United States of America v. Wells Fargo Bank, N.A.

Filing 335

MEMORANDUM OPINION AND ORDER re: 327 LETTER MOTION for Discovery Permitting the Department of Justice to Make a Disclosure Under the Protective Order addressed to Judge Jesse M. Furman from AUSA Jeffrey Oestericher dated 01/13/2022. filed by United States of America. Upon review of the parties' submissions, see ECF Nos. 327, 333, 334, the Court denies the Government's motion. The Court agrees with Wells Fargo that the documents at issue are "Discovery Materia ls" within the broad definition of that term set forth in Paragraph 1 of the Protective Order. Protective Order ¶ 1. Pursuant to Paragraph 32 of the Protective Order, therefore, DOJ was under an obligation to destroy the documents over fi ve years ago and it repeatedly certified that it had done so. Protective Order ¶ 32; ECF No. 333 at 1-2; ECF No. 333-2. To allow DOJ to share documents that it should have destroyed and claimed to have destroyed would do violence to the pla in terms of the Protective Order and the reasonable expectations of Wells Fargo and reward DOJ for its noncompliance. As a legal matter, therefore, the documents are not available to DOJ for any purpose; they effectively do not exist. See, e.g., Be nedict v. McMahon, 315 F.R.D. 447, 451-52 (E.D. Pa. 2016). It follows that the documents are not available to DOJ "for any purpose," including disclosure pursuant to Paragraph 22 of the Protective Order. Moreover, the plain language of P aragraph 22 does not permit DOJ to disclose the documents to the IRS. By its terms, Paragraph 22 permits DOJ to "disclose" otherwise confidential documents "for purposes of reporting any potential violation of law or regulation." ; Protective Order ¶ 22. Here, however, DOJ is merely seeking to comply with a request from the IRS; DOJ does not seek to "report[]" anything within the plain meaning of that term. In short, by its "plain language," the Prot ective Order in this case prohibits DOJ from disclosing the documents at issue to the IRS. SEC v. Merrill Scott & Assocs., Ltd., 600 F.3d 1262, 1271-72 (10th Cir. 2010) (citing City of Hartford v. Chase, 942 F.2d 130, 134-35 (2d Cir. 1991)). Indeed , to permit DOJ to share documents that it was required by the Protective Order to destroy, whether actually or constructively, "would encourage similar improper conduct in the future and would discourage future civil litigants from relying on the governments promises." Id. at 1271. The Clerk of Court is directed to terminate ECF No. 327. SO ORDERED. (Signed by Judge Jesse M. Furman on 2/8/22) (yv)

Case 1:12-cv-07527-JMF Document 335 Filed 02/08/22 Page 1 of 2

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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UNITED STATES OF AMERICA,
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Plaintiff,
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-v:
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WELLS FARGO BANK, N.A., et al.,
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Defendants.
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12-CV-7527 (JMF)
MEMORANDUM OPINION
AND ORDER

JESSE M. FURMAN, United States District Judge:
Nearly six years after the conclusion of this case, the Government moves for an order
permitting the Department of Justice (“DOJ”) to disclose to the Internal Revenue Service
(“IRS”) two documents that Defendant Wells Fargo Bank, N.A., (“Wells Fargo”) designated as
“Confidential” under the Protective Order entered in this case. See ECF No. 327; see also ECF
No. 97 (“Protective Order”). Upon review of the parties’ submissions, see ECF Nos. 327, 333,
334, the Court denies the Government’s motion. The Court agrees with Wells Fargo that the
documents at issue are “Discovery Materials” within the broad definition of that term set forth in
Paragraph 1 of the Protective Order. Protective Order ¶ 1. Pursuant to Paragraph 32 of the
Protective Order, therefore, DOJ was under an obligation to destroy the documents over five
years ago — and it repeatedly certified that it had done so. Protective Order ¶ 32; ECF No. 333
at 1-2; ECF No. 333-2. To allow DOJ to share documents that it should have destroyed — and
claimed to have destroyed — would do violence to the plain terms of the Protective Order and
the reasonable expectations of Wells Fargo and reward DOJ for its noncompliance.
It is of no moment that the parties agreed that certain materials commingled with attorney

Case 1:12-cv-07527-JMF Document 335 Filed 02/08/22 Page 2 of 2

files need not be actually destroyed and that the documents at issue were, presumably as a result,
not physically destroyed. The parties agreed that such documents would be treated as “de facto
destroyed” and would “not be accessed or used for any purpose.” ECF No. 333-1 at 2; see also
ECF No. 333-2 at 1. As a legal matter, therefore, the documents are not available to DOJ for any
purpose; they effectively do not exist. See, e.g., Benedict v. McMahon, 315 F.R.D. 447, 451-52
(E.D. Pa. 2016). It follows that the documents are not available to DOJ “for any purpose,”
including disclosure pursuant to Paragraph 22 of the Protective Order. Moreover, the plain
language of Paragraph 22 does not permit DOJ to disclose the documents to the IRS. By its
terms, Paragraph 22 permits DOJ to “disclose” otherwise confidential documents “for purposes
of reporting any potential violation of law or regulation.” Protective Order ¶ 22. Here, however,
DOJ is merely seeking to comply with a request from the IRS; DOJ does not seek to “report[]”
anything within the plain meaning of that term.
In short, by its “plain language,” the Protective Order in this case prohibits DOJ from
disclosing the documents at issue to the IRS. SEC v. Merrill Scott & Assocs., Ltd., 600 F.3d
1262, 1271-72 (10th Cir. 2010) (citing City of Hartford v. Chase, 942 F.2d 130, 134-35 (2d Cir.
1991)). Indeed, to permit DOJ to share documents that it was required by the Protective Order to
destroy, whether actually or constructively, “would encourage similar improper conduct in the
future and would discourage future civil litigants from relying on the government’s promises.”
Id. at 1271.
The Clerk of Court is directed to terminate ECF No. 327.
SO ORDERED.
Dated: February 8, 2022
New York, New York

__________________________________
JESSE M. FURMAN
United States District Judge

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