Menasha Corp. v. United States Department of Justice , 707 F.3d 846 ( 2013 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 12-1720
M ENASHA C ORPORATION and N EENAH-M ENASHA
S EWERAGE C OMMISSION,
Plaintiffs-Appellees,
v.
U NITED S TATES D EPARTMENT OF JUSTICE,
Defendant-Appellant.
Appeal from the United States District Court
for the Eastern District of Wisconsin.
No. 1:11-cv-00682-WCG—Willliam C. Griesbach, Chief Judge.
A RGUED JANUARY 23, 2013—D ECIDED F EBRUARY 20, 2013
Before P OSNER and W ILLIAMS, Circuit Judges, and
N ORGLE, District Judge.Œ
P OSNER, Circuit Judge. This appeal requires us to
decide whether the attorney work product privilege
Œ
Hon. Charles R. Norgle of the Northern District of Illinois,
sitting by designation.
2 No. 12-1720
protects from pretrial discovery work product ex-
changed between Justice Department lawyers who are
assigned to provide legal assistance to federal agencies
that have conflicting interests.
The core of attorney work product consists of “the
mental impressions, conclusions, opinions, or legal
theories of a party’s attorney or other representative
concerning the litigation.” Fed. R. Civ. P. 26(b)(3)(A)(ii).
The opposing party “shouldn’t be allowed to take a
free ride on the other party’s research, or get the inside
dope on that party’s strategy, or…invite the [trier of fact]
to treat candid internal assessments of a party’s legal
vulnerabilities as admissions of guilt.” Mattenson v. Baxter
Healthcare Corp., 438 F.3d 763, 768 (7th Cir. 2006); see
Ronald J. Allen et al., “A Positive Theory of the Attorney-
Client Privilege and the Work-Product Doctrine,” 19 J.
Legal Stud. 359, 384-86 (1990). But since the purpose of
the privilege is to hide internal litigation preparations
from adverse parties, disclosure of work product to such
a party forfeits the privilege. 8 Charles Alan Wright,
Arthur R. Miller & Richard L. Marcus, Federal Practice
and Procedure § 2024, pp. 530-32 (3d ed. 2010); see Appleton
Papers, Inc. v. EPA, 702 F.3d 1018, 1024-25 (7th Cir.
2012); United States v. Deloitte LLP, 610 F.3d 129, 139-43
(D.C. Cir. 2010).
In 2010 the United States, on behalf of the Environ-
mental Protection Agency and the Department of the
Interior, filed, jointly with the State of Wisconsin, a suit
in a federal district court in Wisconsin against a
number of public and private entities, including the
No. 12-1720 3
two appellees in this case; to simplify our opinion we’ll
pretend the two are one and call the one Menasha. The
suit (United States v. NCR Corp., No. 10-C-910, E.D. Wis.)
charged that the defendants had polluted the 39-mile long
Lower Fox River, plus 1000 square miles of Green Bay
(both bodies of water in Wisconsin), with PCBs
(polychlorinated biphenyls), a toxic chemical, and that
by doing so they had incurred liability under the Com-
prehensive Environmental Response, Compensation, and
Liability Act (CERCLA), 42 U.S.C. § 9601 et seq. (the
“Superfund” law). The complaint asked for declaratory
and injunctive relief and for recovery of “unreimbursed
costs incurred for response activities undertaken in re-
sponse to the release and threatened release of hazardous
substances from facilities at and near the Lower Fox
River and Green Bay Superfund Site in northeastern
Wisconsin (the ‘Site’) as well as damages for injury to,
loss of, or destruction of natural resources resulting
from such releases.” See 42 U.S.C. §§ 9606, 9607. The total
amount of money sought by the plaintiffs has been esti-
mated (how authoritatively we don’t know) at $1.5 billion.
