In re Estate of Covington, 04-35449.

• Decision Date: 25 May 2006
• Docket Number: No. 04-35449.,04-35449.
• Citation: 450 F.3d 917
• Parties: In re the ESTATE OF Matilda COVINGTON, Deceased Colville Indian 101-A1273 IP SA 73 N 01. James Edmonds, Colville Tribal Legal Services, Petitioner-Appellee, v. WIlliam E. Hammett, U.S. Administrative Law Judge, Office of Hearings and Appeals, Department of the Interior; Michael J. Stancampiano, Indian Probate Judge, Office of Hearings and Appeals, U.S. Department of the Interior, Respondents-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

450 F.3d 917

In re the ESTATE OF Matilda COVINGTON, Deceased Colville Indian 101-A1273 IP SA 73 N 01.

James Edmonds, Colville Tribal Legal Services, Petitioner-Appellee, v. WIlliam E. Hammett, U.S. Administrative Law Judge, Office of Hearings and Appeals, Department of the Interior; Michael J. Stancampiano, Indian Probate Judge, Office of Hearings and Appeals, U.S. Department of the Interior, Respondents-Appellants.

No. 04-35449.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 8, 2006.

Filed May 25, 2006.

Katherine J. Barton, Environmental and Natural Resources Division, United States Department of Justice, Washington, D.C., argued the cause for the appellants. Thomas L. Sansonetti and William H. Beatty, Assistant United States Attorneys, and John A. Bryson, Department of Justice, were on the briefs.

David. J. Groesbeck, Spokane, Washington, argued the cause for the appellee. James R. Bellis, Nespelem, Washington, was on the briefs.

Appeal from the United States District Court for the Eastern District of Washington; Fred L. Van Sickle, Chief Judge, Presiding. D.C. No. CV-03-00197-FVS.

Before DIARMUID F. O'SCANNLAIN, BARRY G. SILVERMAN, and RONALD M. GOULD, Circuit Judges.

O'SCANNLAIN, Circuit Judge.

Rarely does a probate matter find its way into federal court. Here we are presented with a will contest involving a member of an Indian tribe in a Department of the Interior probate proceeding where we must decide whether state or federal law of evidence applies.

I

Matilda Covington, a Colville Indian,¹ died on July 13, 1999. On July 9, 1999, shortly before her death, Covington executed a will leaving all her Indian trust allotments to her great-grandson, Brandon Austin Francis, a minor.² Covington's children predeceased her and she left no property to her three living grandchildren. The will listed one of Covington's grandchildren Jolene Francis—the mother of Brandon Austin Francis—as the decedent's personal representative for purposes of administering the estate. Jolene Francis is also listed as a contingent beneficiary for the trust property. Staff attorneys from the Colville Tribal Legal Services ("CTLS") assisted Covington in drafting her will.

Two of Covington's grandchildren—Debra Palmer and Robert Francis—contested her will alleging that she lacked testamentary capacity and was subjected to undue influence. The Department of the Interior's ("Interior") Office of Hearings and Appeals ("OHA") hears will contests involving Indian trust allotments. See supra n. 2. At the third hearing, testimony by the will scrivener and witnesses cast doubt on Covington's state of mind. Further, two of Covington's relatives testified that she was unable to recognize or to speak with them in the days before she executed the will.

Testimony at the probate hearings revealed that Covington had prepared a handwritten worksheet to aid her attorney in drafting the new will. Debra Palmer and Robert Francis sought a subpoena for all materials related to the preparation of the will, presumably hoping that they would shed light on Covington's mental state. OHA Administrative Law Judge ("ALJ") William Hammett oversaw the probate of the will and issued a subpoena duces tecum to James Edmonds—director of CTLS—compelling him to produce copies of all documents relating to the preparation of the will and to appear at a supplemental hearing. Edmonds refused to turn over the documents, claiming that they were privileged attorney-client communications, confidential, and protected work product. Jolene Francis, the personal representative of Covington's estate, refused to waive any privilege.

The ALJ rejected Edmonds's claim of privilege and directed him to produce the relevant materials. Shortly thereafter, Edmonds filed a motion to quash the subpoena in the Eastern District of Washington.³ The district court granted the motion to quash on the grounds that attorney-client privilege protected the materials.

Interior timely appeals.

