United States ex rel. Bibby v. Wells Fargo Bank, N.A.

• Decision Date: 16 November 2015
• Docket Number: CIVIL ACTION NO. 1:06–CV–0547–AT
• Citation: 165 F.Supp.3d 1319
• Parties: United States of America ex rel. , Victor E. Bibby and Brian J. Donnelly, Relators/Plaintiffs v. Wells Fargo Bank, N.A., individually and as s/b/m with Wells Fargo Home Mortgage, Inc., et al., Defendants.
• Court: U.S. District Court — Northern District of Georgia

165 F.Supp.3d 1319

United States of America ex rel. , Victor E. Bibby and Brian J. Donnelly, Relators/Plaintiffs

v.Wells Fargo Bank, N.A., individually and as s/b/m with Wells Fargo Home Mortgage, Inc., et al., Defendants.

CIVIL ACTION NO. 1:06–CV–0547–AT

United States District Court, N.D. Georgia, Atlanta Division.

Signed November 16, 2015

Amy L. Berne, Paris A. Wynn, U.S. Attorney's Office, Atlanta, GA, for Plaintiff United States of America Ex Rel.

James Edward Butler, Jr., Robert Henry Snyder, Jr., Butler, Wooten, Cheeley & Peak, LLP, Marlan Bradley Wilbanks, Tyrone M. Bridges, Wilbanks & Gouinlock, Atlanta, GA, Brandon L. Peak, Joseph Marshall Colwell, Butler, Wooten, Cheeley & Peak, LLP, Columbus, GA, Mary Louise Cohen, Phillips & Cohen, LLP, Washington, DC, for Victor E. Bibby and Brian J. Donnelly, Plaintiffs/Relators.

Amy Pritchard Williams, Sara Salehi Ash, K & L Gates, Charlotte, NC, Noam A. Kutler, Lawrence Coe Lanpher, Soyong Cho, K & L Gates, Washington, DC, Charles T. Huddleston, Nelson Mullins Riley & Scarborough, LLP, Atlanta, GA, for Defendants.

ORDER

Amy Totenberg

, United States District Judge

This False Claims Act case centers on Relators' allegations that Wells Fargo Bank, N.A. (“Wells Fargo”) engaged in a fraudulent scheme to overcharge veterans on closing costs when those veterans refinanced their mortgages through the United States Veteran's Administration's (“VA”) Interest Rate Reduction Refinancing Loan (“IRRRL”) program.

The issue before the Court concerns a discovery dispute between Relators and Wells Fargo about two bullet points found in the minutes for a March 25, 2010 meeting of Wells Fargo's “Government/Emerging Market Assessment Group.” The two bullet points at issue described, briefly, the factual determinations of a Wells Fargo investigation into whether or not Wells Fargo was charging veterans unallowable closing costs when those veterans refinanced their mortgages through the VA refinance program. The two bullet points, along with the rest of the minutes, had been produced to Relators five times roughly one and a half years ago. The remainder of the minutes describe Wells Fargo's business and remedial efforts to address the problem, and a discussion of other, unrelated issues.

The discovery dispute was ignited when Relators took the deposition of Linda Hembree, a former employee of Wells Fargo who was responsible for closing mortgage loans. (See Doc. 606 at 20.) At Ms. Hembree's deposition, Relators sought to question her concerning the two bullet points.

Wells Fargo objected immediately during the deposition (Doc. 606 at 108), sent a letter (Doc. 613–2) seeking to claw back the document pursuant to the Protective Order in this case (Doc. 337), and then filed a Motion for Protective Order (Doc. 613). Wells Fargo claims that the individual who presented the two bullet points at the meeting, Rhea Zembower (formerly Rhea Heintz), had been tasked by Wells Fargo's in-house counsel in October of 2009 to lead a confidential internal investigation into the issue of whether veterans were being charged unallowable fees when refinancing into VA IRRRLs. (Decl. of Rhea Zembower, Doc. 613–2 at ¶ 4 (“Zembower Aff.”).) This investigation was prompted by Wells Fargo's discovery that a class action lawsuit had been filed against them on behalf of individual veterans who alleged they had been charged unallowable fees. Wells Fargo thus argues that the two bullet points are protected work product, created as a result of litigation. Relators argued, inter alia, that that the bullet points were not work product because they were presented in a business meeting and thus had a primarily business purpose. (Doc. 621 at 6, 10–12)

The parties briefed the issue and this Court heard oral argument on the matter at a September 16, 2015 status conference. In addition, Wells Fargo submitted sets of materials in camera on September 11th, 22nd, and 25th of 2015 regarding this dispute. These materials included affidavits from several individuals involved in the investigation that resulted in the two bullet points, and e-mails concerning the start date of the investigation.

The Court made a preliminary determination at the September 16, 2015 that the two bullet points are protected fact work product and provided guidance to Relators as to how they could proceed as they sought discovery on the factual issues underlying the two bullet points. (Doc. 630.) This Order more fully memorializes the Court's analysis of this issue, and also addresses whether two e-mails submitted by Wells Fargo in camera that predate or were created nearly contemporaneously with the start of the investigation, but which were not sent by or to counsel, are privileged or protected under the work product doctrine.

