Regents of the University of Minnesota v. United States of America et al
Filing
176
ORDER denying 160 Motion to Compel. Signed by Magistrate Judge Elizabeth Cowan Wright on 10/29/2021. (TIN)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Regents of the University of Minnesota,
Case No. 17-cv-3690 (DSD/ECW)
Plaintiff,
v.
ORDER
United States of America and
E.I. Du Pont de Nemours and Co.,
Defendants.
This matter is before the Court on Defendant United States of America’s Motion
to Compel (Dkt. 160) (“Motion”). Plaintiff Regents of the University of Minnesota (the
“University”) opposes the Motion. (Dkt. 167.) For the reasons stated forth below, the
Motion is denied.
I.
A.
BACKGROUND
Factual Background
This is an environmental case in which the University seeks cost recovery and
declaratory relief against Defendants United States of America (“the USA”) and E.I. du
Pont de Nemours and Company (“DuPont”) pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act (“CERCLA” or the “Act”)
and against DuPont only pursuant to the Minnesota Environmental Response and
Liability Act (“MERLA”). (Dkt. 1 at 16-22.)1 The University alleges that it incurred
1
All page number citations are to the CM/ECF pagination unless otherwise noted.
over $3 million in environmental investigation and other response costs “in connection
with the release or threatened release of hazardous substances” at a site comprising
approximately 8,000 acres of land in Rosemount, Minnesota (the “Site”) that was
conveyed to the University by the USA via two quitclaim deeds in 1947 and 1948. (Id.
¶¶ 2, 82.) The University continues to own the Site, which now consists of the University
of Minnesota Outreach, Research and Education Park (“UMore Park”) and Vermillion
Highlands, which is a wildlife management and recreation area jointly administered by
the University and the Minnesota Department of Natural Resources.2 (Id. ¶ 7.)
1.
The University’s Acquisition of the Site
The Site was a part of a larger portion of land that was owned by the USA and was
known as the Gopher Ordnance Works (“GOW”).3 (Id. ¶¶ 3-5, 29.) In 1942, the USA
contracted with DuPont to design, construct, and operate the GOW. (Id. ¶¶ 3-5, 30-32.)
The GOW was thereafter constructed between 1942 and 1945. (Id.) From approximately
November 1944 to August 1945, DuPont produced about “29 million pounds of
smokeless powder, 80 million pounds of oleum and 51 million pounds of nitric acid at the
GOW.” (Id. ¶¶ 32-34.)
On January 10, 1946, the USA declared the GOW to be surplus property and in
July 1946, the University submitted a proposal to the War Assets Administration
2
Certain documents refer to the Site as the University of Minnesota Rosemount
Empire property or Rosemount Research Center. (E.g., Dkt. 164-2 at 6-7.)
The parties use the terms “Site” and “GOW” interchangeably throughout their
briefs (see generally Dkts. 163, 167); the Court does the same in this Order.
3
2
(“WAA”) to request a transfer of approximately 8,000 acres of the GOW to the
University for educational and research uses. (Id. ¶¶ 38-41.) That proposal was made
subject to a 100% public education discount under the Surplus Property Act of 1944 and
was approved by the WAA in November 1946. (Id. ¶ 42.) Title to the Site was then
conveyed to the University under two quitclaim deeds: the first deed transferred 4,687
acres of property to the University in 1947 and the second deed transferred 3,320 acres in
1948 (the “1948 Property Transfer”). (Id. ¶ 43.) In 1951, the USA “recaptured” a small
portion of the Site and certain improvements under a national security clause in the 1948
quitclaim deed, and then reconveyed that parcel back to the University in 1961. (Id.
¶¶ 44-46.) The contract and deed for the 1948 Property Transfer contained an
indemnification clause that became the subject of the parties’ dispute as further discussed
in Section I.B.1 (“Indemnification Clause”).
2.
The USA’s Initial Inspections of the Site
In the mid-1980s, the Department of Defense (“DOD”) through the Defense
Environmental Restoration Program (“DERP”) required the U.S. military to perform
environmental restoration activities at all military facilities and “identify and perform
environmental restoration activities at properties that were previously owned, leased or
otherwise possessed by the United States . . .” (described as “Formerly Used Defense
Sites” or “FUDS”). (Id. ¶¶ 52-53.) As a result, the United States Army Corps of
Engineers (“USACE”) performed an initial inspection of the GOW in 1985 and thereafter
commissioned a confirmation study of the GOW “to make a preliminary determination of
the presence or absence of chemical contamination that may have been caused by
3
Department of Defense-related activities” (“Draft Confirmation Study”). (Id. ¶¶ 54-56.)
That study identified the releases of hazardous substances from the DOD’s former
activities at the GOW. (Id.) The USACE conducted additional follow-up inspections of
the GOW in 1991 and again in 1993, and identified “several potential Hazardous,
Radioactive, Toxic Waste (‘HRTW’) FUDS-eligible projects [at] the Site, and
recommended further investigation.” (Id. ¶ 57.)
3.
The USACE Informs the Minnesota Pollution Control Agency of the
Result of its Initial Inspections
Per a Defense and State Memorandum of Agreement between the DOD and the
Minnesota Pollution Control Agency (“MPCA”), the MPCA was to oversee USACE
FUDS investigation and remediation activities in Minnesota. (See Dkt. 168-1, Ex. 1.)
Accordingly, in October 1999, the USACE submitted an Inventory Project Report
(“INPR”) concerning the GOW to the MPCA that listed the GOW as a FUDS that needed
further work. (Id. at 3; Dkt. 1 ¶ 58.) The INPR acknowledged that the Draft
Confirmation Study did not investigate or under-investigated several areas of the GOW
with potential HRTW concerns and that additional study was required to determine
potential contaminations. (Dkt. 1 ¶ 58.) In response, in November 1999, the MPCA
provided written comments on the Draft Confirmation Study and INPR to the USACE
and asked the USACE to perform a Phase I Site Assessment of the GOW. (Id. ¶ 59; see
also Dkt. 168-1, Ex. 1 at 3.) However, the USACE declined that request. (Dkt. 1 ¶ 60.)
4
4.
The MPCA Contacts the University to Request Information Regarding
the GOW and the University Retains Outside Legal Counsel
On May 31, 2001, the MPCA sent a letter to the University seeking access to
information maintained by the University relating to the GOW due to the USACE’s
identification of the GOW as a FUDS that needed further investigation (“Request for
Information”). (Dkt. 168-1, Ex. 1.) In the Request for Information, the MPCA advised
the University of the USACE’s “attempt to transfer environmental liability” for the GOW
to the University based on the Indemnification Clause. (Id. at 2; see also Dkt. 169 ¶ 7.)
The MPCA also noted in the Request for Information that its “focus [was to] mak[e] sure
that the USACE fulfills its obligations to investigate the GOW and remediate any
releases that may be found.” (Dkt. 168-1, Ex. 1 at 2.)
On July 13, 2001, shortly after receiving the Request for Information, the
University’s Office of General Counsel retained outside environmental counsel, Rick
Kubler of Gray, Plant, Mooty, Mooty & Bennett, P.A. (now Lathrop GPM LLP)
(“Outside Legal Counsel”), to provide legal advice regarding the MPCA’s investigation
of environmental issues associated with the GOW. (Dkt. 168 ¶¶ 2, 7; see also Dkt. 169
¶¶ 9-10.)
5.
The University Retains Peer Environmental & Engineering Resources,
Inc. as an Environmental Consultant
On October 16, 2001, Peer Environmental & Engineering Resources, Inc.
(“PEER”) provided a proposal to the University to provide environmental consulting
services on a confidential basis to the University’s Outside Legal Counsel in connection
with the GOW. (Dkt. 168-4, Ex. 4 at 1-6.) That proposal noted that PEER’s services
5
were to be contracted through the University’s Outside Legal Counsel “which is
representing the University on the project, in order to keep the work products and
communications produced by PEER confidential.” (Id. at 2.) The proposal required
PEER to complete two tasks: Task I was for PEER to review and evaluate the
University’s files at the GOW and Task II was for PEER to present information gathered
from that review on a base map of the GOW. (Id. at 4-5.) The University accepted the
proposal on December 9, 2001 (id. at 3) and PEER continued to “provide environmental
consulting services to assist the University’s [O]utside [L]egal [C]ounsel and the Office
of the General Counsel in advising the University through approximately early 2007”
(Dkt. 169 ¶¶ 12-13).
a.
PEER’s Preliminary Environmental Investigation Report
PEER submitted a proposal to the University dated November 6, 2002 to perform
a Preliminary Environmental Investigation of the GOW, which the University accepted
on November 12, 2002. (See Dkt. 168-5, Ex. 5 at 2-6.) Per that proposal, PEER was to
complete three tasks: Task I required PEER to “prepare a Work Plan for investigation of
key historical GOW operational locations” and “outline the investigation activities to be
completed at each location”; Task II required PEER to “conduct environmental
monitoring during completion of soil borings at selected locations”; and Task III required
PEER to prepare a report summarizing the results of its investigation activities, provide
that report to the University’s Outside Legal Counsel in draft form for comments, and
thereafter issue the final report to the University’s Outside Legal Counsel, the MPCA,
and Dakota County. (Id. at 3-4.)
6
A section of that proposal pertained to fees for PEER’s services. (Id. at 4-5.)
