This is the background image for an Adobe Acrobat Capture page with image plus hidden text. IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ELOUISE PEPION COBELL, gt al., Plaintiffs, V. GALE NORTON, Secretary of the Interior, al., Defendants. 1 1 ) 1 ) 1 ) ) ) Case No. 1:96CV01285 INTERIOR DEFENDANTS' RESPONSE AND OBJECTIONS TO REPORT AND RECOMMENDATION OF THE SPECIAL MASTER-MONITOR ON DEFENDANTS' DELIBERATIVE PROCESS PRIVILEGE CLAIMS OVER PHASE 1.5 TRIAL DEPOSITION TESTIMONY The Report and Recommendation of the Special Master-Monitor on Defendants' Deliberative Process Privilege Claims over Phase 1.5 Trial Deposition Testimony (dated March 24, 2003) ("R&R'') correctly found that Interior Defendants' witnesses actually answered twenty-six of the forty-one questions set forth in Plaintiffs' Unanswered Deposition Questions Pursuant to District Court's Memorandum and Order Dated February 5 , 2003 (Feb. 14, 2003) ("Unanswered Questions"). For The R&R specifically addresses thirty-nine questions. Plaintiffs' Unanswered Questions submission appears to indicate 4 1 questions, though the questions are not numbered. The R&R does not address (1) a question to Deputy Secretary J. Steven Griles concerning discussions about Associate Deputy Secretary James E. Cason's role in trust reform, Unanswered Questions at 5, and (2) a question to the Acting Special Trustee for American Indians, Donna Erwin, concerning a meeting she had with the Office of Management and Budget, &at 15-16. Interior Defendants' declarations addressed both questions. Declaration of J. Steven Griles In Support of Interior Defendants' Assertion of Deliberative Process Privilege in Response to Deposition Questions at 10-11 (Feb. 26, 2003) ("Question 5"); Declaration of Donna Erwin in Response to Plaintiffs' Statement of Need Pursuant to Memorandum and Order Dated February 5,2003 at 23-24 (Feb. 26,2003) ("Erwin Declaration") ("Question 9"). This is the background image for an Adobe Acrobat Capture page with image plus hidden text. most of the remaining questions, the R&R, although incorrectly relying on Plaintiffs' inadequate Statement of Need, correctly recommends that Interior Defendants' objections be upheld. However, the R&R incorrectly found that the answer to one question -concerning the Department of the Interior's strategic plan -is not protected by the deliberative process privilege. I. Interior Defendants Answered Most of Plaintiffs' "Unanswered Questions." As confirmed by the R&R, at the depositions the deponents answered most of the questions that Plaintiffs' Statement of Need Pursuant to Memorandum and Order Dated February 5,2003 (Feb. 14,2003) ("Statement of Need") claimed went unanswered. The R&R found that: (1) the deponents answered twenty-six of the cited questions, R&R at 6-17 (questions: l(b), (c), (f); 2(a), (b), (c), (e), (s);3(a); 4(a), ( 4 , (f), (g), (h); 5($, (b), ( 4 , ( 4 , (f), (9, (i);6(a), (c), (el, (f),(g)); (2) Plaintiffs' counsel rephrased one question, which was then answered, R&R at 11-12 (question 4(e) rephrased as 4(f)); (3) one question was objected to only on the basis of the bank examination privilege, R&R at 13; and (4)one question -objected to only on the basis of the attorney-client privilege - had already been decided by the Court on December 23, 2002, R&R at 6 and n.5 (question l(a)) (noting Interior Defendants' noticing of appeal). With regard to question l(a), Interior Defendants agree with the R&R that "this Court's order directing response to question l(a) should be stayed pending the Circuit Court decisions [sic] on defendants' appeal." R&R at 17-18. In sum, twenty-nine of the questions presented to the Special Master-Monitor ("Monitor") - over seventy percent -were either answered or did not involve a deliberative process objection. As a result of Plaintiffs' apparent lack of diligence in reviewing the transcripts to determine whether their questions had been answered, Plaintiffs wasted the time and -2- This is the background image for an Adobe Acrobat Capture page with image plus hidden text. resources of the Monitor, Interior Defendants' counsel and support staff, five high-ranking Department of the Interior officials, and Solicitor's Office attorneys. 