Nat'l Labor Relations Bd. v. Interbake Foods Llc

• Citation: 637 F.3d 492
• Decision Date: 22 February 2011
• Docket Number: No. 09–2245.,09–2245.
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner–Appellant,v.INTERBAKE FOODS, LLC, Respondent–Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

637 F.3d 492

190 L.R.R.M. (BNA) 2269

160 Lab.Cas. P 10,353

NATIONAL LABOR RELATIONS BOARD, Petitioner–Appellant,

v.INTERBAKE FOODS, LLC, Respondent–Appellee.

No. 09–2245.

United States Court of Appeals, Fourth Circuit.

Argued: Oct. 28, 2010.Decided: Feb. 22, 2011.

ARGUED: Kevin Patrick Flanagan, National Labor Relations Board, Washington, D.C., for Appellant. Mark Keenan, McGuirewoods, LLP, Atlanta, Georgia, for Appellee. ON BRIEF: Ronald Meisburg, General Counsel, John E. Higgins, Jr., Deputy General Counsel, John H. Ferguson, Associate General Counsel, Margery E. Lieber, Deputy Associate General Counsel, Eric G. Moskowitz, Assistant General Counsel, Nancy E. Kessler Platt, Supervisory Attorney, National Labor Relations Board, Washington, D.C., for Appellant. Brennan W. Bolt, McGuirewoods LLP, Atlanta, Georgia; Christopher M. Michalik, McGuirewoods LLP, Richmond, Virginia, for Appellee.Before NIEMEYER and GREGORY, Circuit Judges, and DAMON J. KEITH, Senior Circuit Judge of the United States Court of Appeals for the Sixth Circuit, sitting by designation.Affirmed in part and remanded in part for further proceedings by published opinion. Judge NIEMEYER wrote the opinion, in which Judge GREGORY and Senior Judge KEITH joined.

OPINION

NIEMEYER, Circuit Judge:

In connection with an administrative hearing before the National Labor Relations Board (“NLRB” or “Board”) on charges of unfair labor practices against Interbake Foods, LLC, the Board issued a subpoena duces tecum to Interbake, requiring it to appear, to testify, and to produce a broad array of documents at the hearing. Interbake produced some documents and asserted attorney-client and attorney work-product privileges as to others. Following the NLRB General Counsel's challenge to three of the allegedly privileged documents, the administrative law judge (“ALJ”) issued an order requiring Interbake to produce the documents for in camera review. When Interbake refused, the Board filed this application under § 11(2) of the National Labor Relations Act (“NLRA” or “the Act”), 29 U.S.C. § 161(2), for enforcement of the subpoena, requesting that the district court order Interbake to produce the three documents to the ALJ for in camera review so that the ALJ could “fully consider [Interbake's] claims of privilege with respect to [the three] documents.”

The district court denied the Board's application by order dated September 22, 2009. It concluded first that “only an Article III court may determine whether subpoenaed documents are protected by the attorney-client or attorney work-product privileges. As a result, the ALJ's order requiring Interbake to hand over certain privileged documents for in camera review by him was improper.” NLRB v. Interbake Foods, LLC, No. RDB 09–2081, 2009 WL 3103819, at *4 (D.Md. Sept. 22, 2009). It then concluded as to the three documents in question that it need not conduct an in camera inspection because “Interbake ha [d] met its burden of establishing that the documents [were] privileged under Federal Rule of Civil Procedure 26(a)(5)(A), and the NLRB ha[d] not articulated a good faith basis for doubting Interbake's claim of privilege.” Id. at *4 n. 1.

In this appeal from the district court's order, the Board contends that Congress authorized ALJs, in the first instance, to evaluate privilege objections to subpoenaed documents—through in camera review if necessary—and that “judicial review [of an ALJ's determination is] available only after objections are considered and denied by the Board.” The Board also contends that the district court abused its discretion in declining to conduct an in camera review of the three documents in question.

We agree in large part with the Board's position that Congress conferred authority on the Board—and on ALJs as its delegatees conducting administrative hearings on behalf of the Board—to receive and evaluate evidence under the Federal Rules of Evidence and to rule on claims of privilege made with respect to that evidence. But we also hold that an ALJ's order imposed in the course of an administrative hearing, even when ruling on evidence, can only be enforced by an Article III court. When refusal to comply with a subpoena and the Board's order to produce documents is based on the attorney-client or work-product privilege, the Board's recourse is to apply to the district court for an order enforcing the subpoena. In deciding whether to enforce the subpoena, the court must then assess the legitimacy of the claimed privilege. Thus, while we do not preclude any administrative assessment of claims of privilege, we do conclude that when an assessment of those claims is necessary to a court's determination of whether to enforce the subpoena, the assessment must be conducted by the court.

