UNITED STATES DISTRICT COURTDISTRICT OF NEW JERSEY
_____________________________UNITED STATES OF AMERICA
v. Case No. 14-00263-1 (JEI)
JOSEPH SIGELMAN
_____________________________
MEMORANDUM IN SUPPORT OF NON-PARTY SIDLEY AUSTINLLP’S MOTION TO QUASH THE SUBPOENA ISSUED BY
DEFENDANT JOSEPH SIGELMAN
Michael RatoMcELROY, DEUTSCH,MULVANEY & CARPENTER, LLP1300 Mount Kemble AvenueP.O. Box 2075Morristown, New Jersey 07962(973) 993-8100(973) 425-0161 (fax)
John J. KusterTimothy J. TreanorSIDLEY AUSTIN LLP787 Seventh AvenueNew York, New York 10019(212) 839-5300(212) 839-5599(fax)
Attorneys for Non-Party Sidley Austin LLP
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TABLE OF CONTENTS
Page
I. PRELIMINARY STATEMENT...................................................................1
II. BACKGROUND ..........................................................................................3
A. PetroTiger...........................................................................................3
B. The Criminal Case Against Sigelman .................................................3
C. The Internal Investigation of PetroTiger .............................................4
D. Sidley’s Presentation to the Department of Justice and AllegedPresentation to Colombian Authorities................................................5
E. The Subpoena .....................................................................................5
III. ARGUMENT ...............................................................................................7
A. Sigelman Has Not Shown That The Subpoena Is Narrowly TailoredTo Seek Only Relevant Documents ....................................................8
B. Sigelman Has Failed To Show That The Subpoena Seeks DocumentsThat Are Not Otherwise Procurable ..................................................11
C. The Subpoena Must Be Quashed Because It Seeks DocumentsCovered By The Attorney-Client Privilege And Work ProductProtection..........................................................................................12
D. The Subpoena Must Be Quashed Because Sigelman Has NotEstablished That The Documents He Seeks Are Admissible.............18
IV. CONCLUSION ..........................................................................................20
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TABLE OF AUTHORITIES
Page
CASES
Banks v. Office of Senate Sergeant-At-Arms and Doorkeeper,236 F.R.D. 16 (D.D.C. 2006)...........................................................................13
F.T.C. v. Hope Now Modifications, LLC,09-cv-1204, 2011 WL 2634029 (D.N.J. July 5, 2011)......................................12
Hickman v. Taylor,329 U.S. 495 (1947).........................................................................................12
In re Cendant Corp. Securities Litigation,343 F.3d 658 (3rd Cir. 2003) ...........................................................................13
In re Merck & Co., Inc. Securities, Derivative & ERISA Litigation,05–cv–02367, 2012 WL 4764589 (D.N.J. Oct. 5, 2012) ..................................14
Morris v. Eversley,No. 00 Civ. 8166, 2004 WL 856301 (S.D.N.Y. Apr. 20, 2004)........................19
Roxbury-Smellie v. Florida Dep’t of Corrections,324 Fed.Appx. 783 (11th Cir. 2009) ................................................................19
S.E.C. v. Brady,238 F.R.D. 429 (N.D. Tex. 2006).....................................................................16
U.S. v. Betancourt,277 Fed.Appx. 708 (9th Cir. May 6, 2008) ........................................................7
U.S. v. Burger,773 F. Supp. 1419 (D. Kan. 1991) .....................................................................9
U.S. v. Cuthbertson,630 F.2d 139 (3d Cir. 1980).........................................................................7, 18
U.S. v. Eden,659 F.2d 1376 (9th Cir. 1981)......................................................................7, 11
U.S. v. Jackson,155 F.R.D. 664 (D. Kan. 1994)..........................................................................9
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U.S. v. Louis,No. 04-cr-203, 2005 WL 180885 (S.D.N.Y. Jan. 27, 2005) ...............................8
U.S. v. Mix,No. 12-cr-171, 2013 WL 394206 (E.D. La. Feb. 1, 2013)..................................7
U.S. v. Nixon,418 U.S. 683 (1974)..................................................................................passim