United States v. George A. Whiting Paper Co., 644 F.3d 368,
372 (7th Cir. 2011). (An appeal in the Superfund case
was before us in United States v. NCR Corp., 688 F.3d
833 (7th Cir. 2012), and our opinion in that case pro-
vides additional background to the present case, as do
our opinions in Whiting and in Appleton Papers, Inc. v.
EPA, supra.)
Several weeks after the Superfund suit was filed, the
Justice Department submitted to the district court on be-
half of the United States a proposed consent decree that it
4 No. 12-1720
had negotiated with the State of Wisconsin, with two of
the defendants—Brown County and the City of Green
Bay—and with Indian tribal trustees. (For the text of
the 44-page proposed decree, see www.epa.gov/region5/
cleanup/foxriver/pdf/foxriver_cd_201012.pdf (visited
Feb. 4, 2013).) As part of the settlement embodied in
the decree the United States offered to contribute
$4.5 million to the clean up of the polluted site. It made
this offer in recognition that federal agencies, including
the Corps of Engineers (by dredging operations) and—
ironically—the EPA itself (by sending wastepaper con-
taining PCBs to be recycled at mills that dumped
their wastes into the Lower Fox River), might have con-
tributed to the pollution. (To simplify our discus-
sion we ignore the other federal agencies accused of con-
tributing to the pollution.)
With irrelevant exceptions CERCLA requires that a
settlement between the United States and an accused
polluter be embodied in a consent decree, 42 U.S.C.
§ 9622(d)(1)(A), which of course requires judicial ap-
proval. A court considering a proposed CERCLA consent
decree must ensure that it was negotiated fairly—must
“look to the negotiation process and attempt to gauge
its candor, openness, and bargaining balance.” United
States v. Cannons Engineering Corp., 899 F.2d 79, 86 (1st
Cir. 1990); see also United States v. George A. Whiting Paper
Co., supra, 644 F.3d at 372; see generally Beth I.Z. Boland,
“Consent Decrees Under the Superfund Amendments
and Reauthorization Act of 1986: Controlling Discretion
with Procedure,” 1987 U. Chi. Legal Forum 451, 461-64.
No. 12-1720 5
Menasha opposes the proposed consent decree, which
has not yet been approved. It also has filed counter-
claims against the United States for contribution to
remediation costs that Menasha would incur if found
liable. Menasha can do this because the United States
has waived its sovereign immunity to suit under
CERCLA. 42 U.S.C. § 9620(a)(1).
Menasha contends that the federal agencies’ activities
increased the costs of the pollution at the Superfund site
by far more than $4.5 million, which is only three-tenths
of one percent of the estimated potential liability of all
the polluters of the site. The smaller the government’s
contribution to pollution costs, the greater the liability
of other polluters, such as Menasha. Although ordinarily
a nonparty to a consent decree is not bound by it, a
party to a Superfund decree may not be sued for con-
tribution by anyone else. 42 U.S.C. § 9613(f)(2). Approval
of the consent decree would therefore extinguish
Menasha’s counterclaims.
Menasha’s opposition to the proposed decree is based
on suspicions concerning the bona fides of the negotia-
tions within the Justice Department that led up to the
modest estimate of the government’s liability. The team
of lawyers in the Justice Department’s Environment
and Natural Resources Division that is handling the
government’s case is drawn from two of the Division’s
sections: the Environmental Enforcement Section, which
represents the United States in suits to enforce environ-
mental laws, and the Environmental Defense Section,
which defends the United States from suits to enforce
6 No. 12-1720
those laws. The enforcement section normally repre-
sents the EPA because the EPA is an enforcer of federal
environmental laws and doubtless was centrally
involved in developing the government’s Superfund
case. The defense section would normally represent the
Corps of Engineers when the Corps is accused of pollution
and the EPA as well when it’s accused of pollution.
