United States of America v. Microsoft Corporation

Filing 185


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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 9 10 UNITED STATES OF AMERICA, Petitioner, 11 12 13 14 15 16 17 18 19 20 21 22 CASE NO. C15-102RSM ORDER FOR IN CAMERA REVIEW OF DOCUMENTS STILL IN DISPUTE v. MICROSOFT CORPORATION, et al., Respondents. I. INTRODUCTION This matter comes before the Court upon Respondent Microsoft Corporation’s (“Microsoft”) Brief Regarding Privileged Documents Still in Dispute. Dkt. #140. For the reasons discussed herein, the Court ORDERS Microsoft to submit the majority of the documents still in dispute to the Court for in camera review. II. BACKGROUND The Court previously set forth the procedural and factual background to this action and incorporates it by reference herein. See Dkt. #107 at 2-5. 23 24 ORDER FOR IN CAMERA REVIEW OF DOCUMENTS STILL IN DISPUTE - 1 1 In summary, in December 2014 the government filed a petition with the Court requesting 2 an order to enforce Microsoft’s compliance with a designated summons served by the Internal 3 Revenue Service (“IRS”) on October 30, 2014. Dkt. #1 at 1. The designated summons was 4 served as part of the IRS’s examination of Microsoft’s federal income tax liabilities for the 5 taxable periods ending on June 30, 2004, June 30, 2005, and June 30, 2006. Id. ¶ 4. On 6 November 17, 2014, the IRS also served KPMG LLP (“KPMG”), an accounting firm, with a 7 third-party summons. See Case No. 2:14-mc-136-RSM, Dkt. #1 ¶¶ 7-8. During the tax years in 8 question, Microsoft hired KPMG to assist in restructuring Microsoft’s related foreign entity in 9 Puerto Rico. See Dkts. #144 ¶ 10, #140 at 13, and #145 at 6-10. The government alleges that 10 with KPMG’s help, Microsoft designed and implemented a cost sharing arrangement with its 11 newly structured Puerto Rican entity. See Dkt. #145 at 6-14. On November 19 and 20, 2014, the 12 IRS served Microsoft with two additional, related summonses. See Case Nos. 2:14-mc-13313 RSM, Dkt. #1, and 2:14-mc-143-RSM, Dkt. #1. These summonses are all related to the IRS’s 14 examination of cost sharing agreements Microsoft entered into with its Puerto Rican affiliate, 15 and with its Asian affiliate. 1 See Dkt. #1 ¶ 10. The IRS is examining these cost sharing 16 arrangements to determine the accuracy of Microsoft’s federal income tax obligations for the tax 17 years in question. Id. ¶¶ 21-22. 18 On November 20, 2015, the Court granted the government’s petitions to enforce the 19 IRS’s summonses. Dkt. #107 at 17. Soon after, the parties stipulated that “notwithstanding the 20 Court’s denial of Microsoft’s common defenses to enforcement of the document summonses, 21 specific document production requests remain in dispute.” Dkt. #110 at 2. Microsoft was thus 22 “afforded an opportunity to brief specific objections tailored to specific document production 23 24 1 The four petitions for enforcement of the designated summonses were consolidated on January 16, 2015. Dkt. #21 ORDER FOR IN CAMERA REVIEW OF DOCUMENTS STILL IN DISPUTE - 2 1 requests[.]” Id. Microsoft now objects to disclosing a number of documents responsive to the 2 IRS’s summonses. See Dkt. #140. 3 III. DISCUSSION Microsoft is withholding 174 documents from production. 4 Id. at 7. Microsoft is 5 withholding the majority of the documents in dispute based on the federally authorized tax 6 practitioner privilege and/or the work production protection. See Dkt. #141, Exs. A-D. The 7 attorney-client privilege is asserted for twelve documents. Id. ¶¶ 9-11. To support these 8 assertions, Microsoft has produced four privilege logs. Dkt. #141, Exs. A-D. Each privilege log 9 lists the documents withheld from production for each of the four summonses served by the IRS. 10 See id. (privilege logs titled “Designated Summons Privilege Log,” “KPMG Central Files 11 Privilege Log,” “KPMG Personal Files Privilege Log,” and “Related Summonses 2 and 3 12 Privilege Log”). The government disputes the applicability of the privileges and protection 13 asserted by Microsoft, and requests production of the documents withheld. See Dkt. #145. In 14 the alternative, the