Free Memorandum - District Court of Federal Claims - federal

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS THE OSAGE NATION AND/OR TRIBE OF INDIANS OF OKLAHOMA, Plaintiff, v. THE UNITED STATES OF AMERICA, Defendant. ) ) ) ) ) ) ) ) ) ) ) )

Electronically Filed: August 22, 2005 No. 169-00L Judge Emily C. Hewitt

MEMORANDUM IN SUPPORT OF DEFENDANT'S MOTION FOR PROTECTIVE ORDER AGAINST PLAINTIFF'S RULE 30(b)(6) NOTICES OF DEPOSITION AND SUBPOENAS As set out below, the deposition topic that requires Defendant to designate a person or persons to testify concerning the trust duties, responsibilities, and obligations of Defendant under the Act of June 28, 1906, 34 Stat. 539 ("1906 Act") ("Legal Trust Duties Topic") is not appropriate for an RCFC 30(b)(6) deposition because it concerns complex legal issues that are currently pending before the Court and the Court will eventually decide the extent of Defendant's duties under the 1906 Act and other statutes and regulations. The parties have already filed extensive briefs on the Legal Trust Duties Topic and the Court has scheduled oral argument for September 13, 2005. Further, due to the complicated nature of the legal issues and the request for legal conclusions involved in this topic, Defendant would likely have to designate a Government attorney (or attorneys) closely involved with this litigation as a 30(b)(6) witness, a practice heavily disfavored by federal courts.

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I.

INTRODUCTION On May 4, 2005, pursuant to RCFC 30(b)(6), Plaintiff served Deposition Subpoenas

("Subpoenas") and Notices of Deposition ("Deposition Notices") on the Department of the Interior ("Interior") and the Department of the Treasury ("Treasury"). See Interior Deposition Notice (attached as Exhibit 1) and Treasury Deposition Notice (attached as Exhibit 2) (May 4, 2005). The Deposition Notices requested that Interior and Treasury identify an individual to testify regarding: The trust duties, responsibilities, and obligations of the United States established by the Act of June 28, 1906, 34 Stat. 539 ("1906 Act") and any amendments thereto, or by the regulations implementing the 1906 Act and any amendments thereto, and any and all guidelines, manuals, regulations, publications, instructions, internal memoranda, and/or other records relevant to those trust duties, responsibilities, or obligations. Interior Deposition Notice (Exhibit 1) at 11, ¶ 17; Treasury Deposition Notice (Exhibit 2) at 8, ¶ 6. Defendant's contentions related to the 1906 Act involve legal issues which likely could not be addressed by anyone other than an attorney. On May 13, 2005, per the Court's April 15, 2005, Order, Plaintiff provided further explanation of its claims, asserting that the 1906 Act and its implementing regulations, as well as lease terms, establish in Interior specific fiduciary duties to calculate and collect royalties on oil and gas leases ("Royalty Claims"). See The Osage Nation's Statement of Trust Fund

Mismanagement Claims for Tranche One at 1-5. Additionally, Plaintiff contends that 25 U.S.C. §§ 155, 161a, 161b, and 162a establish specific fiduciary duties to deposit the collected royalties in a trust fund and to invest those funds according to law. In response to Plaintiff's assertions, on June 14, 2005, the United States filed Defendant's Motion to Dismiss, In Part, Plaintiff's Tranche One Claims, asserting, inter alia, that the Court 2