Menasha’s counterclaims name both agencies as pol-
luters from which it seeks contribution, though if it pre-
vails the money will come from the federal Judgment
Fund rather than from the budgets of the agencies. See
31 U.S.C. § 1304(a); In re The Judgment Fund and Litigative
Awards Under the Comprehensive Environmental Response,
Compensation, and Liability Act, 73 Comp. Gen. 46, 49, 1993
WL 505822 (Nov. 29, 1993); U.S. Treasury, Financial
Management Service, The Judgment Fund, Nov. 9,
2012, www.fms.treas.gov/judgefund/index.html (visited
Feb. 4, 2013).
Obviously the members of the Justice Department
team communicate with each other in regard to the
case, and often the communication takes the form of
an exchange of memos and emails between team
lawyers drawn from the two litigation sections.
Menasha describes the sections as adversaries, as if one
were a U.S. Attorney’s Office (the enforcement section)
and the other a white-collar criminal defense firm
(the defense section), and argues that therefore the
memos and emails exchanged between the sections
concerning the Superfund litigation have been shared
between adverse parties, resulting in a forfeiture of
the Justice Department’s attorney work product privilege.
No. 12-1720 7
At oral argument Menasha’s lawyer confirmed that
he wants the documents because he suspects collusion
between the enforcement and defense sections. He
suspects that the team drawn from them decided to
understate the contribution of the federal agencies to
the pollution of the Superfund site in order to minimize
the expense to the government of any relief awarded
in a settlement or judgment. To prove that the Justice
Department was concealing the federal role in the
pollution would help Menasha discredit the $4.5 million
estimate of that role in the proposed consent decree.
Notice, though, the paradox: Menasha’s contention that
the government has forfeited the attorney work product
privilege is premised on the enforcement and defense
sections’ being adversaries, but what it really believes
is that they act not in opposition to each other but collu-
sively—that they have ganged up against it to reduce
the hit that the federal fisc will take from the decree
finally entered.
Rather than seek discovery under Rule 26 of the civil
rules of what it contends are unprivileged communica-
tions between the two sections, Menasha filed suit
under the Freedom of Information Act, 5 U.S.C. § 552, to
obtain access to those communications. Concretely,
it is seeking copies of 440 documents (including
electronic documents), exchanged between the sections,
that appear from their titles (Menasha has not been al-
lowed to see the documents) to relate to the Superfund
suit. The district judge declined to look at any of the
documents, as he could have done in camera and thus
without revealing their contents to Menasha. Nor are
8 No. 12-1720
they part of the appellate record. A glimpse of them
would provide a richer context to Menasha’s suit, but
is not essential.
Because the common law privileges available to
private parties in civil litigation provide defenses to
Freedom of Information Act requests as well, see 5 U.S.C.
§ 552(b)(5); NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 148-
49 (1975), the question is whether the government can
assert attorney work product privilege in the 440 docu-
ments. The judge thought not and ordered the doc-
uments turned over to Menasha. His order was an injunc-
tion and so appealable without regard to finality, 28
U.S.C. § 1292(a)(1), though it was final, because it con-
cluded Menasha’s suit under the Freedom of Informa-
tion Act. The judge stayed the order pending appeal.
The proposed consent decree remains pending too,
more than two years after it was filed, to await the out-
come of this appeal.
Menasha’s argument is simple: the enforcement and
defense sections are adversaries; communications be-
tween adversaries are not privileged. But as Einstein
is reputed to have said, “Everything should be made
as simple as possible, but not simpler.”
Doubtless the two sections, having prosecutorial and
defense responsibilities respectively, often disagree.