government requests that the Court conduct an in camera review of the 15 disputed documents to determine if the asserted privileges actually apply. Id. 16-17. The Court addresses the propriety of the asserted privileges and the work product 16 17 doctrine in turn. A. Federally Authorized Tax Practitioner Privilege2 18 Section 7525 of Title 26 of the United States Code effectively extends the attorney-client 19 20 privilege to “federal authorized tax practitioner[s].” A “federally authorized tax practitioner” is 21 “any individual who is authorized under Federal law to practice before the Internal Revenue 22 Service if such practice is subject to Federal regulation under section 330 of title 31, United 23 2 Documents Bates stamped PMSTP0000027-28 and MSTP9007983-MSTP9007995 are considered separately, in 24 section III.C. because these documents also assert the attorney-client privilege ORDER FOR IN CAMERA REVIEW OF DOCUMENTS STILL IN DISPUTE - 3 1 States Code.” 26 U.S.C. § 7525(a)(3)(A). Communications between a taxpayer and a “federally 2 authorized tax practitioner,” are protected “to the extent the communication would be considered 3 a privileged communication if it were between a taxpayer and an attorney.” Id. § 7525(a)(1). 4 This limited privilege does not extend to anything other than a lawyers’ work. United States v. 5 BDO Seidman, 337 F.3d 802, 810 (7th Cir. 2003) (“[T]he § 7525 privilege is no broader than 6 that of the attorney-client privilege . . . .”); United States v. Frederick, 182 F.3d 496, 502 (7th 7 Cir. 1999). This privilege is thus limited to the scope of the attorney-client privilege, and courts 8 “look to the body of common law interpreting the attorney-client privilege to interpret the § 7525 9 privilege.” BDO Seidman, 337 F.3d at 810; Valero Energy Corp. v. United States, 569 F.3d 626, 10 630 (7th Cir. 2009) (“This privilege is no broader than the existing attorney-client privilege.”). 11 The tax practitioner privilege applies to communications made in confidence and “the 12 confidences [must] constitute information that is not intended to be disclosed by the [tax 13 practitioner].” BDO Seidman, 337 F.3d at 811. Accordingly, “the success of a claim of [the tax 14 practitioner] privilege depends on whether the advice given [is] general accounting advice or 15 legal advice.” Valero, 569 F.3d at 630. An exception to the tax practitioner privilege does not 16 protect written communications connected to the promotion of participation in tax shelters. 26 17 U.S.C. § 7525(b). 18 Microsoft contends the tax practitioner privilege applies to 164 documents withheld 19 because each of these documents purportedly reflects a confidential communication between 20 Microsoft and its tax advisors for the purpose of seeking tax advice. Dkt. #140 at 15-21. To 21 support this assertion, Microsoft argues it has made a prima facie showing of the propriety of 22 this privilege through its submission of four privilege logs. Id. at 18. Microsoft argues these 23 privilege logs comport with the requirements found to satisfy a prima facie showing of the 24 ORDER FOR IN CAMERA REVIEW OF DOCUMENTS STILL IN DISPUTE - 4 1 attorney-client privilege in the Ninth Circuit. Id. at 18 (citing and quoting In re Grand Jury 2 Investigation, 974 F.2d 1068, 1071 (9th Cir. 1992)). Microsoft further contends the documents 3 asserting this privilege all “reflect core tax advice,” not business or non-legal advice. Dkt. #140 4 at 19-20. 5 The government disagrees with Microsoft’s assertion of the tax-practitioner privilege, 6 and argues that Microsoft’s privilege logs “are deficient in several respects” and fail to satisfy 7 Microsoft’s prima facie burden. Dkt. #145 at 15-16. However, even if this burden is satisfied, 8 the government argues Microsoft cannot establish the tax-practitioner privilege applies because 9 the accountants hired by Microsoft provided business instead of tax advice. To support this 10 argument, the government cites to documents produced in response to its summonses which 11 appear to indicate that at least one accounting firm, KPMG, was not providing Microsoft with 12 legal advice. Id. at 17-19 (quoting Dkt. #146, Exs. 13 and 27). However, if the Court finds the 13 tax-practitioner privilege applies to the 164 documents withheld, the government argues the tax 14 shelter exception to the tax-practitioner privilege nonetheless warrants disclosure of the 15 documents withheld. Id. at 19-20. 