United States v. Duke Energy Corp.

218 F.R.D. 468, 2003 U.S. Dist. LEXIS 19212, 2003 WL 22434498
District Court, M.D. North Carolina·Decided October 22, 2003·No. No. 1:00 CV 1262·Published·Cited by 38 cases

Opinion

[469]*469 ORDER

ELIASON, United States Magistrate Judge.

This matter is before the Court on a number of motions. They all relate to this Court’s April 11, 2003 Order. United States v. Duke Energy, 214 F.R.D. 383 (M.D.N.C. 2003). There, the Court granted the plaintiff United States of America’s motion to compel discovery of documents relating to communications which defendant Duke Energy Corporation (“Duke Energy”) received from the Utility Air Regulatory Group (“UARG”). The UARG is an association composed of electrical companies, including Duke Energy, and four trade associations. Id. at 389. It claims to be a legal advocacy group.1

Duke Energy resisted disclosure based on attorney-client and work product privilege. Thus, the success of plaintiffs motion to compel depended on whether Duke Energy could prevail on a motion for a protective order establishing that the documents were privileged or protected. Because the documents had been shared with other members of the UARG, the Court considered whether Duke Energy could rely on the joint defense/common interest rule. This rule permits the sharing of attorney-client or work product protected material with other entities without there being a waiver of the privilege or protection. Duke Energy contends business groups with general common interests may combine to share information concerning potential legal problems and that all the information and documents exchanged with and from the association’s attorney would be protected by attorney-client privilege or work product protection. The Court found that proposition to be a drastic expansion of the law of privilege and work product protection. Id. at 390. In the end, Duke Energy failed to sustain its burden of showing that the documents were entitled to attorney-client privilege or work product protection.

Pending before the Court are Duke Energy’s motions for reconsideration, for clarification, and to stay the Court’s Order. The UARG also filed a series of motions. It seeks to intervene for the limited purpose of objecting to or appealing the April 11, 2003 Order. Anticipating being allowed to intervene, the UARG has filed a motion for a protective order and to stay compliance, a motion for reconsideration, and a motion for a protective order, in camera inspection, and an evidentiary hearing.

Motion to Intervene

The UARG seeks to intervene in this action pursuant to Fed.R.Civ.P. 24 for the [470]*470purpose of seeking reconsideration of, objecting to, or appealing the Order. It asserts a need to intervene alleging that the Order violates the UARG’S attorney-client privilege and work product protection, as well as its First Amendment guarantees of freedom of association to petition the government and advocate ideas. Essentially, the UARG wants to entirely re-litigate the issues by having the opportunity to submit additional evidence to support Duke Energy’s previously filed motion for a protective order.

Rule 24 provides for two types of intervention. Rule 24(a) provides for intervention as of right “when the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant’s ability to protect that interest.” In such a situation, intervention should be granted “unless the applicant’s interest is adequately represented by existing parties.” Finally, and most importantly, the application to intervene must be timely. Houston General Ins. Co. v. Moore, 193 F.3d 838, 839 (4th Cir.1999).

Issues relating to attorney-client privilege and work product protection for documents may constitute a sufficient interest for purposes of Rule 24(a). United States v. AT & T, 642 F.2d 1285, 1292 (D.C.Cir.1980). The United States does not contest this, but asserts that the UARG’s participation is unnecessary because Duke Energy adequately protects the UARG’s interests, which are really co-extensive with the interests of its members, including Duke Energy. While conceivably one party to a joint defense association might have interests different from the association, that does not appear to be true in this case.

The record amply reveals that Duke Energy and the UARG are actively working and cooperating with one another in general and, in particular, with respect to the discovery issues involved in this case. The UARG argues that it has an interest different from Duke Energy because it seeks to avoid any precedential impact of the April 11, 2003 decision or any stare decisis effects which may flow therefrom to other litigation in which the UARG documents may be sought from other members of the association. However, the April 11, 2003 Order only applies to the motion for a protective order and the documents involved in this ease. It does not control motions before other courts.2 Whether other courts may choose to adopt the analysis of the April 11, 2003 Order is immaterial. Such action does not constitute stare decisis so as to supply the UARG with an interest to intervene in this action. The UARG also asserts that its First Amendment rights serve as a sufficient interest to allow intervention. As will be discussed later, Duke Energy necessarily shares that interest and, moreover, the UARG fails to establish that the April 11th Order in any way impinges upon an important First Amendment right.

Not only are the UARG’s interests adequately protected by Duke Energy, but also the application is not timely because it is made after the Court has ruled on the issue. Gould v. Alleco, Inc., 883 F.2d 281, 286 (4th Cir.1989), cert. denied, 493 U.S. 1058, 110 S.Ct. 870, 107 L.Ed.2d 953 (1990). The UARG points out that the case has not yet gone to trial and, therefore, no one would be prejudiced by its intervention. However, summary judgment motions have been decided and the case is on the verge of being set for trial. Plaintiff legitimately fears that further delay in obtaining the evidence will deprive it from using the evidence.

The UARG seeks to excuse the untimeliness by arguing that the ruling was unexpected because other courts which have considered similar issues denied the government’s motion to compel. The Court rejects the excuse. To do otherwise is to al[471]*471low the UARG to sit on the sideline while its members litigate discovery issues and then when a member loses that issue, jump in and require the Court to re-litigate the entire matter anew. This imposes significant prejudice to the other parties and burden on the Court. Gould, 883 F.2d 281; United States v. South Bend Community School Corp., 710 F.2d 394, 396 (7th Cir. 1983), cert. denied sub nom. Brookins v. South Bend Community School Corporation, 466 U.S. 926, 104 S.Ct. 1707, 80 L.Ed.2d 181 (1984) (attempted intervention after order entered).

This is not a discovery situation where the third party can legitimately claim surprise. Such might occur, for example, where there is a First Amendment challenge to an already issued confidentiality order by a third party unrelated to the litigation. See 7C Charles Alan Wright, Arthur R. Miller & Mary Kay Kane,

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United States v. Duke Energy Corp., 218 F.R.D. 468, 2003 U.S. Dist. LEXIS 19212, 2003 WL 22434498 (M.D.N.C. 2003).

218 F.R.D. 468 (United States v. Duke Energy Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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