Tasks I and III of the Preliminary Environmental Investigation were to be funded by the
University and Task II was to be funded by the MPCA. (Id. at 2-6; see also Dkt. 168-6,
Ex. 6 at 2-3 (email correspondence from October 4 to October 10, 2002 between
University personnel and the University’s Outside Legal Counsel stating that the “MPCA
[will be] providing funds for the MPCA staff time, sample collection and analysis, [and
the University will be] contributing the work plan and report prep”); Dkt. 168 ¶ 8.)4
The report for the Preliminary Environmental Investigation issued on August 19,
2003. (Dkt. 164-2, Ex. 2 (“Preliminary Environmental Investigation Report”).) The
Preliminary Environmental Investigation Report states that the investigation was
implemented to “evaluate the potential presence of environmental impacts at six primary
areas where former GOW operations occurred” and that “[t]he investigation results will
be used to determine if further investigation and/or possible environmental remediation
related to GOW operations is warranted.” (Id. at 6 § 1.0.) It identified releases of
“hazardous substances to the environment that were associated with the former GOW.”
(Dkt. 168 ¶ 9; Dkt. 1 ¶ 62).)
In November 2003, the MPCA submitted the Preliminary Environmental
Investigation Report to the USACE and requested that it complete a full remedial
4
The Preliminary Environmental Investigation Report notes that funding for
“investigation field activities was provided by the [MPCA] utilizing both State Superfund
resources, and federal resources that were provided by U.S. Environmental Protection
Agency (EPA) through a Cooperative Agreement with the MPCA for the purposes of
conducting investigations at potentially contaminated . . . sites in Minnesota.” (Dkt. 1642, Ex. 2 at 6 § 1.0.)
7
investigation of the GOW. (Dkt. 168 ¶ 9.) On March 4, 2004, the USA provided a draft
fact sheet to the MPCA and agreed to complete an investigation of the GOW as outlined
in the fact sheet. (See Dkt. 168-7, Ex. 7 at 2-5; see also Dkt. 168 ¶ 9.) However, shortly
thereafter, USACE personnel corresponded internally regarding the fact sheet (Dkt. 1688, Ex. 8 at 2-3) and on September 18, 2004, the USA sent a FUDS eligibility finding
report to the MPCA that stated: “[The Site] is eligible for cleanup under DERP-FUDS
policy. However, due to the language in the [1948 Property Transfer] Deed, it was
determined that the project is ineligible for inclusion in the DERP-FUDS program” (Dkt.
168-9, Ex. 9 ¶ 2).
b.
PEER’s Phase I Environmental Site Assessment
In May 2006, the University retained PEER to complete a Phase I Environmental
Site Assessment and to develop a scope of work for a Phase II Environmental
Assessment. (Dkt. 168-12, Ex. 12.) The contract for the Phase I Environmental Site
Assessment included PEER’s service fees. (Id. at 3 ¶ 2-3.) The addendum to the contract
provides, in pertinent part:
[PEER] acknowledges that the services it performs under this Agreement are
provided at the request of, for the benefit of, and to assist, the University’s
legal counsel in rendering legal services and providing confidential legal
advice to the University. [PEER] further acknowledges that the services it
performs under this Agreement are provided in anticipation of potential
litigation between the University and third parties including, but not limited
to, federal, state or local regulatory authorities and persons or entities
potentially responsible for releases of hazardous substances, pollutants or
contaminants on, under, adjacent to or affecting the [GOW]. [PEER] agrees
to preserve the confidentiality of all communications with [the] University
and its legal counsel with respect to the services performed under this
Agreement, and further agrees that it will not reveal its conclusions,
assessments, opinions or observations reached or developed under this
8
Agreement to any person or entity without the prior, express, written
approval of the University or its legal counsel.
(Id. at 11.)
6.
The University Submits a Legal Position Paper to the MPCA
In December 2005, the University’s Outside Legal Counsel sent a legal position
paper to the MPCA regarding the University’s understanding and interpretation of the
Indemnification Clause. (Dkt. 168 ¶ 12.) The position paper set forth the University’s
factual and legal basis for its position that the Indemnification Clause did not transfer
responsibility to the University to investigate and remediate the former GOW. (Id.)
On January 4, 2006, the MPCA sent a letter to the USACE and attached the
University’s legal position paper. (Dkt. 168-10, Ex. 10; see also Dkt. 168 ¶ 13.) The
MPCA asserted its belief that the USACE was responsible for the GOW under CERCLA
and Minnesota law regardless of the Indemnification Clause and stated that “it is the
MPCA’s position that the [USACE] must fully investigate the nature and extent of
contamination to all media associated with all aspects and areas of the GOW operation.”
(Dkt. 168-10, Ex. 10 at 2-3.) In response, the USA again informed the USACE by letter
dated April 4, 2006 that the property transferred by the 1948 Property Transfer “is not
considered to be eligible for FUDS funding.” (Dkt. 168-11, Ex. 11 at 2.)
7.
The University Retains Barr Engineering Company as a Consultant
On July 3, 2008, the University entered into a consulting agreement with Barr
Engineering Company (“Barr”) for Barr to provide environmental consulting services
regarding a Draft Final Focused Site Inspection Report of the Site that was authored by
Bay West, Inc. (Dkt. 168-13, Ex. 13 at 1 § 1; Dkt. 163 at 7 (stating the USA retained
9
third-party engineering firm Bay West); see also Dkt. 169 ¶ 14, Dkt. 168 ¶ 16.) Barr’s
consulting agreement with the University stated in pertinent part:
Nature of Services. . . . . The University seeks [Barr’s] services in
anticipation of potential litigation . . . between the University and third
parties including, but not limited to, federal regulatory authorities. By
signing this Agreement, [Barr] acknowledge[s its] understanding that [it is]
being retained to assist the University in connection with anticipated
litigation by the University. . . .
Confidentiality. By entering into this agreement, [Barr] agrees to keep all
information provided to [it] . . . and other information learned by [it] through
[its] retention confidential. By signing this Agreement, you acknowledge
that materials and information disclosed to you during the course of your
work on this matter, along with the work you perform, will be confidential
and proprietary, and subject to the attorney-client and work product
privileges . . . .
(Dkt. 168-13, Ex. 13 at 1 ¶¶ 1-2.) The payment terms for Barr’s services were attached to
the consulting agreement. (Id. at 5, Ex. B.)
B.
Procedural Background
1.
The Indemnification Clause Relating to the 1948 Property Transfer
Highly relevant to this dispute is the Indemnification Clause. It appears that the
USA has intended to assert since at least 1999 that the Indemnification Clause extended
to CERCLA-related liabilities. (See Dkt. 168-8, Ex. 8 at 2-3.) Accordingly, although the
USA determined the GOW was eligible for cleanup under DERPS-FUDS policy, the
USA ultimately took the position that GOW was ineligible for inclusion in the DERPFUDS program due to the Indemnification Clause. (Dkt. 168-9, Ex. 9 at 2.)
Consistent with this position, on April 5, 2018, the USA filed a Motion for Partial
Judgment on the Pleadings seeking an order holding that the University is not entitled to
10
recover its response costs from the USA under CERCLA with respect to the property
transferred by the 1948 Property Transfer and that the University is required to indemnify
and hold harmless the USA for all of its past, current, and future expenses related to that
property resulting from the University’s ownership or use of the property and/or the
contaminated condition of the property. (Dkt. 48.) The University opposed the motion.
(Dkt. 52.) On July 12, 2018, U.S. District Judge David S. Doty denied the motion. (Dkt.
57.) Judge Doty found the Indemnification Clause was ambiguous, particularly in view
of the fact that the contracts predated CERCLA by 30 years, and that additional factual
development was required. (Dkt. 57 at 7-8.)
On October 31, 2019, after engaging in some discovery, the USA filed a Motion
for Partial Summary Judgment seeking an order that would:
(1)
declare[] that the 1948 Quitclaim Deed’s indemnification clause
covers the University’s claims to recover CERCLA response costs
related to the 1948 Parcel;
(2)
find[] that the University is liable to the United States for all costs the
United States has spent defending itself against the claims to recover
response costs;
(3)
prevent[] the University from recovering from the United States
CERCLA response costs related to the 1948 Parcel, to the extent that
they relate to contamination from the former GOW; and
(4)
order[] the University to indemnify the United States for DuPont’s
contribution claim and contract claim, to the extent those claims relate
to the environmental condition of the 1948 Parcel from the former
GOW.
(Dkt. 92 at 1-2.)
11
Also on October 31, 2019, the University filed a Motion for Partial Summary
Judgment as to the USA’s breach of contract counterclaim and the USA’s affirmative
defense relating to the USA’s liability for the 1948 Property Transfer. (Dkt. 96.)
On October 14, 2020, Judge Doty denied the USA’s motion, granted the
University’s motion, and found that the Indemnification Clause did not include CERLCA
type liabilities. (Dkt. 124 at 13-18, 20.) As a result, Judge Doty dismissed the USA’s
breach of contract counterclaim and struck the USA’s affirmative defense relating its
liability for the 1948 Property Transfer. (Id. at 20.)
2.
The USA’s Motion to Compel
The parties continued to engage in discovery, and on August 10, 2021, the USA
filed the current Motion to Compel. (Dkt. 160.) Specifically, the USA seeks to compel
production of communications and draft reports between the University, the University’s
Outside Legal Counsel, and the University’s environmental consultants, PEER and Barr.