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lacked jurisdiction over Plaintiff's Royalty Claims. See Defendant's Motion to Dismiss, In Part, Plaintiff's Tranche One Claims (June 14, 2005) (hereinafter "Def.'s Mot. to Dismiss"). More than twenty-pages of Defendant's fifty-page brief were devoted to this complicated, threshold legal issue. See id. at 8.-30. Essentially, Defendant disputes Plaintiff's contentions that the 1906 Act, its implementing regulations, or the Tranche One leases, impose money-mandating duties on Interior. Rather, Defendant contends that nothing in the 1906 Act, its implementing regulations, or leases imposes any specific duties on the Secretary of the Interior with respect to calculating royalties, collecting royalties, or imposing or collecting late fees because the 1906 Act is silent as to the calculation of royalties, their collection, and imposition and collection of late fees. The regulations implementing the 1906 Act, and the lease terms that mirror and incorporate the regulations, require the lessees, not Interior, to calculate and pay royalties by dates certain. The Defendant contends that these sources of law do not, when considered together, give the Defendant full management responsibility or plenary or pervasive control of the royalty calculation or collection process. Consequently, absent a money-mandating duty, Defendant has asserted that Plaintiff's Royalty Claims should be dismissed. In response, Plaintiff's filed an opposition brief on July 11, 2005, asserting that Defendant has a duty to calculate and collect oil and gas royalties based on: the 1906 Act and its implementing regulations, which, Plaintiff asserts, give Defendant pervasive authority over oil and gas resources; Defendant's exercise, in fact, of control over the oil and gas resources; and in light of the terms of the trust and the common law obligations of a trustee. Defendant's filed a

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reply brief on July 25, 2005, and the Court has scheduled oral argument on Def.'s Mot. to Dismiss, and the responsive briefing, for September 13, 2005. Prior to the filing of this Motion, Defendant recently contacted Plaintiff's counsel via telephonic conference and electronic mail in an attempt to resolve their disagreement as to the scope of the depositions. Further, Defendant previously memorialized its objection to the

Deposition Notices and Subpoenas in a letter to the Plaintiff and provided its written objections to Plaintiff in an attachment. See Defendant's Objections and Responses to Subpoenas Issued by Plaintiff's Counsel on May 4, 2005 (May 23, 2005) (attached as Exhibit 3). Unfortunately, Plaintiff and Defendant were unable to reach a resolution on the Legal Trust Duties Topic, and therefore, Defendant is requesting the Court to issue a protective order limiting the scope of Plaintiff's Deposition Notice. Specifically, Defendant requests that the Court order Plaintiff to restate its Deposition Notices and strike the Legal Trust Duties Topic. II. ARGUMENT A. PLAINTIFF'S LEGAL TRUST DUTIES TOPIC IS NOT APPROPRIATE FOR AN RCFC 30(B)(6) DEPOSITION AND THE DEPOSITION NOTICES SHOULD BE RESTATED TO STRIKE THIS TOPIC

By its Legal Trust Duties Topic, Plaintiff seeks to depose representatives from Treasury and Interior about complicated legal issues. Plaintiff's request that both Interior and Treasury designate an individual to testify about the Legal Trust Duties Topic is inappropriate for an RCFC 30(b)(6) deposition because Plaintiff seeks deposition testimony about Defendant's legal theories related to this topic. Indeed, as set out above, the Legal Trust Duties Topic concerns threshold legal issues that are currently being reviewed by this Court in response to the Def.'s Mot. to Dismiss and responsive briefing thereto. Furthermore, the legal issues associated with

