from discovery, and noted that the privilege is a
qualified privilege that can be overcome when the need for the
material and fact-finding outweighs the Government’s interest in
nondisclosure.

On appeal, Bowers and Kubota argue that the

Magistrate Judge failed to properly weigh the factors set forth
in North Pacifica v. City of Pacifica, 274 F. Supp. 2d 1118 (N.D.
Cal. 2003), in balancing the privilege against the requesting
party’s need for discovery.

In actuality, the Magistrate Judge

expressly recognized these factors in his order before completing
his balancing analysis.

See ECF No. 184, PageID #s 3735-37.

With respect to item 16, after an in camera review, the
Magistrate Judge found that the redacted portions predated and
assisted the Government’s decision to litigate the case, and were
part of the agency’s investigatory files.

The Magistrate Judge

therefore concluded that the deliberative process and
investigative files privileges protected the redactions from
discovery.1

See ECF No. 184, PageID # 3743.

The Magistrate

Judge then determined that Bowers and Kubota had not shown that
their need for disclosure of the redacted material outweighed the
Government’s interest in maintaining the privilege, noting that

1

The investigative privilege protects law enforcement
investigatory files from civil discovery. See Logan v. Pullman,
2005 WL 8158945, at*3 (E.D. Wash. Nov. 8, 2005).
6

Case 1:18-cv-00155-SOM-WRP Document 214 Filed 06/01/20 Page 7 of 19
4360

PageID #:

the redacted information (1) went to nonpublic information
concerning the measurements for qualifying as a major case;
(2) would not aid fact-finding relevant to this litigation, as
the limited redactions effectively allowed disclosure of the
factual information in item 16; and (3) would not significantly
aid experts through disclosure of the agency’s prelitigation
calculations of the ESOP’s losses because Bowers and Kubota still
had the opportunity to conduct full discovery into those loss
calculations.

See id., PageID # 3744.

With respect to items 27 and 35, the Magistrate Judge,
after an in camera review, determined that certain redactions
were appropriate under the attorney-client privilege.
PageID #s 3745-46.

See id.,

Bowers and Kubota are not appealing that

portion of the order.

However, with respect to item 27 (but not

35), the Magistrate Judge determined that four pages of
redactions were also appropriately withheld under the
deliberative process privilege.

See id., PageID # 3746.

The

Magistrate Judge determined that these redactions went to matters
that predated and assisted the Government’s decision to litigate
this case.

The Magistrate Judge noted that the redacted version

of item 27 still allowed the factual information in the document
to be disclosed and determined that Bowers and Kubota had not
shown that their need for discovery of the redacted information
(the agency’s impressions of the valuation report) outweighed the

7

Case 1:18-cv-00155-SOM-WRP Document 214 Filed 06/01/20 Page 8 of 19
4361

agency’s interests in protecting the information.

PageID #:

The Magistrate

Judge stated that, for the same reasons articulated with respect
to item 16, Bowers and Kubota had failed to show that their need
for discovery as to prelitigation loss calculations outweighed
the Government’s interests in maintaining the privilege.

See

id., PageID #s 3746-47.
With respect to items 28d, 30, 31, 36, and 38, the
Magistrate Judge, after an in camera review, similarly determined
that redactions were appropriate under the deliberative process
privilege.

The Magistrate Judge determined that these redactions

went to matters that predated and assisted the Government’s
decision to litigate this case.

The Magistrate Judge noted that

the redacted versions still allowed factual information in the
documents to be disclosed and determined that Bowers and Kubota
had not shown that their need for the redacted information (the
agency’s prelitigation impressions, analyses, and critiques as to
valuation and loss calculations) outweighed the Government’s
interests in protecting the information.

See id., PageID # 3748,

3751-53.
With respect to item 29, the Magistrate Judge, after an
in camera review, determined that certain redactions were
appropriate under the attorney-client privilege.
# 3749.

See id., PageID

The Magistrate Judge also determined that fourteen other

pages of redactions were appropriate under the deliberative

8

Case 1:18-cv-00155-SOM-WRP Document 214 Filed 06/01/20 Page 9 of 19
4362

process privilege.

PageID #:

The Magistrate Judge determined that these

redactions went to matters that predated and assisted the
Government’s decision to litigate this case, while allowing
discovery of the factual information in the document.

The

Magistrate Judge further determined that Bowers and Kubota had
failed to demonstrate that their need for discovery of the
redacted information (the agency’s prelitigation value analysis)
outweighed the agency’s interests in protecting the information.
See id., PageID #s 3749-50.
On April 17, 2020, Bowers and Kubota sought
reconsideration of the Magistrate Judge’s discovery order,
arguing that the Magistrate Judge should have “fully articulated
the application of the factors set forth in N[orth] Pacifica, LLC
v. City of Pacifica, 274 F. Supp. 2d 1118, 1222 (N.D. Ca. 2003).”
See ECF No. 187, PageID # 3795.
On April 21, 2020, the Magistrate Judge denied the
reconsideration motion, ruling that the motion failed to show a
manifest error or law or fact and rejecting its argument that his
order should have included more detail.

