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General Electric Co. v. Johnson

September 12, 2006

GENERAL ELECTRIC CO., PLAINTIFF,
v.
STEVEN JOHNSON, ADMINISTRATOR, UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, AND THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, DEFENDANTS.



The opinion of the court was delivered by: John D. Bates United States District Judge

MEMORANDUM OPINION

Presently before the Court is plaintiff General Electric Company's ("GE") motion to compel production of approximately 6,177 documents that defendants Environmental Protection Agency ("EPA") and Steven Johnson, in his capacity as administrator of EPA, claim are covered by the deliberative process privilege, attorney-client privilege, and work product doctrine. GE has also requested the appointment of a special master to conduct an in camera review of these documents. A motions hearing was held with the Court on June 2, 2006, following which the Court ordered the parties to make two additional submissions. Specifically, defendants were required to utilize a statistically-reliable method to generate a sample of approximately 100 documents that is representative of the various withholding claims and geographic regions at issue, to facilitate the Court's in camera review. GE, on the other hand, was ordered to submit a list (organized by stamped document numbers) and a copy of all documents with respect to which it claims that defendants have, by virtue of disclosing those documents, effected subject-matter waiver of any otherwise applicable privilege. Based upon its in camera review of these documents in light of applicable law, and for the reasons that follow, the Court will grant GE's motion in part and deny it in part.

BACKGROUND

I. Factual and Procedural Background.

This action was originally filed against defendants on November 28, 2000 as a challenge to the facial constitutionality of certain provisions of the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9606(a) et seq., and to EPA's method of administering § 106(a) of that statute. Section 106(a) empowers EPA to require responsible parties to clean up a contaminated site if it finds "that there may be an imminent substantial endangerment to the public health or welfare or the environment because of an actual or threatened release of a hazardous substance from a facility." 42 U.S.C. § 9606(a). The usual course of conduct is for EPA to send the responsible party a "Section 106 order," also referred to as a "UAO." Defs.' Mem. Opp'n at 3.*fn1 If the recipient fails to comply with the UAO, then EPA may bring an action in federal court seeking to compel compliance, during which the recipient may present all of its challenges to the UAO. If the court determines that the recipient lacked "sufficient cause" for refusing to comply, then the court may impose penalties and punitive damages. 42 U.S.C. §§ 9606(b)(1), 9607(c)(3); Defs.' Mem. Opp'n at 3. A recipient that chooses to comply with a UAO may petition EPA to reimburse the response costs from the Superfund, see 42 U.S.C. §§ 9606(b)(2)(A), (C-D); Defs.' Mem. Opp'n at 3, and, in the event that EPA denies the petition, may file an action for reimbursement in federal district court, see 42 U.S.C. §§ 9606(b)(2)(B), (E); Defs.' Mem. Opp'n at 3.

On March 31, 2003, this Court granted EPA's motion to dismiss GE's amended complaint on the ground that § 113(h) of CERCLA barred pre-enforcement review of GE's constitutional challenge to CERCLA. See General Electric Co. v. Johnson, Civil Action No. 00-2855, dkt. no. 54 (D.D.C. Mar. 31, 2003) (Order). That decision was overturned on appeal, and the case was remanded to this Court. See General Electric Co. v. EPA, 360 F.3d 188 (D.C. Cir. 2004). Thereafter, discovery was stayed to allow the Court to rule on EPA's motion for summary judgment. See General Electric Co. v. Johnson, Civil Action No. 00-2855, dkt. no. 69 (D.D.C. Nov. 22, 2004) (Order). In its motion, EPA argued that GE's constitutional challenge to CERCLA was a facial challenge limited to review of the statute's text and, accordingly, that GE was required to establish that CERCLA is unconstitutional in every application, consistent with United States v. Salerno, 481 U.S. 739 (1987). EPA contended that GE could not carry its burden under Salerno because CERCLA plainly was constitutional as applied in emergency situations.

GE vigorously opposed EPA's motion, arguing that the complaint advanced not only a facial due process challenge based on CERCLA's text, but also a challenge based upon EPA's pattern and practice of administering § 106, which, it asserted, was not foreclosed by the jurisdictional bar of § 113(h) as interpreted by the D.C. Circuit on appeal. See General Electric Co., 360 F. 3d at 193-94. Accordingly, GE moved the Court to permit discovery as to both of its claims. In its Memorandum Opinion of March 30, 2005, this Court held that although the challenged statutory provisions are not unconstitutional "on their face," see General Electric Co. v. Johnson, 362 F. Supp. 2d 327, 330 (D.D.C. 2005), GE had nonetheless sufficiently alleged a "pattern and practice" challenge to the procedure that EPA employs in administering § 106, id. at 334, 337, 344. The crux of GE's pattern and practice claim is that EPA's "enforcement first" policy and administration has deprived GE of its constitutional right to procedural due process of law. The Court allowed the parties to begin discovery regarding this claim.