11. Plaintiffs' Statement of Need Did Not Adequately Address the "Unanswered Questions" and Should Not Have Required a Response from Interior Defendants. Interior Defendants object to the R&R's coilsideration of Plaintiffs' Statement of Need, which failed to establish any basis for Interior Defendants to answer Plaintiffs' Unanswered Questions. Plaintiffs were required to submit "a detailed statement setting out the reasons why they require answers to these questions." Memorandum Opinion at 14 (Feb. 5 , 2003). Plaintiffs' Statement of Need: (1) made virtually no specific arguments about their need for answers to the questions they claim went unanswered; (2) failed to "establish that [their] need for the information outweighs the interest of the government in preventing disclosure of the information," Memorandum Opinion at 5; (3) failed to cite or reference the "unanswered questions" in all but four instances2; and (4) failed to address the five factors required by this Court to carry their burden. See Memorandum Opinion at 5 (Feb. 5, 2003) (''once the elements of the privilege have been met, the burden shifts to the party opposing the privilege"). Rather than apply the five factors, Plaintiffs primarily argued that the resignation of former Special Trustee for American Indians Thomas N. Slonaker and "countless other decisions made by the The four references to the deposition transcripts: (I) coinplained about a question, Statement of Need at 5 n.6, that Special Trustee Donna Erwin answered, R&R at 13 (question 5(f)); (2) cited testimony of the Executive Director of the Department of the Interior's Office of Historical Trust Accounting, Bert T. Edwards, that did not appear in Plaintiffs' Unanswered Questions, Statement of Need at 5 n.7; (3) cited Mr. Edwards' testimony, id.at 6 n.8, which included one question he answered and another question that the R&R found was moot, R&R at 10-11 (questions 4(c) and 4(d)); and (4) complained that "[Associate Deputy Secretary James E.] Cason refused to answer all questions" related to "management and administration of the Individual Indian Trust," Statement of Need at 7 n.9, although the R&R found that the only "unanswered" question contained in that portion of Mr. Casonk deposition transcript had in fact been answered, R&R at 6-7 (question l(b)). -3- This is the background image for an Adobe Acrobat Capture page with image plus hidden text. defendants during the [sic] this litigation relates directly to the credibility of the Secretary and her senior managers and counsel." Statement of Need at 6. Phase 1.5 discovery concerns Interior's plan for an accounting of Individual Indian Money ("IIM") trust funds and for JIM trust management. Those plans are extant and will stand or fall on their merit, not on the opinions of Interior officials relating to Mr. Slonaker's tenure or drafts of a quarterly report to this Court. Plaintiffs further argued broadly that "to the extent such information is deliberative, the needs of plaintiffs and this court clearly outweigh the interest of defendants and their counsel to conceal more fi-aud, more retaliation and more deception." Statement of Need at 7. Plaintiffs' repeated and continuing allegations of "fraud, more retaliation, and more deception" have already chilled Interior's deliberative process. Their stated goal is to use the predecisional opinions, advice and recommendations of Interior officials to attack the "credibility of the Secretary and her senior managers and counsel." Statement of Need at 6-7. Yet such discourse is and should remain protected to encourage government officials to take positions that may be at odds with their superiors, peers and subordinates without fear of scrutiny and the resultant allegations that an agency is at odds with itself or had serious questions about decisions and policies. The Interior Defendants should not have been compelled to submit declarations in the face of such a clearly inadequate statement of need and such a grossly inaccurate representation of what deposition questions were "unanswered." Letter of Sandra P. Spooner to Joseph S. Kieffer, III, Special Master-Monitor (Feb. 26,2003) (Exhibit "A"attached (enclosures omitted)). Nevertheless, rather than jeopardize Interior Defendants' ability to prevent disclosure of privileged information, Interior Defendants submitted five declarations supporting their privilege claims and explaining how most questions had been answered, and prepared a detailed summary of their responses to each -4- This is the background image for an Adobe Acrobat Capture page with image plus hidden text. question set forth by Plaintiffs, in accordance with the Court's February 5 , 2003 Order. See id. Those responses were submitted to the Monitor and filed under seal. Id. 111. Interior Defendants Properly Asserted the Deliberative Process Privilege with Regard to the Purpose of the Department of the Interior's Strategic Plan. At the deposition of James G. Pauli of Electronic Data Systems Corp. ("EDS"), Interior Defendants' counsel properly objected to the question: "What is the purpose of [the Department of the Interior's] strategic plan?" Deposition Transcript of James G. Pauli at 50: 17-54:4 (Dec. 19,2002) ("Pauli Deposition"), quoted in Declaration of Ross 0.Swimmer in Support of Interior Defendants' Assertion of Deliberative Process Privilege at 9-11 (Feb. 26, 2003) ("Swimmer Declaration"). Mr. Pauli testified that the plan was