16 Microsoft has met its prima facie burden of establishing the applicability of the tax- 17 practitioner privilege. In the Ninth Circuit, privilege logs may establish applicability of the 18 attorney-client privilege, and thereby the tax-practitioner privilege, as long as the log identifies 19 the following information: 20 21 “(a) the attorney and client involved, (b) the nature of the document, (c) all persons or entities shown on the document to have received or sent the document, (d) all persons or entities known to have been furnished the document or informed of its substance, and (e) the date the document was generated, prepared, or dated.” 22 In re Grand Jury, 974 F.2d at 1071 (citing Dole v. Milonas, 889 F.2d 885, 888 n.3 (9th Cir. 23 1989)). A privilege log with this information, accompanied by affidavits that speak to the 24 ORDER FOR IN CAMERA REVIEW OF DOCUMENTS STILL IN DISPUTE - 5 1 confidential nature of the documents withheld, can establish the withholding party’s prima facie 2 burden. Id. (“Whatever questions the Corporation’s log might leave open with regard to whom 3 the documents were shown or were intended to be shown are answered to our satisfaction by the 4 affidavits of the attorneys responsible for preparing the documents.”). Here, the privilege log 5 entries asserting the tax-practitioner privilege include information from each of these categories. 6 See Dkt. #141, Exs. A-D. In addition to its privilege logs, Microsoft has also submitted 7 declarations from William J. Sample, Microsoft’s Vice President Tax, Michael Boyle, 8 Microsoft’s former Corporate Vice President of Finance and Tax Counsel, and Brett Weaver, a 9 partner at KPMG. See Dkts. #142-144. These declarations assert KPMG was hired to provide 10 privileged tax-practitioner advice, and Mr. Sample and Mr. Boyle each declare the tax 11 practitioner privilege was not waived, the documents in dispute were stored securely, and the 12 documents were not “disseminated beyond those in the Tax Department or counsel with a need 13 to know.” Dkts. #142 ¶ 3 and #143 ¶ 27. Microsoft’s privilege logs, accompanied with the 14 submitted declarations, satisfy Microsoft’s prima facie burden of demonstrating the tax15 practitioner privilege applies. 16 Notwithstanding Microsoft’s satisfied burden, the government has met the minimal 17 burden necessary to establish that in camera inspection of documents asserting the tax18 practitioner privilege is warranted. District courts may conduct an in camera review to 19 determine whether an asserted privilege applies as long as the party seeking this review “show[s] 20 a factual basis sufficient to support a reasonable, good faith belief that in camera inspection may 21 reveal evidence that information in the materials is not privileged.” In re Grand Jury, 974 F.2d 22 at 1074-75. Although Microsoft contends KPMG was hired to provide tax advice, the 23 government has submitted documents, produced to the government by Microsoft and KPMG, 24 ORDER FOR IN CAMERA REVIEW OF DOCUMENTS STILL IN DISPUTE - 6 1 which indicate KPMG may have been involved with the provision of business, not tax, advice. 2 See, e.g., Dkt. #146, Exs. 8 (slideshow, prepared by KPMG, proposing alternate structures for 3 Microsoft’s foreign entities) and 13 (KPMG engagement letter outlining the different phases, 4 including a design and implementation phase, of KPMG’s work with Microsoft). That KPMG 5 may have been engaged in something other than lawyers’ work is highlighted by KPMG’s own 6 engagement letters to Microsoft. See Dkt. #146, Exs. 13 and 25. In one letter, dated August 31, 7 2004, KPMG urges Microsoft to “consult with legal counsel to review the design of the IHCo 8 strategy to determine any potential legal issues that may arise in connection with its 9 implementation.” Id. Ex. 13 at 3. In another, dated April 29, 2005, KPMG outlines its