II. The Current Discovery Dispute.

On June 17, 2005, GE served a broad discovery request upon EPA, seeking tens of thousands of documents dating as far back as 1980. Defs.' Mem. Opp'n at 4. The parties worked together to narrow the scope of the requests, but these issues were not fully resolved until August 29, 2005, through the Court's order. Id.; see General Electric Co. v. Johnson, Civil Action No. 00-2855, dkt. no. 93 (D.D.C. Aug. 29, 2005) (Order). Thereafter, EPA conducted a five-month nationwide search for, and then review and retrieval of, approximately 20,000 documents, which occupied hundreds of employees and required 14,000 personnel hours to complete. Defs.' Mem. Opp'n at 4. To date, EPA has produced a total of 12,866 documents from multiple regions, but claims that the remaining 6,177 documents are protected by the deliberative process privilege, attorney-client privilege, and/or work product doctrine.*fn2 See id. at 1 n.1; Defs.' Exh. 2 (EPA's revised and cumulative privilege log). GE argues that EPA's privilege assertions are overly broad and inapplicable, and that EPA has implicitly waived some protections through its disclosure of other documents that are similar in character and subject matter. See, e.g., Pl.'s Mem. Supp. at 1. Because these documents are allegedly "crucial" to the "core issues" of its pattern or practice claim, GE requests that the Court issue an order forcing EPA to produce all remaining documents. Id. at 1, 3. Moreover, GE seeks the appointment of a special master to conduct an in camera review of any documents that remain the subject of dispute following the Court's rulings as to the proper scope of the protections and privileges asserted. Id. at 1.

The Court held a motions hearing on June 2, 2006. That same day, the Court ordered GE to submit a copy of all documents that it alleges were inadvertently disclosed by EPA and therefore form the basis of GE's arguments for subject-matter waiver. EPA was ordered to use a statistically-viable method to generate a sampling of approximately 100 documents drawn from the updated privilege log for the Court to review in camera. EPA has generated that sampling after first removing from its privilege log those documents that GE does not seek to obtain. In order to comply with the Court's direction that the sampling be a fair cross-section of the various privilege assertions, geographic regions, and classes of documents included in EPA's privilege log, EPA decided to include a total of ninety-nine documents in the following distribution: twenty-five documents from the Office of Site Remediation and Enforcement; ten documents from each of two other EPA Headquarters Offices (designated as "OGC" and "FFEO"); five documents from the Department of Justice; eight documents from each of the EPA Regional Offices for Regions Two, Five, and Nine; and five documents from each of the EPA Regional Offices for Regions One, Three, Four, Six, Seven, Eight and Ten. Defs.' Cover Letter of 06/14/2006 at 1. To determine which documents would comprise this distribution, EPA assigned random numbers to each privilege log entry using the computer program Microsoft Excel. Id. GE agreed that this sampling method was fair. Id. Following the in camera submission, the parties conferred further and decided that the documents designated as P.L. No. 975, P.L. No. 5002, P.L. No. 2215, and P.L. No. 2290 should be removed from the privilege log and, hence, the in camera sampling. Defs.' Cover Letter of 6/16/2006. In their place, the parties added four new documents, identified as P.L. No. 1042, P.L. No. 6535, P.L. No. 1724, and P.L. No. 546. Id.

Based upon its in camera review of the documents submitted by the parties, the various legal memoranda, and EPA's most recent privilege log, the Court will grant GE's motion in part and deny it in part. This Memorandum Opinion sets out the legal framework to be applied in making privilege determinations as to the over 6,000 documents for which EPA has claimed privilege. Table T-1, attached hereto, summarizes the Court's privilege findings with respect to the sampling of documents reviewed in camera. Table T-2, also attached, indicates the Court's determinations regarding the inadvertently-disclosed documents that form the basis for GE 's subject-matter waiver arguments. Because there is no evidence of bad faith or noncompliance on the part of EPA, the Court denies GE's request for the appointment of a special master. However, in light of the errors identified by the Court during its in camera review, the Court directs EPA to perform the following tasks: (1) review all withholdings in light of the principles and findings set forth herein regarding the scope and possible waiver of the protections asserted; (2) make additional disclosures to GE consistent with the Court's analysis; (3) prepare an updated privilege log; and (4) submit a new statistically-representative sampling (consisting of no more than 50 of the documents identified on the final privilege log) for the Court to review in camera.

