Secretary of Labor v. BHP Copper, Inc. and Secretary of Labor v. Tetra Tech Construction Services

Plain-English summary

After a fatal accident at BHP Copper's Pinto Valley Mine, BHP conducted an internal investigation in which Tetra Tech participated, and the Secretary sought the report and related materials in discovery. The Judge had ordered production of factual materials while allowing legal strategy, attorney opinions, and mental impressions to be redacted. She denied reconsideration because the report was required by MSHA regulation and company policy and would have been created in essentially similar form without litigation, so most investigation materials were not protected work product. Attorney-client privilege protected employee or management communications made to obtain legal advice and the advice itself, but it did not shield underlying facts or every document written by or copied to counsel. The Judge also denied interlocutory certification because immediate review would delay rather than materially advance the two-citation case. BHP and Tetra Tech were ordered to produce reports, presentations, drawings, photographs, memoranda, fact statements, and other factual summaries while redacting protected advice, strategy, and attorney impressions.

Decision snapshot

• Governing provisions: 30 C.F.R. § 50.11(b); 29 C.F.R. § 2700.76(a)(1)
• Outcome: Reconsideration and interlocutory-review certification were denied, and production of the factual investigation materials was ordered with privilege redactions.
• Key point: A mine accident report created because of both regulatory duties and anticipated litigation is not wholly privileged when it would have been produced in similar form as ordinary required business work.

Full text (FMSHRC public release)

Federal Mine
Safety and Health Review Commission

Office
of Administrative Law Judges

721
19th St., Suite 443

Denver,
CO  80202-2500

Office: 
(303) 844-5266/Fax:  (303) 844-5268

June 24, 2016

SECRETARY
OF LABOR,                                             :          CIVIL PENALTY
PROCEEDING

MINE
SAFETY AND HEALTH                                :

ADMINISTRATION,
(MSHA),                                 :          Docket No. WEST 2013-636-M

Petitioner,                               
:          A.C. No. 02-01049-315370

:

v.                                                        
:

:

BHP
COPPER, INC.,                                                :

Respondent.                           
:          Mine: Pinto Valley Operations

:

:

SECRETARY
OF LABOR,                                             :          CIVIL PENALTY
PROCEEDING

MINE
SAFETY AND HEALTH                                :

ADMINISTRATION,
(MSHA),                                 :          Docket No. WEST 2013-587-M

Petitioner,                               
:          A.C. No. 02-01049-315369

:

v.                                                        
:

:

TETRA
TECH CONSTRUCTION SERVICES,       :

Respondent.                           
:          Mine: Pinto Valley Operations

ORDER DENYING MOTION FOR RECONSIDERATION

ORDER DENYING MOTION TO CERTIFY

Before:                                    Judge
Miller

These
cases are before me upon a petition for assessment of a civil penalty filed by
the Secretary of Labor pursuant to Section 105(d) of the Federal Mine Safety
and Health Act of 1977, 30 U.S.C. § 815(d) (“the Act”).  The cases involve a
fatal accident that occurred at the Pinto Valley Mine on September 22, 2012.  In
response to the accident, Respondent BHP Copper, Inc. (“BHP”) conducted an
internal investigation into the accident, in which Respondent Tetra Tech
Construction Services (“Tetra Tech”) also participated pursuant to a common
interest agreement.  On March 21, 2016, the Secretary filed a motion to compel
production of the mine’s fatal accident report and related documents.  I
granted in part and denied in part the Secretary’s motion to compel in an order
dated April 25, 2016.  On April 29, 2016, BHP filed a motion requesting that I
stay the order and reconsider it, or, in the alternative, certify the order for
interlocutory review by the Federal Mine Safety and Health Review Commission.  Tetra
Tech joined in the motion. I stayed the order in an email to the parties on May
2, 2016, pending further review.  The Secretary filed a response in opposition
to BHP’s motion, and BHP filed a reply.

I.                  
BRIEF
SUMMARY OF THE PARTIES’ ARGUMENTS

BHP
argues that reconsideration is appropriate because the order is contrary to
law.  The order requires BHP to provide any documents containing factual
information, with any deliberation, attorney opinion, comment, legal strategy,
or mental impression redacted.  Order at 7.  BHP argues that this conclusion
erroneously applies the Supreme Court’s holding in Upjohn Co. v. United
States, 449  U.S. 383 (1981), and is contrary to Ninth Circuit precedent in
Admiral Ins. Co. v. U.S. Dist. Court for Dist. of Ariz., 881 F.2d 1486,
1493-95 (9th Cir. 1989).  It further argues that it is uncertain how to comply
with the order to the extent that it is required to separate facts from
opinions.  Finally, BHP further argues that my conclusion that the materials
sought were prepared in the ordinary course of business and thus not protected
by the work product privilege is contrary to law.  It argues that this
conclusion ascribes a single purpose to the documents, which is inappropriate
under Ninth Circuit precedent.    

