The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge
(D. Ariz., Case No. CV-04-2147-PHX-JAT)
Currently pending in the above-captioned miscellaneous action is Apollo Group, Inc.'s ("Apollo") motion to compel Respondent, the Department of Education (the "DOE"), to produce documents responsive to a subpoena duces tecum pursuant to Federal Rule of Civil Procedure 45, dated July 3, 2006 (the "Amended Subpoena"), and issued from the United States District Court for the District of Columbia in connection with the underlying securities litigation pending in the District of Arizona. The DOE opposes Apollo's Motion to Compel and has filed its own Cross-Motion to Quash the Amended Subpoena. In addition, Apollo has filed a Motion to Strike evidence submitted by the DOE in opposition to Apollo's Motion to Compel, as well as a Motion to Strike a responsive pleading filed by the DOE, both of which the Court shall deny. With respect to Apollo's Motion to Compel and the DOE's Cross-Motion to Quash, based on a searching review of the filings before the Court and the relevant case law and regulations, the Court concludes that Apollo may pursue the production of documents responsive to the Amended Subpoena via a Motion to Compel pursuant to Federal Rule of Civil Procedure 45(c)(2)(B). Although the DOE asserts that the documents sought in the Amended Subpoena are privileged under the deliberative process, attorney-client, and attorney work-product privileges, the Court is unable to assess the DOE's claims of privilege because the DOE has failed to produce a privilege log as required by Federal Rule of Civil Procedure 45(d)(2). As such, the Court shall order the DOE to produce a privilege log so that the Court can assess the DOE's claims of privilege.
Apollo is a defendant in a securities class action pending in the District of Arizona, which arose out of an August 2003 Program Review conducted by the DOE addressing Apollo's compliance with federal regulations, contained within Title IV of the Higher Education Act of 1965, which prohibit the payment of incentive compensation to enrollment counselors. Apollo Mot. to Compel at 2; 12/25/06 Decl. of Kristopher P. Diulio, Ex. B (Complaint, In re Apollo Group, Inc. Securities Litigation). Apollo is the largest for-profit provider of higher education in the United States, and operates through several subsidiaries, including the University of Phoenix ("UOP"). Apollo Mot. to Compel at 2. In early 2003, two former UOP employees brought a qui tam action alleging that UOP violated the Higher Education Act. Apollo Mot. to Compel at 1a.*fn1
Although the Department of Justice declined to intervene in the qui tam action on May 7, 2003, in August 2003, the DOE began an on-site program review of UOP to determine whether UOP was in compliance with federal regulations and, if not, the extent of the violations. Id.; DOE Mot. to Quash at 4.
During the August 2003 Program Review, the DOE issued a Program Review Report (the "Report"), which identified a violation of the Higher Education Act. Apollo Mot. to Compel at 1a; DOE Mot. to Quash at 5. Apollo responded to the Report orally and in writing, and in September 2004, Apollo paid $9.8 million to settle the Program Review issues with the DOE. Apollo Mot. to Compel at 1a; DOE Mot. to Quash at 6. Subsequently, the plaintiff in the underlying securities litigation sued Apollo for allegedly failing to timely disclose the contents of the Report. Apollo Mot. to Compel at 1a. Apollo, however, "believes that the Report was legally and factually faulty and was not subject to disclosure," id., and in an attempt to "demonstrate the many flaws in the DOE's Report, Apollo has sought to obtain the DOE's underlying work papers from the Program Review" in order to defend against the underlying securities litigation, id. at 1.