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this topic are exceedingly complex, as demonstrated by the lengthy briefs1 in this case. To address this complex legal topic, Defendant would likely have to designate a Government attorney (or attorneys)2 closely associated with this litigation as a 30(b)(6) witness, a practice heavily disfavored by federal courts. Accordingly, the Court should issue a protective order precluding Plaintiff from deposing Defendant with respect to the Trust Duties Topic. The frequency or extent of the use of discovery methods may be limited if (i) the discovery sought is unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive; (ii) the party seeking discovery has had ample opportunity by discovery...to obtain the information sought; or (iii) the discovery is unduly burdensome or expensive." RCFC 26(b)(2); see also Capital Props. v. United States, 49 Fed. Cl. 607, 611 (Cl. Ct. 2001) (citing Hickman v. Taylor, 329 U.S. 495, 507-8 (1947)). Such limits may be imposed by a protective order, issued pursuant to RCFC 26(c), which provides that the Court may, for good cause, "make any order which justice requires to protect a party or persons from annoyance, embarrassment, oppression, undue burden or expense, including . . . that the discovery may be had only by a method of discovery other than that selected by the party seeking discovery." RCFC 26(c)(3). Good cause exists if a party can demonstrate that the discovery request is considered likely to oppress an adversary or might otherwise impose an undue burden. Capital Props., 49 Fed. Cl. at 611; St. Matthew Publishing, Inc. v. United States, 41 Fed. Cl. 142, 147 (Cl. Ct. 1998). A motion for protective order is directed to the broad discretion of the Court and decided upon the facts of each case. St. Matthew, 41 Fed. Cl. at 145 (citing Heat & Control, Inc. v.
Def.'s Mot. to Dismiss is 50 pages; Pl. Osage Nation's Opp. To Def.'s Mot. to Dismiss is 40 pages; and Def.'s Reply in Supp. Of Mot. to Dismiss, is 23 pages. 2 The "legal work of [Interior] [is] performed under the supervision and direction of the Solicitor of [Interior}...." 43 U.S.C. § 1455.
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Hester Indus., Inc., 785 F.2d 1017, 1023 (Fed. Cir. 1986)); Exxon Research, 44 Fed. Cl. at 601.3 In determining whether to grant a motion for protective order, the Court must balance and accommodate the conflicting discovery needs of the parties. Id.; see also Exxon Research and Eng'g. Co. v. United States, 44 Fed. Cl. 597, 601 (Fed. Cl. 1999) (articulating three reasons for its conclusion that depositions were not the appropriate form of discovery for claims construction). Generally, an RCFC 30(b)(6) deposition that seeks the disclosure of a complex legal issue or topic is not appropriate for a deposition. See e.g., id. at 601-602; McCormick-Morgan, 134 F.R.D. at 287; Taylor v. United States, 166 F.R.D. 356, 362 n. 7 (M.D. N.C. 1996). Because the complexity of an issue depends, at least in part, upon the experience an individual has with a particular topic, invariably, it would be difficult for a non-attorney to provide a competent response to questions about legal issues and conclusions of law. Exxon Research, 44 Fed. Cl. at 602. Moreover, it would be highly inefficient and burdensome to prepare a non-attorney to testify on such topics, which may implicate privileged information. In re Independent Serv. Organ. Antitrust Litigation, 168 F.R.D. 651, 654 (D. Kan. 1996) (citing United States v. District Council of New York City, No. 90 CIV 5722 (CSH), 1992 WL 208284, at *15 (S.D.N.Y. Aug. 18, 1992) (aside from the issues of privilege, it would be highly inefficient and burdensome to marshal facts and prep a witness to testify on a legal issue. Therefore, RCFC 30(b)(6)

depositions are not designed to discover contentions or legal theories. See, e.g., St. Matthew, 41 Fed. Cl. at 147 (requiring Plaintiff to restate its deposition notice to exclude requests for legal

The Court may consider a variety of factors in determining whether good cause exists, including: (1) whether a less expensive and less invasive method of discovery would provide the necessary information; and (2) whether it would be difficult for one deponent to testify about the issue; and (3) whether disclosure will violate any privacy interests;. See, e.g., id. at 601-602; see also Forest Prod. Northwest, Inc. v. United States, 62 Fed. Cl. 109, 114 n. 9 (Fed. Cl. 2004) (citing Glenmede Trust Co. v. Thompson, 56 F.3d 476, 483 (3d Cir. 1995).