ANALYSIS

I. The Deliberative Process Privilege

A. Parameters of the Privilege

The deliberative process privilege "serves to assure that subordinates within an agency will feel free to provide the decisionmaker with their uninhibited opinions and recommendations without fear of later being subject to public ridicule or criticism." Coastal States Gas Corp. v. Dep't of Energy, 617 F.2d 854, 866 (D.C. Cir. 1980). To this end, the privilege protects documents or communications that are "predecisional" and "deliberative" in nature. See, e.g., Am. Fed'n of Gov't Employees, Local 2782 v. U.S. Dep't of Commerce, 907 F.2d 203, 207 (D.C. Cir. 1990). One important inquiry is whether the document constitutes "secret law" actually applied by the agency in its dealings with the public. See Tax Analysts v. IRS, 117 F.3d 607, 617 (D.C. Cir. 1997); Coastal States, 617 F.2d at 867. The existence of "secret law" is ordinarily evidenced by documents that "serve as 'law' in the specific case to which they are addressed" or "serve as 'law'-like precedent in subsequent cases." Schlefer v. United States, 702 F.2d 233, 237 (D.C. Cir. 1983).

To be considered predecisional, the material must "'precede, in temporal sequence, the 'decision' to which it relates.'" Hinckley v. United States, 140 F.3d 277, 284 (D.C. Cir. 1998) (quoting Senate of the Commonwealth of Puerto Rico v. U.S. Dep't of Justice, 823 F.2d 574, 585 (D.C. Cir. 1987)). "'Accordingly, to approve exemption of a document as predecisional, a court must be able to pinpoint an agency decision or policy to which the document contributed.'" Id. (quoting Senate of Puerto Rico, 823 F.2d at 585); see also Wilderness Society v. United States Dep't of the Interior, 344 F. Supp. 2d 1, 12 (D.D.C. 2004) (ordering disclosure because agency failed to identify a specific, final agency decision). As with all privilege assertions, the agency bears the burden of demonstrating the final policy or decision that was reached at the end of the particular deliberative process that the document plays into. See SafeCard Servs., Inc. v. Securities Exchange Comm'n, 926 F.2d 1197, 1204 (D.C. Cir. 1991). "Documents which are protected by the privilege are those which would inaccurately reflect or prematurely disclose the views of the agency, suggesting as agency position that which is as yet only a personal position." Coastal States, 617 F.2d at 866.

The purpose of the privilege is to protect the consultative process by guarding against the deterrence of deliberative candor in future discussions. See id. At the very instant that an agency aligns its policy or program congruently with the views expressed in a particular document, the document is no longer seen as "reflect[ing] the personal opinions of the writer"; rather, it reflects the position of the agency. See Tax Analysts, 117 F.3d at 617-18; Coastal States, 617 F.2d at 868, 869. Under such circumstances, the document is no longer considered "predecisional," see Coastal States, 617 F.2d at 866, and the purpose of the privilege is not implicated -- it is the agency, not the individual drafter, that may thereafter be exposed to ridicule or criticism if the policy proves ill-advised. See Sterling Drug, Inc. v. Fed. Trade Comm'n, 450 F.2d 698, 670 (D.C. Cir. 1971). The law is unconcerned with scorn directed at the agency because "[w]henever an agency's actions are opened to public view, the agency exposes itself to pressure and criticism." Tax Analysts, 117 F.3d at 618.

Hence, the agency must establish that it has never implemented the opinions or analyses contained in the document, incorporated them into final agency policy or programs, referred to them in a precedential fashion, or otherwise treated them as if they constitute agency protocol. See NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 161 (1975); see also Tax Analysts, 117 F.3d at 617-18; SafeCard, 926 F.2d at 1205; Coastal States, 617 F.2d at 866, 869. The labels assigned to the documents by the agency (e.g., "formal," "binding," "precedential," "final," "adopted," "draft," or "deliberative") are not dispositive in this regard, and conclusory or general assertions contained in declarations are insufficient. See Schlefer, 702 F.2d at 240-44; Coastal States, 617 F.2d at 867-68; see also Tax Analysts, 117 F.3d at 617. The mere fact that the agency has accepted a document's conclusion, however, does not mean that the document is postdecisional. Nat'l Council of La Raza v. Dep't of Justice, 411 F.3d 350, 358 (2d Cir. 2005). Rather, the agency must have adopted the document's rationale. See Renegotiation Bd. v. Grumman Aircraft Eng'g Corp., 421 U.S. 168, 184 (1975); see also La Raza, 411 F.3d at 359; Afshar v. Dep't of State, 702 F.2d 1125, 1143 n.22 (D.C. Cir. 1983). The Supreme Court has recognized that agencies are engaged in a constant process of policy evaluation and revision. Sears, 421 U.S. at 153 n.18; see also Wilderness Society, 344 F. Supp. 2d at 13. Accordingly, a document that, in a "follow-up" capacity, discusses or analyzes a policy that was previously adopted by the agency will not be considered postdecisional unless its recommendations and assessments form the basis for the agency's continued maintenance, or subsequent abandonment or revision, of the pre-existing policy. See Wilderness Society, 344 F. Supp.2d at 13.

