Begelman & Orlow, P.C. v. Dean

• Court: District Court, District of Columbia
• Decided: October 7, 2013
• Docket: Misc. No. 2013-0699
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

BEGELMAN & ORLOW, P.C., trading as BEGELMAN, ORLOW & MELLETZ,

Petitioner, Misc. No. 13-699 (CKK) v.

DEBORAH LAMBERT DEAN,

Respondent.

MEMORANDUM OPINION (October 7, 2013)

Petitioner Begelman & Orlow, P.C., filed this miscellaneous action on July 12, 2013,

seeking to compel Respondent Deborah Lambert Dean of the Branch 5 Office of Procedure and

Administration for the Internal Revenue Service to comply with a subpoena for the production of

documents issued in this District on June 20, 2013. The Court granted the Respondent’s motion

to quash as conceded after the Petitioner failed to file a timely response to the motion to quash.

Presently before the Court is the Petitioner’s [6] Motion for Reconsideration. Upon

consideration of the pleadings,1 the relevant legal authorities, and the record as a whole, the

Court finds that the Petitioner failed to set forth excusable neglect for failing to timely file an

opposition to the motion to quash, and even considering the Petitioner’s arguments on the merits,

the Court would still have quashed the subpoena. Accordingly, the Petitioner’s [6] Motion for

Reconsideration is DENIED.

1 The Court’s analysis is based on the record as a whole, but focused on the following documents, in chronological order of filing: Pet’r’s Mot. to Compel, ECF No. [1]; Resp.’s Mot. to Quash, ECF No. [3]; Pet’r’s Mot. for Reconsideration (“Pet’r’s Mot.”), ECF No. [6]; Resp.’s Resp. to Pet’r’s Mot. for Recons. (“Resp.’s Opp’n”), ECF No. [7]; Pet’r’s Reply, ECF No. [8]. I. BACKGROUND

Begelman & Orlow filed suit against Kristy L. Ferara in the United States District Court

for the District of New Jersey, alleging Ms. Ferara breached her contract with Begelman &

Orlow to pay the firm 33 and 1/3 percent of the gross amount of any whistleblower award to Ms.

Ferara, minus costs. Begelman & Orlow, P.C. v. Ferara, No. 1:12-329, Compl. (D.N.J. filed

Jan. 18, 2012). On June 20, 2013, the Petitioner issued a subpoena to Deborah Lambert Dean of

the Branch 5 Office of Procedure and Administration for the Internal Revenue Service in

Washington D.C. Subpoena, ECF No. [1-2], at 1. The subpoena instructed Ms. Dean to produce

the “IRS form 11369 related to Kristy Ferara, Novatis Corporation, and any related entities,” to

McKnight and Kennedy, LLC, in Silver Spring, Maryland, at 10:00 AM on June 28, 2013.

The Petitioner moved to compel compliance with the subpoena on July 12, 2013. Pet’r’s

Mot. to Compel, ECF No. [1]. The Court noted that in initiating this miscellaneous action the

Petitioner named the wrong party, and ordered Ms. Dean to show cause by no later than August

9, 2013, why the motion to compel should not be granted. 7/30/13 Order, ECF No. [2]. On

August 9, 2013, the IRS filed a motion to quash. Resp.’s Mot., ECF No. [3]. The certificate of

service indicates counsel for the Petitioner was served via the Court’s electronic filing system

(“ECF”), and a copy was served on the Petitioner itself via first class mail. Resp.’s Mot. to

Quash at 4. Pursuant to Local Civil Rule 7(b) and Federal Rule of Civil Procedure 6(d), the

Petitioner’s response to the motion to quash was due on or before August 26, 2013. On August

28, 2013, the Court had yet to receive any response from the Petitioner, and thus granted the

motion to quash. 8/28/13 Order, ECF No. [5].

The following day, the Petitioner filed the present Motion for Reconsideration. Pet’r’s

Mot., ECF No. [6]. The motion indicates that counsel for the Petitioner received a courtesy copy

2 of the IRS’ motion, but “[d]ue to vacation dates,” counsel “did not read th[e] Motion to Quash

until after the response date had passed, and the Order was entered by this Court.” Pet’r’s Mot.,

ECF No. [6], ¶ 9. The Petitioner makes no mention of the ECF notification of the motion, which

would have been received on or about 5:41 PM on August 9, 2013. Instead, the Petitioner

laments that the IRS did not serve Begelman & Orlow itself with a copy of the Motion to Quash.

Id. ¶ 8. The motion goes on to address the merits of the IRS’ motion to quash. Id. ¶¶ 10-15.

The Petitioner’s motion to reconsider, including to the extent it argues the merits of the IRS’

motion to quash, is now fully briefed and ripe for consideration by the Court.