(Id. at 1; Dkt. 163 at 3.)
On August 10, 2021, this Court held a pre-discovery dispute conference and set
the hearing on the Motion for August 30, 2021. (Dkts. 161-162.) At the August 30
hearing and in its brief in support of the Motion, the USA noted that although the
USACE had hired two engineering consulting firms (including Bay West) to perform
environmental investigations of the GOW, the USA (unlike the University) has not
withheld correspondence to and from its engineering consultants. (See Dkt. 163 at 24.)
The USA states that the University submitted a privilege log with 4,440 entries
dating back to 2002, about two-thirds of which are communications between
12
representatives of PEER and Barr and the University and/or the University’s Outside
Legal Counsel and attachments to those communications, such as draft reports
(collectively, “Documents”). (Id. at 5-7.) The USA states that the University has
withheld all of the Documents on the basis of the work-product doctrine, and about 500
of them also on grounds of attorney-client privilege. (Id. at 5-6.) The USA argues that
the University has not met its burden of demonstrating that the Documents are protected
by the work-product doctrine and the Documents therefore should be produced. (Id. at 34, 10-12.)
As it relates to its burden argument, the USA contends that the University’s
privilege log does not sufficiently demonstrate that the Documents are subject to the
work-product doctrine. (Id. at 11.) The USA also argues that the University failed to
meet its burden of showing that the communications with PEER and Barr were made in
anticipation of litigation. (Id.) The USA maintains that because the environmental
investigations by PEER and Barr were done for non-litigation purposes, that is “to
evaluate the nature of environmental conditions and whether contamination was present
at the Site, and what cleanup may be needed,” the Documents are not protected by the
work-product doctrine. (Id. at 10-13.) In support of this argument, the USA states that
none of the final reports for the environmental investigations, including PEER’s
Preliminary Environmental Investigation Report from 2003, the report for the
Groundwater Assessment of the Site prepared by Barr in 2009, or the two Remedial
Investigation Reports by Barr in 2011-12 and 2017, indicate that they were prepared in
anticipation of litigation, but instead reference other environmental-related purposes and
13
objectives. (Id.) The USA also argues that the deposition testimony of Jim Eidem, a
representative of Barr, does not show that the documents prepared by Barr were done in
anticipation of litigation. (Id. at 14.)
The USA contends that the University has not provided any evidence to show it
anticipated litigation with the MPCA and/or the University in 2003. (Dkt. 163 at 11.)
However, at the August 30 hearing, the USA stated that it does not dispute the University
may have contemplated litigation with the USA as early as 2001, but still argues that the
Documents at issue were not prepared in anticipation of litigation.
With respect to litigation against the MPCA, according to the USA, while the
University may have environmental obligations under Federal and State law as a land
owner, steps taken to comply with those laws to avoid potential enforcement actions are
not taken in anticipation of litigation. (Dkt. 163 at 11, 16-21.) The USA relies on an
Eastern District of Michigan case, Ford Motor Co. v, Michigan Consolidated Gas Co.,
No. 08-CV-13503, 2013 WL 5435184 (E.D. Mich. Sept. 27, 2013), to support this
argument and contends that the present case is distinguishable from a case from this
District, Bituminous Casualty Corp. v. Tonka Corp., 140 F.R.D. 381 (D. Minn. 1992).
(Dkt. 163 at 18-21.) Ultimately, the USA argues that “undertaking work pursuant to
legal obligations—even if the University feared litigation from the MPCA if it didn’t live
up to its obligations—is not the same as undertaking work in anticipation of litigation.”
(Id. at 19.)
As to anticipated litigation against the USA, the USA argues that the University
misconstrues what it means for work to be done in anticipation of litigation. (Id. at 21.)
14
This is because the response costs that the University seeks to recover under CERCLA,
that is “costs [the University] incurred to help address environmental contamination,” are
(according to the USA) “the exact same costs [the University] paid for its engineering
firms to allegedly help it prepare for litigation,” and, according to the reasoning set forth
in Ford Motor, the University’s position that costs incurred to help address
environmental contamination are also costs incurred to help prepare for litigation is
“absurd[].” (Id. at 21-22.)
The USA also asks the Court to order production of the Documents even if it finds
they are subject to work-product protection because the USA has a substantial need for
them and cannot, without undue hardship, obtain them through alternative discovery. (Id.
at 22-25.) The USA’s final work-product argument is that the University has impliedly
waived the work-product doctrine by placing its communications with its environmental
consultants and the drafts attached to those communications at issue. (Id. at 22-28.)
As to the attorney-client privilege, the USA asks this Court to find that
communications involving PEER and Barr are not protected by the attorney-client
privilege because the environmental consultants are third parties to the attorney-client
relationship and the University has not shown that they fall under the “functional
equivalent” of employees for the privilege to attach. (Id. at 28-29.)
3.
The University’s Opposition
In its opposition, the University argues that it anticipated litigation with the MPCA
and the USA starting in 2001 due to the University’s status as an owner of the GOW and
15
due to the differences in the University’s and the USA’s interpretations of the
Indemnification Clause. (Dkt. 167 at 15-16, 23.)
The University contends that the Documents serve a “dual purpose” that falls
within the protection of the work-product doctrine and that the protection is not
extinguished merely because the University submitted the final reports to the MPCA.
(Id. at 18, 23-24.) The University maintains that various courts, including the Tonka
court, “agree that efforts like these that are made to comply with environmental agencies’
directives and to conduct remediation in a way that avoids further penalties or
enforcement actions constitute actions taken in anticipation of litigation, and the analysis
that goes into related decisions concerning these compliance efforts can be properly
withheld as work product.” (Id. at 18.)
The University urges this Court to consider the total factual circumstances of this
case, noting that when the MPCA formally requested the USACE to conduct a Phase I
Environmental Site Assessment of the GOW, the USACE declined that request based on
the Indemnification Clause, and the University thereafter received the Request for
Information from the MPCA which stated that the USACE was trying to “transfer
environmental liability” to the University based on the Indemnification Clause. (Id. at
25.) The University maintains that its Deputy General Counsel at that time (William
Donohue) was familiar with the implications of such a request from the MPCA due to his
experience “with environmental enforcement proceedings and litigation through his work
as Special Assistant General with the MPCA” and his experience representing the
University in other formal regulatory proceedings with the MPCA and the Environmental
16
Protection Agency (“EPA”), and “had a subjective belief that litigation regarding
potential contamination at the Site would occur.” (Id. at 25-26.) Citing Tonka and
several cases with favorable discussions of Tonka, the University argues that the courts in
those cases considered the totality of the circumstances and found communications and
draft reports prepared by environmental consultants to assist legal counsel in response to
requests by an environmental agency were protected by the work-product doctrine. (Id.
at 17-25.)
The University contends that other than arguing that the Documents are relevant,
the USA has not shown it has a substantial need for them. (Id. at 28-37.) First, the
University argues that because the USA has full access to the facts underlying the
environmental reports and the final reports, it has alternative means to obtain the
discovery it needs. (Id. at 29-30.) In addition, the USA has deposed two representatives
of Barr and the University states that it has not impeded the USA’s ability to depose
PEER or other Barr employees. (Id. at 30.) To the extent the USA complains about the
University’s objections during those depositions (Dkt. 163 at 24), the University states
that it only objected to questions that went to consultants’ communications with counsel
(Dkt. 167 at 30). As to costs, the University has produced unredacted invoices to the
USA. (Id. at 30-31.) The University also argues that the USA is merely speculating that
University counsel influenced the final reports and could have explored (and did) explore
this issue during depositions. (Id. at 31-32.) The University says the USA has failed to
explain why the Documents are necessary to determine if the costs sought by the
University are necessary costs consistent with 42 U.S.C. § 9607(a)(4)(B). (Id. at 32-33.)
17
Finally, the University contends that the USA makes only an implied waiver argument,
that the case relied on by the USA, Pamida, Inc. v. E.S. Originals, Inc., 281 F.3d 726 (8th
Cir. 2002), has no bearing on this dispute, and that the University has not waived any
protection because it does not seek to make testimonial use of the work product at issue,
but will instead rely on the final reports and invoices to support its claims. (Id. at 34-36.)
The University also requests that if the Court finds the USA has met its burden of
showing a substantial need for any of the Documents withheld on the basis of ordinary
work product, that the Court give the University an opportunity to submit a revised
privilege log and to provide copies of documents that constitute opinion work product for
an in camera review. (Id. at 28 n.7.)
As to attorney-client privilege, the University acknowledges that Minnesota law
governs privilege principles and argues that while the Minnesota Supreme Court has not
addressed the question of whether the privilege extends to the “functional equivalent” of
employees, this District and the Eighth Circuit have recognized that extension. (Id. at
38.) The University ultimately asks the Court to defer a ruling on the issue of attorneyclient privilege to allow it to serve a revised privilege log and for the Court to allow
separate briefing on the privilege issue and perform an in camera review to determine
whether the privilege attaches under the “functional equivalent” employees theory. (Id.
at 39.)
DuPont did not file a brief in support or opposition of the Motion. However, at the
August 30 hearing, DuPont generally asserted that the breadth of the Documents the
University withheld on the basis of the work-product doctrine is overly broad.
18
II.
A.