U.S. v. Onyenso,No. 12-cr-602, 2013 WL 5322651 (D.N.J. Sept. 20, 2013) ......................7, 9, 11
U.S. v. Ruedlinger,172 F.R.D. 453 (D.Kan. 1997)...........................................................................9
U.S. v. RW Prof. Leasing Servs. Corp.,228 F.R.D. 158 (E.D.N.Y. 2005) .......................................................................8
U.S. v. Shrader,716 F.Supp.2d 464 (S.D.W.Va. 2010)..............................................................10
U.S. v. Silva-Arzeta,06-cr-120, 2007 WL 2344937 (N.D.Okla. 2007) .............................................10
U.S. v. Treacy,No. 08 Cr. 366, 2009 WL 812033 (S.D.N.Y. Mar. 24, 2009).....................15, 16
U.S. v. Wittig,247 F.R.D. 661 (D. Kan. 2008)..........................................................................7
Upjohn Co. v. U.S.,449 U.S. 383 (1981).........................................................................................12
Westinghouse Elec. Corp. v. Republic of Philippines,951 F.2d 1414 (3rd Cir. 1991)..........................................................................14
OTHER AUTHORITIES
Fed. R. Evid. 502(a)..................................................................................15, 16, 17
Fed. R. Crim. Pro. 17 .....................................................................................passim
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I. PRELIMINARY STATEMENT
Pursuant to Federal Rule of Criminal Procedure 17(c)(2), non-party Sidley
Austin LLP (“Sidley”) herein moves to quash a subpoena issued by Defendant
Joseph Sigelman (“Sigelman”) and served on Sidley on September 19, 2014 (the
“Subpoena”). Sigelman, whose misconduct has already resulted in great burden to
his former employer, PetroTiger Limited (“PetroTiger”), seeks to impose further
burden through the issuance of a subpoena that well exceeds the narrow scope of
specific, relevant, admissible, and not otherwise-procurable evidence that the
Supreme Court has deemed permissible under Rule 17. See U.S. v. Nixon, 418
U.S. 683, 699-700 (1974).
Beyond the fact that the Subpoena is impermissibly overbroad and
inconsistent with the very limited discovery allowed by Rule 17, it is Sidley’s
understanding that the documents it produced to the United States Department of
Justice (“DOJ”) already have been provided by the DOJ to Sigelman’s counsel –
which constitutes the universe of non-privileged documents requested by the
Subpoena that are even arguably relevant to Sigelman’s criminal case. If Sigelman
believes that there are more documents provided by Sidley to the DOJ that were
not produced, Sigelman must obtain those documents from the DOJ, rather than
unnecessarily burden a non-party like Sidley. Further, while the Subpoena broadly
seeks “any and all documents” relating to an internal investigation of PetroTiger
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conducted by Sidley, the only documents that the Subpoena identifies with
specificity are the “memoranda of interview associated with the investigation” of
PetroTiger. These documents, which contain inadmissible hearsay in any event,
are classic examples of the type of attorney work product that is protected from
disclosure during discovery because, among other things, they contain the mental
impressions and legal opinions of counsel. Further, Sidley and PetroTiger have
taken substantial precautions to ensure that they have not waived that work product
protection. Sigelman should not be able to invade Sidley’s work-product as part of
his blind hunt for exculpatory evidence based on nothing more than speculation
and his hunch that the documents he seeks “no doubt” will touch on his anticipated
theory that his co-conspirators allegedly acted without his knowledge. Courts
routinely quash Rule 17 subpoenas that are based upon such speculation because
they are the very kind of impermissible “fishing expedition” that is not permitted
under that Rule.
It is Sigelman’s burden to establish that the Subpoena complies with the
Nixon factors. He has fallen far short of meeting that burden and, as set forth
below in further detail, the Court should quash the Subpoena.
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II. BACKGROUND
A. PetroTiger
PetroTiger is a British Virgin Islands oil and gas company with operations in
Colombia. (Dkt. 1 at 8.)
