Heebe et al v. United States of America

Filing 99

ORDER & REASONS granting in part and denying in part 79 Motion to Compel Defendant to Comply with the Court's Prior Orders as set forth in document. Signed by Judge Helen G. Berrigan on 07/27/2012. (kac, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
HEEBE, ET AL.
v.
UNITED STATES OF AMERICA

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CIVIL ACTION No: 10-3452
SECTION C
JUDGE HELEN G. BERRIGAN

ORDER & REASONS1
Before this Court is a Motion to Compel Defendant (“Government”) to Comply with the
Court’s Prior Orders by Plaintiffs, Frederick R. Heebe, Shadowlake Management, LLC, Fred
Heebe Investments, and Live Oak Homes Corporation (hereinafter “Plaintiffs”). (Rec.Doc. 79).
Plaintiffs request that the Government return copies of all privileged documents pursuant to this
Court’s Order of December 20, 2010. (Rec.Doc. 22). Plaintiffs also request that the Government
return copies of all seized documents pursuant to this Court’s February 24, 2011 Order, which
granted the Government a one week extension for return of privileged documents and also
ordered that copies of all documents, including those not privileged, be given to plaintiffs.
(Rec.Doc. 62). Finally, plaintiffs ask that a protocol be implemented for the segregation and
return of privileged documents. Having considered the record, applicable law, and memoranda
of counsel, this Court PARTIALLY GRANTS AND PARTIALLY DENIES this Motion.

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Rebekka Veith, a second-year student at Tulane University Law School, contributed to
the research and preparation of this order and reasons.
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Background
On September 23, 2010, members of the Federal Bureau of Investigation executed a
search warrant, authorized by United States Magistrate Judge Louis Moore, Jr, for the “offices of
River Birch Landfill... located at 2000 Belle Chasse Highway, Gretna, Louisiana, 70056.”
(Rec.Doc.3-3, Ex. A). In December of 2010, this Court granted a motion for return of property
seized by the Government during this search. (Rec.Doc. 22). In its Order, this Court noted that
the Government’s search of 2000 Belle Chasse Highway was objectively unreasonable and
displayed a “callous disregard” for Fourth Amendment privacy rights. (Rec.Doc. 22 at 5). This
Court concluded that the only “adequate remedy” available to petitioners whose property was
seized was “either the return of seized property or at least copies of seized data sufficient to
resume Petitioners’ daily business operations.” (Rec.Doc. 22 at 8). The Government was given
one week, until December 27, 2010, to complete a “clean team” review and return privileged
documents to petitioners. (Rec.Doc. 23). On February 24, 2011, this Court conducted an
evidentiary hearing in reconsideration of its Order to return seized documents, and at the
conclusion ordered the Government to provide plaintiffs with “copies of everything taken”
during the search of the River Birch property by March 3, 2011. (Rec.Doc. 62 at 2). Because it
appears that Government is still not in full compliance with either of these orders, a protocol
must be established to provide for documents at issue to be copied and returned. Plaintiffs and
the Government propose different protocols for the copying and return of these documents.
Plaintiffs’ is as follows:
For Hard Copy Documents:
1.
Defendant, if it has not done so already, will have a vendor brand each
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document with a unique Bates-stamp number.
2.
Defendant will provide a copy set of the Bates-stamped documents to
Plaintiffs.
3.
Plaintiffs will provide a privilege log to Defendant identifying each
privileged document by Bates-stamp number(s).
4.
Defendant will segregate and seal all copies of the listed documents
without reviewing the substance. For each listed document, Defendant
will maintain a record of which government attorneys or agents have
had possession of or access to the document.
5.
If, based on the log, Defendant does not dispute a privilege assertion, it
will return all copies of that document to Plaintiffs.
6.
If, based on that log, Defendant disputes a privilege assertion, the parties
will meet and confer in an effort to resolve the dispute.
7.
The Court will decide any unresolved privilege documents.
For Electronic Documents:
1.
Defendant may not review the substance of the electronic evidence in
the first instance, but may review file names or conduct electronic
searches to identify documents for a substantive review.
2.
Before conducting a substantive review, Defendant must first provide a
copy of the review set to Plaintiffs. The parties will negotiate the
processing and formatting of the documents as well as a method to
identify the documents with unique numbers, such as by creating singlepage TIFF images of the documents with unique Bates-stamp numbers.
3.
Plaintiffs will review the documents and provide a privilege log to
Defendant identifying each privileged document.
4.
Defendant may proceed to review the documents not listed on the
privilege log.
5.
If, based on the log, Defendant does not dispute a privilege assertion, it
will destroy, segregate, or return all copies of that document.
6.
If, based on the log, Defendant disputes a privilege assertion, the parties
will meet-and-confer in an effort to resolve the dispute.
7.
The Court will decide any unresolved privilege disputes.
8.
Defendant will maintain an audit trail of persons who have accessed
electronic files.
(Rec.Doc. 79-1 at 6-7).
The Government’s proposed protocol, which has been in place since the August 23, 2010
search, is as follows:
a.