LEGAL STANDARD
Work-Product Doctrine
The work-product doctrine, first articulated in Hickman v. Taylor, 329 U.S. 495
(1947), is codified in Rule 26(b)(3)(A) of the Federal Rules of Civil Procedure, and
provides in pertinent part that:
[A] party may not discover documents and tangible things that are prepared
in anticipation of litigation or for trial by or for another party or its
representative (including the other party’s attorney, consultant, surety,
indemnitor, insurer, or agent). But . . . those materials may be discovered if:
(i) they are otherwise discoverable under Rule 26(b)(1); and
(ii) the party shows that it has substantial needs for the
materials to prepare its case and cannot, without undue
hardship, obtain their substantial equivalent by other means.
Fed. R. Civ. P. 26(b)(3)(A)(i)(ii). The work-product doctrine serves to “promote the
operation of the adversary system by ensuring that a party cannot obtain materials that his
opponent has prepared in anticipation of litigation.” Pittman v. Frazer, 129 F.3d 983,
988 (8th Cir. 1997) (citing Westinghouse Elec. Corp. v. Republic of the Philippines, 951
F.2d 1414, 1428 (3d Cir. 1991)). Documents protected by the doctrine include “trial
preparation documents that contain the fruits of the attorney’s investigative endeavors
and any compendium of relevant evidence prepared by the attorney.” In re Murphy, 560
F.2d 326, 337 (8th Cir. 1977).
The applicability of the work-product doctrine is factually intensive and depends
on the circumstances of the particular case. Marvin Lumber & Cedar Co. v. PPG Indus.,
19
Inc., 168 F.R.D. 641, 645 (D. Minn. 1996). The Eighth Circuit employs the following
test in determining whether the protection attaches:
The test should be whether, in light of the nature of the document and the
factual situation in the particular case, the document can fairly be said to have
been prepared or obtained because of the prospect of litigation. But the
converse of this is that even though litigation is already in prospect, there is
no work product immunity for documents prepared in the regular course of
business rather than for purposes of litigation.
Id. (quoting Simon v. G.D. Searle & Co., 816 F.2d 397, 401 (8th Cir. 1987)) (cleaned up).
“While the ‘work product’ may be, and often is, that of an attorney, the concept of ‘work
product’ is not confined to information or materials gathered or assembled by a lawyer.”
Diversified Indus., Inc. v. Meredith, 572 F.2d 596, 603 (8th Cir. 1977).
Documents prepared in the ordinary course of business are not protected by the
work-product doctrine, however, the protection attaches once there is a reasonable
prospect of litigation. Simon, 816 F.2d at 401. And “[w]here work product is intertwined
between prospective litigation and non-litigation business purposes, the work product
doctrine should properly attach.” Marvin Lumber, 168 F.R.D at 645.
The party seeking work-product protection bears the burden of establishing it. In
re Grand Jury Subpoena Duces Tecum, 112 F.3d 910, 925 (8th Cir. 1997). In so doing,
the party must “(i) expressly make the claim; and (ii) describe the nature of the
documents, communications, or tangible things not produced or disclosed—and do so in
a manner that, without revealing information itself privileged or protected, will enable
other parties to assess the claim.” Fed. R. Civ. P. 26(b)(5)(A).
20
1.
Types of Work Product
The work-product doctrine can be categorized into two: ordinary work product and
opinion work product. Baker v. Gen. Motors Corp., 209 F.3d 1051, 1054 (8th Cir. 2000).
The distinction between the two types of work product is an important one:
Ordinary work product includes raw factual information. Opinion work
product includes counsel’s mental impressions, conclusions, opinions or
legal theories. Ordinary work product is not discoverable unless the party
seeking discovery has a substantial need for the materials and the party
cannot obtain the substantial equivalent of the materials by other means. In
contrast, opinion work product enjoys almost absolute immunity and can be
discoverable only in very rare and extraordinary circumstances, such as when
the materials demonstrate that an attorney engaged in illegal conduct or
fraud.
Id. (quotations and citations omitted). The party seeking to overcome the work-product
protection bears the burden of establishing substantial need and undue burden. Id.
2.
Waiver of Work-Product Protection
The work-product doctrine “is not absolute and may be waived.” Pamida, 281
F.3d at 732. The Eighth Circuit has held that a party must intend to disclose a document
that is otherwise protected by the work-product doctrine to waive the protection as to that
specific document. See Pittman, 129 F.3d at 988; see also In re Bair Hugger Forced Air
Warming Devices Prods. Liab. Litig., MDL No. 15-2666 (JNE/FLN), 2017 WL 5188342,
at *5 (D. Minn. March 7, 2017) (finding that “[d]isclosure to a third party of a document
otherwise protected as work product waives that protection if ‘it has substantially
increased the opportunities for potential adversaries to obtain the information’”) (quoting
Wright & Miller, supra, § 2023, and citing various cases). A waiver of work-product
protection may also arise when the party seeking to assert the protection elects to make a
21
testimonial use of the alleged protected materials. United States v. Nobles, 422 U.S. 225,
239 (1975).
The work-product doctrine may be impliedly waived when the party claiming the
protection brings a claim “in which the information allegedly protected is crucial and
unavailable by other means,” intends to waive the protection, and “the interests [of]
fairness and consistency mandate a finding of waiver.” Pamida, 281 F.3d at 732 (citing
Wigmore, Evidence in Trial at Common Law, § 2327 at 636 (J. McNaughton rev. 1961)).
In short, the protection should not be used to shield information that underlies the
allegations and claims in a case. In re Grand Casinos, Inc., 181 F.R.D. 615, 622 (D.
Minn. 1998).
B.
CERCLA
Enacted in 1980, CERCLA “grants the President broad power to command
government agencies and private parties to clean up hazardous waste sites.” Key Tronic
Corp. v. United States, 511 U.S. 809, 814 (1994). Under CERCLA, the Federal
government may opt to clean up a contaminated area itself or may compel potentially
responsible persons (“PRPs”) to perform the cleanup. Id. Section 107(a) of the Act
itemizes four classes of PRPs, including in pertinent part: “(1) the owner and operator of
a vessel or a facility, (2) any person who at the time of disposal of any hazardous
substance owned or operated any facility at which such hazardous substances were
disposed of . . . .” See 42 U.S.C. §§ 9607(a). The PRPs are liable for:
(A) all costs of removal or remedial action incurred by the United States
Government or a State or an Indian Tribe not inconsistent with the national
contingency plan;
22
(B) any other necessary costs of response incurred by any other person
consistent with the national contingency plan;
(C) damages for injury to, destruction of, or loss of natural resources,
including the reasonable costs of assessing such injury, destruction, or loss
resulting from such a release. . . .
Id. The Act defines “respond” or “response” to mean “remove, removal, remedy, and
remedial action . . . all such terms (including the terms ‘removal’ and ‘remedial action’)
include enforcement activities related thereto.” Id. § 9601(25). Section 113(f)(1) of the
Act “allows persons who have undertaken efforts to clean up properties contaminated by
hazardous substances to seek contribution from other parties liable under CERCLA.”
Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 160 (2004). “Accordingly,
liability may be found under CERCLA extending to all potentially responsible parties.”
FMC Corp. v. Northern Pump Co., 668 F. Supp. 1285, 1289 (D. Minn. 1987).
III.
ANALYSIS
The USA challenges the sufficiency of the privilege log (Dkt. 163 at 11), but
primarily focuses on whether the Documents were prepared in anticipation of litigation
with the MPCA or USACE (id. at 11-22). The USA also argues that it has a substantial
need for the Documents that requires their production even if protected by the workproduct protection (id. at 22-25) and contends that the University waived any workproduct protection (id. at 25-28). Finally, the USA argues the Documents are not
protected by the attorney-client privilege. (Id. at 28-30.)
23
A.
Sufficiency of the University’s Privilege Log
The USA makes a cursory challenge to the sufficiency of the privilege log,
asserting:
First, the University’s privilege log fails to adequately demonstrate that the
documents in question are, in fact, subject to the work-product privilege. For
instance, Entry No. 63 is an email from Steve Jansen of Peer Engineering
and Rick Kubler of Lathrop Gage withheld as work-product, and is described
only as “Discussing draft documents prepared in anticipation of litigation
RE: Preliminary Environmental Investigation.” There is simply nothing in
this entry which demonstrates that the document is in fact subject to the
work-product privilege.
(Dkt. 163 at 11.)
The University’s 133-page privilege log contains six columns labeled “number,”
“date,” “sender,” “recipient,” “privilege type,” and “description.” (See Dkt. 164-1 at 2.)
The Court finds the University’s privilege log meets the requirements of Rule
26(b)(5)(A). The USA challenges only the sufficiency of the descriptions. (See Dkt. 163
at 11 (document “is described only as . . .”).) The log describes each document using
phrases such as “Discussing draft documents prepared in anticipation of litigation RE:
revisions to Work Plan and FSP per MPCA Comments,” “Discussion of strategy in
anticipation of litigation RE: public meeting,” “Discussing draft documents prepared in
anticipation of litigation RE: remedial investigation comments from Dakota County,”
“Discussing draft documents prepared in anticipation of litigation RE: meeting with
MPCA” and “Providing legal advice RE: USACE response to letter,” and provides the
date the communication was made along with the names of the senders and recipients
(with a few exceptions). (See, e.g., Dkt. 164-1 at 115, 116, 118, 119, 132.)