See ECF No. 191.

On May 5, 2020, Bowers and Kubota timely appealed the
Magistrate Judge’s discovery order and denial of their motion for
reconsideration.

See ECF No. 194; Local Rule 74.1(a) (allowing

appeals within 14 days of a magistrate judge’s nondispositive
order).

9

Case 1:18-cv-00155-SOM-WRP Document 214 Filed 06/01/20 Page 10 of 19
4363

III.

PageID #:

Standard of Review.
Under 28 U.S.C. § 636(b)(1)(A), a district judge may

set aside a magistrate judge’s nondispositive order if it is
“clearly erroneous or contrary to law.”

See also Bhan v. NME

Hosp., Inc., 929 F.2d 1404, 1414-15 (9th Cir. 1991) (stating that
§ 636(b)(1) “provides that the magistrate’s decision on a
nondispositive issue will be reviewed by the district judge under
the clearly erroneous standard”).

The Ninth Circuit has

explained, “Pretrial orders of a magistrate under 636(b)(1)(A)
are reviewable under the ‘clearly erroneous and contrary to law’
standard; they are not subject to de novo determination.

The

reviewing court may not simply substitute its judgment for that
of the deciding court.”

Grimes v. City & Cty. of San Francisco,

951 F.2d 236, 241 (9th Cir. 1991) (quotation marks and citations
omitted).
The threshold of the “clearly erroneous” test is high.
“A finding is ‘clearly erroneous’ when although there is evidence
to support it, the reviewing court on the entire evidence is left
with the definite and firm conviction that a mistake has been
committed.”

United States v. U.S. Gypsum Co., 333 U.S. 364, 395

(1948); accord Easley v. Cromartie, 532 U.S. 234, 242 (2001)
(stating that, in reviewing for clear error, “a reviewing court
must ask whether, on the entire evidence, it is left with the
definite and firm conviction that a mistake has been committed”

10

Case 1:18-cv-00155-SOM-WRP Document 214 Filed 06/01/20 Page 11 of 19
4364

PageID #:

(quotation marks and citation omitted)); Balen v. Holland Am.
Line Inc., 583 F.3d 647, 655 (9th Cir. 2009) (“Review under the
clearly erroneous standard is significantly deferential,
requiring a definite and firm conviction that a mistake has been
committed.” (quotation marks and citation omitted)); Burdick v.
Comm’r Internal Revenue Serv., 979 F.2d 1369, 1370 (9th Cir.
1992) (“A finding of fact is clearly erroneous if we have a
definite and firm conviction that a mistake has been
committed.”).
“‘A decision is ‘contrary to law’ if it applies an
incorrect legal standard or fails to consider an element of the
applicable standard.’”

Green v. Kanazawa, No. CV 16-00054

LEK-KSC, 2018 WL 5621953, at *3 (D. Haw. Oct. 30, 2018) (quoting
Na Pali Haweo Cmty. Ass'n v. Grande, 252 F.R.D. 672, 674 (D. Haw.
2008)).
IV.

ANALYSIS.
This is a very limited appeal with respect to the

Magistrate Judge’s denial of Bowers and Kubota’s request for
unredacted copies of items 16, 27, 28d, 29, 30, 31, 35, 36, and
38.

Bowers and Kubota argue that allowing the redactions based

on the Government’s deliberative process privilege was clearly
erroneous or contrary to law because the Magistrate Judge did not
properly balance their need for discovery against the
Government’s interest in asserting the privilege.

11

Specifically,

Case 1:18-cv-00155-SOM-WRP Document 214 Filed 06/01/20 Page 12 of 19
4365

PageID #:

they argue that the Magistrate Judge failed “to articulate its
application of the factors set forth in N[orth] Pacifica” and to
“properly appl[y] the North Pacifica factors.”

See ECF No. 194,

PageID #s 3885-86.
The deliberative process privilege permits the
Government to withhold from discovery “documents that reflect
advisory opinions, recommendations and deliberations comprising
part of a process by which government decisions and policies are
formulated.”

FTC v. Warner Commc'ns Inc., 742 F.2d 1156, 1161

(9th Cir. 1984).

The privilege was “developed to promote frank

and independent discussion among those responsible for making
governmental decisions and also to protect against premature
disclosure of proposed agency policies or decisions.”
(quotation marks and citation omitted).