Peter Butler, Sr. is an attorney who is licensed to practice in the state of
Louisiana. Butler maintains an office within [River Birch Landfill’s]
administrative office. Consequently, some of the information seized
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may relate to his clients and be subject to an attorney-client privilege.
Nevertheless, every effort will be made not to gain access to privileged
information. Therefore, the investigators will utilize other Agents, FBI
employees, and an Assistant United States Attorney, as a “Privilege
Team,” to view any potentially privileged material.
b.
A “Privilege Team” of FBI Agents and other employees will be used to
search the premises and non-privileged materials responsive to the
warrant will be provided to the Assistant U.S. Attorneys assigned to the
“Prosecution Team.” Any suspected privileged materials will be
collected by the “Privilege Team.” A custodian will be designated to
segregate alleged privileged materials, a computer forensic analyst will
extract information from the computer storage systems and digital
media, and an Assistant United States Attorney assigned to the
“Privilege Team” will review the extracted information to determine
whether such materials are, in fact, privileged. Members of the
“Privilege Team” will not be involved in the investigation and will be
instructed not to discuss the case or materials with any members of the
“Prosecution Team.”
c.
If any materials appear to be so privileged, such materials will be
segregated by the forensic analyst and will be designated as such. The
privileged materials will not be revealed in any way to members of the
“Prosecution Team,” including the prosecutor, case agent, or any other
material witnesses. The privileged materials will be returned Peter
Butler, Sr.
d.
The “Privilege Team” will forward to the “Prosecution Team” any and
all materials that are not privileged materials.
e.
If the “Privilege Team” disagrees on whether or not certain materials are
privileged, such materials will be submitted to a United States District
Court Judge for a ruling as to whether the privilege applies and/or
whether the materials fall within any exception to the attorney-client
privilege.
f.
The arguable privileged materials retained by the “Privilege Team” will
not be shown to the “Prosecution Team” unless and until a Judge
determines that the materials are not privileged or fall within any
exception to the attorney-client privilege.
g.
Computer files will be initially examined by the “Privilege Team” to
determine relevance and privileged status in accordance with the abovedescribed procedure.
(Rec.Doc. 93 at 5-6).
In addition to their proposed protocol, plaintiffs also urge this Court to reject the
Government’s use of a “Privilege Team,” which plaintiffs refer to as a “taint team,” but is

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also referred to in this Order as a “clean team.” (Rec.Doc. 79-1 at 10-11).
Law and Analysis
This Court has considered both parties’ proposals for document return protocol, and has
determined, based on these proposals and applicable law, the method for segregating and
returning privileged documents that best suits these circumstances. Plaintiffs and the
Government disagree on three important issues: whether a clean team may be used, whether the
Government must Bates-stamp the electronic information in their possession in addition to
Bates-stamping hard copies of documents, and whether the Government must maintain a record
of who has possession of or access to potentially privileged documents.
I. Use of a Clean Team
A “clean team” consists in this case of FBI agents, an Assistant United States Attorney
and other employees who are not involved in the investigation of the plaintiff, and whose task is
to identify potentially privileged documents and then segregate these documents from nonprivileged material. (Rec.Doc. 93 at 5). The plaintiffs’ memorandum notes that clean teams are
often discouraged or rejected by courts. (Rec.Doc. 79-1 at 11-12). And in fact, this Court has
determined that the “taint team” procedures used by the Government during the search of
plaintiffs’ offices caused “irreparable injury” to the plaintiffs. (Rec.Doc. 74 at 9-11). However,
clean teams are appropriate in “limited, exigent circumstances in which the government officials
have already obtained the physical control of potentially privileged documents through the
exercise of a search warrant.” In re Grand Jury Subpoenas, 454 F.3d 511, 523 (6th Cir. 2006).
This is precisely what has happened in the case at hand, and thus the use of a clean team to make
initial privilege determinations will be appropriate if the proper procedure is used. Case law