24
Although the log does not identify which of the senders and recipients are
attorneys, the USA did not dispute that the communications involved attorneys or
challenge the log on the ground that any sender or recipient (other than Barr and PEER)
was not an attorney and therefore rendered the communication not privileged or protected
by the work-product doctrine or resulted in waiver. In the absence of a more thorough
argument from the USA, and based on the facts of this case, the Court concludes that the
log describes the documents “in a manner that, without revealing information itself
privileged or protected, will enable other parties to assess the claim.” See Fed. R. Civ. P.
26(b)(5)(A); Luminara Worldwide, LLC v. Liown Elecs. Co., No. CV 14-3103
(SRN/FLN), 2015 WL 9861106, at *3 & n.1 (D. Minn. Oct. 5, 2015) (finding initial
descriptions of “Legal advice re license,” “Legal advice re intellectual property,” and
“Legal advice re litigation” insufficient but more detailed descriptions adequate),
objections overruled, No. 14CV03103SRNFLN, 2016 WL 6774229 (D. Minn. Nov. 15,
2016). Indeed, the USA was able to discern that certain attachments to communications
related to specific reports and investigations from the privilege log. (See Dkt. 163 at 6
(identifying drafts of Preliminary Environmental Investigation and 2017 Remedial
Investigation).) The Court denies the Motion insofar as the USA challenges the
sufficiency of the privilege log.
B.
The Documents Were Prepared in Anticipation of Litigation with the MPCA
and USACE
The Court next addresses the USA’s argument that the Documents were not
prepared in anticipation of litigation because, according to the USA, they were created to
25
avoid litigation, and are therefore not protected under the work-product doctrine. (Dkt.
163 at 16-22.)
The USA relies on the purposes set forth in various final reports (which the
University has produced in this litigation) to support this argument, including:
• “to evaluate the potential presence of environmental impacts at six primary areas
where former GOW operations occurred” (Dkt. 163 at 12);
• “develop a conceptual site model of hydrogeologic conditions within the UMA
and UMore Park (study area) and construct a groundwater flow model that can be
used to evaluate potential impacts of and associated mitigation strategies for the
proposed mining and ancillary site operations within the UMA” (id. at 13);
• “to collect information needed to identify and assess potential risks to human
health and the environment associated with historical uses of the property so that
cleanup alternatives can be developed in the future to address any unacceptable
risks” (id.); and
• “to investigate known and potential releases of hazardous substances and
petroleum products with the former GOW and post-GOW land uses” (id. at 14).
The University responds that documents created by an environmental consultant in
response to an agency’s request can serve a “dual purpose” that falls within the protection
of the work-product doctrine, even if they also serve a non-litigation purpose. (Dkt. 167
at 16-17.) The University further responds that “courts regularly find that documents
prepared by environmental consultants—including draft investigation reports and
communications with counsel—are protected work product.” (Id. at 17 (citing Tonka).)
The parties’ arguments focus on Ford Motor and Tonka, supra, where the USA
argues that the Court should follow Ford Motor (Dkt. 163 at 18-22) and the University
argues that the Court should follow Tonka (Dkt. 167 at 17-38). The Court therefore
discusses those cases below.
26
In Ford Motor, the EPA, the Agency for Toxic Substances and Disease Registry,
and the Michigan Department of Natural Resources investigated and evaluated a property
in 1988 that was formerly owned by Ford Motor Company (“Ford”) which Ford used for
wastewater treatment through a subsidiary named Rouge Steel. 2013 WL 5435184, at *1.
Ford purchased the property from MichCon in 1966 and maintained liability for
hazardous substances when Ford sold Rouge Steel to a company that ultimately merged
into the Rouge Steel Company. Id. Severstal Dearborn, LLC (“Severstal”) purchased the
Rouge Steel Company assets, including the property at issue, in 2004. Id.
In 1998, the EPA performed a multimedia inspection on the property and in 1999,
Ford received notice from the EPA that the property was a “‘high priority’ for
environmental cleanup.” Id. at *2. Ford and Rouge Steel as a result entered into a
voluntary agreement with the State of Michigan to investigate and remediate the property
to satisfy the requirements of the Resource Conservation and Recovery Act, resulting in a
Corrective Action Consent Order (“CACO”), which was finalized in May 2000. Id. The
State of Michigan accepted their proposal and asked the EPA to hand over regulatory
authority for this site to the Michigan Department of Environmental Quality (“MDEQ”).
Id. Ford contracted with environmental consultant Conestoga Rovers and Associates
(“CRA”) to assist it with negotiating the CACO, preparing environmental reports in
compliance with the CACO, and to clean up the property. Id.
Ford and Severstal later filed suit for recovery costs against MichCon. Id. at *1.
During the pendency of that suit, MichCon sought to obtain draft reports for CRA’s
environmental investigation and communications between plaintiffs and CRA which had
27
been withheld as protected work product. Id. at *2. Ford and Severstal argued that they
were operating under the specter of enforcement litigation once they engaged CRA in
connection with the CACO, and as a result, documents created by CRA were created in
anticipation of litigation with the EPA or MDEQ. Id. at *3. Ford and Severstal also
argued that litigation was anticipated after they approached MichCon for a portion of the
response costs in 2000 but were unable to reach an agreement. Id. at *2-3.
The court in Ford Motor rejected Ford and Severstal’s argument that they
anticipated litigation with the MDEQ/EPA, stating:
Plaintiffs’ position relies on the assumption that Plaintiffs knew that they
would (or that they intended to) fail in their efforts under the CACO; that is,
that they would ultimately be in violation of some environmental act or
policy, which would allow the MDEQ or the EPA to pursue them. This is
always a threat; the documents at issue were created to avoid litigation, not
in anticipation of litigation. And with regard to the instant litigation [with
MichCon], Plaintiffs’ contention is circular. If Plaintiffs are to be believed,
they created a mountain of paperwork in anticipation of a lawsuit in which
their ultimate goal was to obtain payment for creation of the same mountain
of paperwork. Therefore, the Court finds that the potential litigation with the
EPA, the MDEQ, or [MichCon] is not a sufficient basis under which to assert
work-product protection.
Id. at *4 (footnote omitted). The court did note that Ford and Severstal had asserted at
the hearing that they made the decision to sue MichCon in 2006 and that documents
created after that date were protected, but did not decide that issue as MichCon had not
had the chance to respond. Id. at *4 n.3.
In Tonka, a case relied on by the University, the defendant Tonka Corporation
notified the EPA in 1981 that a site in Mounds, Minnesota might be a potential hazardous
waste site pursuant to CERCLA. 140 F.R.D. at 384. Accordingly, Tonka and the MPCA
28
conducted investigations at the site between 1982 and June 1984. Id. In June 1984,
elevated levels of hazardous waste were discovered near the site and on February 5, 1985,
the MPCA directed Tonka to retain consultants to assess the magnitude of groundwater
and soil contamination at the site, which led to Tonka retaining Barr as an environmental
consultant. Id. at 384 & n.3. In 1986, pursuant to MERLA, the MPCA issued a “Request
for Response Action” naming Tonka as a responsible party for pollution at the site and
requested that Tonka investigate, remediate, and monitor the site, or otherwise face harsh
consequences. Id. at 385.
In 1985, Tonka notified its insurers of its obligations to remediate the site and in
May 1987, Barr prepared a remedial investigation report. Id. Tonka, along with its
insurer, financed the investigations and cleanup of the site. Id. The insurer thereafter
filed a declaratory action for its costs and Tonka filed a counterclaim against that insurer
and other insurers seeking indemnification of its response costs. Id. at 383. The insurers
sought various documents from Tonka during discovery, including draft reports and
communications by and to Tonka’s engineering consultants. Id. Tonka withheld
documents that were circulated between Tonka, Tonka’s counsel, and Tonka’s
consultants that were not provided to the MPCA pursuant to the work-product doctrine
due to its anticipated litigation with the MPCA. Id. at 383, 387. The insurers then sought
to compel production of those documents. Id.
The Tonka court focused on “whether counsel’s investigation and Tonka’s
subsequent remedial measures were conducted in the course of Tonka’s ordinary business
or in anticipation of litigation.” Id. at 389. The court found communications and
29
documents prepared after the MPCA directed investigation and remediation of the site in
February 1985 were properly withheld, reasoning that documents generated from
Tonka’s efforts to fulfill its obligations were generated in anticipation of litigation with
the MPCA once hazardous substances were discovered at the site in 1984 and the MPCA
directed Tonka to investigate and remediate the site in February 1985. Id. at 389-90. The
court noted that the “threat of litigation with the MPCA was the motivating factor which
moved Tonka to complete the cleanup of the [site]” and “the consultants’ preliminary
drafts of documents which were ultimately submitted to the MPCA and the underlying
data for those documents [were] the fruits of counsel’s investigation endeavors.” Id. As
the Tonka court explained:
The MPCA’s designation of responsible party status thus imposes a huge
obligation on the responsible party and requires a responsible party to make
important strategic decisions about whether to comply with the MPCA’s
request. Any action that a company takes in response to the MPCA’s
requests before and after designation of responsible party status are therefore
made under the strong prospect of future litigation over issues such as the
propriety of the designation of responsible party status, the scope of the clean
up and the adequacy of the clean up. The fact that Tonka was able to avoid
actual litigation with the MPCA in this case does not mean that the efforts
undertaken by Tonka’s counsel and its consultants were not done in
anticipation of litigation.