B. The Criminal Case Against Sigelman
On November 8, 2013, the DOJ filed a criminal complaint charging
Sigelman with (1) Conspiracy to Commit Wire Fraud; (2) Conspiracy to Violate
the Foreign Corrupt Practices Act (“FCPA”); (3) additional FCPA charges; and (4)
Conspiracy to Commit Money Laundering. The charges related to a scheme by
Sigelman, Hammarskjold and PetroTiger’s former general counsel, Gregory
Weisman (collectively, the “Former Managers”), “to obtain kickbacks at the
expense of their investing partners . . . and to pay bribes to a foreign official . . . in
order to secure a lucrative oil services contract in the Republic of Colombia. (See
Criminal Complaint (Dkt. 1).) In November 2013, Mr. Weisman pled guilty to
conspiracy to violate the FCPA and to commit wire fraud. (Declaration of John J.
Kuster (“Kuster Decl.”), Ex. A (Weisman plea agreement).) Mr. Hammarskjold
pled guilty to the same charges in February 2014. (Id., Ex. B (Hammarskjold plea
agreement).) Mr. Sigelman’s jury trial is currently scheduled to commence on
January 6, 2015. (Dkt. 34.)
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C. The Internal Investigation of PetroTiger
In March 2011, after concerns arose regarding PetroTiger’s financial
performance and the Former Managers’ transparency with respect to corporate
governance, among other concerns, PetroTiger’s Board of Directors (the “Board”)
commenced an internal investigation of all financial aspects of PetroTiger. (Kuster
Decl., ¶ 3.) It has been reported that later that same month, the Board “ousted
Messrs. Sigelman and Hammarskjold.” (Dkt. 62, Ex. A.) At considerable cost to
the company, the Board retained Sidley and other advisors to assist it with respect
to the internal investigation, which involved the collection of approximately
330,000 documents from the company. (Kuster Decl., ¶ 4.)
During the investigation of the company’s financial transactions, the
improper payments that are the subject of a number of the DOJ’s charges against
Sigelman were discovered (the “Duran Payments”). (Id., ¶ 5.) PetroTiger, through
Sidley, promptly self-reported the Duran Payments to the DOJ, and subsequently
complied with the DOJ’s requests for documents. (Id., ¶ 6.) The DOJ’s
investigation, and the cooperation therewith by PetroTiger’s new management,
imposed significant expense upon PetroTiger during a time of great financial
distress. (Id.) Ultimately, Sidley produced to the DOJ every non-privileged
document in its possession, custody, or control responsive to the DOJ’s requests.
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(Id.) Further, the DOJ represented to Sidley that it had produced all such
documents to Sigelman. (Id.)
D. Sidley’s Presentation to the Department of Justice and AllegedPresentation to Colombian Authorities
Sidley met with the DOJ several times to discuss its investigation. (Kuster
Decl., ¶ 7.) Although Sidley prepared various interview memoranda, Sidley never
shared any of those documents with the DOJ, nor provided any detailed oral
recitation of their content to the DOJ. (Id.) Further, the DOJ conducted its own
interviews of PetroTiger employees and witnesses in connection with its
investigation into Sigelman. (Id.) Ultimately, Sidley produced approximately
4,500 pages of documents to the DOJ, all of which the DOJ informed Sidley
already have been produced to counsel for Sigelman. (Id., ¶ 6.)
Sidley never met or had any communications with any Colombian
authorities, nor provided any documents to them. (Id., ¶ 9.)
E. The Subpoena
Sigelman filed a motion on September 9, 2014 before this Court seeking to
subpoena certain documents from Sidley. In his motion papers, Sigelman stated
that he sought “documents and information obtained and generated during” the
company’s internal investigation. (Mtn. at 2). Mr. Sigelman further argued that he
anticipates that part of his defense will be that his co-conspirators (both of whom
have pled guilty) acted without his knowledge, and then speculates that the
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materials called for by the Subpoena “no doubt touch directly on the activities” of
his co-conspirators and have the “potential to exonerate him.” (Id.) Mr. Sigelman
provides absolutely no basis to support his speculation that the documents he
contends may be in Sidley’s possession would in any way exonerate him.
The DOJ sent a letter to the Court on September 12, 2014 indicating that it
“took no position” on whether the Court should permit the Subpoena to be issued.
(Dkt. 64.) On September 15, 2014, the Court granted Sigelman’s unopposed
motion and permitted the subpoena to be served. (Dkt. 68.)