role in 10 helping Microsoft implement the cost share agreement KPMG helped design in the first phase of 11 KPMG’s engagement. Dkt. #136, Ex. 25 at 2. Communications made primarily to assist in 12 implementing a business transaction are not protected by the tax practitioner privilege. See 13 United States v. ChevronTexaco, 241 F. Supp. 2d 1065, 1076-78 (finding that attorney-client 14 privilege does not apply to communications reflecting information used to implement a 15 transaction and not legal advice). Here, KPMG’s letter stresses that its role “does not encompass 16 any legal services a KPMG member firm may be authorized to provide.” Dkt. #136, Ex. 25 at 2. 17 The exhibits submitted by the government, when compared to the timing of some of the 18 documents withheld by Microsoft, see Dkt. #141, Exs. A-C, call into question the applicability of 19 the tax-practitioner privilege. The Court thus agrees that in camera review of the documents 20 asserting the tax-practitioner privilege is warranted.3 21 22 23 24 3 Although the task of reviewing 164 documents is not light, given the importance of assuring the accurate assessment of federal income tax liabilities by the IRS, the Court will exercise its discretion to conduct an in camera review of the documents asserting the tax practitioner privilege. Additionally, because the Court will conduct an in camera review of these documents, the Court will not consider the government’s tax shelter exception argument at this point in time. ORDER FOR IN CAMERA REVIEW OF DOCUMENTS STILL IN DISPUTE - 7 B. Work Product Doctrine4 1 2 Microsoft also asserts the work product doctrine protects disclosure of 170 documents 3 sought by the government. The work product doctrine protects documents and tangible things 4 from discovery if they are prepared in anticipation of litigation by a party, or a party’s 5 representative. Fed. R. Civ. P. 26(b)(3). Assertions of work product protection are governed by 6 federal law. Schreib v. American Family Mut. Ins. Co., 304 F.R.D. 282, 285 (W.D. Wash. 7 2014); Lexington Ins. Co. v. Swanson, 240 F.R.D. 662, 666 (W.D. Wash. 2007). The main 8 purpose of the work product rule is to “prevent exploitation of a party's efforts in preparing for 9 litigation.” Holmgren v. State Farm Mut. Auto. Ins. Co., 976 F.2d 573, 576 (9th Cir. 1992) 10 (quoting Admiral Ins. Co. v. United States District Court, 881 F.2d 1486, 1494 (9th Cir.1989)). 11 To determine if the documents sought by the government are protected from disclosure 12 under the work product doctrine, the Court must first determine whether the documents were 13 created or obtained “in anticipation of litigation or for trial.” See United States v. Richey, 632 14 F.3d 559, 567 (9th Cir. 2011). However, even if Microsoft anticipated litigation, for documents 15 that serve a dual purpose (documents not created exclusively for litigation – such as documents 16 also created in the ordinary course of business), Microsoft must demonstrate these documents 17 were created “because of” litigation. E.g., id. at 567-68. 18 Microsoft advances three main arguments to demonstrate the documents it seeks to 19 withhold were created in anticipation of litigation. Dkt. #140 at 22-25. Microsoft first contends 20 it had “good reason” to anticipate litigation over its cost sharing arrangements given the IRS’s 21 aggressive stance on transfer pricing issues. Id. at 24. Aside from noting that audits and 22 litigation about transfer pricing issues were “prevalent” when KPMG was hired in 2004, 23 24 4 Documents Bates stamped PMSTP0000027-28, PMSTP0000015-16, MSTP9010845-924, MSTP9001268-80, MSTP9000904-916, MSTP9013961-3963, MSTP9014965-5024, and MSTP9007983-MSTP9007995 are considered separately, in section III.C., because these documents also assert the attorney-client privilege. ORDER FOR IN CAMERA REVIEW OF DOCUMENTS STILL IN DISPUTE - 8 1 Microsoft also explains that its own relationship with the IRS prompted it to anticipate litigation. 