Id. at 389-90 (citations omitted). The Tonka court also found:
Although litigation was always a prospect from the moment Tonka notified
the EPA of the existence of the Tonka Main Site pursuant to CERCLA,
before the MPCA issued its Request for Initial Investigation the prospect of
litigation was too remote to enable the court to conclude that the documents
at issue here were prepared or obtained because of the prospect for litigation.
Id. at 390.
Neither Ford Motor nor Tonka is controlling precedent, and the Court is mindful
30
of the Eighth Circuit’s instruction that “the test [for work-product protection] should be
whether, in light of the nature of the document and the factual situation in the particular
case, the document can fairly be said to have been prepared or obtained because of the
prospect of litigation.” Simon, 816 F.2d at 401 (cleaned up). Further, as U.S. Magistrate
Judge Hildy Bowbeer recently explained, when determining at what point the prospect of
litigation arose sufficiently to invoke work-product protection under Rule 26(b)(3), and
whether the documents at issue were prepared because of the prospect of litigation, “the
Court must be mindful of the Eighth Circuit’s admonition that ‘the work product doctrine
is to be applied in a commonsense manner in light of reason and experience as
determined on a case-by-case basis.’” S.T. Specialty Foods, Inc. v. Copesan Servs. Inc.,
No. 19-CV-0339 (NEB/HB), 2020 WL 30281, at *5 (D. Minn. Jan. 2, 2020) (quoting
Pittman v. Frazer, 129 F.3d 983, 988 (8th Cir. 1997)). Judge Bowbeer further explained
that “work product protection may arise even when there has been no explicit threat of
litigation so long as the prospect of litigation is ‘identifiable because of specific claims
that have already arisen.’” Id. (quoting McConnell v. Farmers Ins. Co., Inc., No. 074180-CV-C-NKL, 2008 WL 510392, at *2 (W.D. Mo. Feb. 25, 2008)). Courts should
“examine objective evidence, such as the ‘factual situation’ and the ‘nature of the
documents’ to determine whether a document ‘can fairly be said to have been prepared or
obtained because of the prospect of litigation.’” Id. (quoting Simon, 816 F.2d at 401).
The factual situation in this case is as follows: In May 2001, the MPCA sent the
Request for Information to the University, alerting the University of contaminations at
the Site. (See Dkt. 168-1, Ex. 1; Dkt. 169 ¶ 4.) The Request for Information stated the
31
MPCA’s intent to ensure the Site was investigated and remediated (Dkt. 168-1, Ex. 1 at
1) and notified the University of the USACE’s attempt to “transfer environmental
liability” for the Site to the University due to the Indemnification Clause (id. at 2).
William Donahue, the University’s Deputy General Counsel at that time, stated in
his declaration that in his “roles as Special Assistant Attorney General for the State of
Minnesota,” where he represented the MPCA for five years, “and Deputy General
Counsel of the University,” he “had prior experience with Superfund and other
environment enforcement and litigation matters . . . includ[ing] representing the
University since the early 1980s with respect to the University of Minnesota Rosemont
Research Center Superfund Site” and representing the MPCA as a member of the
Attorney General’s legal staff. (Dkt. 169 ¶¶ 2-3, 10.) Donohue stated that after the
University received the MPCA’s Request for Information on June 1, 2001, he
“anticipated the matter would likely result in litigation,” retained the University’s Outside
Legal Counsel to provide legal advice with regard to the Request for Information and as
to Superfund liability in July 2001, and retained PEER in October 2001 to review the
information requested by the MPCA and “assist legal counsel to provide advice to the
University on the likelihood that the GOW caused significant environmental issues and
the University’s potential liability for those issues.” (Id. ¶¶ 8-9, 12.)
Donohue further stated that the University retained Barr in 2008 “to assist the
Office of the General Counsel and outside environmental counsel in providing legal
advice to the University regarding its potential environmental liability and in anticipation
of litigation.” (Id. ¶ 14.) Donohue stated that he “anticipated that the GOW matter
32
would likely result in litigation between the University, the MPCA, the United States, and
potentially other parties,” and that the University retained Outside Legal Counsel and the
environmental consulting firms to act as consulting experts “with the explicit
understanding that their work was for the purpose of enabling us to provide legal advice
to our client with our legal opinions,” where the advice was “informed by technical
information developed by the environmental consultants working under the direction of
the attorneys.” (Id. ¶ 15.) Donohue identified the University’s potential Superfund
liability, MPCA enforcement actions, and the University’s claims against the USACE
and other potentially responsible parties as the anticipated litigation. (Id. ¶¶ 13-14.)
Donohue’s belief, based on his experience, that the MPCA’s Request for
Information sent on May 31, 2001 would likely result in litigation with the MPCA and
USACE is consistent with the findings of several courts that similar requests from
environmental agencies create the prospect of litigation, including with parties other than
the agency. See, e.g., Atl. Richfield Co. v. Current Controls, Inc., No. 93-CV-0950E(H),
1997 WL 538876, at *2 (W.D.N.Y. Aug. 21, 1997) (“In light of the surrounding
circumstances—including the EPA’s activities and the nature of environmental law,
which often leads to litigation involving numerous parties with past or present
associations with contaminated property—that belief was objectively reasonable.”);
Briggs & Stratton Corp. v. Concrete Sales & Servs., 174 F.R.D. 506, 509 (M.D. Ga.
1997) (“In situations involving environmental cleanups the strong prospect of future
litigation arises at the time potentially responsible parties are identified.”); Tonka, 140
F.R.D. at 389-90 (“Any action that a company takes in response to the MPCA’s requests
33
before and after designation of responsible party status are therefore made under the
strong prospect of future litigation over issues such as the propriety of the designation of
responsible party status, the scope of the clean up and the adequacy of the clean up.”).
Other objective evidence supports a finding that the University reasonably
anticipated litigation with the MPCA and USACE after receiving the May 31, 2001
Request for Information and has continued to do so at least until filing this lawsuit. As
stated above, the University retained Outside Legal Counsel to provide legal advice with
regard to the Request for Information and as to Superfund liability in July 2001, shortly
after receiving the Request for Information. (Dkt. 169 ¶ 9.) Further, PEER was retained
in October 2001 through the University’s Outside Legal Counsel “in order to keep the
work products and communications produced by PEER confidential” (Dkt. 168-4, Ex. 4
at 2) and retained for purposes of reviewing the information requested by the MPCA and
“assisting legal counsel to provide advice to the University on the likelihood that the
GOW caused significant environmental issues and the University’s potential liability for
those issues” (Dkt. 169 ¶ 12).
The addendum to the University’s 2006 contract with PEER for its Phase I
Environmental Site Assessment states:
[PEER] acknowledges that the services it performs under this Agreement are
provided at the request of, for the benefit of, and to assist, the University’
legal counsel in rendering legal services and providing confidential legal
advice to the University. [PEER] further acknowledges that the services it
performs under this Agreement are provided in anticipation of potential
litigation between the University and third parties including, but not limited
to, federal, state or local regulatory authorities and persons or entities
potentially responsible for releases of hazardous substances, pollutants or
contaminants on, under, adjacent to or affecting the [GOW]. [PEER] agrees
34
to preserve the confidentiality of all communications with [the] University
and its legal counsel with respect to the services performed under this
Agreement, and further agrees that it will not reveal its conclusions,
assessments, opinions or observations reached or developed under this
Agreement to any person or entity without the prior, express, written
approval of the University or its legal counsel.
(Dkt. 168-12, Ex. 12 at 11).
As to Barr, the 2008 consulting agreement for Barr’s services provided in
pertinent part:
Nature of Services. . . . . The University seeks [Barr’s] services in
anticipation of potential litigation . . . between the University and third
parties including, but not limited to, federal regulatory authorities. By
signing this Agreement, [Barr] acknowledge[s its] understanding that [it is]
being retained to assist the University in connection with anticipated
litigation by the University. . . .
Confidentiality. By entering into this agreement, [Barr] agrees to keep all
information provided to [it] . . . and other information learned by [it] through
[its] retention confidential. By signing this Agreement, you acknowledge
that materials and information disclosed to you during the course of your
work on this matter, along with the work you perform, will be confidential
and proprietary, and subject to the attorney-client and work product
privileges . . . .
(Dkt. 168-13, Ex. 13 at 1 ¶¶ 1-2.)
Based on the record, the Court finds that the University both subjectively and
reasonably anticipated litigation with the MPCA and the USACE after receiving the May
31, 2001 Request for Information on June 1, 2001. The fact that litigation did not
commence until the University brought this action in 2017 does not require the
conclusion that the University did not reasonably anticipate litigation in 2001. See Safco
Prod. Co. v. Welcom Prod., Inc., No. CV 08-4918 (JRT/JJG), 2010 WL 11252007, at *4
(D. Minn. Feb. 10, 2010) (“[L]itigation may be anticipated long before it is actually
35
commenced.”). Indeed, the USA stated at the hearing that it did not dispute that the
University contemplated litigation as early as 2001, and conceded in its brief that certain
documents prepared by the environmental consultants (“a list of facts relevant to
asserting a defense to an MPCA enforcement action against the University”) could have
been prepared in anticipation of litigation. (Dkt. 163 at 17-18.)