The
Secretary argues that reconsideration is not warranted because there has been
no change in controlling law, the order did not contain a clear error of law,
and the order will not result in any injustice.  The Secretary argues that the
order correctly applies the holding in Upjohn that “a party cannot
conceal a fact merely by revealing it to his lawyer.”  449 U.S. at 396.  The
Secretary also argues that the conclusion that the materials in question were
not protected by work product privilege was correct.

II.               
LEGAL
STANDARD

The
Commission has held that reconsideration of a final order is appropriate if the
Commission has “overlooked or misapprehended significant facts or legal
arguments.”  Island
Creek Coal Co.,
23 FMSHRC 138, 139 (Feb. 2001).  Similarly, reconsideration of a final judgment
in federal court is appropriate only if the court is “presented with newly
discovered evidence, committed clear error, or if there is an intervening
change in the controlling law.”  McDowell v. Calderon, 197 F.3d 1253,
1255 (9th Cir. 1999) (emphasis omitted) (interpreting Fed. R. Civ. P. 59(e)
regarding alteration of a judgment).

Regarding intermediate orders, Federal
Rule of Civil Procedure 54(b) provides that

any
order or other decision, however designated, that adjudicates fewer than all
the claims or the rights and liabilities of fewer than all the parties does not
end the action as to any of the claims or parties and may be revised at any
time before the entry of a judgment adjudicating all the claims and all the
parties’ rights and liabilities.

Accordingly,
a showing of clear error or a change in law may not be necessary for
modification of an interlocutory order.  See Agapito Assocs., Inc., 30
FMSHRC 1187, 1188-89 (Dec. 2008) (ALJ) (deciding that an Island Creek
showing was not necessary for reconsideration of an order denying a motion to
stay).

III.            
DISCUSSION

A.    
Work
Product Privilege

BHP
asks that I reconsider my conclusion that the materials addressed in the motion
to compel, an accident investigation report and related documents, were not
protected by the work product privilege.  BHP asserts that its investigation of
the accident that killed Jon Vanoss was conducted in preparation for
litigation.  However, BHP also had a regulatory obligation to investigate the
accident.  The Secretary’s regulations require that “Each operator at a mine
shall investigate each accident and each occupational injury at the mine.  Each
operator of a mine shall develop a report of each accident.”  30 C.F.R. §
50.11(b).  In addition, BHP had an internal policy requiring an investigation
after any accident at the mine.  The issue in this case is whether the work
product doctrine limits discovery of materials that were prepared in anticipation
of litigation but also pursuant to a regulatory requirement or internal
business policy. 

The
Supreme Court has recognized that in order to effectively prepare a case, a
lawyer must be able to “assemble information, sift what he considers to be the
relevant from the irrelevant facts, prepare his legal theories and plan his
strategy without undue and needless interference.”  Hickman v. Taylor,
329 U.S. 495, 511, 67 S. Ct. 385, 393 (1947).  Accordingly, the Federal Rules
of Civil Procedure limit discovery of “documents and tangible things that are
prepared in anticipation of litigation or for trial by or for another party or
its representative” unless the party seeking to discover the materials
demonstrates a substantial need.  Fed. R. Civ. P. 26(b)(3); see also United
States v. Nobles, 422 U.S. 225, 237-38, 95 S. Ct. 2160, 2170 (1975) (“The
Court therefore recognized a qualified privilege for  certain materials
prepared by an attorney ‘acting for his client in anticipation of
litigation.’”)

Materials
that are prepared in anticipation of litigation as well as for another purpose
are often referred to as having a “dual purpose.”  Courts that have addressed the
issue of work product protection of these materials have adopted the “because
of” test.  See, e.g., United States v. Richey, 632 F.3d 559, 568 (9th
Cir. 2011); United States v. Adlman, 134 F.3d 1194, 1203 (2d Cir. 1998);
Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Murray Sheet Metal Co.,
967 F.2d 980, 984 (4th Cir. 1992).  Under this test, materials should be
considered “prepared ‘in anticipation of litigation,’ and thus within the scope
of [Rule 26(b)(3)], if in light of the nature of the document and the factual
situation in the particular case, the document can fairly be said to have been
prepared or obtained because of the prospect of litigation.”  Adlman,
134 F.3d at 1202 (internal quotations omitted) (citing 8 Charles Alan Wright et
al., Federal Practice & Procedure § 2024 (1994)).  In Adlman,
the Second Circuit explained further that:

Where a document
is created because of the prospect of litigation, analyzing the likely outcome
of that litigation, it does not lose protection under this formulation merely
because it is created in order to assist with a business decision.  Conversely,
it should be emphasized that the “because of” formulation … withholds
protection from documents that are prepared in the ordinary course of business
or that would have been created in essentially similar form irrespective of the
litigation.

Id.; see also
Richey, 632 F.3d at 568 (holding that an appraisal report required by
the IRS for a tax deduction was not covered by the work product doctrine
because the report would have been prepared even in the absence of litigation).

The
Ninth Circuit addressed a situation similar to the one at hand in Torf,
which involved a “dual purpose” investigation conducted in part because of
regulatory requirements.  In re Grand Jury Subpoena (Mark Torf/Torf Envtl.
Mgmt.), 357 F.3d 900 (9th Cir. 2004).  An agent of the company’s attorney
had conducted an investigation into hazardous substances at the company’s plant
in response to a request from the EPA as well as in preparation for litigation
with the government.  Id. at 904.  A grand jury later sought to subpoena
documents produced as part of the investigation.  Id.  The Ninth Circuit
held that the documents were protected by the work product doctrine because the
litigation purpose of the documents “so permeates any non-litigation purpose
that the two purposes cannot be discretely separated from the factual nexus as
a whole.”  Id. at 910.  In reaching its conclusion, the court emphasized
that the company had hired an attorney “only after learning that the federal
government was investigating it for criminal wrongdoing” and that it was not
“assigning an attorney a task that could just as well have been performed by a
non-lawyer.”  Id. at 909. 

In
this case, the company had a clear regulatory obligation to conduct an
investigation of the accident and produce a report.  The company also had a
policy requiring an investigation of any accident, and detailed procedures for
how to conduct the investigation.  Thus, I find that BHP’s accident report
“would have been created in essentially similar form irrespective of the
litigation.”  See Adlman, 134 F.3d at 1202.  I also find that
this case is distinguishable from Torf.  While in that case the company
hired an attorney only after learning that the government was investigating it,
here the company contacted its attorney soon after learning of the accident. 
Further, I find that unlike in Torf, the investigation here was “a task
that could just as well have been performed by a non-lawyer.”  See Torf,
357 F.3d at 909.  The deposition testimony submitted by the Secretary indicates
that investigations were at times conducted without the supervision of an
attorney.  Sec’y Ex. 7 at 129.  The only exception to this is notes by the
attorney or his agents regarding legal strategy, which could not have been
produced by a non-attorney and would not have been produced but for anticipated
litigation.  See Upjohn Co. v. United States, 449 U.S. 383, 400 (Jan.
1981) (“Rule 26 accords special protection to work product revealing the attorney’s
mental processes.”)  Accordingly, I find that, with the exception of those
notes, the materials relating to the investigation were not protected by the
work product doctrine. 

B.    
Attorney-Client
Privilege

In
my initial order, I concluded that parts of the investigation report and
related materials were protected by the attorney-client privilege, but that
factual matter contained in the documents was not privileged.  BHP asks that I
also reconsider this conclusion.

Materials
for which BHP claims attorney-client privilege include the incident report
summarizing findings of the investigation; drafts of the report; slide
presentations, memoranda, and flow charts summarizing the report; memoranda to
and from counsel regarding the investigation; notes taken by counsel regarding
the accident; emails to and from counsel relating to logistics, procedures, and
legal strategy for carrying out the investigation; and emails to and from
counsel discussing the findings of the investigation. 

The
attorney-client privilege is intended to “encourage full and frank
communication between attorneys and their clients.”  Upjohn v. United States,
449 U.S. 383, 389 (1981).  The privilege “rests on the need for the advocate
and counselor to know all that relates to the client’s reasons for seeking
representation” to enable the lawyer to effectively advise and advocate for the
client.  Trammel v. United States, 445 U.S. 40, 51 (1980).

To
successfully assert attorney-client privilege, the party claiming the privilege
must demonstrate that

(1) the asserted
holder of the privilege is or sought to become a client; (2) the person to whom
the communication was made (a) is a member of the bar of a court, or his
subordinate and (b) in connection with this communication is acting as a
lawyer; (3) the communication relates to a fact of which the attorney was
informed (a) by his client (b) without the presence of strangers (c) for the
purpose of securing primarily either (i) an opinion on law or (ii) legal
services or (iii) assistance in some legal proceeding, and not (d) for the
purpose of committing a crime or tort; and (4) the privilege has been (a)
claimed and (b) not waived by the client.

Hawkins
v. Stables,
148 F.3d 379, 383 (4th Cir. 1998).

The
Secretary argues that BHP has not proven part 3(c) of the test with regard to
most of the documents requested because the accident investigation was not
conducted for the purpose of obtaining legal advice, but rather to determine
the cause of the accident and identify measures to prevent a recurrence. 

In
Upjohn, the Supreme Court ruled that attorney-client privilege extended
to communications made during an internal investigation conducted to ensure
compliance with the law.  449 U.S. at 392.  The Court noted that “In light of
the vast and complicated array of regulatory legislation confronting the modern
corporation, corporations, unlike most individuals, ‘constantly go to lawyers
to find out how to obey the law.’”  Id.  As in the area of work product
privilege, communications made to an attorney can often have more than one
purpose.  To resolve the issue of whether such communications are covered by
the attorney-client privilege, courts apply the “primary purpose test.”  In
re Kellogg Brown & Root, Inc., 756 F.3d 754, 760 (D.C. Cir. 2014).  The
D.C. Circuit has described the test as asking “whether obtaining or providing
legal advice was one of the significant purposes of the attorney-client
communication.”  Id. (emphasis added); cf. United States v. Richey,
632 F.3d 559, 567 (9th Cir. 2011) (finding that privilege did not apply because
communications were “not made for the purpose of providing legal advice, but,
instead, for the purpose of determining the value” of property).  In Kellogg,
the court concluded that communications made as part of an internal
investigation were privileged because one of the significant purposes of the
investigation was to obtain or provide legal advice, even though the
investigation was also conducted as part of a compliance program required by
federal regulations.  Id. 

I
find that, while the investigation at issue was conducted in part for business
reasons, it was also done for the purpose of obtaining legal advice.  The
investigation was led by counsel, and the attorney claims that he provided
legal advice as a part of that investigation.

However,
it is not clear from the record that all of the documents withheld were
communications by a client to counsel.  In Upjohn, the Court made clear
that the attorney-client privilege extended only to “the responses to the
questionnaires” the attorney had sent to employees “and any notes reflecting
responses to interview questions.”  449 U.S. at 397.   In this case, many of
the documents at issue were written by the attorney and his investigation team
rather than by clients.  See, e.g., Privilege Log ¶¶ 1, 9-16.  These
documents are protected only insofar as they reflect statements by employees or
managers given directly to counsel or his agents seeking legal advice and
documents that include that legal advice.  Conclusions or impressions of the
attorney, including attorneys’ notes, are protected by the work product  privilege
as discussed above.   Any emails from clients to counsel regarding the investigation
are protected if the statements relate to the procurement of legal advice, but
emails that simply include an attorney as one of many recipients are not
protected.  The work of an attorney in giving advice and legal conclusions and
impressions is protected by privilege, but the facts of the case are not, and
may not be shielded by privilege.

IV.            
INTERLOCUTORY
REVIEW

BHP
asks that if I deny its motion for reconsideration, I certify the April 25
Order for
interlocutory review by the Commission.  Commission Rule 76 provides that the
judge should certify a ruling for interlocutory review if the ruling involves a
controlling question of law and immediate review will materially advance the
final disposition of the proceeding.  29 C.F.R. § 2700.76(a)(1). 

I
find that a controlling question of law is involved: whether materials relating
to a mine’s internal investigation of an accident are protected by the
attorney-client privilege or work product doctrine.  However, the resolution of
this question will not materially advance the final disposition of this proceeding. 
BHP states that an Arizona state court has ruled in related civil litigation
that BHP’s investigation materials are protected from discovery under state
law.  Nevertheless, the issue is not dispositive as to the entire case.  The
parties have already engaged in extensive discovery for a case that involves
only two citations.  The case is set to be heard nearly four years after the
subject accident occurred.  Appellate review of this issue would merely delay
the proceeding further. 

V.               
ORDER

For
the reasons above, Respondent’s Motion for Reconsideration is hereby DENIED.
 Respondent’s Motion for Certification for Interlocutory Review is also DENIED. 
Consistent with the April 25 Order, BHP and Tetra Tech are ORDERED to
provide all requested documents to the Secretary except for documents that
include the impressions, thoughts and conclusions of  Respondent’s attorneys.  Reports,
slide presentations, drawings, photographs, memoranda, fact statements and
other materials summarizing the findings of the investigation must be
provided.  Statements by employees and management to counsel seeking advice or
advice from the attorney, contained in the documents may be redacted. 
Discussions of legal strategy by counsel may also be redacted. 

/s/
Margaret A. Miller

Margaret A.
Miller

Administrative
Law Judge

Distribution: (U.S. First Class Certified Mail)

Norman E. Garcia, U.S. Department of Labor, 90 7th
Street, Room 3-700, San Francisco, CA  94103

Demian Camacho, U.S. Department of Labor, 350 South
Figueroa Street, Suite 370, Los Angeles, CA 90071

Michael C. Ford, Snell & Wilmer, LLP, One Arizona Center, 400 East Van
Buren Street, Suite 1900, Phoenix, AZ 86004

Peter S. Gould, Squire Patton Boggs
(US), LLP, 1801 California Street, Suite 4900, Denver, CO 80202