Navajo Nation v. United States

46 Fed. Cl. 353, 2000 U.S. Claims LEXIS 56, 2000 WL 340910
United States Court of Federal Claims·Decided March 31, 2000·No. No. 93-763L·Published·Cited by 6 cases

Opinion

OPINION

BASKIR, Judge.

This matter involves the enforcement of a protective order issued by this Court. The moving parties, Peabody Holding Company, Inc., Peabody Coal Company, and Peabody Western Coal company (collectively “Peabody”) request that we hold in contempt plaintiff and plaintiff’s counsel, Mr. Paul E. Frye, Esq., and impose sanctions. Peabody alleges that plaintiff violated the Court’s Confidentiality and Protective Order dated February 26, 1996, (CAPO) by using informa[354]*354tion and documents subject to that Order, and specifically the “Sullivan memorandum,” to pursue a lawsuit against Peabody in the United States District Court for the District of Columbia.

In deciding whether to hold plaintiff in contempt we evaluate whether the plaintiff has violated the Order, and if so, to what extent. After reviewing the CAPO in the peculiar context of the discovery in this case, we find that the Navajo Nation has substantially complied with the CAPO. Accordingly, we deny Peabody’s motion.

The Navajo Nation has filed a motion to determine the status of documents presumably covered by the CAPO, asking that we remove that protection. Although we consider the Sullivan memorandum to be in the public domain, we decline to do so, and therefore deny plaintiffs motion. We also deny plaintiffs motion to compel production of certain Peabody documents.

BACKGROUND

Peabody is not a party in the above-captioned case, a claim by the Navajo Nation against the United States alleging breach of trust and breach of contract. However, Peabody is intimately involved in the facts surrounding the Navajo Nation’s claims. Those facts are laid out in detail in our Opinion dismissing this suit. See Navajo Nation v. United States, 46 Fed.Cl. 217 (2000). We repeat them only as necessary to resolve the disputes presently before us. At the outset, we note that defendant takes no position on the present motions.

The Underlying Claims

The Navajo Nation’s claims center around the approval in 1987 by then-Secretary of the Interior Donald Hodel of amendments to a coal lease between the Navajo Nation and Peabody. Chief among the amendments was the increase in the royalties to be paid for Navajo coal. The lease entered into in 1964 provided for the payment of 37.5 cents per ton, an inequitable rate by modern day standards. In 1987, that rate was amended to 12.5 percent, a rate negotiated by the Navajo Nation and Peabody.

The royalty rate had been a contentious topic for some time prior to the negotiated amendments. As the 20-year anniversary of the lease approached, the parties anticipated an increase of the royalties pursuant to a lease clause authorizing the Secretary to make a reasonable adjustment. In June 1984, the Navajo Area Director, an official of the Bureau of Indian Affairs, significantly increased the royalties to 20 percent. Peabody and other private interests affected by the potential rise in coal royalties immediately appealed the decision. Then, upon learning that the appeal was likely to be denied, the companies lobbied to stay consideration of the appeal and force further negotiations with the Indians. Peabody hired Stanley Hulett, a close personal friend of Mr. Hodel, to intervene on its behalf. Unbeknownst to the Navajo Nation, the Secretary met with Mr. Hulett and subsequently signed a memorandum, drafted by Peabody, directing Interior Department officials to urge the parties to negotiate further. The directive was contrary to the expressed desire of the Navajo, who wished to resolve the pending appeal without further delay or negotiation. The Sullivan memorandum relates Mr. Hulett’s role in these events.

Discovery Disputes With Peabody

Evidence of Peabody’s activities was directly relevant to plaintiffs claims against the United States. But non-party discovery did not progress smoothly. Evidence regarding the Hulett-Hodel meeting came to light at an excruciatingly slow pace. We relate this discovery history in some detail both to give a flavor of that process and also to contrast it with recent litigation in this case. In summary, it suffices to say that Peabody immediately identified the Sullivan memorandum as subject to the first subpoena it received from the government. Agreements of counsel and Court orders notwithstanding, Peabody did not reveal the existence of the memorandum until forced to do so after its existence was independently discovered by the parties’ counsel. It was not actually produced until January 31, 1997, a full 2)6 years after the initial subpoena.

[355]*355The case was filed in December 1993. As early as July 1994, the United States served two very broad subpoenas on Peabody seeking production of documents relating to the amendment of the Navajo-Peabody lease. Peabody attorneys promptly prepared a list of potentially responsive material. See Summary of Documents Potentially Relevant to Department of Justice Subpoena (Plaintiffs Opposition, Ex. 6). However, there were items on this list that Peabody felt were protected from discovery. Notable among those items is the following entry marked with an asterisk and a question mark:

Internal memorandum — CONFIDENTIAL — from E. Sullivan to F. Barkofske re: Navajo Lease Royalty Rate Adjustment.

PI. Opp., Ex. 6 at 3. The document denoted by the entry, the Sullivan memorandum, relates the circumstances of Mr. Hulett’s hiring, summarizes the Hulett-Hodel meeting, discusses the legal considerations of engaging in ex parte contact, and comments on the payment for Mr. Hulett’s services. The summary of potentially responsive documents was used internally by Peabody, and was apparently not disclosed to the Navajo Nation nor the United States, at least not until after they discovered the Sullivan memorandum.

Production of the subpoenaed documents was stalled while the parties attempted to come to an agreement on confidentiality. On June 14, 1995, the Navajo Nation served two subpoenas of its own upon Peabody. Peabody resisted production of the items responsive to the Navajo Nation’s subpoenas.

The government cooperated fully with plaintiff in an effort to facilitate non-party discovery and the parties repeatedly called upon the Court to intervene in discovery disputes involving Peabody. It was not always clear whether Peabody objected to production of documents on the basis of privilege (whether attorney/client or attorney work product) or because it considered the material proprietary in nature. Certainly the latter was a major concern. In resisting the Navajo Nation’s motion to compel production, Peabody argued that disclosure of the documents would compromise ongoing and future negotiations of other leases.

Discovery deadlines were continued time and again while the Navajo Nation and Peabody negotiated the terms for production of documents. Apparently, the level of particularity by which purportedly privileged materials would be described in a privilege log was a formidable stumbling block. In the end, Peabody agreed to furnish the facts recounted in those documents for which it claimed privilege.

Despite the early identification of relevant documents in Peabody’s possession, Peabody and the Navajo Nation did not concur upon the terms of a protective order until February 26, 1996.

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Navajo Nation v. United States, 46 Fed. Cl. 353, 2000 U.S. Claims LEXIS 56, 2000 WL 340910 (uscfc 2000).

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