II. DISCUSSION

The Petitioner does not articulate a legal basis for reconsideration, but the Court

construes the Petitioner’s motion as a late motion for extension of time in which to respond to

the IRS’ motion to quash. Federal Rule of Civil Procedure 6 provides that the Court may extend

the time for a party to act within a specified time “on motion made after the time has expired if

the party failed to act because of excusable neglect.” Fed. R. Civ. P. 6(b)(1)(B). The Petitioner

argues that its failure to file a timely opposition to the motion to quash should be excused

because (1) the IRS only served counsel for the Petitioner and not the Petitioner itself with a

copy of the motion to quash; and (2) counsel for the Petitioner did not review the courtesy copy

until after the response deadline had passed because counsel was on vacation. Notably absent

from the Petitioner’s motion is any explanation as to why counsel failed to act upon receipt of

the ECF notification at approximately 5:41 PM on August 9, 2013, indicating the IRS had filed a

motion to quash. “It is well-established that ‘inadvertence, ignorance of the rules, or mistakes

construing the rules do not usually constitute excusable neglect,’ as is required for the granting of

post-deadline extensions of time.” Jarvis v. Parker, No. 13-350, 2013 WL 2406293, at *1

3 (D.D.C. June 3, 2013) (quoting Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507

U.S. 380, 392 (1993)). Pursuant to Local Civil Rule 5.4(b)(6) counsel are “responsible for

monitoring their e-mail accounts, and, upon receipt of an electronic filing, for retrieving the

noticed filing.” Local Civ. R. 5.4(b)(6). Even if counsel for the Petitioner did not receive the

ECF notification, counsel “remained obligated to monitor the court’s docket,” particularly in

light of the Court’s order requiring the IRS to file its response on or before August 9, 2013. Fox

v. Am. Airlines, Inc., 389 F.3d 1291, 1294 (D.C. Cir. 2004). “Indeed, one would think that, at the

very least,” counsel’s or Petitioner’s failure to receive a timely answer to the Order to Show Case

“would has aroused [their] suspicion, thus prompting [them] to check the court’s docket for any

recent filings.” Id. This is particularly true in light of the IRS’ representation that it informed

Begelman & Orlow itself on August 8 that the IRS would be asserting the deliberative process

privilege in response to the motion to compel. Resp.’s Opp’n at 3.2 Counsel’s failure to respond

to the motion to quash does not constitute excusable neglect, and the failure of the Petitioner,

itself a law firm, to investigate the status of the motion to compel, merely compounds the failure

to respond, and certainly does not excuse it.

Assuming arguendo that the Court were to find excusable neglect justifying the

Petitioner’s failure to respond to the IRS’ motion to quash existed in this case, the Court would

grant the IRS’ motion to quash on the merits. The subpoena issued to Ms. Dean sought the “IRS

Form 11369 related to Kristy Ferara.” Section 25.2.2.6 of the Internal Revenue Manual

identifies Form 11369 as a “confidential evaluation report on claim award” which “documents

the whistleblower’s contribution to the identification of tax non-compliance and collection of

2 Petitioner indicates it does not recall the IRS making this representation. Pet’r’s Reply at 1-2. Regardless, Petitioner should have expected that the IRS would file something on August 9, 2013, the deadline for the IRS to respond to the Order to Show Cause. 4 taxes, penalties and interest. The form and attachments will assist the Director, Whistleblower

Office, in making an award determination.” I.R.M. § 25.2.2.6(6), (14). Regulations provide that

the claim file for the whistleblower should contain, among other things, “Form 11369 for each

taxpayer,” and “[n]arratives to fully explain the contributions of the whistleblower in the case

and fully document the actions taken in regard to the issues.” Id. § 25.2.2.6(14)(a)-(b). Once

completed, the Form 11369 and other documents in the claim file are provided to the IRS

Whistleblower Office, which reviews the documents and makes a recommendation as to an

award percentage. Id. § 25.2.2.6(20); Decl. of D. Tonuzi, ECF No. [3-1], ¶ 6. The

recommendation and claim file are provided to the Director of the Whistleblower Office, who

reviews the materials and issues a final award determination. Tonuzi Decl. ¶ 6. The Petitioner

clarified in the motion to reconsider that it “does not seek documents or records that were used to

complete the Form 11369. It only seeks the Form 11369 itself.” Pet’r’s Mot. ¶ 5 (emphasis

added).