II

Interior contends that under the regulations, the ALJ may admit evidence that does not comport with state evidentiary rules.⁴

A

As a threshold matter, we must address Interior's assertion that its interpretation of its own regulations is due deference. Interior is indeed correct that an agency's interpretation of its own regulations is generally entitled to deference. See, e.g., Auer v. Robbins, 519 U.S. 452, 461, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997); League of Wilderness Defenders/Blue Mts. Biodiversity Project v. Forsgren, 309 F.3d 1181, 1183 (9th Cir.2002) ("An agency's interpretation of its own regulations is entitled to deference unless it is plainly erroneous or inconsistent with the regulation[.]"). Though Interior may be due deference, we are reminded that "Congress has delegated to the administrative official and not to appellate counsel the responsibility for elaborating and enforcing statutory commands." Investment Company Institute v. Camp, 401 U.S. 617, 628, 91 S.Ct. 1091, 28 L.Ed.2d 367 (1971). In Bowen v. Georgetown University Hospital, 488 U.S. 204, 212, 109 S.Ct. 468, 102 L.Ed.2d 493 (1988), however, the Supreme Court refused to extend Chevron deference when "the agency itself has articulated no position on the question." The Court explained that "[d]eference to what appears to be nothing more than an agency's convenient litigating position would be entirely inappropriate." Id. Despite these admonitions, Auer explained that an agency's litigating position may be entitled to deference if it reflects the agency's "fair and considered judgment on the matter in question" and is not a "`post hoc rationalization.'" 519 U.S. at 462, 117 S.Ct. 905 (quoting Bowen, 488 U.S. at 212, 109 S.Ct. 468). If Interior's position meets these requirements, and is not plainly erroneous or inconsistent with the regulations, we will defer to it.⁵

B

Interior has published regulations regarding Indian trust probate proceedings pursuant to 5 U.S.C. § 301, which authorizes the head of any executive department to prescribe regulations to conduct the business of the department.

The relevant OHA regulation on form and admissibility of evidence states:

(a) Interested parties may offer at a formal hearing such relevant evidence as they deem appropriate under the generally accepted rules of evidence of the State in which the evidence is taken, subject to the administrative law judge's or Indian probate judge's supervision as to the extent and manner of presentation of such evidence.

(b) The administrative law judge or Indian probate judge may admit letters or copies thereof, affidavits, or other evidence not ordinarily admissible under the generally accepted rules of evidence. The weight to be attached to evidence presented in any particular form is within the discretion of the administrative law judge or Indian probate judge, taking into consideration all the circumstances of the particular case.

(c) Stipulations of fact and stipulations of testimony that would be given by witnesses were such witnesses present, agreed upon by the interested parties, may be used as evidence at the hearing.

(d) The administrative law judge or Indian probate judge may in any case require evidence in addition to that offered by the interested parties.

43 C.F.R. § 4.232.

Another OHA regulation limits production of privileged materials:

(a) An interested party may make a written demand to produce documents for inspection and copying or photographing. This demand:

. . . (4) May demand any documents, papers, records, letters, photographs, or other tangible things that are:

(i) Relevant to the issues;

(ii) In the other party's or custodian's possession, custody, or control; and

(iii) Not privileged. . . .

(c) On his or her own motion, the administrative law judge or Indian probate judge may issue an order to any interested party or custodian of records for the production of material or information that is relevant to the issues and not privileged. . . .

43 C.F.R. § 4.220 (emphasis added).

While under § 4.220, the ALJ lacks authority to subpoena privileged materials, the regulation does not specify whether federal or state privilege law applies. The parties agree that if federal evidentiary law applies to these proceedings, § 4.220 would not bar the admission of Covington's notes.⁶ Obviously, the first question is whether § 4.232 adopts federal or state evidentiary rules. Second, we must determine whether the relevant source has incorporated the testamentary exception to the attorney-client privilege.

C

Does § 4.232 adopt state or federal law? CTLS contends that subsection (a) applies the evidentiary rules of the state in which the evidence is introduced. Interior, on the other hand, contends that subsection (a) only determines what evidence the parties may offer as a matter of right, and that subsections (b) and (d) allow the ALJ to admit evidence on the basis of federal common law.

Subsection (a) is the only provision of either regulation that mentions state or federal law, noting that the parties "may offer . . . relevant evidence as they deem appropriate under the generally accepted rules of evidence of the State in which the evidence is taken." 43 C.F.R. § 4.232(a). The plain text of the regulation supports CTLS's interpretation: the evidence the parties may offer is determined by state law, not federal law. As to substantive evidentiary issues surrounding proffered evidence—such as whether Covington's communications with her attorney are privileged (or, conversely whether they may be offered as evidence)—subsection (a) identifies state law as the relevant authority.

But the question remains where subsection (a) fits as part of the overall regulatory scheme. Campesinos Unidos v. U.S. Dep't of Labor, 803 F.2d 1063, 1069 (9th Cir.1986) ("Our task is to interpret the regulation as a whole, in light of the overall statutory and regulatory scheme, and not to give force to one phrase in...