On the question of whether the district court abused its discretion in declining to conduct an in camera inspection of the three documents, we affirm in part and remand in part, directing the court to review the privilege claim as to the “e-mail string” attached to two e-mails that the court found privileged.

I

During the course of two unsuccessful organizing campaigns by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, Local 68 (“the Union”) at Interbake's facility in Front Royal, Virginia, the Union filed unfair labor practice charges against Interbake, and the NLRB issued various complaints against Interbake on those charges. At the hearing on those complaints before the NLRB, conducted by ALJ John T. Clark, an Interbake employee, Missy Jones, revealed that during the campaigns, she had secretly recorded conversations with Interbake colleagues and supervisors. Following an investigation into the matter, conducted by Interbake's Human Resources Manager, Jill Slaughter, Inter-bake fired Jones for violating company policy in (1) smuggling the recorder into Interbake's facility in violation of Interbake's electronic device policy, (2) violating company policy by admittedly recording line team meetings, and (3) violating Interbake's work conduct provisions by the manner in which she handled the recordings. The Union promptly filed an additional unfair labor practice charge, alleging that Jones' firing was motivated by a desire to punish Jones for her Union activities and for testifying against Interbake, and the Board issued another complaint on that charge. That complaint was also assigned to ALJ Clark, who consolidated the hearing on that complaint with the hearing on the earlier filed complaints.

At the request of the NLRB General Counsel, the Board issued a subpoena to Jill Slaughter to appear before Judge Clark, to testify at the hearing, and to bring with her a broad array of documents. In the designation of documents, the subpoena demanded that, with respect to any document withheld from production on a claim of privilege, Slaughter describe the document's author, recipient, date, and subject matter. In response to the subpoena, Interbake produced approximately 320 pages of documents and withheld about 50 documents or groups of documents, asserting that they were protected by the attorney-client or work-product privilege. As requested by the Board, Interbake provided a privilege log setting forth the information requested about each document withheld. See also Fed.R.Civ.P. 26(a)(5)(A). At the same time, Interbake also filed a petition to revoke the subpoena as to the privileged documents, pursuant to § 11(1) of the NLRA, 29 U.S.C. § 161(1).

At the hearing, Slaughter testified that the earliest she had communicated with anyone regarding Missy Jones' termination was February 13, 2009. This testimony, however, conflicted with Interbake's privilege log, which listed two e-mails authored by Slaughter on February 9, 2009, regarding the “Missy Jones investigation” (Bates Nos. IBF100113 and IBF100427). Based on the inconsistency in dates, the General Counsel requested that ALJ Clark conduct an in camera inspection of those documents to determine whether they were in fact privileged. The General Counsel also sought an in camera inspection of handwritten notes of a telephone conversation taken by Angie Otto, a non-attorney, regarding the Jones investigation (Bates No. IBF100179). Following the arguments of counsel and the ALJ's review of the Board's decision in CNN America, Inc., 352 N.L.R.B. 448 (2008), the Judge concluded that the only proper exercise of his discretion would be to take a look at the three documents in camera. He said, “I feel I have to do it, I'm bound to do it, and so I can't argue against the Board because I have to follow what I think is their direction, and I do. So I have to order you to give me the [three] documents from the privilege log.” After Interbake stated that it was “not prepared” to comply with the order, the Board filed this application for enforcement of the subpoena and the ALJ's order for in camera review.

In its application, the Board sought specifically an order from the district court directing Interbake “to comply with Judge Clark's lawful order that it produce documents IBF100113, IBF100427, and IBF100179 responsive to the Board's administrative subpoena duces tecum at such time and place as Judge Clark may designate for an in camera inspection so that Judge Clark may fully consider [Interbake's] claims of privilege with respect to those documents.” Following a hearing, the district court denied the application by order dated September 22, 2009, and this appeal followed.

II

The Board contends that the district court erred in refusing to issue an order directing Interbake to produce the three subpoenaed documents to ALJ Clark for in camera review. This review, the Board argues, would enable the ALJ, in the first instance, to determine whether the documents are protected by a privilege. In refusing to issue the order, the district court held that “only an Article III court may determine whether subpoenaed documents are protected by the...