2 Id. Microsoft cites to its continual state of audit and its “long history of disputes with the IRS” 3 as proof it anticipated litigation over the cost share agreements now being investigated by the 4 IRS. Id. Finally, given the size of these transactions, along with the complexity of Section 482 5 of the Internal Revenue Code, Microsoft contends it anticipated its cost share arrangements 6 would “inevitably draw intense scrutiny by the IRS and result in an adversarial dispute and 7 litigation with the IRS.” Id. at 25. 8 The government disagrees with Microsoft’s assertion of the work product protection, and 9 instead argues that allowing Microsoft to make these “sweeping claims” would in effect “shield[] 10 all business planning documents from disclosure.” Dkt. #145 at 21. The government argues that 11 even if Microsoft anticipated litigation, the documents now withheld cannot be said to have been 12 created “because of” anticipated litigation. Id. To support these arguments, the government 13 highlights deficiencies with Microsoft’s privilege logs. Id. at 24-26. Regarding Microsoft’s 14 Designated Summons Privilege Log, the government points out that the document descriptions 15 do not allow it to determine whether the emails listed were created in anticipation of litigation. 16 Id.; Dkt. #141, Ex. A. With respect to the privilege logs listing documents responsive to 17 KPMG’s summonses, the government contends these documents may contain non-legal 18 accounting and business advice since KPMG was retained in part to design and implement 19 Microsoft’s cost sharing arrangements. Dkts. #145 at 25 and #141, Exs. B and C. Finally, the 20 government argues that the documents in Microsoft’s Related Summonses 2 and 3 privilege log 21 list dual purpose documents not created “because of” litigation. Dkt. #145 at 25; see Dkt. #141, 22 Ex. D. 23 24 ORDER FOR IN CAMERA REVIEW OF DOCUMENTS STILL IN DISPUTE - 9 1 Microsoft has demonstrated that it reasonably anticipated litigation when it consulted 2 with accountants regarding its transfer pricing agreements. Microsoft’s prior tax disputes with 3 the IRS, the size of Microsoft’s cost sharing agreements, the complexity of the law that applies to 4 cost sharing agreements, along with the IRS’s treatment of transfer pricing issues all support the 5 Court’s conclusion. However the government has raised a sufficient factual basis to question 6 whether the documents on Microsoft’s four privilege logs are dual-purpose documents not 7 created “because of” anticipated litigation. 8 If the documents asserting the work product protection served both a litigation and a 9 business purpose, the Court must determine whether these documents “appear to reflect or [are] 10 borne out of reasoning about strategies or analyses for litigation,” in which case the work 11 production protection would apply. ChevronTexaco Corp., 241 F. Supp. 2d at 1084. On the 12 other hand, if the documents “appear only to reflect the logistics or mechanics of implementing 13 business concepts,” then the work product doctrine will most likely not apply as these documents 14 “would have been created in essentially similar form irrespective of the litigation.” Id. In 15 camera review of the documents asserting the work product protection will allow the Court to 16 make this determination. 17 C. Attorney Client Privilege Finally, Microsoft asserts the attorney-client privilege with respect to twelve documents.5 18 19 See Dkt. #141, Exs. A and D. The attorney-client privilege is intended to prevent disclosure of 20 confidential communications “made by a client to an attorney in order to obtain legal advice.” In 21 re Grand Jury, 974 F.2d at 1070 (quoting In re Grand Jury Subpoenas (Hirsch), 803 F.2d 493, 22 496 (9th Cir. 1986)). The privilege also protects an attorney’s advice in response to a client’s 23 24 5 Documents Bates stamped PMSTP0000027-28, PMSTP0000015-16, MSTP9011488-90, MSTP9010845-924, MSTP9001268-80, MSTP9000904-916, MSTP9009093-9106, MSTP9009065-9078, MSTP9009051-9064, MSTP9013961-3963, MSTP9014965-5024, and MSTP9007983 all assert the attorney-client privilege. ORDER FOR IN CAMERA REVIEW OF DOCUMENTS STILL IN DISPUTE - 10 1 confidential disclosures. Id. However, if a client seeks non-legal advice, for instance business 2 advice, the privilege does not apply. Richey, 632 F.3d 559, 