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Tri-State Hospital Supply Corp. v. United States

December 16, 2005


The opinion of the court was delivered by: John M. Facciola United States Magistrate Judge


This case was referred to me by Judge Kennedy for resolution of all non-dispositive motions. Currently before me is the issue of whether certain government documents are shielded from discovery under the attorney-client, work product, deliberative process, and law enforcement privileges. After reviewing the documents in camera, I have determined that, under the facts and circumstances of this litigation, most, but not all, of the documents are not in fact shielded by those privileges.


Tri-State Hospital Supply Corporation ("Tri-State") is a corporation that sells hospital supplies in the United States. In the past, Tri-State imported surgical equipment from suppliers in Pakistan and received rebates on those purchases. In reporting its receipt of those purchases to United States Customs Service, now called the United States Customs and Boarder Protection ("Customs"), Tri-State declared the price reflected on the purchase invoices, not the price it paid after taking into account the rebates.

In the 1990's, Customs investigated Tri-State, criminally and civilly, for allegedly falsifying forms submitted to Customs. As a result, Customs issued civil penalty notices against Tri-State and referred the matter to the Department of Justice ("DOJ") for collection of those penalties. In 1996, DOJ brought a collection suit against Tri-State in the United States Court of International Trade, alleging fraud, negligence, and gross negligence. The fraud count was dropped by DOJ during trial; the gross negligence count was dismissed pursuant to Tri-State's motion for judgment as a matter of law; and the ordinary negligence count went to the jury, which returned a verdict in Tri-State's favor. Subsequently, Tri-State filed the present civil action against the government, alleging abuse of process and malicious prosecution.

On August 31, 2004, Tri-State filed a Motion to Compel Responses to Plaintiff's First Set of Interrogatories, First Request for Production of Documents, Second Request for Production of Documents, and Second Request for Admissions ("Pl.'s Mot. to Compel"), seeking, among other things, the production of documents for which the government had asserted the attorney-client, work product, deliberative process, and law enforcement privileges. Upon consideration of TriState's motion and the related filings, the court granted the motion in part and denied the motion in part, ordering the government to submit the documents it claimed to be privileged for in camera review. Tri-State Hosp. Supply Corp. v. United States, 226 F.R.D. 118, 133-40 (D.D.C. 2005). In response to the court's order, the government submitted two sets of documents with corresponding privilege logs: twenty-three documents from Customs and 224 documents from DOJ.


The government has asserted four different privileges: the attorney-client, work product, deliberative process, and law enforcement privileges. Before beginning, it may be helpful to conceptualize this court's analysis as a series of privilege specific "filters" through which the documents must pass in order to be shielded from discovery. These filters are based on the fundamental principles guiding the privileges and on the specific arguments presented by the parties.

The documents that the government claims are protected by the attorney-client privilege must first pass through two filters. First, the documents must in fact be attorney-client privileged. Specifically, in order to be shielded from production, the documents must reflect confidential communications from a client to an attorney made for the purpose of seeking legal advice or services. The documents that do not survive this first filter must be produced unless they are protected by another specific privilege claimed by the government. The documents that survive the filter must also survive the "crime-fraud" filter. They cannot be shielded from production if they reveal a communication that was made in furtherance of a crime, fraud, or other misconduct. Because the attorney-client privilege is absolute, any document that survives both of these filters is protected from discovery regardless of the applicability of any other privilege.

Moving on to the work product privilege. First, the document must in fact be work product. If the document is work product, then it must pass through a second filter, which I will call "Tri-State's need" filter. If Tri-State's need for the document is great enough, then the document must be surrendered. The documents that survive this filter - the ones for which Tri-State does not have a great enough need - must survive a third filter, the "crime-fraud" filter.

Work product cannot be shielded from discovery if it was created in furtherance of a crime, fraud, or other misconduct.

That leaves two privileges: the deliberative process privilege and law enforcement privilege. With regard to the deliberative process privilege, the court finds that, because TriState's claims place the government's deliberative process squarely in issue, the privilege is inapplicable. With regard to the law enforcement privilege, the court finds that, with a few exceptions, Tri-State's need for the documents outweighs the public's interest in nondisclosure of the information.

