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COBELL v. NORTON

March 15, 2004.

ELOUISE PEPION COBELL, et al., Plaintiffs,
v.
GALE NORTON, et al., Defendants



The opinion of the court was delivered by: ROYCE LAMBERTH, District Judge

MEMORANDUM AND ORDER

The Court has before it the task of deciding the Department of the Interior's May 29, 2003 Motion to Disqualify ("Motion to Disqualify") Special Master Balaran [2078]. Interior Defendants ask the Court to recuse the Special Master from further participation in this case on the grounds that the Master retained the services of a former Interior contractor to assist with his investigation into allegations that Interior filed a false and misleading Eighth Quarterly Report. Interior is not joined by its co-defendant, the Department of the Treasury.

The Court, for the reasons set forth below, finds Interior Defendants' Motion to Disqualify devoid of merit and concludes that the Special Master engaged in no untoward conduct and demonstrated no bias or partiality.

  I. BACKGROUND

  On August 30, 2002, Native American Indian Distributors, Inc. ("NAID") filed a Motion for a Temporary Restraining Order, Preliminary and Permanent Injunctive Relief, protesting Interior's attempt "to punish NAID for presenting accurate and unbiased information" for inclusion in the Eighth Quarterly Report to the Court. The Court denied NAID's motion on Page 2 September 24, 2002. In an effort "to ascertain," however, "whether there is any validity to NAID's contention," the Court, on November 5, 2002, ordered Special Master Balaran "to investigate whether Interior engaged in any [] concealment" in the creation of the Eighth Quarterly Report. Order dated Nov. 5, 2002 at 1.*fn1

  The Special Master conducted his investigation and, on April 21, 2003, filed the Interim Report of the Special Master Regarding the Filing of Interior's Eighth Quarterly Report ("Interim Report"). The Interim Report set out the following "preliminary" findings:
Interior withheld material information from the Court in the Status Report to the Court Number Eight, January 16, 2002 ("Final January Eighth Quarterly Report") and that it did so to conceal infirmities in the TAAMS system and misleading and inaccurate representations in previous quarterly submissions. . . . [N] either the Final January Eighth Quarterly Report, nor the Interim Report upon which it relied, was designed to provide the Court with a candid assessment of the TAAMS effort. Rather, they were contrived to present a gilded portrait of the TAAMS system and avoid adverse consequences arising from contempt proceedings pending at the time.
Interim Report at 2.

  One month after the Master issued the Interim Report, Interior filed its Motion to Disqualify on the grounds that "the Special Master prepared the Report with the direct assistance of a former NAID employee, Mike S. Smith, one of the principal NAID witnesses to the events described in the Interim Report." Motion to Disqualify at 2, 3 and n.2. Based solely on what it Page 3 characterizes as "extraordinary" conduct, id., Interior urges the Court not only to recuse Special Master Balaran from further participation in the investigation into the Eighth Quarterly Report and accord his preliminary findings no weight, but to bar him "from serving in any further capacity in this case." Id. at 2, n.2.

  As discussed more fully below, the Court finds that: (1) no fully informed objective observer could reasonably impute bias or prejudice to the Special Master for his conduct during the Eighth Quarterly Report investigation; (2) the Master cannot be recused pursuant to 28 U.S.C. § 455(a) and (b)(1) since his knowledge of disputed evidentiary facts was not gained extrajudicially; (3) Interior's delay in seeking the Master's disqualification constitutes a waiver; and (4) Interior has failed to meet its burden of proving "bias in fact" pursuant to § 455(b)(1).

 
The Court will briefly recapitulate the facts underlying this decision.
II. THE SPECIAL MASTER'S INVESTIGATION
A. Production of the "Administrative Record"
  On October 7, 2002, the Special Master informed Interior that he was preparing to investigate NAID's allegations that the Department of the Interior concealed and withheld pertinent information from the Court in the Eighth Quarterly Report. See Letter from Special Master Alan L. Balaran to Justice Attorney Peter B. Miller (Oct. 7, 2002). To facilitate that investigation, the Master requested that Interior produce, among other documents, the administrative records for the Sixth and Seventh Quarterly Reports and the November 2002 draft of the Eighth Quarterly Report. The Special Master specified that the documents he sought were located in room 5141 of the Main Interior Building in a four-drawer filing cabinet; three-ring binders, and several marked and labeled boxes. Id. Page 4

  Interior responded two days later, requesting "a copy of the order regarding this matter to avoid any misunderstanding regarding the scope of your authority from the Court to conduct such an investigation." Letter from Justice Attorney Phil Seligman to Special Master Alan L. Balaran (Oct. 9, 2002). The next day, Mr. Seligman transmitted another letter to the Master indicating that the agency had "initiated the effort to secure the documents requested in your letter of October 7, 2002," but wished first "to examine an order from the Court identifying the nature of, and authority for, your investigation. . . ." Letter from Justice Attorney Phil Seligman to Special Master Alan L. Balaran (Oct. 10, 2002).