Id.

The privilege therefore

allows agencies to freely “explore possibilities, engage in
internal debates, or play devil’s advocate without fear of public
scrutiny.”

Carter v. U.S. Dep't of Commerce, 307 F.3d 1084, 1089

(9th Cir. 2002).
For the deliberative process privilege to apply, a
document must be predecisional and deliberative in nature.
Id.

The Ninth Circuit has explained,
A “predecisional” document is one prepared in
order to assist an agency decisionmaker in
arriving at his decision, and may include
recommendations, draft documents, proposals,
suggestions, and other subjective documents
which reflect the personal opinions of the
12

Case 1:18-cv-00155-SOM-WRP Document 214 Filed 06/01/20 Page 13 of 19
4366

PageID #:

writer rather than the policy of the agency.
A predecisional document is a part of the
“deliberative process,” if the disclosure of
the materials would expose an agency’s
decisionmaking process in such a way as to
discourage candid discussion within the
agency and thereby undermine the agency's
ability to perform its functions.”
Assembly of State of Cal. v. U.S. Dep't of Commerce, 968 F.2d
916, 920 (9th Cir. 1992) (quotation marks and citations omitted);
see also FTC v. Warner Commc'ns, 742 F.2d at 1161 (explaining
that, to be predecisional, a document must have been generated
before the adoption of an agency’s policy or decision and that,
to be deliberative in nature, a document must contain opinions,
recommendations, or advice about agency policies).

“Purely

factual material that does not reflect deliberative processes is
not protected.”

FTC v. Warner Commc'ns, 742 F.2d at 1161.

Bowers and Kubota do not challenge on appeal the Magistrate
Judge’s determination that the deliberate process privilege
applies to the redacted material.

But they correctly note that

that does not end the inquiry.
As the Magistrate Judge recognized, the deliberative
process privilege is a qualified privilege.

Even when the

Government has shown the applicability of the deliberative
process privilege, a “litigant may obtain deliberative materials
if his or her need for the materials and the need for accurate
fact-finding override the government’s interest in
non-disclosure.”

Id.

The Ninth Circuit has explained that
13

Case 1:18-cv-00155-SOM-WRP Document 214 Filed 06/01/20 Page 14 of 19
4367

PageID #:

courts “balance four factors in determining whether this
exception to the deliberative process privilege is met: ‘1) the
relevance of the evidence; 2) the availability of other evidence;
3) the government’s role in the litigation; and 4) the extent to
which disclosure would hinder frank and independent discussion
regarding contemplated policies and decisions.’”

Karnoski v.

Trump, 926 F.3d 1180, 1206 (9th Cir. 2019) (quoting FTC v. Warner
Commc'ns, 742 F.2d at 1161).

Rather than citing and discussing

this binding case precedent regarding overcoming the deliberative
process privilege, Bowers and Kubota complain that the Magistrate
Judge failed to sufficiently articulate his analysis with respect
to permissive factors identified by the Northern District of
California in North Pacifica:
In deciding whether the qualified
deliberative process privilege should be
overcome, a court may consider the following
factors: (1) the relevance of the evidence;
(2) the availability of other evidence,
(3) the government’s role in the litigation,
and (4) the extent to which disclosure would
hinder frank and independent discussion
regarding contemplated policies and
decisions. Other factors that a court may
consider include: (5) the interest of the
litigant, and ultimately society, in accurate
judicial fact finding, (6) the seriousness of
the litigation and the issues involved,
(7) the presence of issues concerning alleged
governmental misconduct, and (8) the federal
interest in the enforcement of federal law.
274 F. Supp. 2d at 1122 (citation omitted and emphasis added).

14

Case 1:18-cv-00155-SOM-WRP Document 214 Filed 06/01/20 Page 15 of 19
4368

PageID #:

The Magistrate Judge did not clearly err in failing to discuss
North Pacifica’s factors 5 though 8.
That decision was issued by then-Magistrate Judge
Edward Chen (now a district judge) of the Northern District of
California.

Judge Chen is widely respected, and his North

Pacifica decision has been cited to this court before, but it was
not binding on the Magistrate Judge in this case.

Moreover, that

decision expressly states that consideration of the factors it
examines is permissive.

This court nevertheless examines whether

the Magistrate Judge clearly erred or whether his order was
contrary to North Pacifica’s factors 1 though 4, as those are the
same factors identified by the Ninth Circuit in Karnoski, 926
F.3d at 1206, which is binding on this court.

This court

concludes that Bowers and Kubota show no err in the Magistrate
Judge’s balancing of the factors.
Not only did the Magistrate Judge have the normal
briefing in this matter, he had two rounds of supplemental
briefing, held two hearings, and conducted an in camera review of
the redacted material in dispute.
adjudicating numerous arguments.