566 (9th Cir. 2011). Additionally, 3 the voluntary disclosure of a privileged communication results in the waiver of the privilege for 4 any other communications concerning the same subject. Id. The party asserting the attorney5 client privilege must “make a prima facie showing that the privilege protects the information the 6 party intends to withhold.” In re Grand Jury, 974 F.2d at 1071. This prima facie showing can 7 be made through a privilege log and accompanying declarations attesting to the confidential 8 nature of the documents withheld. Id. 9 Microsoft has made a prima facie showing that these twelve documents are protected by 10 the attorney-client privilege. Microsoft lists the twelve documents for which the attorney client 11 privilege is asserted on two privilege logs. See Dkt. #141, Exs. A and D. Two of the emails 12 claiming the privilege are listed on Microsoft’s Designated Summons Privilege Log; the entries 13 for those two emails list the date, custodian, author, recipients, and a short description of the 14 contents of the email. Id. Ex. A. These emails were sent in May 2015 and February 2016. Id. 15 The remaining ten documents claiming attorney-client privilege are listed on Microsoft’s Related 16 Summonses 2 and 3 Privilege Log. Id. Ex. B. All ten documents are emails, four only claim the 17 attorney-client privilege, and the remaining six also claim the tax-practitioner privilege and/or 18 the work product protection. Id. For each email, Microsoft lists dates, the name of the email’s 19 author, the recipients of the email, and a short description of the asserted privilege. Id. Besides 20 these privilege logs, the declarations of Mr. Sample and Mr. Boyle also indicate these documents 21 were intended to remain confidential, they were stored securely, and the attorney-client privilege 22 was not waived. See Dkts. #142 ¶ 3 and #143 ¶ 27. Considering the information provided by 23 these twelve privilege log entries, along with Mr. Sample’s and Mr. Boyle’s declarations, the 24 ORDER FOR IN CAMERA REVIEW OF DOCUMENTS STILL IN DISPUTE - 11 1 Court finds Microsoft has made a prima facie showing that these twelve documents are protected 2 by the attorney-client privilege. 3 The government’s challenges to the contrary are not persuasive. The government claims 4 Microsoft has not met is prima facie burden because Microsoft’s privilege log descriptions are 5 too vague, there are instances where no attorney is identified on the privilege log, and several 6 documents are email chains. Dkt. #145 at 15-16. Although some of these privilege log entries 7 include no attorney as a recipient or author, all twelve identify the person whose legal advice is 8 being discussed, as well as the subject matter of that legal advice. See ChevronTexaco Corp., 9 241 F. Supp. 2d at 1077 (“The privilege might protect a communication between nonlegal 10 employees in which the employees discuss or transmit legal advice given by such counsel.”); see 11 Dkt. #141 at Exs. A at 8 and D at 22, 23, 25-27. However, the Court agrees that emails in an 12 email chain that do not reflect legal advice are not protected by the privilege and must be 13 disclosed by Microsoft. Id. at 1077-78 (ordering party to produce portions of email reflecting 14 “purely business matters”). 15 While Microsoft has met its prima facie burden of establishing applicability of the 16 attorney-client privilege, the government has “show[n] a factual basis sufficient to support a 17 reasonable, good faith belief that in camera inspection may reveal evidence that information in 18 the materials is not privileged,” with respect to eight entries. In re Grand Jury, 974 F.2d at 19 1074-75. The two emails claiming attorney-client privilege in the Designated Summons 20 Privilege Log, and six emails claiming this privilege in the Related Summonses 2 and 3 Log, all 21 reflect either internal communications between Microsoft’s in-house attorneys, internal 22 communications between Microsoft’s in-house attorneys and nonlegal employees, or internal 23 24 ORDER FOR IN CAMERA REVIEW OF DOCUMENTS STILL IN DISPUTE - 12 1 communications between non-legal employees.6 See Dkt. #141, Exs. A and D. Whether the 2 attorney-client privilege applies to these emails depends on the role Microsoft’s attorneys played 3 in these communications. This is the case given that “unlike outside counsel, in-house attorneys 4 can serve multiple functions within the corporation.” ChevronTexaco, 241 F. Supp. 2d at 1076. 