United States v. Benzer

• Decision Date: 15 December 2015
• Docket Number: Case NO.: 2:13-cr-00018-JCM-GWF
• Parties: UNITED STATES OF AMERICA, Plaintiff, v. LEON BENZER, et al., Defendants.
• Court: U.S. District Court — District of Nevada

UNITED STATES OF AMERICA, Plaintiff, v. LEON BENZER, et al., Defendants.

Case NO.: 2:13-cr-00018-JCM-GWF

UNITED STATES DISTRICT COURT DISTRICT OF NEVADA

December 15, 2015

ORDER

Motion to Dissolve Protective Orders (#630, 635)

This matter is before the Court on Intervener Las Vegas Review Journal's (hereinafter "Review Journal") Motion to Dissolve Protective Orders (#630, 635), filed on June 9, 2015. The United States filed its Opposition (#684) on June 26, 2015. The Review Journal filed its Reply (#694) on July 2, 2015. The Court conducted a hearing in this matter on August 5, 2015. None of the Defendants have taken a position with respect to the Review Journal's motion.

BACKGROUND

The indictment in this case alleged that Defendants conspired to take control of condominium homeowners associations ("HOAs") in Southern Nevada and thereby gain control over the HOAs' construction defect claims and steer them to attorneys and construction companies involved in the conspiracy. Numerous individuals were charged in the alleged conspiracy and have pled guilty and been sentenced. This includes the alleged co-mastermind of the conspiracy, Leon Benzer, who was sentenced on August 6, 2015. Four defendants in this case, Keith Gregory, Salvatore Ruvolo, David Ball and Edith Gillespie, proceeded to trial in April 2015, were found guilty and have since been sentenced. These defendants have appealed from their convictions. A fifth defendant in a related case, United States v. Stephanie Liane Markham, Case No. 2:14-cr- 00388-JCM-GWF, was charged with making a false statement to the FBI, perjury, and obstruction of justice. Ms. Markham proceeded to trial in September 2015, was found guilty and is awaiting sentencing.

During the prosecution of these cases, the Government produced voluminous discovery to the Defendants, including, among other things, investigation reports, reports of interviews, search warrant affidavits and returns, and records relating to the various homeowners associations, the election of homeowner association board members, construction defects and repairs, and documents pertaining to individual defendants and other persons allegedly involved in the conspiracy. Some of the documents produced during discovery were admitted as evidence during the trial of Defendants Gregory, Ruvolo, Ball, and Gillespie. Otherwise, with the exception of reports regarding certain proffer sessions between Defendant Leon Benzer and the Government that were filed under seal by Defendant Keith Gregory, discovery documents produced by the Government were not filed with the Court and are not part of the docket in this case or in related cases.¹

On January 29, 2013, shortly after the indictment in this case was filed and the Defendants entered their not-guilty pleas, counsel for the Government and Defendants entered into a Stipulation and Protective Order which was approved by the Court on January 29, 2013. See Stipulated Protective Order (#46). The stipulated protective order provided:

that this Court issue an Order protecting from disclosure to the public any discovery documents containing the personal identifying information such as social security numbers, drivers license numbers, dates of birth, bank account numbers, bank records, or addresses of participants, witnesses and victims in this case. Such documents shall be referred to herein as "Protected Documents."

Stipulated Protective Order (#46), pg. 2.

The order further stated that because many of the documents to be produced by the Government contained personal identifiers, redacting those personal identifiers in the documentsprior to production "would prevent the timely disclosure of discovery to defendants." The Government therefore agreed to produce the documents without redacting the personal identifiers subject to the documents being provided only to defendants, their attorneys of record, and the attorneys' paralegals, investigators, experts, and secretaries performing work on behalf of the defendants Id., pgs. 2-3, ¶¶ 2-4. The order prohibited disclosure of the Protected Documents to other persons. It did not, however, restrict the use or introduction of Protected Documents as evidence at trial. It further provided that upon conclusion of the case, Defendants' counsel would return the Protected Documents to the Government or would destroy them. Id., pg. 3, ¶¶ 5-8.