not "in effect." Pauli Deposition at 53: 10-11. The R&R then correctly found that the "question addressed was a plan under development within the Department of the Interior on which EDS was providing advice to defendants." R&R at 15. With no further analysis, the R&R incorrectly concluded that "review of the sealed detailed summary regarding this response indicates that the complete response . . . would not have been subject to the deliberative process privilege . . . .'I -Id. This conclusion must be rejected. "[A] master's conclusions of law are entitled to no special deference froni the reviewing court, and will be overturned whenever they are believed to be erroneous." Oil, Chemical & Atomic Workers Int'l Union, AFL-CIO v. NLRI3, 547 F.2d 575, 580 (D.C. Cir. 1976) (citing Case v. Morrisette, 475 F.2d 1300, 1308 (D.C. Cir. 1973)). Absent "careful review by the trial judge, judicial authority" would otherwise be "effectively delegated to an official who has not been appointed pursuant to [Alrticle HI of the Constitution." Meeropol v. Meese, 790 F.2d 942, 96 1 (D.C. Cir. 1986). Thus, with or without objections to the R&R, its conclusions of law must be reviewed de novo and are not -5- This is the background image for an Adobe Acrobat Capture page with image plus hidden text. binding until the Court has adopted them. The Court "shall accept the master's findings of fact unless clearly erroncous." Fed. R. Civ. P. 53(e)(2). Interior Defendants stand on their arguments made during the deposition colloquy concerning this question and stated in the Swimmer Declaration. Because the plan was not in effect, discussion of the plan, including its purpose, was deliberative and predecisional. See Swimmer Declaration f 11 at 11. "The purpose of the plan includes the scope of the plan, which had not yet been decided. The purpose of a strategic plan is a fundamental underpinning of the plan and to hinder open and creative debate of the stated purpose of the plan would harm the process of developing the plan and potentially its effectiveness as well, to the plaintiffs' ultimate detriment." Id. A draft plan, like other drafts, is protected by the deliberative process privilege. Coastal States Gas Coy. v. Department of Energy, 617 F.2d 854, 866 (D.C. Cir. 1980), cited in Memorandum Opinion at 7; see also R&R at 16 (recommending that the Court uphold objection to revealing list of standards being considered for January 6, 2003 trust reform plan). The answer to this question should, therefore, remain protected by the deliberative process privilege. IV. The R&R Contains an Improper and Incorrect Advisory Opinion that Implies a Fiduciary Exception to the Deliberative Process Privilege. Bert T. Edwards, Executive Director of the Department of the Interior's Office of Historical Trust Accounting ("OHTA"), was asked during his deposition to "detail [] adaptive strategies" suggested by Department officials in discussing the July 2,2002 Report to Congress on an historical accounting plan; Interior Defendants objected on the basis of the deliberative process privilege. Deposition Transcript of Bert T. Edwards at 134:7-135:lO (Dec. 18, 2002) ("Edwards Deposition"), quoted in Declaration of Bert T. Edwards In Support of Interior Defendants' Assertion of Deliberative -6- This is the background image for an Adobe Acrobat Capture page with image plus hidden text. Process Privilege in Response to Deposition Questions at 6 (Feb. 27,2003) (“Edwards Declaration”). In support of Interior Defendants‘ objection, Mr. Edwards stated: This type of private, undisclosed interaction between myself as Executive Director of OHTA and other Interior officials and employees is essential to making important decisions such as this decision over the scope of the historical accounting. The decision itself may be analyzed and criticized by Plaintiffs or others, but the decision stands on its merits, not on who recommended what to whom. Permitting Plaintiffs to obtain information to attack officials and employees for their predecisional opinions will stifle debate and prevent alternative viewpoints from being heard. Those views may ultimately be rejected, but they assist my ability to be confident that my decisions as Executive Director of OHTA are sound. Edwards Declaration 1111 at 7-8. Plaintiffs’ Statement of Need did not address the potential chilling effect of disclosure of otherwise privileged information. Disregarding the record evidence, the R&R opines that “[r]elease of their discussions will not place other government officials in fear of release of their candid expression of opinions unless they also owe a fiduciary trust duty to their beneficiaries to apprise them of the management decisions made regarding administration of their trust.