Maybe the Corps of Engineers is a favorite pet of the
defense section, while the enforcement section identi-
fies with the EPA—except when the EPA contributes to
pollution, in which case the agency may engage the
sympathy of the defense section. After all, lawyers in
No. 12-1720 9
each section work with employees of their “client”
agencies—some documents sought by Menasha were
sent not just between the sections but also to the Corps
and the EPA—and they may come to identify with the
missions and outlook of their respective “clients.” It’s
true that inscribed on the Justice Department’s seal is
the motto “The United States wins a case whenever
justice is done one of its citizens in the courts,” which
might seem to blunt the enforcement section’s prosecuto-
rial zeal. And true too that the defense section’s stated
mission is not to defend environmental suits against
federal agencies à outrance but instead “to fairly resolve
federal agency liability, thereby protecting the federal
fisc against excessive claims while ensuring that the
government pays its ‘fair share’ of environmental cleanup
costs.” U.S. Dept. of Justice, Environment & Natural
Resources Division, “EDS History,” www.justice.gov/enrd/
3599.htm (visited Feb. 4, 2013). But such official blan-
dishments are unlikely to reveal the true culture of an
organization.
All this is of no moment. Neither the EPA nor the
Corps of Engineers is a party to the Superfund litiga-
tion. The United States, represented by the Justice De-
partment, is the only federal party and the lawyers
in the enforcement and defense sections have no
authority to determine its negotiating aim and strategy.
Their recommendations, joint or several, are reviewed by
the Assistant Attorney General who heads the Environ-
ment and Natural Resources Division. Her decision
concerning the proposed consent decree was reviewed
by the Associate Attorney General, his approval being
10 No. 12-1720
necessary because the settlement would cost the govern-
ment more than $2 million. 28 C.F.R. §§ 0.160(a)(2), 0.161.
He was the one ultimately to approve the proposed
decree that would acknowledge federal liability of
$4.5 million.
The situation is much the same as if a private company
were sued for selling a cosmetic that erases lines
from the aging face but is alleged to have frozen the
eyelids of one of its consumers permanently shut. The
marketing staff might urge the general counsel to settle
the case, at whatever the cost, to avoid damaging pub-
licity. The company’s dermatological staff—the proud
inventor of the cosmetic—might argue that the shut-eyed
customer’s reaction to the product was idiosyncratic if
not indeed fabricated and urge the general counsel to
fight the case to the death. Some of the lawyers in
the general counsel’s office might side with the
marketers, for those lawyers are assigned to help the
marketing department. Other lawyers, those assigned to
defend the company against malpractice claims, might
side with the dermatologists. The general counsel would
decide. The fact that he would be choosing between
adversaries within the company—adversaries by virtue
of differences in role and perspective—would not
entitle the plaintiff’s malpractice lawyer to information
exchanged among the defendant’s battling subordinate
lawyers: information about litigating strategy, about
the strengths and weaknesses of the client’s and adver-
sary’s cases, about possible terms of settlement—kinds
of information that the work product privilege shields
from an adversary. The Justice Department is entitled
No. 12-1720 11
to the same treatment as the private company in our
example because it enjoys the same common law
privileges as private litigants enjoy.
Were Menasha’s position sound, the Justice Department
could never shield attorney work product in a case
like this—a case, not unusual, in which the federal gov-
ernment by virtue of its size and diversity has internal
conflicts—without a crippling reorganization of the
Department. Suppose the Department decided (were
we to affirm the district court) that to protect its work
product it must create an impermeable membrane
between the enforcement section and the defense sec-
tion. Each section would have to draft its own
proposed consent decree. Maybe the enforcement
section’s decree would sock it to the government agencies
believed to have contributed to the PCB pollution, and
maybe the defense section’s decree would go easy on
them. The competing drafts would go to the Assistant
Attorney General and from there to the Associate
Attorney General. These officials would balance the
interests bearing on the adoption of a position by the
United States: the interest in strong enforcement of
federal environmental law, including enforcement
against federal agencies; the interest in economizing on
federal expenditures; and the interest in settlement,
implying a need for compromising the federal interests
in order to strike a deal, which might require the gov-
ernment to assume a greater liability than it thought
strictly merited by the facts. In making these judg-
ments these officials would want not only to consult the
lawyers in the enforcement and defense sections who
12 No. 12-1720
had prepared the competing proposed consent decrees;
they would also want to show each section’s proposal
to the other section for comment. They could not do this,
according to Menasha, without making those memo-
randa discoverable by the opposing parties in the litiga-
tion. The Justice Department’s ability to formulate a posi-
tion that would reconcile competing interests within our
vast federal government would be severely hampered.