On September 19, 2014, Sigelman served the Subpoena on Sidley’s
Washington D.C. office.1 The Subpoena broadly requests:
1. Any and all documents referring to, related to, orcollected during an internal investigation of PetroTiger Ltd.or any of its current and former parents, subsidiaries,affiliates, predecessors and successors, employees,managers, officers, directors, partners or members,including, but not limited to, any memoranda of interviewassociated with the investigation.
2. Any and all documents related to communicationsbetween Sidley Austin LLP and the United StatesDepartment of Justice, and between Sidley Austin LLP andColombian officials in connection with the above-referencedinternal investigation, including, but not limited to,presentations made by Sidley Austin LLP.
(Kuster Decl, Ex. C (emphasis added).)
1 The investigation at issue in the Subpoena was conducted by Sidley’s New Yorkoffice and all documents in Sidley’s possession reside in New York. (KusterDecl., ¶ 11.)
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III. ARGUMENT
Rule 17 provides that the “court may quash or modify [a subpoena issued
thereunder] if compliance would be unreasonable or oppressive.” Fed. R. Crim.
Pro. 17(c)(2). It is well-settled that “[c]ourts must be careful that Rule 17(c) is not
turned into a broad discovery device, thereby undercutting the strict limitation of
discovery in criminal cases found in [Rule 16].” U.S. v. Cuthbertson, 630 F.2d
139, 146 (3d Cir. 1980).2
The Supreme Court has held that a defendant seeking discovery under Rule
17 must show:
(1) that the documents are evidentiary and relevant; (2) thatthey are not otherwise procurable reasonably in advance oftrial by exercise of due diligence; (3) that the party cannotproperly prepare for trial without such production . . .; and(4) that the application is made in good faith and is notintended as a general ‘fishing expedition.”
United States v. Nixon, 418 U.S. 683, 698-99 (1974); see also U.S. v. Onyenso, No.
12-cr-602, 2013 WL 5322651 (D.N.J. Sept. 20, 2013) (explaining that “[t]he Nixon
2 See also U.S. v. Betancourt, 277 Fed.Appx. 708, 711 (9th Cir. May 6, 2008)(subpoena duces tecum not a discovery device and application may not be intendedas general “fishing expedition”); U.S. v. Mix, No. 12-cr-171, 2013 WL 394206, *2(E.D. La. Feb. 1, 2013) (Rule 17(c) not intended to provide discovery device forcriminal cases, and breadth of requests was deemed fishing expedition and notsufficiently narrow); U.S. v. Wittig, 247 F.R.D. 661, 664 (D. Kan. 2008) (rejectingsubpoenas that resembled discovery requests, including broad language fordocuments and communications).
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standard has been routinely applied in this Circuit to Rule 17(c) subpoenas issued
to third parties”). Importantly, the burden is on the party who served the subpoena
to establish compliance with the Nixon factors. See U.S. v. Eden, 659 F.2d 1376,
1381 (9th Cir. 1981) (quashing subpoena where the issuing party “failed to meet
his burden”); U.S. v. RW Prof. Leasing Servs. Corp., 228 F.R.D. 158, 162
(E.D.N.Y. 2005) (“In order to meet its burden, the proponent has to show that the
documents sought are both relevant and admissible . . .”).
What Sigelman seeks via the Subpoena is exactly the type of “broad
discovery” prohibited by Nixon and its progeny. As set forth below, Sigelman has
not (and cannot) satisfy the Nixon factors and the Subpoena should be quashed.