I. Discussion

A. The Work Product Doctrine and Burden–Shifting

The Court first addresses Wells Fargo's assertion that the two bullet points are protected by the work product doctrine. The work-product doctrine provides a qualified immunity that protects “documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative.” Fed.R.Civ.P. 26(b)(3)(A)

. The doctrine has two elements: to be protected under the doctrine, the document “must be (1) produced by an attorney or her agent¹ and (2) created in anticipation of litigation.” Adams v. City of Montgomery, 282 F.R.D. 627, 633 (2012).

The party seeking shelter under the work product doctrine bears the burden of establishing that the documents it seeks to protect were prepared in anticipation of litigation. See Carnes v. Crete Carrier Corp., 244 F.R.D. 694, 697 (N.D.Ga.2007)

. This burden may be satisfied through a privilege log and affidavits from counsel, the party, its agents, or its employees, and by any of the traditional ways in which proof is produced in pretrial proceedings. Id. at 698.

Once the party seeking protection meets its burden of showing that the work product doctrine applies to the items it seeks protection for, the burden shifts to the opposing party to demonstrate the existence of exceptional circumstances for the discovery of otherwise privileged documents. In re Shell Oil Refinery, 132 F.R.D. 437, 442 (E.D.La.1990)

, clarified by 134 F.R.D. 148 (E.D.La.1990).

B. Prepared in Anticipation of Litigation

The primary issue here is whether the two bullet points were created “in anticipation of litigation.” Fed.R.Civ.P. 26(b)(3)(A)

. The concept “ ‘in anticipation of litigation’ contains within it two related, but nonetheless distinct, concepts. One is temporal. The other is motivational.” 2 Edna Selan Epstein, The Attorney–Client Privilege and the Work–Product Doctrine 836 (5th ed. 2007) (“Epstein ”). To satisfy the temporal requirement of the “ ‘in anticipation of litigation [requirement]’ a document must, obviously, have been prepared before or during the litigation.” Id. ; see also

SmithKline Beecham Corp. v. Apotex Corp., 232 F.R.D. 467, 484–85 (E.D.Pa.2005) (“a document's date of creation is an important part of the analysis as to whether it was prepared for anticipated or ongoing litigation.”)

This temporal component of the “in anticipation of litigation” requirement is met here, as the two bullet points were created as the result of an investigation into ongoing litigation. And according to the materials submitted in camera by Wells Fargo, that litigation was still pending at the time of the meeting where the bullet points were presented. (In Camera Affidavit of Rhea Zembower, Sept. 25, 2015 at ¶ 12.)

However, “[t]he temporal element, standing alone ... is not sufficient. The document or material must also have been prepared for litigation and not for some other purpose. It is [this] second, [motivational] concept that is determinative.” 2 Epstein at 837; see also U.S. v. Adlman, 134 F.3d 1194, 1202 (2d Cir.1998)

(documents must be prepared “because of” litigation to be entitled to protection); MapleWood Partners, L.P. v. Indian Harbor Ins. Co., 295 F.R.D. 550, 621 (S.D.Fl.2013) (describing “causation” component of work product test). Under this element, the Court must determine why the documents were created in order to assess the applicability of the work product doctrine. See

Fojtasek v. NCL Ltd., 262 F.R.D. 650, 654 (S.D.Fl.2009).

Of course, determining a single motivating purpose behind the creation of a document will often prove difficult. In re Grand Jury Subpoena, 357 F.3d 900, 908 (9th Cir.2004)

(when purposes of a document are “profoundly interconnected, the [work product doctrine] analysis is more complicated.”) The work product doctrine has evolved to recognize this reality. Courts now readily acknowledge that dual-purpose documents that have both a litigation and non-litigation purpose (or purposes) may still be entitled to protection. Adams v. City of Montgomery, 282 F.R.D. 627, 634 (M.D.Ala.2012). To determine the existence and scope of a claim for work product protection, the former Fifth Circuit adopted a “primary motivating purpose” test in United States v. Davis, 636 F.2d 1028, 1040 (5th Cir.1981)

.² This test asks whether the primary consideration in the creation of the document was anticipated litigation. Other circuits have adopted a potentially broader “because of” test that asks if, “in light of the nature of the document and the factual situation in the particular case, the document can be fairly said to have been prepared ... because of the prospect of litigation.” Adlman, 134 F.3d at 1202 (citing Charles Alan Wright, Arthur R. Miller, and Richard L. Marcus, 8 Federal Practice & Procedure § 2024, at 343 (1994) (emphasis removed).

Under either standard, a document created because of the prospect of litigation does not lose its protection just because it also serves a secondary, non-litigation purpose. However, documents prepared in the ordinary course of business, pursuant to public requirements unrelated to litigation, or for other non-litigation purposes are not protected if they...