“ R&R at 1I . The R&R thus essentially invokes a fiduciary exception to the deliberative process privilege without any citation to law or fact. Interior Defendants are still unaware of any case, statute or reguIation that supports such a position. See Memorandum Opinion at 2-7. In effect, the R&R does not weigh the chilling effect on decisionmaking, but rejects it out of hand despite the R&Rs unequivocal conclusion that Interior Defendants properly asserted and supported their assertion of the deliberative process privilege concerning this question. R&R at 10 (“process engaged in to come to the decision . . .was clearly deliberative and pre-decisional”). In addition, Plaintiffs did not carry their burden because they f d e d to show their need for the information and failed to address the five factors. Statement of Need at 4-6. -7- This is the background image for an Adobe Acrobat Capture page with image plus hidden text. Nevertheless, the R&R concluded that the "questions whether the assertion of the privilege over this line of questioning at the time was proper, which it was, or should be rejected in light of the plaintiffs' countervailing interests and need for the information, which may have been the case, are moot." R&R at1 1. Although the R&Rs ultimate finding that the question need not be answered was correct, the R&R's mootness determination makes its discussion of the five factors -and particularly the effect on future decision-making -advisory. V. Interior Defendants Properly Invoked the Bank Examination Privilege to Protect Unpublished Information from Bank Examination Reports. At the deposition of the Department of the Interior's Acting Special Trustee for American Indians, Donna Erwin, Lnterior Defendants objected on the basis of the bank examination privilege to a question seeking information contained in confidential government banking reports. Deposition Transcript of Donna Erwin at 75: 18-76:21 (Dec. 20,2002) ("Erwin Deposition"), quoted in Erwin Declaration at 6-7. Although, as the R&R states, Ms. Erwin agreed that "ratings [of banks] are published,'' Erwin Deposition at 78:5-7, she did not state that the reports themselves were published and Plaintiffs have made no such showing. Plaintiffs' counsel asked whether "any. . . reports [were] critical to [sic] the performance of the trust partner." Id.at 76:8-9. Without developing further evidence, the R&R is incorrect to conclude that publication of bank "ratings" equates with publication of bank examination "reports." R&R at 13. Interior Defendants note that, nonetheless, the R&R determined that 'Ithe information sought is so tangential to the Phase 1.5 trial . . . that it is not necessary for this Court to ponder the question further or direct further response." -8- This is the background image for an Adobe Acrobat Capture page with image plus hidden text. CONCLUSION For the reasons stated above, the Court should: (I) accept the R&R's findings that deponents answered twenty-six of the questions Plaintiffs designated as unanswered; (2) accept the R&R's recommendation that the answer to question I' 1(a)" concerning attorney-client communications about trust reform be stayed pending appeal; (3) reject the R&R's recommendation that Interior Defendants be required to answer question "G(b)" concerning the purpose of the Department of the Interior's strategic plan; (4) reject the R&R's advisory opinion that implies a fiduciary exception to the deliberative process privilege; and ( 5 ) reject the R&R's finding that information protected by the bank examination privilege had already been disclosed. April 7,2003 Respectfully submitted, ROBERT D. McCALLUM, JR. Acting Associate Attorney General STUART E. SCHIFFER Deputy Assistant Attorney General J. CHRISTOPHER KOHN W C . Bar No. 261495 Deputy Director JOHN T. STEMPLEWICZ Senior Trial Counsel CYNTHIA ALEXANDER Trial Attorney JOHN R. KRESSE D.C. Bar No. 430094 Trial Attorney Commercial Litigation Branch Civil Division P.O. Box 875 Ben Franklin Station Washington, D.C. 20044-0875 (202) 514-7194 -9- This is the background image for an Adobe Acrobat Capture page with image plus hidden text. United States Department olJustice Civil Division Comtnercial Litigation Branch Sandra r. Spooncr P 0 Box $75, Hcn Franklin Scam Tel: (202) 514-7194 Deputy Director Washlllpmn, 0c 20034-0x75 FIl7 {202} 307-0404 kmid wridra spocir~rr'&usdu~gav February 26,2003 BYFACSLMILE Joseph S - Kieffer, JJT Special Master Monitor 420 7th Street, NW, #705 Washington, DC 20004 Re: Cobell v. Norton, 03.D.C. Case No. I :96CV01285 (RCL) Dear Mr. Kieffer: In accordance with thc Court's order dated February 5,2003, we submit with this letter, for review in caiiiera, detailed surnmaries of Lhc rcsponses that would have been given by witnesses whose privileged testimony i s sought by the plaintiffs. Although these are being provided to you o n thc clste they are due, Interior