Apollo began its efforts to obtain the work papers in October 2004, by servingthe DOE with a FOIA request seeking the work papers, broken down into seven different categories. Id. at 4; Diulio Decl. Ex. C (10/25/04 Letter from D. Cox to J. Trumble). The DOE responded to Apollo's FOIA request with four interim response letters and a final response dated May 3, 2005. Apollo Mot. to Compel at 5; Diulio Decl. Exs. D-H (Letters dated 12/29/04, 2/18/05,2/28/05, 4/8/05, and 5/3/05). The DOE produced a total of 5,353 pages, but withheld 2,022 pages based on certain FOIA exemptions. Apollo Mot. to Compel at 5; Diulio Decl. Ex. H (5/3/05 Letter from J. Van Vlandren to D. Cox) at 3. Apollo appealed the DOE's FOIA response on June 15, 2005. Apollo Mot. to Compel at 5; Diulio Decl. Ex. I (6/15/05 Letter from D. Cox). On October 31, 2005, the DOE issued its final determination on Apollo's appeal, denying the appeal with respect to the pages withheld from the original search, producing an additional 185 pages discovered pursuant to a supplemental search, and withholding an additional 2,061 pages located during that supplemental search based on various FOIA exemptions. Apollo Mot. to Compel at 5; Diulio Decl. Ex. J (10/31/05 Letter from M. Clark to D. Cox). The DOE did not provide a log of the withheld documents, but generally described the fourteen (14) categories of documents withheld pursuant to FOIA Exemptions 5 and 7(C). Id.
In response, on June 5, 2006, Apollo served the DOE with a subpoena duces tecum, issued from the United States District Court for the District of Columbia, seeking production of the documents withheld from the DOE's FOIA production. Apollo Mot. to Compel at 7; Diulio Decl. Ex K (6/5/06 Subpoena). The DOE determined that Apollo's initial subpoena failed to comply with the DOE's Touhy regulations, which are located at 34 C.F.R. § 8, and so informed Apollo in a letter dated June 29, 2006. DOE Reply and Mot. to Supp. Cross-Mot. to Quash (hereinafter "DOE Mot. to Supp.") at 5; Ex. 7 (6/29/06 Letter from H. Graham-Oliver to J. Toffer). Apollo then served the DOE with a second subpoena duces tecum, dated July 3, 2006 (the "Amended Subpoena"), which Apollo asserts conformed to the DOE's Touhy regulations and which sought the same information as the initial subpoena, including (1) unredacted versions of any redacted documents the DOE produced pursuant to the FOIA request; (2) the 4,083 pages of documents that the DOE withheld from its FOIA production; and (3) various documents pertaining to the Program Review, the Report, or the qui tam action, to the extent they are not covered by categories (1) and (2).Apollo Mot. to Compel at 7; DOE Mot. to Supp. at 6.
The DOE responded to the Amended Subpoena in a letter dated July 13, 2006, asserting that the Amended Subpoena still failed to comply with the DOE's Touhy regulations because those regulations specify that the Secretary may allow the production of [DOE] records only if she determines that the demand satisfies the requirements of 34 C.F.R. § 8.3 and that disclosure . . . Would not be contrary to an interest of the United States, which includes furthering a public interest of the Department and protecting human and financial resources of the United States.
DOE Mot. to Supp. Ex. 8 (7/13/06 Letter from J. Dailey to K. Diulio) at 3 (citing 34 C.F.R. § 8.5(c)).The DOE further explained that a review of [Apollo's] demand under the standards in 34 C.F.R. § 8.5 makes clear that authorizing production of the documents sought would be contrary to the interests of the United States [because Apollo] has previously sought access to all of the records responsive to your subpoena under the FOIA, and the Department has produced to you all responsive records that are not exempt from public disclosure under that statute.
On December 19, 2006, Apollo filed the instant Motion to Compel pursuant to Federal Rule of Civil Procedure 45(c)(2)(B). On January 19, 2007, the DOE opposed Apollo's Motion to Compel and filed its own Cross-Motion to Quash the Amended Subpoena, pursuant to Federal Rules of Civil Procedure 26(b)(1) and 45(c)(3). Apollo filed a Reply in further support of its Motion to Compel on January 26, 2007. On February 6, 2007, the DOE filed a Reply and Motion to Supplement its Cross-Motion to Quash, to which Apollo responded with a Motion for Leave to File a Sur-Reply in Opposition to the DOE's Motion to Supplement. The DOE responded to Apollo's Motion for Leave to File a Sur-Reply with a Reply dated February 26, 2007. Thereafter, on March 1, 2007, Apollo responded with a Motion to Strike what it viewed as the DOE's attempt to file a third brief in opposition to Apollo's Motion to Compel. In addition to the filings directly ...