5 Here, the eight in-house communications all indicate that Microsoft’s in-house attorneys 6 rendered legal advice about a “transaction structure” or a “restructuring.” See Dkt. #141, Exs. A 7 and D. While the Court acknowledges that advice pertaining to the tax consequences of a 8 transaction “is rooted virtually entirely in the law,” this must be balanced with the knowledge 9 that in-house attorneys often serve more than just a legal role. ChevronTexaco, 241 F. Supp. 2d 10 at 1076. Consequently, the Court “cannot simply assume that every communication involving 11 in-house counsel that related to this transaction was made primarily for the purpose of securing 12 [or providing] legal advice.” Id. Because the Court cannot determine the extent to which 13 Microsoft’s counsel acted in a legal, as opposed to a business, capacity in advising Microsoft on 14 its transaction structures, the Court finds that in camera review of eight internal communications 15 withheld based on the attorney-client privilege is warranted. 16 However, regarding the emails Bates Stamped MSTP9010845-MSTP9010924, 17 MSTP9009093-MSTP9009106, MSTP9009065-MSTP9009078, and MSTP9009051- 18 MSTP9009064, which reflect legal advice from outside law firms, the government has not 19 “show[n] a factual basis sufficient to support a reasonable, good faith belief that in camera 20 inspection may reveal evidence that information in the materials is not privileged.” In re Grand 21 Jury, 974 F.2d at 1074-75. Consequently the Court will not conduct an in camera review of 22 those emails, and Microsoft need not disclose them to the government. 23 6 See Documents Bates stamped PMSTP0000027-28, PMSTP0000015-16, MSTP9011488-90, MSTP9001268-80, 24 MSTP9000904-916, MSTP9013961-3963, MSTP9014965-5024, and MSTP9007983-MSTP9007995. ORDER FOR IN CAMERA REVIEW OF DOCUMENTS STILL IN DISPUTE - 13 1 IV. CONCLUSION The Court, having reviewed Microsoft’s Brief (Dkt. #140), the government’s Response 2 3 (Dkt. #145), Microsoft’s Reply (Dkt. #177, Ex. 1), the declarations and exhibits attached to each, 7 4 and the remainder of the record, hereby finds and ORDERS : (1) Microsoft is ORDERED to produce the documents listed in Privilege Logs A, B, C, 5 6 and D, except for Documents Bates Stamped MSTP9010845-MSTP9010924, 7 MSTP9009093-MSTP9009106, MSTP9009065-MSTP9009078, and MSTP9009051- 8 MSTP9009064, to the Court within ten (10) days of the filing of this Order; 9 (2) To the extent the email chains in Documents Bates Stamped MSTP9010845- 10 MSTP9010924, MSTP9009093-MSTP9009106, MSTP9009065-MSTP9009078, and 11 MSTP9009051-MSTP9009064, do not reflect legal advice, Microsoft is ordered to 12 produce those emails to the government; and (3) The Clerk of the Court is directed to forward a copy of this Order to all counsel of 13 record. 14 DATED this 5th day of May 2017. 15 16 A 17 RICARDO S. MARTINEZ CHIEF UNITED STATES DISTRICT JUDGE 18 19 20 21 22 23 24 7 The Court notes that Microsoft does not object to an in camera review of the disputed documents. Dkt. #177, Ex. 1 at 6. However, Microsoft requests an opportunity to provide the Court additional evidence and argument in support of the privileges and protection it asserts. Id. At this point in time, the Court declines to allow additional argument. If the Court determines it does not have enough information to evaluate a claim of privilege, it will decide at that time whether to conduct an ex parte hearing or propound written questions, filed under seal, to Microsoft. See Valero, 569 F.3d at 631 (finding district court did not abuse its discretion in denying company opportunity to bolster its privilege claims where documents themselves allowed court to determine propriety of privilege asserted). ORDER FOR IN CAMERA REVIEW OF DOCUMENTS STILL IN DISPUTE - 14

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