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opinions and conclusions of law); see also JPMorgan Chase Bank v. Liberty Mutual Insur. Co., 209 F.R.D. 361, 362 (S.D.N.Y. 2002); In re Independent, 168 F.R.D. at 654. And whereas attorneys may be capable of responding to questions about complex legal issues, the Court should hesitate to order the deposition of an attorney. Exxon Research, 44 Fed. Cl. at 602. In fact, the deposition of an attorney should be avoided until all other possible discovery methods have proven unsuccessful. Id. at 601; Sparton Corp. v. United States, 44 Fed. Cl. 557, 566 (Fed. Cl. 1999) (when a party seeks to depose a witness, such party must, at least, make a "modest showing that the deposition is of significant utility or practical necessity"); see also Securities Exchange Commission v. Buntrock, No. 02 C 2180, 2004 WL 1470278, *5-6 (June 29, 2004 N.D. Ill.) (noting that certain courts are critical of deposition notices that seek, if not the deposition opposing counsel, then the practical equivalent thereof). In sum, topics involving legal opinions or conclusions of law should not be addressed in depositions, as it would be highly inefficient and burdensome to prepare a witness to testify on such topics and a deposition of attorneys should be avoided until all other methods for discovery have been attempted. See, e.g., Exxon Research, 44 Fed. Cl. at 601 (hesitating to order the deposition of one of Exxon's attorneys); see also In re Independent, 168 F.R.D. at 654; Lance, Inc. v. Ginsburg, 32 F.R.D. 51 (E.D. Pa. 1962); Arkwright Mutual Insur. Co. v. National Union Fire Insur. Co., No. 90 Civ. 7811 (KC), 1993 U.S. Dist. LEXIS 1163, *7-8 (S.D. N.Y. Feb. 4, 1993). In this case, the Legal Trust Duties Topic seeks deposition testimony about Defendant's legal theories and conclusions of law related to the Plaintiff's Royalty Claims. Specifically, the information Plaintiff is seeking relates to threshold issues regarding this Court's jurisdiction over

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Plaintiff's Royalty Claims. See, e.g., Def's Mot. to Dismiss (asserting that that Plaintiff has failed to demonstrate that the Court has jurisdiction over Plaintiff's Royalty Claims under the 1906 Act, its implementing regulations, or the leases ). The legal theories and contentions related to this issue are currently pending before this Court and are complex, as evidenced by the parties' lengthy briefs, which total in excess of 100 pages. It would be highly inefficient, duplicative, and burdensome to prepare a witness to testify on the Trust Duties Topic because, in order to respond to Plaintiff's questions, Defendant would have to articulate its interpretation of the terms of the 1906 Act and its implementing regulations. Defendant also contends that due to the complexity of the legal issues involved, only a Government attorney closely associated with the litigation and briefing in this case would have the appropriate experience to respond to questions about the Legal Trust Duties Topic. Yet, as this Court has acknowledged, the deposition of attorneys should be avoided.4 Thus, Plaintiff should not be permitted to depose Defendant regarding the Legal Trust Duties Topic. The reasoning is obvious - whereas Defendant would be heavily burdened, and possibly prejudiced if Plaintiff were permitted to depose a Government attorney closely associated with this litigation, Plaintiff has essentially already received the information it seeks in Def.'s Mot. to Dismiss and Def.'s Reply. In light of the foregoing, Defendant requests that this Court order Plaintiff to restate its Deposition Notice, striking the Legal Trust Duties Topic.

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Although Defendant believes that the briefing referenced above sufficiently articulates Defendant's contentions regarding Defendant's trust duties under the 1906 Act and its implementing regulations, it would have been more appropriate for Plaintiff to have served Defendant with contention interrogatories requesting the factual basis for Plaintiff's contentions regarding its trust duties under the 1906 Act.

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III.

CONCLUSION For the aforementioned reasons, the Court should require Plaintiff to restate its

Deposition Notices, striking the Legal Trust Duties Topic. Respectfully submitted, on August 22, 2005 KELLY A. JOHNSON Acting Assistant Attorney General By: s/ Brett D. Burton BRETT D. BURTON United States Department of Justice Environment and Natural Resources Division P. O. Box 663 Washington, D.C. 20044-0663 Telephone: (202) 305-0212 Fax: (202) 353-2021 Attorney of Record for Defendant OF COUNSEL: Martin J. LaLonde Kevin Webb Jennifer Allaire John H. Martin Stephen Simpson Attorney Office of the Solicitor Division of Indian Affairs U.S. Department of the Interior MS 6456 Washington, D. C. 20240 Telephone: (202) 219-1659 Fax: (202) 208-3490 Teresa E. Dawson Senior Counsel Office of Chief Counsel Financial Management Services U.S. Department of the Treasury 401 14th Street, S.W. Room 552A Washington, D.C. 20227 Telephone: (202) 874-2567 Fax: (202) 874-6627

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