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suggests that a clean team using the proper procedure will review documents and distinguish
those which are potentially privileged from those which it believes are not privileged, at which
point the party to whom the documents belong is able to review the documents and “identify any
objections.” United States v. Grant, 2004 WL 1171258 at *1 (S.D.N.Y. May 25, 2004). In this
case, because plaintiffs have agreed to pay for Bates-stamping of all hard copies of documents in
the Government’s possession, the Government must return original hard copies, along with
Bates-stamped copies of these documents to plaintiffs, as well as their privilege determinations.
The Government will maintain Bates-stamped copies of these documents in order to make those
privilege determinations.
The Government proposes that after their “privilege team” designates potentially
privileged materials, the Assistant United States Attorney on the team “will review the extracted
information to determine whether such materials are, in fact, privileged.” (Rec.Doc. 48 at 9).
After that privilege determination is made, the materials will be returned to plaintiffs. Id. But
again, case law suggests that the proper method for determination of privilege is actually that the
clean team will identify and return to the original owner all documents that are “potentially
privileged”. In re Search of 5444 Westheimer Road Suite 1570, 2006 WL 1881370 at *2
(S.D.Tex. July 6, 2006). If a document that is believed by its original owner to be privileged is
not designated as such, that dispute should be heard before a court before the document is turned
over to any prosecution team. Id.
Here, the Government’s procedure as it is currently set out does not appear to allow
plaintiffs to dispute their determination. (Rec.Doc. 48 at 9). Step “d” of the procedure provides
that “The ‘Privilege Team’ will forward to the “Prosecution Team” any and all materials that are

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not privileged materials.” Id. Step “e” states that if the “Privilege Team” disagrees on whether
or not certain materials are privileged, those materials will be submitted to a United States
District Court Judge. Id. This seems to suggest that if all the members of the privilege team
agree that a document is not privileged, it will be sent to the prosecution team without allowing
the plaintiffs a chance to disagree with the determination. It then seems to suggest the Court will
decide internal disputes among the “privilege team,” but plaintiffs will not have their own
chance to bring disputes. To the extent that step “e” does not allow for plaintiffs to bring
privilege disputes for hard copy documents, the Court does not endorse the Government’s
protocol because it is not proper. Plaintiffs must have a chance to dispute privilege
determinations made by the clean team.
Thus, the Government may use their clean team to make privilege determinations but the
proper protocol will allow for plaintiffs to make challenges to privilege determinations, first in a
meet-and-confer session with both parties present, and then in front of this Court if the dispute is
not resolved, before the potentially privileged documents are submitted to the prosecution team.
II. Bates-stamping
Plaintiffs have requested that the Government “brand each document with a unique
Bates-stamp number” and provide a copy set of these stamped documents to the plaintiffs.
(Rec.Doc.79-1 at 7). The Government has agreed to Bates-stamp the hard copy documents in
their possession if plaintiffs will pay for the Bates-stamping. (Id. at 8-9). Plaintiffs have agreed
to pay for Bates-stamping both hard-copy and electronic documents. (Rec.Doc. 93-4). In spite of
this, the Government refuses to Bates-stamp the electronic documents in their possession.
(Rec.Doc.79-1 at 8-9). Because the Government has agreed to Bates-stamp the hard copy

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documents if plaintiffs pay for this service, and because plaintiffs has agreed to pay for the
service, the Government shall Bates-stamp these hard-copy documents. Plaintiffs plan to
provide the Government with a privilege log when they have received the Bates-stamped copies
of documents in the Government’s possession. (Rec.Doc.79-1 at 7).
Plaintiffs maintain that unless electronic documents are Bates-stamped, they will only be
able to identify potentially privileged documents in a privilege log by “date, author and recipient,
to the extent that information exists.” (Rec.Doc 79-1 at 14). A privilege log ordinarily must also
contain a description of the subject matter of the document and provide an explanation for why
the document is privileged. Jones v. Hamilton County Sheriff’s Dept., 2003 WL 21383332 at *4
(S.D.Ind. June 12, 2003). If plaintiffs still possess the original hard-drives that were copied
during the search, then they will be able to create a privilege log for the Government using the
information on these hard-drives. Although plaintiffs have agreed to pay for the Government to
Bates-stamp all of the electronic documents, the Court finds that its solution will create less
waste than requiring the Government to Bates-stamp the 4.7 terabytes of information in its
possession. (Rec.Doc.78 at 189). However, if plaintiffs no longer have these hard-drives or
copies thereof, then the situation becomes analogous to that of the hard-copy documents, as
plaintiffs do not possess the same information that the Government does. If this is the case, the
Government shall provide Plaintiffs with copies of all of the hard-drives in their possession or
agree to Bates-stamping of the electronic information.
III. Maintaining a Record of Who Accesses Potentially Privileged Documents
Plaintiff also asks that the Government maintain a record of which Government attorneys
or agents have had possession of or access to the privileged documents (Rec.Doc.79-1 at 17).