A. Attorney-Client Privilege

The government withheld both Customs and DOJ documents from production under the attorney-client privilege. In moving to compel, Tri-State argues that the attorney-client privilege is inapplicable because "communications made or work performed in the furtherance of the government's malicious prosecution and abuse of process are not protected by the attorney-client privilege." Pl.'s Mot. to Compel at 20. In support of this argument, Tri-State relies on what is commonly referred to as the crime-fraud exception to the attorney-client privilege. See Pl.'s Mot to Compel at 20-21. Before addressing the crime-fraud exception, the court must determine whether the documents are in fact attorney-client privileged.

The attorney-client privilege protects certain communications between a client and his attorney in order to encourage clients to be as candid as possible with their attorneys and thereby secure the best possible advice. Upjohn Co. v. United States, 449 U.S. 383, 389 (1981). In determining whether a document is attorney-client privileged, the relevant inquiry is whether the communication contained therein was made by a client to its attorney for the purpose of seeking legal advice or services, whether the client had a reasonable belief that the communication was confidential, and whether the disclosure of the communication would tend to reveal the confidential information. Evans v. Atwood, 177 F.R.D. 1, 3 (D.D.C. 1997).

This circuit defines the attorney-client privilege narrowly, protecting only the disclosure of communications made by the client to the attorney for the purpose of seeking legal advice or services. Evans, 177 F.R.D. at 3 (citing Tax Analysts v. Internal Revenue Service, 117 F.3d 607, 617 (D.C. Cir. 1997)). Communications from the attorney to the client are protected only insofar as the attorney's communication discloses an attorney-client privileged communication from the client. Evans, 177 F.R.D. at 3 (citing Brinton v. Dep't of State, 636 F.2d 600, 603-04 (D.C. Cir. 1980)).

1. Customs Documents

The government asserts the attorney-client privilege for documents relating to Customs' issuance of a civil penalty notice to Tri-State, its consideration of Tri-State's petition for relief from that penalty, its referral of the matter to DOJ for collection, and its attempted referral to the United States Attorney's Office for prosecution. After reviewing the Customs documents, the court finds that most are not attorney-client privileged because they do not reveal communications made pursuant to an attorney-client relationship.

The attorney-client privilege only applies to communications that are the product of an attorney-client relationship and maintained as confidential between the attorney and the client. Brinton, 636 F.2d at 603. The mere fact that the person whose opinion or advice is sought is an attorney does not create a privileged communication.

The Customs documents at issue consist of correspondence among government employees, primarily attorneys, located in different government offices, including various Customs offices, the United States Attorney's Office for the Eastern District of Virginia, and the Civil Division of DOJ. To determine whether the correspondence was made as part of an attorney-client relationship, it is necessary to step back and look at the expectations of the parties to the communication. In doing so, a distinction must be drawn between correspondence in which the government employee or lawyer is seeking legal guidance or services for his own needs or on behalf of the agency and, on the other hand, correspondence in which two or more lawyers are discussing how to best represent a mutual client or interest. The court's review of the Customs documents reveals that many of them fall within the latter category, specifically, that of parties working together to decide how best to handle Customs' civil penalty against Tri-State. While the attorneys to these communications may have reasonably expected the communications to be protected from disclosure under the work product doctrine, discussed later in this opinion, they could not have reasonably expected them to be attorney-client privileged.

There are three Customs documents, however, that the court finds to be attorney-client privileged. All three of these documents are letters referring the Tri-State matter to another government office for further enforcement. The first document is a letter from Customs' Fines, Penalties, and Forfeitures Section to Customs' Office of the Chief Counsel referring the matter for collection. Privilege Log for Documents Produced by Customs, Doc. No. 8. Similarly, the second document is a letter from Customs' Office of the Chief Counsel to DOJ referring the matter for collection. Id. at Doc. No. 15. The third document is a letter from Customs to the United States Attorney's Office for the Eastern District of Virginia seeking criminal prosecution against Tri-State. Id. at Doc. No. 13. Under the circumstances of each of these letters, the author is seeking legal services on behalf of his agency and, in essence, seeking to become a client of the recipient. In addition, these letters contain confidential communications, ...

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