Generally, material is considered deliberative if it "'reflect[s] the give-and-take of the consultative process.'" See Tax Analysts, 117 F.3d at 617 (quoting Coastal States, 617 F.2d at 866). There is some overlap between the "predecisional" and "deliberative" requirements, however. Accordingly, the assessment of a document's deliberative nature may be a function of whether it is properly deemed predecisional. Id. Despite this seeming circularity, the D.C. Circuit has held that documents that evaluate the relative "strengths and weaknesses of alternative views" are not protected -- despite appearing, at first blush, to qualify as deliberative -- if they constitute an agency's statement of the law. See id. This is because "[t]he government's opinion about what is not the law and why it is not the law is as much a statement of government policy as its opinion about what the law is." Id. Hence, a document that "reflects a view eventually rejected by a field [employee may] . . . still represent[] the opinion of the [agency]," in which circumstance "the public can only be enlightened by knowing what the [agency] believes the law to be." Id. It is incumbent upon the agency, then, to establish "'what deliberative process is involved, and the role played by the documents in issue in the course of that process.'" Coastal States, 617 F.2d at 869; see also Senate of Puerto Rico, 823 F.2d at 585-86. Documents that do not provide advice to a superior, suggest the disposition of a case, discuss the relative pros and cons of a specific approach, or constitute "one step of an established adjudicatory process," but rather constitute "straightforward explanations" of an agency's pre-existing policy or regulations against the backdrop of specific or hypothetical factual situations, are not deliberative. Coastal States, 617 F.2d at 868.

To determine whether a document is recommendatory in nature, courts often consider the following traits: language; tone; circulation stream; apparent purpose; relative hierarchical positions of the drafter and recipients; depth and extent of subsequent adherence or reference to, or citation of, the document; and whether the agency has ever used the document to train personnel, treated it as precedential, or described it as having been "amended" or "rescinded," for example. See, e.g., Coastal States, 617 F.2d at 860, 868; see also Arthur Andersen & Co. v. Internal Revenue Serv., 679 F.2d 254, 257 (D.C. Cir. 1982) ("The designation of . . . documents as 'drafts' does not end the inquiry."); Wilderness Society, 344 F. Supp. 2d at 13 (citing the agency's failure to tie the documents to particular authors and recipients, and to provide their titles, as a partial basis for ordering disclosure). As a general rule, the party invoking the deliberative process privilege is only entitled to withhold the deliberative and predecisional portions of the document -- that is, purely factual information is ordinarily considered segregable. This is not the case, however, when the disclosure of the factual material would inappropriately expose the deliberative process, or when the material is otherwise incapable of being extracted without compromising the deliberative process. See Heartwood, Inc. v. United States Forest Serv., 431 F. Supp. 2d 28, (D.D.C. 2006) (citing Wash. Res. Project, Inc. v. Dep't of Health, Ed. & Welfare, 504 F.2d 238, 249 (D.C. Cir. 1974)); Petroleum Info. Corp. v. Dep't of the Interior, 976 F.2d 1429, 1434 (D.C. Cir. 1992)).

"The [deliberative process] privilege was fashioned in cases where the governmental decisionmaking process is collateral to the plaintiff's suit." In re Subpoena Duces Tecum, 145 F.3d 1422, 1424 (D.C. Cir.), modified, 156 F.3d 1279 (D.C. Cir. 1998) (citing In re Subpoena Served Upon the Comptroller of the Currency, 967 F.2d 630 (D.C. Cir. 1992)). Accordingly, the privilege may not apply if the plaintiff's cause of action is "directed at the government's intent." Id.; see also Dep't of Econ. Dev. v. Fetherston, 139 F.R.D. 295, 299 (S.D.N.Y. 1991); Grossman v. Schwarz, 125 F.R.D. 376, 385 (S.D.N.Y. 1989); United States v. AT&T Co., 524 F. Supp. 1381, 1389-90 (D.D.C. 1981). Quite simply, under such circumstances, "the privilege's raison d'etre evaporates." In re Subpoena Duces Tecum, 145 F.3d at 1424; see also 156 F.3d at 1280. Here, GE submits that the privilege "is a nonsequitur" because the pattern and practice claim is squarely directed at EPA's intent. Specifically, GE points to its supporting allegations, which it claims assert that

EPA intentionally uses its UAO authority so as to (1) impose an immediate deprivation on UAO recipients; (2) to prolong UAOs to deprive respondents of any meaningful opportunity to be heard on challenges to EPA's action; (3) to penalize [potentially responsible parties] that seek to pursue judicial review of UAO decisions; and (4) to ...


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