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The Government argues that doing this might “allow a potential criminal defendant to obstruct
and thwart the investigations.” However, the United States District Court for the District of
Columbia has noted, in United States v. Neill that:
“Where the government chooses to take matters into its own hands rather than
using the more traditional alternatives of submitting disputed documents for in
camera review by a neutral and detached magistrate or by court-appointed special
masters, it bears the burden to rebut the presumption that tainted material was
provided to the prosecution team.”
United States v. Neill, 952 F.Supp 834, 841 (D.D.C. 1997). In Neill, the court found that because
the prosecution team testified that it had received no privileged information, and no evidence
existed to show that the “taint team” had disclosed information to the prosecution team, the
Government had shown that, in fact, no tainted material was provided to the prosecution team.
Id. at 842.
Here, as this Court has noted, the clean team process was corrupted during the on-site
search, when individuals not on the clean team handled potentially privileged materials.
(Rec.Doc.74 at 9). It is thus proper under Neill for this Court to require that the Government
maintain a log of which prosecutors and Government agents had access to the potentially
privileged materials in order to prevent further corruption. And it is worth noting that in this
case, plaintiffs maintain that they do not want a copy of this record; they request this procedure
so that the record may be referenced in the case of an indictment. (Rec.Doc. 94-2 at 10). The
Government should not be required to provide to plaintiffs any information that would
compromise a criminal investigation, but they must keep this record of who has and has had
access to the potentially privileged files. This is mandatory.
Conclusion

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Accordingly,
IT IS ORDERED that the protocol for clean team review and privilege
determinations and disputes shall proceed as follows:
For Hard Copies of Documents
1.

2.
3.
4.
5.
6.

The Government shall Bates-stamp all hard copies of documents in the
Government’s possession. Plaintiffs shall pay for these costs, as previously
offered.
Bates-stamped copies of all documents shall be returned to Plaintiffs, along with
privilege determinations made by the Government’s clean team.
Plaintiffs shall review the determinations and agree or dispute, and shall reference
the Bates-stamp number to the clean team for each disputed document, if any.
The parties shall meet and confer based on the privilege disputes, if any.
If no agreement is reached, the privilege disputes shall be brought before this
Court.
Only after the parties or this Court have resolved a privilege dispute shall the
documents that are determined to be non-privileged be sent to the Government’s
prosecution team.

For Electronic Information
1.

2.
3.

4.
5.
6.

Plaintiffs must be in possession of all of the electronic information that the
Government has copied. If Plaintiffs are not currently in possession of all of this
information, the Government shall provide them with copies.
The Government’s clean team shall make privilege determinations but will not
forward them to the prosecution team until the steps outlined below are taken.
Plaintiffs shall create a privilege log or make privilege determinations based on
the information in their possession. This log or these determinations shall be
submitted to the Government’s clean team.
The parties shall meet and confer based on privilege disputes, if any.
If no agreement is reached, the privilege disputes shall be brought before this
Court.
Only after the parties or this Court have resolved a privilege dispute shall the
documents that are determined to be non-privileged be sent to the Government’s
prosecution team.
IT IS FURTHER ORDERED that all clean team review by the Government be

completed by August 15, 2012, in order to comply with this Court’s prior order of December 20,
2010. (Rec.Doc. 22).
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IT IS FURTHER ORDERED that the Government shall maintain a record of any
Government attorneys or agents who have possession of or access to these potentially privileged
documents.

New Orleans, Louisiana, this 27th day of July, 2012.

___________________________________
HELEN G. BERRIGAN
UNITED STATES DISTRICT JUDGE

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