The two sections have no autonomy. So imagine a
team of lawyers handling a case and the team decides
that one of them shall be the devil’s advocate and take
the side of the opposing party to the lawsuit and write
briefs and memos trashing his own side. He is thus cast
in the role of an adversary. Does his sharing of his
briefs and memos with the other members of the team
forfeit the work product privilege? That would be an
absurd suggestion. But how different is this case? The
government has conflicting interests; its resolution of
them is the face it presents to the adversary. The resolu-
tion may be wormwood to some of the government
lawyers. The sections may be at loggerheads. Is there
any warfare more bitter than turf warfare? Indeed the
Corps and the EPA did have (though they managed
to resolve) a dispute over the Superfund cleanup: the
Corps complained that the EPA wanted to stop the
Corps from engaging in mechanical dredging (which
stirs up PCB-contaminated sediment) and that this
would have a disastrous effect on shipping. Tony
Walter, “Hurdles Cleared for Port of Green Bay Dredging;
Work to Begin in Late May, Early June,” Green Bay Press
Gazette, Apr. 1, 2010, www.greenbaypressgazette.com/
No. 12-1720 13
article/20100401/GPG0108/4010619/ (visited Feb. 4, 2013).
For all we know, the enforcement section, or the
defense section, felt humiliated by the consent decree
ultimately proposed to the court. Maybe the proposed
decree drafted by one section was adopted in its
entirety by the Assistant and Associate Attorneys
General, and the other consigned to the paper shredder.
All this is irrelevant to work product privilege, which
shields the wrangles within the client’s legal team from
the opposing party. The Associate Attorney General, who
approved the proposed consent decree, is not a judge
adjudicating a suit between the EPA on the one hand
and the Corps of Engineers and a host of other federal
agencies (including, confusingly enough, the EPA) on
the other hand. The Superfund suit was brought not by
or against (or by and against) a medley of separate
federal agencies conceived of as parties. The only federal
party was the United States, a single party represented
by a single legal representative, the Justice Department.
See 28 U.S.C. §§ 516, 519; United States v. Providence
Journal Co., 485 U.S. 693, 706 (1988); The Attorney
General’s Role as Chief Litigator for the United States, 6 Ops.
Off. Legal Counsel (O.L.C.) 47, 1982 WL 170670 (Jan. 4,
1982). There are disputes, mainly though not only in-
volving independent federal agencies, in which a fed-
eral agency is authorized to sue in its own name and
different parts of the government may find themselves
squaring off against each other as opposing parties in
litigation. See, e.g., United States v. ICC, 337 U.S. 426, 430-
31 (1949); SEC v. Federal Labor Relations Authority, 568
F.3d 990, 997-98 (D.C. Cir. 2009) (concurring opinion);
14 No. 12-1720
Michael Herz, “United States v. United States: When Can
the Federal Government Sue Itself?” 32 William &
Mary L. Rev. 893, 907-10 (1991); United States v. Nixon, 418
U.S. 683, 697 (1974). But as this is not such a case, infor-
mation in the nature of attorney work product ex-
changed among the Department’s lawyers is not infor-
mation exchanged among adverse parties and is therefore
privileged.
The Justice Department contends that some of the
documents sought by Menasha are also protected by
other common law privileges, such as the attorney client
privilege and the deliberative process privilege, and
also by the privilege for information the disclosure of
which could interfere with federal law enforcement.
5 U.S.C. § 552(b)(7)(A). We need not consider these con-
tentions, because all the documents at issue are pro-
tected by the work product privilege.
R EVERSED.
2-20-13