A. Sigelman Has Not Shown That The SubpoenaIs Narrowly Tailored To Seek Only Relevant Documents
The Subpoena should be quashed because Sigelman has failed to meet his
burden of showing that the Subpoena seeks only “specific” and “relevant”
documents. As an initial matter, the Subpoena’s requests for “[a]ny and all
documents referring to, related to, or collected during an internal investigation of
PetroTiger . . .” and “[a]ny and all documents related to communications” between
Sidley and various government officials are impermissibly overbroad as a matter of
law. Indeed, such requests for “[a]ny and all” documents have been rejected by
numerous courts. See, e.g., U.S. v. Louis, No. 04-cr-203, 2005 WL 180885
(S.D.N.Y. Jan. 27, 2005) (a demand for “‘any and all’ documents relating to
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several categories of subject matter (some of them quite large), rather than specific
evidentiary items, [] clearly indicat[es] that Defendant seeks to obtain information
helpful to the defense by examining large quantities of documents, rather than to
use Rule 17 for its intended purpose—to secure the production for a court
proceeding of specific admissible evidence’”); U.S. v. Ruedlinger, 172 F.R.D. 453,
455-56 (D. Kan. 1997) (rejecting requests for “any and all audit reports” and entire
“investigations file”); U.S. v. Jackson, 155 F.R.D. 664, 668 (D. Kan. 1994)
(rejecting requests for “any and all documents,” “all correspondence” and “all
related records”).
Further, Sigelman has not shown why “any and all documents” relating to
the internal investigation of PetroTiger even have the potential of being relevant to
his criminal case, or why PetroTiger should be burdened with the cost of reviewing
and producing all such documents. Instead of recognizing controlling Third
Circuit law, Sigelman relies throughout his motion papers on a 2006 case from the
District of D.C. for his assertion that “the Nixon requirement can ‘be satisfied if
there is a ‘sufficient likelihood,’ demonstrated through rational inferences, that the
documents being sought contain relevant and admissible evidence.’” (See Mtn. at
1-2 (citing U.S. v. Libby, 432 F. Supp. 2d 26, 31 (D.D.C. 2006).) But that is not
the law in this Circuit. See Onyenso, 2013 WL 5322651 at *2 (mere speculation
that discovery may reveal relevant material not enough because “in this Circuit, a
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greater showing is required than a Defendant’s hope that he may find useful
information”).3 The internal investigation involved the collection of approximately
330,000 documents from the company. The Subpoena unreservedly requests all of
those documents without any indication as to why they are all even potentially
relevant.
Mr. Sigelman provides nothing more than his pure speculation that the
materials called for by the Subpoena “no doubt touch directly on the activities” of
his co-conspirators and have the “potential to exonerate him.” (Mtn. at 2.) Indeed,
he has failed to articulate any factual basis to support his speculation that the
documents he seeks would be likely to exonerate him. This is precisely the kind of
“fishing expedition” that is not permitted under Rule 17. Nixon, 418 U.S. at 699-
700; U.S. v. Shrader, 716 F.Supp.2d 464, 475 (S.D.W.Va. 2010) (“[T]he Court
finds that the subpoena is an impermissible fishing expedition. Defendant theorizes
that there might be exculpatory material in the records; such a theory is not
sufficient.”); U.S. v. Silva-Arzeta, 06-cr-120, 2007 WL 2344937, *8 (N.D.Okla.
2007) (“discovery is not to be allowed if it is a mere fishing expedition based on
3 Holdings from other jurisdictions tend to follow the Third Circuit’s higherstandard. See, e.g., U.S. v. Burger, 773 F. Supp. 1419, 1425 (D. Kan. 1991) (“thedocuments sought cannot be potentially relevant or admissible, they must meet thetest of relevancy and admissibility at the time they are sought”).
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the defendant’s mere hopes of finding exculpatory evidence”) (internal quotation
and citation omitted).
Accordingly, the Subpoena is in violation of Nixon’s “relevance” and
“specificity” limitations and must be quashed.
B. Sigelman Has Failed To Show That The SubpoenaSeeks Documents That Are Not Otherwise Procurable
Even if Sigelman could establish that his request for all documents relating
to the internal investigation is appropriate insofar as those documents relate to the
charges against him (and are therefore at least potentially relevant), Sigelman still
would be unable to meet his burden under Nixon. In Nixon, the Court found the
subpoena at issue to be proper in part because “[t]he subpoenaed materials [were]
not available from any other source . . . .” 418 U.S. at 702 (holding that a party
seeking the production of documents through Rule 17 must demonstrate that the
documents “are not otherwise procurable . . .”); see also Eden, 659 F.2d at 1381
(“to justify a subpoena for production before trial, the proponent must also
demonstrate that the subpoenaed materials are not available from any other
source”); Onyenso, 2013 WL 5322651 at *2 (same). That is not the case here.