Moreover, Donohue, who was intimately involved with legal issues around the
Site, stated that he anticipated litigation with both entities as of June 2001 and that Barr
and PEER were retained to assist counsel in providing legal advice, informed by the
technical information the consultants developed, with respect to Superfund liability,
MPCA enforcement actions, and the University’s claims against the USACE. (Dkt. 169
¶¶ 8-9, 12-15.) The Barr and PEER agreements confirm that they were retained by the
University’s Outside Legal Counsel—consistent with Donohue’s declaration—and
reference the parties’ understanding of the need for confidentiality and that the
environmental consultants were retained in anticipation of potential litigation. (Dkt. 1684, Ex. 4 at 2; Dkt. 168-12, Ex. 12 at 11; Dkt. 168-13, Ex. 13 at 1 ¶¶ 1-2.) While the
October 2001 engagement letter with PEER does not specifically reference litigation, in
view of Donohue’s declaration, including that the University anticipated litigation after
receiving the Request for Information from the MPCA on June 1, 2001 and that PEER’s
initial scope of work included “reviewing the information requested by the MPCA
Superfund Program and assisting counsel to provide advice to the University on the
likelihood that the GOW caused significant environmental issues and the University’s
potential liability for those issues” (Dkt. 169 ¶ 12), the Court finds that the University’s
36
Outside Legal Counsel engaged PEER in October 2001 to assist counsel with providing
legal advice to the University in anticipation of litigation.
As the University notes, numerous courts have found draft reports and
communications with environmental consultants under similar circumstances to have
been created in anticipation of litigation and protected work product. See, e.g., In re
Grand Jury Subpoena, 357 F. 3d 900, 908-09 (9th Cir. 2004) (“Here, Ponderosa’s
response to the Information Request and its accession to the Consent Order were done
under the direction of an attorney in anticipation of litigation. By cooperating with the
EPA, Ponderosa sought to avoid litigation with the government. . . . The withheld
documents, however, just like the others, were prepared by [the environmental
consultant], at least in part, to help [counsel] advise and defend Ponderosa in anticipated
litigation with the government. Thus, the withheld documents fall within the broad
category of documents that were prepared for the overall purpose of anticipated
litigation.”); NL Indus., Inc. v. ACF Indus. LLC, No. 10CV89W, 2015 WL 4066884, at
*7 (W.D.N.Y., July 2, 2015) (finding work-product protection applied to materials
prepared by an environmental consultant where the company retained the consultant “to
guide it through the cleanup and to identify possible responsible parties and defenses for
[the company] and its attorneys to provide its legal defense and advocate for its claims”);
Atl. Richfield, 1997 WL 538876, at *2-4 (finding “(1) draft reports, proposals and plans
prepared by [site owner’s] consultants that (a) contain testing, remediation and cost data,
(b) were reviewed by [site owner’s] in-house lawyers and other [site owner] employees
and (c) were then finalized and submitted to the EPA; and (2) correspondence among in37
house lawyers, other [site owner] employees and consultants regarding the consultants’
reports, proposals and plans” protected by work-product doctrine) (discussing Tonka);
Briggs & Stratton, 174 F.R.D. at 509 (upholding the assertion of work-product protection
and finding documents prepared by environmental consultants in response to an EPA
order for cleanup “were not produced voluntarily or for any business purpose which
existed apart from the EPA order” and because the “extensive costs involved in the cleanup and the possibility of identifying other potentially responsible parties to share in the
costs” created the reasonable conclusion that “litigation was contemplated against any
other potentially responsible party from the time of issuance of the EPA order”)
(discussing Tonka); Tonka, 140 F.R.D. at 389-90 (documents generated by Barr and other
consultants relating to investigations and to prepare reports responsive to MPCA
directives were protected by work-product doctrine). Here, based on the facts of this
case, the Court finds that the Documents were prepared in anticipation of litigation with
the MPCA and the USACE.5
The USA relies on Barr representative Jim Eidem’s deposition testimony that he
did not recall “any other purpose” for the 2012 Remedial Investigation report and 2017
Remedial Investigation report other than “to investigate known and potential releases of
hazardous substances and petroleum products with the former GOW and post-GOW land
As to the MPCA’s funding of the 2002 Preliminary Environmental Investigation,
in view of the fact that PEER worked only for the University, the University controlled
the investigation and report preparation, and the University’s Outside Legal Counsel had
to review and comment on the report before it was provided to the MPCA (Dkt. 168 ¶ 8;
Dkt. 168-5, Ex. 5 at 3-4; Dkt. 168-6, Ex. 6), this funding does not alter the Court’s
conclusion that this report was prepared in anticipation of litigation.
5
38
uses,” identify strategies to address them and data gaps, and “assist in the planning and
implementation of future site-specific activities” to demonstrate that the Documents were
not prepared in anticipation of litigation. (Dkt. 163 at 14.) However, Eidem also testified
that “everything” Barr did “from the get-go” was “related to litigation support” and “in
preparation for litigation” and that part of his job was assisting the University in
preparing for litigation. (Dkt. 168-14, Ex. 14 at 4, 7.) The Court concludes that Eidem’s
testimony, when considered in context, supports a finding that Barr’s technical work was
performed to assist the University’s legal counsel in anticipation of litigation with the
MPCA and the USACE.
The USA argues that this case is factually different from Tonka because “[t]he
court in Tonka held that litigation was not anticipated with the MPCA until after the
MPCA issued a formal ‘Request for an Initial Investigation,’ which was followed up by a
formal ‘Request for Response Action.’” (Dkt. 163 at 21.) The Tonka court found—
under the circumstances of that case—that the “prospect of litigation was too remote”
before the MPCA sent a letter in February 1985 to Tonka’s lawyer asking that Tonka
retain a consultant and take steps to assess contamination at the site. 140 F.R.D. at 384,
390. But the Tonka court did not impose a “formal request” requirement for documents
to be generated in anticipation of litigation or hold that a particular type of document
(whether a Request for an Initial Investigation or otherwise) is required. In fact, requiring
a particular type of document (whether a “formal request,” identification as a potentially
responsible party, or something else) to trigger the prospect of litigation such that the
work-product protection would attach is inconsistent with the Eighth Circuit’s
39
admonition that “the work product doctrine is to be applied in a commonsense manner in
light of reason and experience as determined on a case-by-case basis.” Pittman, 129 F.3d
at 988.
The USA also argues that “Tonka’s approach would protect routine business
planning and operational records related to all sorts of regulated activities from discovery
. . . .” (Dkt. 163 at 20.) This “slippery slope” argument ignores the fact that the test for
work-product protection is “whether, in light of the nature of the document and the
factual situation in the particular case, the document can fairly be said to have been
prepared or obtained because of the prospect of litigation.” Simon, 816 F.2d at 401. The
fact that a business activity is “regulated” does not necessarily mean that test is met, but
here, where the MPCA stated its intent to investigate and remediate the Site on May 31,
2001, was seeking information from the University, and had informed the University that
the USACE was attempting to “transfer environmental liability” to the University, the
prospect of litigation was real enough for work-product protection to attach. The Court
also finds unpersuasive the USA’s argument that “it may well be true that the University
hired consultants to investigate contamination to avoid some sort of enforcement action
from the MPCA if it had failed to conduct the environmental investigations, but this
work was clearly not done solely in anticipation of that very same litigation the
University sought to avoid.” (Dkt. 163 at 17 (emphasis added).) There is no
requirement that the work be done “solely in anticipation of litigation,” rather, “[w]here
the work product of the attorneys is intertwined between prospective litigation and nonlitigation business purposes, the work product doctrine should properly attach.” Marvin
40
Lumber, 168 F.R.D at 645.
As for Ford Motor, the USA has cited no other decision applying the reasoning of
that case. Other courts have found work performed by environmental consultants under
circumstances similar to those in Ford Motor—that is, pursuant to a consent order—to
constitute work performed in anticipation of litigation. See, e.g., In re Grand Jury
Subpoenas, 357 F.3d at 908 (“Here, Ponderosa’s response to the Information Request and
its accession to the Consent Order were done under the direction of an attorney in
anticipation of litigation. By cooperating with the EPA, Ponderosa sought to avoid
litigation with the government.”); Atl. Richfield, 1997 WL 538876, at *2-3 (documents
containing testing, remediation and cost data created in response to a consent order and
reviewed by site owner’s in-house counsel before being finalized and submitted to the
EPA and correspondence among in-house lawyers, other employees and consultants
regarding the consultants’ reports, proposals and plans were prepared in anticipation of
litigation). Regardless of the reasoning in Ford Motor, based on the facts of this case, the
Court finds the University reasonably anticipated litigation with the MPCA and USACE
after it received the May 31, 2001 Request for Information (again, which included the
statement that the USACE was attempting to “transfer environmental liability” from the
USACE to the University).
The USA also argues that the “circular” nature of the fact that the costs the
University incurred to address environmental contamination are “the exact same costs” it
paid Barr and PEER to prepare for litigation with the MPCA and USACE makes the
University’s claim that such work was in anticipation of litigation “absurd[].” (Dkt. 163
41
at 21-22.) This argument runs afoul of the principle that the work-product doctrine can
attach “[w]here the work product of the attorneys is intertwined between prospective
litigation and non-litigation business purposes.” Marvin Lumber, 168 F.R.D at 645.
Having considered the factual situation and the nature of the Documents, the Court
finds that the Documents were prepared in anticipation of litigation with the MPCA and
USACE, that the University’s subjective belief that litigation with those entities was
likely after receiving the MPCA’s Request for Information on June 1, 2001 was
objectively reasonable, and that the Documents are protected work product.