He then issued a lengthy order
On appeal, Bowers and Kubota

focus on a narrow aspect of his order, arguing that the
Magistrate Judge did not sufficiently explain how he weighed
factors in determining whether their need for the redacted
material and accurate fact-finding outweighed the Government’s

15

Case 1:18-cv-00155-SOM-WRP Document 214 Filed 06/01/20 Page 16 of 19
4369

interest in nondisclosure.
at 1161.

PageID #:

See FTC v. Warner Commc'ns, 742 F.2d

Bowers and Kubota fail to satisfy their burden on this

appeal of demonstrating that the Magistrate Judge order was
clearly erroneous or contrary to law.
The record demonstrates that the Magistrate Judge
effectively weighed the factors set forth Karnoski, 926 F.3d at
1206.

The Magistrate Judge conducted an in camera review of the

redacted material.

With respect to each item at issue, the

Magistrate Judge determined that the redactions allowed
disclosure of the factual material in it.

Weighing Bowers and

Kubota’s need for the redacted material and accurate fact-finding
against the Government’s interest in nondisclosure, the
Magistrate Judge then determined with respect to each redacted
item that the Government’s interest outweighed that of Bowers and
Kubota.

While the redacted information may be relevant to Bowers

and Kubota’s statute of limitation defense and to value and loss
calculations (Karnoski’s first factor weighing in favor of
disclosure), the Magistrate Judge determined after his in camera
review of the material that Bowers and Kubota could still conduct
full discovery into those issues.

In other words, the Magistrate

Judge correctly determined that Karnoski’s second factor weighed
in favor of nondisclosure because the evidence Bowers and Kubota
sought was available through other discovery.

16

Case 1:18-cv-00155-SOM-WRP Document 214 Filed 06/01/20 Page 17 of 19
4370

PageID #:

While the evidence as to when the Government knew of
Defendants’ alleged violations of ERISA is primarily under the
Government’s control, the Magistrate Judge also correctly
determined that such knowledge could be discovered through other
nonprivileged material.

Karnoski’s third factor therefore weighs

in favor of the Government with respect to the category of
redactions going to any statute of limitation defense.

With

respect to these redactions, disclosure would chill the
Government’s frank and independent discussions regarding
contemplated policies and decisions.

Karnoski’s fourth factor

also weighs in favor of the Government, especially because Bowers
and Kubota do not need the redacted information to support their
statute of limitation defense, given their opportunity to get
other discovery as to that defense.

With respect to redactions

relating to that defense, they show no clear error.

The

Magistrate Judge correctly balanced the factors identified in
Karnoski.
To the extent that Bowers and Kubota seek evidence
concerning valuation and loss, that information is not solely
controlled by the Government.

Instead, what Bowers and Kubota

seem to be seeking is information about the Government’s thoughts
and deliberative process with respect to valuation and loss.
Bowers and Kubota may be speculating that there might be a
statement against interest in the redacted material.

17

However,

Case 1:18-cv-00155-SOM-WRP Document 214 Filed 06/01/20 Page 18 of 19
4371

PageID #:

the Magistrate Judge reviewed the material in camera and
determined that the factual information in it had been
effectively disclosed and that Bowers and Kubota could conduct
discovery as to the Government’s value and loss calculations.
Karnoski’s third factor therefore weighs in favor of the
Government with respect to redactions going to value and loss
calculations.

Karnoski’s fourth factor also weighs in favor of

the Government with respect to that subject because what Bowers
and Kubota seek goes to the Government’s prelitigation
discussions about Defendants’ conduct.

Allowing discovery of

frank discussions among Government representatives deciding
whether to bring an action would end up restricting the
Government’s policies and decisions.

With respect to redactions

going to valuation and loss calculations, Bowers and Kubota show
no clear error relating to the Magistrate Judge’s balancing of
the factors identified in Karnoski.
V.

CONCLUSION.
The court affirms the Magistrate Judge’s orders

allowing the Government to provide Defendants with redacted
versions of items 16, 27, 28d, 29, 30, 31, 35, 36, and 38.

18

Case 1:18-cv-00155-SOM-WRP Document 214 Filed 06/01/20 Page 19 of 19
4372

PageID #:

IT IS SO ORDERED.
DATED: Honolulu, Hawaii, June 1, 2020.

/s/ Susan Oki Mollway
Susan Oki Mollway
United States District Judge

Scalia v. Heritage, et al., Civ. No. 18-00155 SOM-WRP; ORDER AFFIRMING DISCOVERY
ORDER REGARDING DOCUMENTS 16, 27, 28d, 29, 30, 31, 35 36, AND, 38

19