Quite the contrary, Sidley has produced to the DOJ all non-privileged documents
in its possession, custody or control that are relevant to the charges against
Sigelman, and all of those documents have already been provided to Sigelman’s
counsel by the DOJ. (See Kuster Decl., ¶ 6.) But even if Sidley had provided
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documents to the DOJ that were not yet produced, Sigelman’s appropriate recourse
would be to obtain them from the DOJ, not from a non-party under Rule 17. The
Court should also quash the Subpoena to the extent it seeks any additional
documents from Sidley that Sigelman believes may have been provided to the DOJ
but not yet produced by the DOJ to him.
C. The Subpoena Must Be Quashed Because It Seeks DocumentsCovered By The Attorney-Client Privilege And Work ProductProtection
The only documents requested by the Subpoena with even a modicum of
specificity – “memoranda” prepared by counsel – fall squarely within the
protection of the attorney work-product doctrine. Accordingly, to the extent that
the Subpoena seeks these documents, it should be quashed.
Any interview or other investigation memoranda prepared by Sidley would
contain counsels’ mental impressions, conclusions, and opinions. (Kuster Decl., ¶
7.) Accordingly, these documents constitute protected work product. See
Hickman v. Taylor, 329 U.S. 495, 508 (1947) (“Not even the most liberal of
discovery theories can justify unwarranted inquiries into the files and the mental
impressions of an attorney.”); Upjohn Co. v. U.S, 449 U.S. 383, 399-400 (1981)
(“Forcing an attorney to disclose notes and memoranda of witnesses’ oral
statements is particularly disfavored because it tends to reveal the attorney’s
mental processes” in that the “‘statement would be [the attorney’s] language,
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permeated with his inferences.’”) (quoting Hickman, 329 U.S. at 513, and 516-17
(Jackson, J., concurring)); see also F.T.C. v. Hope Now Modifications, LLC, 09-cv-
1204, 2011 WL 2634029, *3 (D.N.J. July 5, 2011) (“[m]emoranda summarizing
oral interviews . . . may indirectly reveal the attorney’s mental processes, his
opinion work product . . . .[S]pecial considerations . . . must shape any ruling on
the discoverability of interview memoranda . . . .[S]uch documents will be
discoverable only in a ‘rare situation.’”) (quoting In re Grand Jury Investigation,
599 F.2d 1224, 1231 (3d Cir. 1979)); In re Cendant Corp. Securities Litigation,
343 F.3d 658, 664 (3rd Cir. 2003) (explaining that discovery of such “opinion
work product. . . requires a heightened showing of extraordinary circumstance”).
These memoranda are also protected by the attorney-client privilege because they
reflect Sidley’s legal advice to PetroTiger and information provided to Sidley in
connection with same. See Banks v. Office of Senate Sergeant-At-Arms and
Doorkeeper, 236 F.R.D. 16, 20 (D.D.C. 2006) (“Counsel’s notes and memorandum
of the employee interviews and conversations clearly reveal what the employees
told counsel. These interviews and conversations were an integral part of the
process of providing information to counsel so that counsel could provide the
sought after legal representation” and are therefore “attorney-client privileged.”).
Thus, as a threshold matter, Sidley’s interview and other internal memoranda are
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protected by the work product doctrine and attorney-client privilege from
disclosure.4
Perhaps recognizing this substantial hurdle, Sigelman asserts that “although
some of the documents generated during the Investigation may have at one time
been protected by attorney-client privilege, PetroTiger waived that privilege when
it divulged the investigation’s findings to third parties, including officials of the
United States and of Colombia.” (Mtn. at 2-3.) There are several problems with
Sigelman’s contention, however:
First, Sidley never disclosed any interview or other memoranda to the DOJ
or any third party. In fact, the DOJ conducted its own witness interviews prior to
indicting Mr. Sigelman and his co-conspirators and those statements are the ones
that have any arguable relevance to these criminal proceedings. (Kuster Decl., ¶
7.) Further, Sidley and PetroTiger took specific steps to keep confidential the
information contained in these Sidley memoranda. No interview or other
memoranda have ever been made publicly available or to Sidley’s knowledge ever
4 In light of the Subpoena’s failure to comply with the Nixon factors, Sidleyrespectfully submits that it would be unduly burdensome and inconsistent with thelimited discovery permitted under Rule 17 to require a non-party such as Sidley toundertake the significant task of preparing a detailed privilege log. The discoverySigelman seeks from Sidley is clearly an impermissible fishing expedition, andproviding a log of all privileged documents would enable Sigelman to obtaininformation about Sidley’s documents that he has no basis to discover under Rule17 in the first place.