On May 12, 2014, the counsel for the Government and the Defendants, except for Defendant Gillespie, entered into a second Stipulation and Protective Order which was approved by the Court on May 13, 2014. See Stipulated Protective Order (#283). This order governed the disclosure of "documents relating to sensitive material" that was not otherwise described in the Stipulation and Protective Order. Like the first stipulated protective order, the subject documents were referred to as the "Protected Documents." The order provided that the Government would make the Protected Documents available for inspection by defense counsel at the United States Attorney's office. Defense counsel would not be provided with copies of the documents, but would be allowed to make notes regarding the documents. Id., pg. 2, ¶ 2. The order further stated as follows:

Except as provided below, Defense Counsel, attorneys' paralegals, investigators, experts, and secretaries employed by the attorneys of record and performing on behalf of the defendants, and the Defendant shall not make disclosure of the contents of the Protected Documents to any person who is not part of that defense team (including representatives of the news media), including but not limited to any summary, extract or verbatim account of any portion thereof.

Stipulated Protective Order (#283), pgs. 2-3, ¶ 5.

The order stated that a Defendant could request a copy of any Protected Document by filing a request to the court under seal. Id., pg. 3, ¶ 9. It further provided that "if any Protected Document or any portion of the Protected Documents are to be filed with the Court at any time, or information within the Protected Documents to be disclosed in such filing, in connection with this matter, or referred to in any pleading filed with the Court, such documents shall be filed with the Clerk of the Court under seal and in sealed envelopes prominently marked with the caption of this case and thenotation: 'Contains Information Subject to Protective Order.'" Id.

The Government explained the purpose of Stipulated Protective Order (#283) in its opposition to the Review Journal's motion as follows:

The Second Protective Order protects documents related to an investigation conducted by the Department of Justice's Public Integrity Section regarding allegations involving, among others, personnel of the U.S. Attorney's Office for the District of Nevada as well as other local public figures (collectively, the "PIN File"). This investigation resulted in no criminal charges or disciplinary action concerning any government employee. Nor were any charges brought against any non-government individuals or public figures involved in the investigation. There is a very specific risk of harm and prejudice if the Second Protective Order was dissolved and individuals who had reviewed the PIN File could speak to the press and others about these allegations. The individuals mentioned in the PIN File could face public ridicule and irreparable damage to their reputations on the basis of uncharged and unproven conduct. Indeed, this harm not only satisfies the standard of good cause, but also satisfies the more demanding compelling reason standard required when documents are filed with the court attached to dispositive motions.

Government's Opposition (#684), pg. 8, lines 6-20.

During the hearing on this motion, the Government's counsel further stated that the Government made the documents available for inspection by the defendants' counsel out of an abundance of caution. Government's counsel stated:

We didn't think they were discoverable in this case. And, in fact, early in the case, one of the defendants moved to compel production of those same documents. I think you actually issued an order saying she couldn't show how it was material to her defense. Judge Mahan adopted that R & R.

However, as the case went on, just to be cautious, we produced them. And we produced them pursuant to that second protective order.

Those decisions went hand in hand together. So, we had a very strong reliance interest in that second protective order. We wouldn't have produced those documents most likely but for that second protective order. And I think by their actions, defense counsel really agreed that those documents were irrelevant, because only two of the charged defendants had defense counsel who came and reviewed those documents, which it's important to note were not provided to defense counsel in produced form, but were instead made available for their inspection pursuant to Rule 16.

So, these - we're talking about documents that aren't even in the possession of defense counsel now. We're talking about documents that are in the possession of the Department of Justice and the FBI.

Transcript of Proceedings (#771), pg. 24, line 6 to pg. 25, line 9.

With respect to investigation of individuals in the United States Attorney's office, the Government's counsel also stated that not only was no one criminally charged as a result of that investigation, no one was disciplined administratively or in any other fashion for the conduct uncovered in that investigation. Transcript of Proceedings (#771), pg. 34, lines 8-11. Government's counsel also stated that the investigation probed "in great detail into their personal lives, personal relationships, romantic relationships." Id., pg. 34, lines 13-15.

The Review Journal argues that the Government has failed to establish good cause for the continuation of the protective orders and that the press and the public are entitled to review the documents covered by both orders. It therefore argues...