  On November 5, 2002, the Court issued an Order of Reference directing the Special Master to investigate whether Interior withheld or concealed information in its Eighth Quarterly Report to the Court, and, "at the conclusion of his investigation, . . . [to] file with the Court, with copies to defendants' and plaintiffs' counsel, his report and recommendation detailing his findings and conclusions." Order dated Nov. 5 at 1-2.

  When Interior did not produce the requested documents by January 2003, the Special Master inquired into the status of the October 7, 2002 request for production. See Attachments to Interior Defendants' Objections to "Interim" Report of the Special Master Regarding the Filing of Interior's Eighth Quarterly Report (May 4, 2003). The agency responded on January 29, 2003, acknowledging that, "[o]n November 5, 2002, the Court entered an order authorizing your investigation into the allegations made by NAID" and assuring the Special Master that it was "willing to produce . . . subject of course to any necessary privilege assertions, any documents that . . . would assist in [the] investigation." Letter from Justice Attorney Phil Seligman to Special Master Alan L. Balaran (Jan. 29, 2003) at 1, 2. Page 5

  Two days later, Interior reassured the Special Master that,
[a]s requested, Interior will copy the entire collection of documents previously identified by you and your assistant Shana Greatman, as being possibly related to your investigation into the allegations made by a representative of an Interior contractor, Native American Industrial Distributors. Interior will conduct a privilege review of the documents in the collection and produce non-privileged documents, accompanied by a privilege log, on February 14, 2003.
  Letter from Justice Attorney Phil Seligman to Special Master Alan L. Balaran (Jan. 31, 2003).

  Interior did not produce the requested documents as promised. Instead the Department of Justice invited the Special Master to meet and confer with then-former NAID employee Mike Smith in room 5141 of the Main Interior Building on February 27, 2003 to jointly identify those documents responsive to the Special Master's request.

  On April 4, 2003, Interior provided "[t]he first of a projected series of productions," consisting of approximately 2,310 documents "responsive to [the Special Master's] request of October 7, 2002 for documents related to [his] investigation of claims made by NAID." See Letter from Phil Seligman to Special Master Balaran (Apr. 4, 2003) (setting out Bates Numbers for the documents provided). This proved to be Interior's only production until June 27, 2003, when, at the Master's insistence, the Department of Justice turned over 12 boxes of documents responsive to the October 7, 2002 request. See Letter from Special Master Alan L. Balaran to Justice Attorney Phil Seligman at 1 (June 24, 2003) ("I am [] directing you to produce these records before the end of the month").

  Justice attached the following correspondence with its production:

  Enclosed are documents responsive to your request of October 7, 2002 for documents related to your investigation of claims made Page 6 by NAID, as authorized in the November 5, 2002 Order of the Court . . . A privilege log for those documents for which Interior wishes to assert privilege will be provided to you later . . . In the meantime . . . we ask that Interior be given an opportunity to assert a claim of privilege before you disclose the information in any document.

  Letter from Justice Attorney Phil Seligman to Special Master Alan L. Balaran (June 27, 2003).

  The Special Master responded that same day:
Thank you for producing the NAID documents to my office. In response to your concern that I not share these documents with any person affiliated with NAID, please be advised that I have no intention of doing so. Had this production, the request for which was first initiated by letter to Peter Miller dated October 7, 2002, been provided in a more timely fashion, it would not have been necessary to retain the services of an ex-NAID employee and secure the documents used in the Interim Report from outside sources. Your production this date obviates the need for such outside assistance.
  Letter from Special Master Alan L. Balaran to Justice Attorney Phil Seligman (June 27, 2003).

  B. The March and April 2003 Monthly Reports of the Special Master

  On April 1, 2003, the Special Master filed the Monthly Report of the Special Master, attaching his invoice for services rendered during March 2003. That invoice included 4 entries for work performed by "MSS" (Mike S. Smith) during the month of February and 61 entries for work performed during March 2003. The descriptions accompanying those entries reveal that, between February 27, 2003 and March 31, 2003, MSS reviewed Eighth Quarterly Report ("8QR") documents, chronology reports, the TAAMS template, the Records Management Template, and the probate backlog template, and he also compiled appraisal information. One of the entries reveals that, on February 27, 2003, MSS "Reviewed files in DOI regarding 8QR." A Page 7 corresponding entry by the Special Master ("ALB") attached to the February Monthly Report of the Special Master (Mar. 3, 2002), indicates that, on February 27, 2003, the Master "[m]e[t] at Interior to review NAID documents." Both entries reflect that MSS and the Special Master each spent exactly one hour reviewing files and NAID documents at Interior. Invoices attached to the March 2003 Monthly Report of the Special Master also reveal that, in March, the Special Master spent no fewer than eight days drafting the Interim Report, one day "reviewing NAID documents" (3/21/03) and another "[r]eviewing NAID memoranda and e-mails relating to creation of 8QR" (3/26/03). Another time entry indicates that, on March 4, 2003, Special Master assistant Edward Volz ("EKV") conducted a "[m]eeting with Mike Smith regarding work objectives."

  Interior filed no objections to the March 2003 monthly report, did not ask the Special Master to identify "MSS," did not question the Special Master's possession of NAID "documents, memoranda and e-mails," and did not question the content of the time entries of MSS and the Special Master that indicated a full months work evaluating documents Interior had not yet provided.