C.
The USA Has Not Shown Substantial Need for the Documents or that the
USA Cannot Obtain the Substantial Equivalent Through Alternative
Discovery
In the alternative, the USA asks the Court to order production of the Documents
even if they are protected work product on the ground that the USA has a substantial need
for the information they contain and cannot obtain that information by other means.
(Dkt. 163 at 22-25.) The USA argues that: (1) the Documents “bear directly upon the
accuracy and weight that should be placed upon the engineering firms’ conclusions in
their final, publicly available reports”; (2) the Documents “may show how the
engineering firms’ conclusions have ‘changed over time’”—that is, whether the
conclusions in the report were influenced by the University and its attorneys; (3) the
Documents may reveal the reasonableness of the “necessary” response costs incurred by
the University; and (4) the USA has no alternative means to obtain them. (Id.) In so
arguing, the USA contends that the Documents fall under the category of ordinary work
product because they involve environmental consultants’ communications and draft
42
documents, and to the extent they contain opinion work product, are opinions of nonattorneys. (Id.)
The University responds that it has produced unredacted invoices that reflect the
University’s response costs, final versions of the draft reports at issue, and the factual
information and objective data underlying the reports. (Dkt. 167 at 30-33.) Moreover,
the USA has already deposed two Barr representatives, one of whom (Eidem) appears to
have had extensive involvement with Barr’s final reports submitted to the MPCA on
behalf of the University, and the University asserts that it has not impeded the USA’s
attempt to depose other representatives of Barr and PEER.6 (Id. at 30; see also Dkt. 163
at 14 (describing Eidem as “lead author” of 2012 Remedial Investigation).)
The Court concludes that the USA has not met its burden of showing substantial
need or that it cannot obtain the substantial equivalent of the Documents through other
means. There is no dispute that the University has produced the final reports, underlying
data and factual information, and unredacted invoices, or that Barr and PEER witnesses
were and are available for deposition, and the USA has not explained why it cannot
challenge, for example, whether the costs sought are “necessary” and whether the
The USA bases its “substantial need” argument in part on the University’s
objections made during those depositions. (Dkt. 163 at 24.) Having reviewed the
transcripts, and in view of the fact that the USA did not seek any relief from the Court
during the depositions or shortly thereafter, the Court concludes that the University’s
objections do not establish substantial need or that the USA cannot obtain the substantial
equivalent of the information it seeks through other means, including because Eidem
testified that draft reports were shared with the University and Outside Legal Counsel and
that changes were made to the reports based upon their comments if they were technically
sound. (Dkt. 164-8, Ex. 8 at 14; Dkt 168-14, Ex. 14 at 3.)
6
43
technical conclusions drawn are accurate using that discovery and the opinions of the
USA’s own experts. Rather, the USA’s arguments amount to speculation that the
University’s work product will reveal that Barr’s and PEER’s conclusions were
influenced by the University and its attorneys.7 (See Dkt. 163 at 23 (“The United States
has a need to see the engineering firms’ ‘unadorned views on the key issues,’ i.e. sources
of contamination, prior to input from the University and its attorneys. Further, the
communications and drafts may show how the engineering firms’ conclusions have
‘changed over time.’”) (citing Rumble v. Fairview Health Servs., No. 14-CV-2037
(SRN/FLN), 2016 WL 4515922, at *4 (D. Minn. Aug. 29, 2016)).)8 The USA has not
explained why it could not explore this topic through depositions, and in fact did ask
Eidem if he made changes based on input from the University. (Dkt. 168-14, Ex. 14 at
3.) The Court concludes, as several other courts have in this context, that the USA has
not shown a substantial need for the Documents or that the USA is not able to obtain the
substantial equivalent through other means, including the final reports, underlying facts
7
During the hearing, the USA postulated that the environmental consultants could
have added statements that the USA was responsible for the Site contamination at the
direction of the University and its lawyers. When asked why the University’s lawyers
would tell the consultants to add a statement along those lines, the USA responded,
“Well, I think clearly that could have been put in to support its anticipated litigation
against the United States” and that there could be “a litigation benefit” to including that
statement in the reports. This rationale plainly undermines the USA’s position that the
environmental consultants’ reports were not prepared in anticipation of litigation.
Notably, Rumble involved interview notes containing witnesses’ initial testimony
as to key issues, where many of the witnesses no longer remembered “what they said, or
certain details about the care [the plaintiff] had received.” 2016 WL 4515922, at * 3. As
noted in Rumble, a failure in witness memory can constitute undue hardship, id. at *3, but
those circumstances are not present here.
8
44
and data, unredacted invoices, and witness depositions. See, e.g., Atl. Richfield, 1997 WL
538876, at *3 (finding no substantial need where site owner had “produced the final
versions of the draft reports, plans and proposals that are at issue” and withheld no
underlying factual information or objective data); Briggs & Stratton, 174 F.R.D. at 51011 (finding no substantial need and no showing that information could not be obtained
through other discovery where site owner agreed to produce unredacted bill and had
produced “all factual information contained in the withheld documents . . . and all
underlying analytical data . . .” relating to the environmental consultant’s cleanup of the
site).
Finally, the USA suggests that the Documents should be produced because the
USA produced its communications with its environmental consultants and any attached
drafts. (See Dkt. 163 at 24.) This has no bearing on the legal analysis. The question is
whether the USA has shown substantial need for the Documents to prepare its case and
whether the USA cannot, without undue hardship, obtain the substantial equivalent of the
information contained in the Documents by other means. See Fed. R. Civ. P.
26(b)(3)(A)(ii). As explained above, the USA has not met its burden in either regard.
D.
The University Did Not Waive Protection of the Work-Product Doctrine
Relying on Pamida, supra, the USA’s final argument is that the University waived
the work-product protection by bringing its claims against the USA. (Dkt. 163 at 25.)
The USA argues that the University seeks to use the University’s environmental
consultants’ investigations in establishing its case against it and that the University’s
attempt to recover necessary costs results in an implied waiver of the work-product
45
protection.9 (Dkt. 163 at 26-28.) In response, the University contends that Pamida is
distinguishable and that it does not intend to make testimonial use of the Documents, but
instead will rely on the final reports and unredacted invoices which have been made
available to the USA. (Dkt. 167 at 35.)
In Pamida, the Eighth Circuit found an implied waiver of work-product protection
in an indemnification action where the “crucial issues” were “the nature of the work the
attorneys performed in the patent infringement action [for which Pamida sought
indemnification], what actions were taken by Pamida to notify Dynasty of the patent
infringement action and of Pamida’s claim for indemnification, and whether the $750,000
incurred in attorneys’ fees was reasonable.” 281 F.3d at 732. The question was not only
“whether Pamida intended to waive the privilege, but also whether the interests of
fairness and consistency mandate a finding of waiver.” Id. The USA contends the
University’s “investigations established key facts in its claims against the United States”
but that the University “seeks to shields inquiry into how these investigations were
actually conducted and the reports finalized.” (Dkt. 163 at 25.) The USA, however, has
not explained why it cannot inquire into “how these investigations were actually
conducted” and whether PEER’s and Barr’s conclusions “evolved” using the final reports
and witness depositions. As to the USA’s arguments that the University has put its
response costs at issue (Dkt. 163 at 26), the USA has not explained why it cannot explore
whether the costs were necessary based on the unredacted invoices as well as the other
9
The USA did not identify any direct waiver.
46
information produced in this case. Unlike Pamida, where Pamida refused to disclose any
information about the underlying work for which it sought indemnification, 281 F.3d at
729, the University has produced extensive information about its work, including the
final reports, underlying data and objective facts, and unredacted invoices. Under these
circumstances, the Court finds that the interests of fairness and consistency do not
mandate a finding of waiver. Id. Moreover, the Court finds Pamida inapposite here for
two other reasons: it is the USA, not the University, who seeks to make testimonial use of
the Documents, and the USA has not shown it requires the Documents to explore how
Barr and PEER’s conclusions changed and whether the response costs are necessary.
See, e.g., UnitedHealth Grp. Inc. v. Columbia Cas. Co., No. CV 05-1289 (PJS/SRN),
2010 WL 11537514, at *25 (D. Minn. Aug. 10, 2010) (rejecting application of Pamida
where “the information sought was not crucial and unavailable by other means because of
independent evidence that can demonstrate the same information” and “most importantly,
the party claiming the privilege . . . does not intend to make testimonial use of the work
product”) (cleaned up); see also In re Murphy, 560 F.2d at 339 n.24 (“When the opposing
party, rather than the party seeking to preserve the work product privilege, calls witnesses
and questions them as to events that may be discussed in the work product, there is no
waiver under Nobles.”) (citing United States v. Nobles, 422 U.S. 225, 239 (1975)). For
these reasons, the Court finds the University did not waive work-product protection for
the Documents.10
10
Because the Court denies the Motion based on work-product protection, the Court
does not reach the parties’ arguments as to the attorney-client privilege.
47
IV.
ORDER
For the reasons stated above, and based upon all the files, records, and proceedings
herein, IT IS ORDERED THAT the United States of America’s Motion to Compel
(Dkt. 160) is DENIED.
DATED: October 29, 2021
s/Elizabeth Cowan Wright
ELIZABETH COWAN WRIGHT
United States Magistrate Judge
48
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