defendants have sought a one-day cxtcnsion of timc (0file them with tfic Court b c c a u s thcy could not be completed prior to 4:00, when the clerks office closcd. As you know, plaintiffs were required to submit "ti dclailcd statement setting out the rcasons why they require answers to these questions." h4etnorandurn Opirtiori at 14; Grdcr at 2-3. Plaintiffs' Statement of Need madc virtually no specific arguments about their need for answers lo any of the questions they Cl3lnl are unanswered. Furthermorc, as thc transcripts clearly reveal, riiariy o i the queslions Piainliffs claim are unanswered were, in fact, ans&red. Plaintiffs prinianly q u e that the resignation of former Special Trustee Tom Slonaker and "countless other decisions made by the defendants during the [sic] this litigation relates directly to rhc crcdibility of thc Sccrctary and her senior managers and counsel." Plaintiff? Statcrnent of Need at 6. Plairitiffs further assert - incorrectly --that "to the extent such infomiation is deliberativc. the iiccds of ylaintifls and this court clcurly oulweiiJi tlic inrertst of defcndaiits arid h i r counsel to conceal more fraud, more retiiliation and more dl-coption." Statemen1of Nced at 7. Pliasc 1.5 discovcry concerns Interior's plan for an accounting of Individual Iridian Moncy ("LUCZ") trust fuiids and for I I M tiust managxienl. Those plans are extant and will stand 01 fall on their merit, not on the opinions otlntcnor officials rclatius lo Mr. Slurtaker's tenure or dnfts ofa quitrterly report to this Court. Protecting Interior's delitierative ~~roccssscs in this matter i s far more Exhibit A Defs' Opp to SM-M K&R This is the background image for an Adobe Acrobat Capture page with image plus hidden text. important than in a normal case. Plaintiffs' repeated and continuing allegations of "fi-dud, retaliation and Iriorc deception," Stalement of Need at 6, have already chilled the deliberative process. Their stated goal is to use the prcdccisional opinions, advice and recomnieiidations of Interior officials to attack the "credibility of the Secretary and hcr scnior managers and counsel." Statcrnent oCNeed at 6. Yet such discourse is atid should rcmain protected to encourage government officialsto take positions that may be at odds with their superiors, peers and subordinates without fear of scrutiny and thc rcsultant allegations that an agency is at odds with itself or fiad serious questions about decisions and policies. Plaintiffs will make even more unwarranted and unsuppoited attacks on Intenor if they are giveii access to opinions and recornlendations that are inconsistent with finat dccisions on Indian trust issues. Plaintiffs will undoubtedly altack those officials they disagrec with for coming down on the "wrong" side of a~ issue. If Plaintiffs are given this infomation, hterior officials wilI bc forced to avoid controversy and debate about important dccisions affecting all Americans. This chilling cffcct already has occurred in this litigation bu.t . - car1 get much worse. Officials and employees, many already afraid or rcluctant to air their views due to this litigation, will hllcome more reluctant. Hence, the Departmeilt's ability to make good decisions will be further hampered. The Tnterior ncfcndants should not be compelled to subinit declarations i n thc face of such -a clearly inadequate statemenl o f neul. Nevertheless, rather than jeopardize Interior Dcfcndmis' ability to prevent disclosure of-piivileged in fiirmation, Interior Defendants are responding to each question sct forth by piaintiffs. Those responses arc enclosed and will be filed under seal tomorrow, Sincerely,< c.- \ Sandra P. Spooner cc hy FAX w/o enclosures: Mr. Dennis Gingold Mr. Kcith Harper c i This is the background image for an Adobe Acrobat Capture page with image plus hidden text. CERTIFICATE OF SERVICE I declare under penalty of perjury that, on April 7, 2003 I served the Foregoing Interior Defendants' Response and Objections to Report and Recommendation of the Special Master- Monitor on Defendants' Deliberative Process Privilege Claims over Phase I . 5 Trial Desposition Testimony by facsimile in accordance with their written request of October 3 1,2001 upon: Keith Harper, Esq. Native American Rights Fund 1712N Street, N.W. Washington, D.C. 20036-2976 (202) 822-0068 By US. Mail upon: Elliott Levitas, Esq. 1100 Peachtree Street, Suite 2800 Atlanta, GA 30309-4530 By facsimile and US. Mail upon: Alan L. Balaran, Esq. Special Master 1717 Pennsylvania Avenue, N.W. 13th Floor Washington, D.C. 20006 (202) 986-8477 By hand upon: Joseph S. Kieffer, KI Special Master Monitor 420 7thStreet, N.W. Apartment 705 Washington, D.C. 20004 (202)248-9543 Dennis M Gingold, Esq. Mark Kester Brown, Esq. 1275 Pennsylvania Avenue, N.W. Ninth Floor Washington, D.C. 20004 (202) 3 18-2372 JaySt. John n: