Equal Employment Opportunity Comm'n v. Lutheran Soc. Serv

Citation186 F.3d 959,337 U.S. App DC 373
Decision Date24 August 1999
Docket NumberNo. 98-5245,98-5245
Parties(D.C. Cir. 1999) Equal Employment Opportunity Commission, Appellee/Cross-Appellant v. Lutheran Social Services, Appellant/Cross-Appellee Consolidated with 98-5401
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)

Appeals from the United States District Court for the District of Columbia(No. 98ms00133)

Jonathan P. Graham argued the cause for appellant/cross appellee. With him on the briefs was Dan S. Sokolov.

John F. Suhre, Attorney, Equal Employment Opportunity Commission, argued the cause for appellee/cross-appellant.

With him on the briefs was Philip B. Sklover, Associate General Counsel.

Before: Silberman, Williams and Tatel, Circuit Judges.

Opinion for the Court filed by Circuit Judge Tatel.

Dissenting opinion filed by Circuit Judge Silberman.

Tatel, Circuit Judge:

In this proceeding to enforce an administrative subpoena, the Equal Employment Opportunity Commission seeks access to a report prepared by attorneys for appellant Lutheran Social Services summarizing the results of an investigation into alleged violations of Title VII. The EEOC argues that Lutheran waived its claim that the report is protected by the attorney-client and work product privileges by failing to comply with a regulation requiring subpoena recipients to present any objections to the Commission within five days. We conclude that under the particular circumstances of this case Lutheran's failure to present its objections pursuant to the regulation cannot be viewed as a waiver of its attorney-client and work product privileges. In addition, because Lutheran's lawyers conducted their investigation "in anticipation of litigation," we conclude that the entire report is fully protected by the work product privilege.

I

In July 1996, the board of Lutheran Social Services became aware of two anonymous memoranda accusing its president of creating a hostile work environment for female employees. Responding to these accusations, Lutheran placed the president on administrative leave and hired the law firm of Williams & Connolly to investigate the accusations and advise Lutheran as to its potential liability. Williams & Connolly interviewed sixteen employees, two former employees, and two former board members, advising each interviewee that Lutheran had retained the firm to investigate certain charges and asking each to keep the content of the interview confidential. Based on these interviews, Williams & Connolly prepared a report for Lutheran's board that summarized and categorized the interviews (without revealing who made which statements) and assessed Lutheran's potential Title VII liability. Only one copy of the report was made. Board members were permitted to read the report only in the presence of Lutheran's permanent outside counsel, Matthew Watson, and were required to return the copy to him. Shortly after receiving the report, the board requested the president's resignation.

Almost ten months later, the EEOC began investigating sex discrimination charges filed by two former Lutheran employees. The Commission's investigator asked Lutheran to produce several documents, including the Williams & Connolly report. Lutheran turned over everything the Commission requested except the law firm's report, claiming it to be protected by the attorney-client privilege. Following an exchange of letters between the investigator and Watson, in which Watson reiterated Lutheran's claim of privilege, the EEOC issued a subpoena demanding production of the report by February 13, 1998. Addressed to Lutheran's Human Resources Director, the subpoena was dated January 30 and sent on that date by certified mail.

On about February 9, Lutheran retained Williams & Connolly to represent it in connection with the subpoena. In a February 13 letter advising the EEOC investigator that Lutheran had retained the firm, a Williams & Connolly associate stated that "the subpoena is improper and our client, therefore, does not intend to comply with it." Letter from Oliver Garcia, Williams & Connolly, to Aaron C. Blight, EEOC (Feb. 13, 1998). The letter concluded: "I would be happy to discuss this matter with you further." Id. According to the associate, the investigator later responded by telephone, informing him that he was referring the matter to EEOC trial counsel but promising to contact the associate before taking further action. See Garcia Decl. p p 2, 5. The investigator neither recalls nor denies making such a promise. See Blight Decl. p 3.

Shortly thereafter, the EEOC filed this enforcement action in the United States District Court for the District of Columbia. The Commission alleged that Lutheran had waived its attorney-client privilege by failing to comply with EEOC procedures for challenging subpoenas. Codified at 29 C.F.R. 1601.16(b)(1) (1998), those procedures provide that "[a]ny person served with a subpoena who intends not to comply shall petition the issuing Director ... to seek its revocation or modification. Petitions must be mailed ... within five days ... after service of the subpoena." The EEOC promulgated this regulation pursuant to section 710 of the Civil Rights Act of 1964, as amended by the Equal Employment Opportunity Act of 1972, Pub. L. No. 92-261, 7, 86 Stat. 103, 109 (1972) (codified at 42 U.S.C. 2000e-9 (1994)), which grants the Commission all investigative powers possessed by the National Labor Relations Board under section 11 of the National Labor Relations Act, 29 U.S.C. 161 (1994). Section 11 of the NLRA in turn provides that a party receiving an NLRB subpoena may within five days file a petition with the Board seeking revocation or modification of the subpoena on the grounds that it either "does not relate to any matter under investigation" or "does not describe with sufficient particularity the evidence whose production is required." 29 U.S.C. 161(1). On the merits, the EEOC argued that the attorney-client privilege does not protect statements made by employees with interests adverse to their employer. The Commission also argued that the work product privilege, which protects only documents prepared "in anticipation of litigation," Fed. R. Civ. P. 26(b)(3), was equally inapplicable because at the time Williams & Connolly prepared the report, the prospect of Title VII litigation was "too speculative."

In defense, Lutheran challenged the legality of the EEOC's section 1601.16(b)(1) procedures, arguing that the statute's use of the word "may" prohibited the Commission from adopting mandatory procedures. In the alternative, Lutheran argued that under the particular circumstances of this case--the Commission knew of Lutheran's objections and those objections were based on the attorney-client and work product privileges--its failure to follow the Commission's regulations should not be considered a waiver. Responding to the Commission's claim that the report was not privileged, Lutheran said that the report revealed confidential communications between the law firm and Lutheran, that it reflected the attorneys' "mental processes," and that the attorneys had prepared it in anticipation of litigation by Lutheran's president and employees.

Without explanation and without reviewing the report, the district court directed Lutheran to produce the report, but allowed it to "redact any portion ... that constitutes legal advice or conclusions." EEOC v. Lutheran Soc. Servs., No. 98ms133 (D.D.C. June 11, 1998). Both sides appeal.

II

Lutheran first argues that the section 1601.16(b)(1) procedures violate Title VII. Title VII confers on the EEOC the same subpoena authority the National Labor Relations Act gives to the National Labor Relations Board. See 42 U.S.C. § 2000e-9. Section 11 of the NLRA provides in full:

Within five days after the service of a subpena [sic] on any person requiring the production of any evidence in his possession or under his control, such person may petition the Board to revoke, and the Board shall revoke, such subpena [sic] if in its opinion the evidence whose production is required does not relate to any matter under investigation, or any matter in question in such proceedings, or if in its opinion such subpena [sic] does not describe with sufficient particularity the evidence whose production is required.

29 U.S.C. § 161(1). According to Lutheran, by making the subpoena review process mandatory (i.e., requiring that a party objecting to the subpoena "shall petition" and that petitions "must be mailed ...within five days," see 29 C.F.R. § 160.16(b)(1)), the regulation violates the statute's plain language, which uses optional terms (i.e., "such person may petition the Board to revoke"). Lutheran also points out that unlike section 11 of the NLRA, the regulation covers any objection, not just those based on relevance or particularity. Given that "Congress has directly spoken to the precise question at issue," argues Lutheran, "that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837, 842-43 (1984). We need not resolve Lutheran's Chevron argument, however, because whatever authority the EEOC has under the statute, we conclude that it has no power to strip federal courts of authority to determine whether the subpoena the agency seeks to enforce is lawful.

At the outset, we note that the EEOC conceded at oral argument that compliance with its section 1601.16(b)(1) procedures is not jurisdictional, and for good reason: "[E]xhaustion is a jurisdictional prerequisite," we have held, "[o]nly when Congress states in clear, unequivocal terms that the judiciary is barred from hearing an action until the administrative agency has come to a decision." I.A.M. Nat'l Pension Fund Benefit Plan C v. Stockton Tri Indus., 727 F.2d 1204, 1208 (D.C. Cir. 1984); see also id. at 1209...

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