The IRS moved to quash the subpoena on the grounds the Form 11369 is protected by the

deliberative process privilege. The deliberative process privilege “allows the government to

withhold documents and other materials that would reveal advisory opinions, recommendations

and deliberations comprising part of a process by which governmental decisions and policies are

formulated.” In re Sealed Case, 121 F.3d 729, 737 (D.C. Cir. 1997) (citation omitted). “Two

requirements are essential to the deliberative process privilege: the material must be

predecisional and it must be deliberative.” Id. “Both requirements stem from the privilege’s

‘ultimate purpose[, which] . . . is to prevent injury to the quality of agency decisions’ by allowing

government officials freedom to debate alternative approaches in private.” Id. (quoting Nat’l

Labor Relations Bd. v. Sears, Roebuck & Co., 421 U.S. 132, 151 (1975)). The deliberative

5 process privilege does not shield documents that simply state or explain a decision the

government has already made or protect material that is purely factual, unless the material is so

inextricably intertwined with the deliberative sections of documents that its disclosure would

inevitably reveal the government's deliberations. Id.

The IRS explains that the Form 11369 contains “advisory opinions of government

officials about the value of information provided by a whistleblower,” including “the opinions of

[IRS] personnel at many levels recorded at a time when the opinions were not fully developed

and the issues were still being debated,” and any factual information within the Form 11369 “is

inextricably intertwined with the recommendation made by the Whistleblower Office personnel.”

Tonuzi Decl. ¶ 10. The Petitioner does not dispute the IRS’ claim that the Form 11369 is subject

to the deliberative process privilege, nor does it dispute that the factual information in the Form

11369 is inextricably intertwined with the privileged information. Instead, the Petitioner argues

that it mistakenly requested the Form 11369 when in it really sought the “factual narratives” that

form part of the whistleblower claim file, but do not constitute part of the Form 11369 itself.

Pet’r’s Reply at 2. Yet in the very next paragraph, the Petitioner indicates that it cannot pursue

its claim against Ms. Ferara “without the knowledge of whether or not the IRS intends to pay

Ms. Ferara an award,” information that would be contained in the Form 11369 and not the

factual narratives in the claim file. Id. at 3.

To the extent the Petitioner seeks the factual narratives in the IRS whistleblower claim

file for Ms. Ferara, the Petitioner offers no legal basis on which the Court may compel the IRS to

produce a document the Petitioner has not subpoenaed the IRS to produce. Examining the face

of the subpoena actually issued by the Petitioner, the issue for the Court is whether the Petitioner

has made a sufficient showing to overcome the IRS’ invocation of the deliberative process

6 privilege. “The deliberative process privilege is a qualified privilege and can be overcome by a

sufficient showing of need. This need determination is to be made flexibly on a case-by-case, ad

hoc basis.” In re Sealed Case, 121 F.3d at 737. In making this determination, the Court takes

into consideration a number of factors, including “the relevance of the evidence,” “the

availability of other evidence,” “the seriousness of the litigation,” “the role of the government,”

and the “possibility of future timidity by government employees.” Id. (citation omitted). The

parties do not dispute that the Form 11369 is relevant to the litigation between the Petitioner and

Ms. Ferara, although the relevance of this particular document is limited because the Form 11369

does not represent a final decision as to whether Ms. Ferara shall receive a whistleblower award.

It is the IRS’ final determination that is directly relevant to whether Begelman & Orlow is

entitled to payment from Ms. Ferara. Moreover, the IRS argues the Petitioner could obtain the

same information by propounding interrogatories to or deposing Ms. Ferara, which the Petitioner

does not dispute. The Court does not doubt that the litigation is significant to the Petitioner, this

is not a case in which the documents sought “may shed light on government misconduct,” or

otherwise “serve the public’s interest in honest, effective government.” Id. at 738. At its core,

the subpoena at issue arises out of purely private litigation. By contrast, exposing the IRS’

preliminary opinion(s) as to the appropriateness of a whistleblower award risks suppressing the

agency’s candor in the name of private litigation in which the Government has no vested interest.

On balance, the Court finds that the Petitioner has not made a sufficient showing to overcome the

IRS’ claim of deliberative process privilege with respect to the Form 11369 regarding Kristy

Ferara.

IV. CONCLUSION

For the foregoing reasons, the Court declines to reconsider its earlier order granting the

7 IRS’ motion to quash the subpoena issued by Petitioner Begelman & Orlow in connection with

the Petitioner’s suit against Kristy Ferara, seeking a portion of any whistleblower award to Ms.

Ferara from the IRS. The Court granted the IRS’ motion to quash the subpoena as conceded

when the Petitioner failed to file a timely response to the motion to quash. In its present motion,

the Petitioner did not demonstrate that its failure was due to excusable neglect. Moreover, even

if the Court were to reach the merits of the parties’ dispute, the document requested in the

subpoena is protected by the deliberative process privilege, and the Petitioner has not made a

sufficient showing of need to overcome the claim of privilege. Accordingly, the Petitioner’s [6]

Motion for Reconsideration is DENIED.

An appropriate Order accompanies this Memorandum Opinion.

/s/ COLLEEN KOLLAR-KOTELLY UNITED STATES DISTRICT JUDGE