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disseminated beyond PetroTiger’s Board and legal counsel, nor have any of these
documents been shared with the DOJ. (Id., ¶¶ 7-8.) Thus, there is no evidence of
waiver with respect to these particular documents.
Second, to the extent that Sigelman is attempting to argue that Sidley waived
the attorney-client privilege or work-product protection over undisclosed
documents in light of its discussions with the DOJ, such a theory is not supported
by the decisions cited in Sigelman’s motion papers. See Westinghouse Elec. Corp.
v. Republic of Philippines, 951 F.2d 1414. 1423-27 (3rd Cir. 1991) (rejecting the
waiver defense of “selective disclosure” and finding that particular documents
disclosed to the government were thereafter discoverable, but not addressing
waiver of undisclosed documents); In re Merck & Co., Inc. Securities, Derivative
& ERISA Litigation, 05–cv–02367, 2012 WL 4764589, *2 (D.N.J. Oct. 5, 2012)
(same).
But even assuming that Sigelman was attempting to make a broader
argument that Sidley somehow made a “subject-matter waiver” because it shared
certain documents or information with the DOJ, neither the law nor the facts here
support it. Indeed, Rule 502 of the Federal Rules of Evidence provides that, if
privileged material is disclosed to the Government, any waiver that occurs only
extends to additional, undisclosed material if, in the case of an intentional waiver,
the disclosed and undisclosed materials concern the same subject matter and
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“ought in fairness to be considered together.” Fed. R. Evid. 502(a). The Advisory
Committee Notes to Rule 502 state that a finding of waiver should be “reserved for
those unusual situations in which fairness requires a further disclosure of related,
protected information, in order to prevent a selective and misleading presentation
of evidence to the disadvantage of the adversary.” Id. at advisory committee’s
note (emphasis added).
In U.S. v. Treacy, No. 08 Cr. 366, 2009 WL 812033 (S.D.N.Y. Mar. 24,
2009), a law firm moved to quash a Rule 17(c) subpoena on the grounds that the
documents sought, which included interview memoranda relating to an internal
investigation of the law firm’s client, were both attorney-client privileged and
protected work product. After the defendant asserted that the law firm had waived
privilege in light of certain disclosures to the government, the court explained that,
in the absence of a “detailed oral recitation” of an interview memorandum’s
contents, “courts have routinely declined to find that waiver has occurred.” Id. at
*1 (citing SEC v. Beacon Hill Asset Mgmt. LLC, 231 F.R.D. 134, 143
(S.D.N.Y.2004) and In re Qwest Commc’ns Int’l Inc., 450 F.3d 1179, 1181, 1196
(10th Cir.2006)); see also S.E.C. v. Brady, 238 F.R.D. 429, 444 (N.D. Tex. 2006)
(limiting waiver with respect to documents disclosed to the SEC to “the documents
actually disclosed”).
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Further, even though the law firm in Treacy had, in fact, disclosed certain of
its actual interview memoranda to the government, the court rejected an argument
that the law firm “was using the privilege as both a ‘sword and a shield’ by
choosing which memoranda it disclosed” because “such a concern is not
implicated where, as here, the holder of the privilege is not a party to the action
and seeks no advantage against its adversary.” Id. at *2. The court ultimately
quoted from Rule 502 and found that because the law firm (and the Board
committee it represented) had “no adversary in th[e] action,” and because there
was “no suggestion of ‘selective’ or ‘misleading’ conduct” (as evidenced by the
fact that “all of the interview memoranda that were disclosed to the Government
ha[d] now been provided to defendant”), the case did “not present any of the
‘unusual circumstances’ that otherwise would require a finding of waiver.” Id.