  On April 21, 2003, the Special Master submitted his Interim Report to the Court and the parties. Footnote 1 of the Interim Report explains that the Master labeled the report "Interim" as opposed to "Final" because, at the time the report issued, he had "not [] received the bulk of the discovery he has repeatedly requested, [and was] constrained to utilize documentation obtained outside of normal channels and with which the parties may have no familiarity." Interim Report at 1, n. 1. The Special Master assured the parties and the Court that, "following receipt of Page 8 comments by the parties, receipt of documents already requested, and oral testimony, he [would] issue a final report." Id.

  On May 6, 2003, the Special Master filed the April Monthly Report of the Special Master describing services he rendered in April 2003. The invoices attached to the April report contain 14 time entries for MSS — two of which indicate that, on April 3 and 4, 2003, he "Draft[ed] 8th QR analysis."

  Interior filed its objections to the Interim Report on May 4, 2003. Four days later, on May 8, 2003, Interior filed its Motion in Limine to Exclude Testimony of Plaintiffs' Witness Michael S. Smith, voicing, for the first time, its concern over the Special Master's retention of Mr. Smith. In that motion, Interior argued that "[t]he Special Master did not inform Interior before he hired Mike Smith, a witness to the events being investigated, to assist him in his investigation of NAID's claims." Id. at 3. The agency further insisted that "Mr. Smith did more than just assist in the investigation. According to the Special Master's billing information, Mr. Smith actually drafted portions of the Interim Report." Id. In support, Interior cited four of the time sheet entries filed in the Special Master's March and April monthly reports — the two mentioned above (indicating that MSS "drafted 8QR analysis") and two attributable to EKV (Edward Volz, the Special Master's assistant) (indicating that, on April 15, 2003 Edward Volz "[a]ssisted the Special Master and Mike Smith editing report on the 8th Quarterly Report" and, on April 16, 2003, "[a]ssisted Mike Smith editing and organizing materials for report on the 8th Quarterly Report."). Id.

  On May 13, 2003, Interior filed a Motion to Supplement its Objections to the Interim Report of the Special Master Regarding the Filing of Interior's Eighth Quarterly Report, Page 9 maintaining that, "[a]fter its Objections were filed, [it] learned, based in part upon invoices submitted by the Special Master on May 6, 2003, the Special Master secretly hired one of the principal witnesses to the events described in the Interim Report to assist with his investigation and with the drafting of the Interim Report." On May 29, 2003, Interior filed its Motion to Disqualify.

  On February 17, 2004, the Special Master filed his Motion for Leave to File Special Master Balaran's Statement in Response to Interior Defendants' Motion to Disqualify Him, which the Court granted the following day and Interior responded to on March On March 8, 2004, the Special Master filed his Consent to Interior Defendants' Motion to file a Reply to His Statement, and his Motion for Leave to File a Supplemental Statement which the Court granted on March 12, 2004.

  III. GOVERNING LEGAL STANDARDS

  Interior advances the argument that,
[t]he Special Master's contacts with Mr. Smith and his decision to employ Mr. Smith would cause any reasonable observer to question his impartiality and demonstrate actual bias. A judicial officer who purports neutrally to evaluate the conduct of a defendant cannot conduct extensive ex parte contacts with a complaining witness, much less hire that person to help prepare his report. And a Special Master who prejudges a defendant in this fashion and then stigmatizes it in a public report cannot properly continue as judicial officer. Recusal is therefore required.
Motion to Disqualify at 2.

  Before addressing the merits of Interior's claim, the Court notes that, when confronted with a disqualification or recusal request, it must begin its analysis with a presumption against disqualification. See Tripp v. Executive Office of the President, 104 F. Supp.2d 30, 34 (D.D.C. Page 10 2000) ("Judges are presumed to be impartial"); McCann v. Communications Design Corp., 775 F. Supp. 1506, 1522 (D. Conn. 1991) ("The judge to whom a recusal motion is addressed is presumed to be impartial"). This is because a judge, or in this instance, the Special Master, is presumed qualified to hear a proceeding, Idaho v. Freeman, 478 F. Supp. 33 (D. Idaho 1979), and must not be disqualified under § 455 merely because a litigant equates an adverse decision with a lack of impartiality. Idaho v. Freeman, 507 F. Supp. 706, 722 (D. Idaho 1981) (citing S.Rep. No. 93-419, 93rd Cong., 1st Sess.1973, p. 5).

  Interior, to overcome this presumption, must clearly and convincingly demonstrate that Special Master conducted himself in a manner supporting his disqualification. See Kinnear-Weed Corp. v. Humble Oil & Ref. Co., 441 F.2d 631, 634 (5th Cir. 1971) (clarifying that a party must produce clear and convincing evidence that a judge should be disqualified pursuant to section 455). Interior must also demonstrate that the Special Master's prejudice is personal and arises from extra-judicial matters. See Liteky v. United States, 510 U.S. 540 (1994) (recusal of judges for ...


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