Likewise, here, Sidley is not a party to this action, and thus is not an
adversary to Sigelman. Nor has Sidley engaged in any “misleading” conduct of
the kind that could give rise to the concerns described in the advisory committee
notes to FRE 502. Moreover, Sidley has not provided the DOJ with a “detailed
oral recitation” of the contents of any of its interview memoranda. Nor did Sidley
produce any interview or other memoranda to the DOJ. (Kuster Decl., ¶ 7.)
Indeed, the circumstances here are particularly removed from the advisory
committee concerns, because as noted above, the DOJ conducted its own
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interviews of the potential witnesses involved, and the DOJ has produced all of the
documents Sidley provided to the DOJ pursuant to its requests to Sigelman’s
counsel. (Id., ¶ 6). Finally, Sidley’s limited disclosures to the DOJ hardly present
the “unusual circumstance” that would make subject matter waiver appropriate.
Rather, Sidley’s investigation of PetroTiger and subsequent voluntary disclosures
were of the type that are routinely conducted by conscientious businesses in light
of the fact that “both the DOJ and SEC place a high premium on self-reporting,
along with cooperating and remedial efforts, in determining the appropriate
resolution of FCPA matters.”5 It would be contrary to Rule 502 to apply such
waiver to a situation of routine self-reporting. Accordingly, the Subpoena should
be quashed to the extent that it requests documents not disclosed to the DOJ.
D. The Subpoena Must Be Quashed Because SigelmanHas Not Established That The Documents He Seeks AreAdmissible
Finally, Sigelman has failed to show that the Subpoena seeks admissible
documents, as required by Nixon. Mr. Sigelman baldly asserts that the Subpoena
calls for documents that “no doubt touch directly on the activities of [his] co-
conspirators” and, because they have “the potential to exonerate him” they are
“properly a subject of the subpoena.” (Mtn at 2.) In support, Sigelman contends
5 See A Resource Guide to the U.S. Foreign Corrupt Practices Act, by the CriminalDivision of the U.S. Department of Justice and the Enforcement Division of theU.S. Securities and Exchange Commission.
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that “the Third Circuit has explicitly held that ‘exculpatory evidence in the
possession of third parties’ is ‘retrievable under a Rule 17(c) subpoena.’” (Id.
(citing Cuthbertson, 651 F.2d at 195).) But Sigelman’s misleading citation fails to
include the Third Circuit’s very next line: “naked exculpatory material held by
third parties that does not rise to the dignity of admissible evidence simply is not
within the rule.” Id. (emphasis added). In Cuthbertson, the court reversed a
contempt order for failure to comply with a subpoena because the documents
sought were “[o]n their face . . . simply hearsay” and because “[n]either the
government nor defendants have asserted a relevant exception to the hearsay rule.”
Id.
Likewise, here, the interview and any other internal memoranda sought by
Sigelman constitute inadmissible hearsay and cannot become evidence at trial to
prove the truth of the matters asserted therein. See Roxbury-Smellie v. Florida
Dep’t of Corrections, 324 Fed.Appx. 783, 785 (11th Cir. 2009) (interview notes
constitute inadmissible hearsay); Morris v. Eversley, No. 00 Civ. 8166, 2004 WL
856301, *2 (S.D.N.Y. Apr. 20, 2004) (interview memorandum is “pure hearsay”).
Further, to the extent Sigelman seeks the opinions of counsel as set forth in
Sidley’s internal memoranda, those opinions are not relevant evidence. The
determination of Sigelman’s culpability is for a jury of his peers to make, not
Sidley or PetroTiger’s in-house counsel.
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IV. CONCLUSION
For the foregoing reasons, Sidley respectfully requests that the Court quash
the Subpoena.
Dated: Morristown, New JerseyOctober 6, 2014 By: /s/ Michael Rato _
Michael RatoMcELROY, DEUTSCH,MULVANEY & CARPENTER, LLP1300 Mount Kemble AvenueP.O. Box 2075Morristown, New Jersey 07962(973) 993-8100(973) 425-0161 (fax)
John J. KusterTimothy J. TreanorSIDLEY AUSTIN LLP787 Seventh AvenueNew York, New York 10019Tel: (212) 839-5300
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