Free Response - 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: May 6, 2005 No. 00-169 L Judge Emily C. Hewitt

DEFENDANT'S OPPOSITION TO THE OSAGE NATION'S OBJECTIONS TO DEFENDANT'S PRIVILEGE CLAIMS

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TABLE OF CONTENTS I. II. III. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 A. LEGAL STANDARDS FOR ASSERTIONS OF PRIVILEGE . . . . . . . . . . . . . . 4 1. 2. B. C. Attorney-Client Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Attorney-Work Product Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

DEFENDANT PROPERLY INVOKED THE ATTORNEY-CLIENT AND WORK PRODUCT PRIVILEGES TO PROTECT DOCUMENTS . . . . . . . . . . 7 THE FIDUCIARY EXCEPTION DOES NOT APPLY TO ATTORNEYCLIENT PRIVILEGED COMMUNICATIONS OF FEDERAL AGENCIES ACTING IN THEIR ROLES AS TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 1. Background and legal standards for the fiduciary exception . . . . . . . . . . 10 a. b. 2. Application of the fiduciary exception to private trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Extension of the fiduciary exception to the Department of the Interior, acting as trustee . . . . . . . . . . . . . . . . 12

The fiduciary exception should not apply to the federal government because the tribal beneficiary is not the "real client" of legal advice provided to the trustee in the same sense as beneficiaries to private trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 a. Even in Trust Matters, Interior receives advice regarding its own federal interests together with advice concerning its responsibilities to the beneficiaries, and thus the tribal beneficiaries cannot be deemed to be the "real client" of the legal advice or representation obtained by the trustee . . . . . . . . . . . . . . . . . . . 13 Federal agencies owe a duty to fulfill the many directives of Congress, not only those involving Indian Tribes, thus the Indian Tribes cannot be deemed the "real client" of legal advice or representation obtained by federal agencies acting as trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Congress has not recognized tribal beneficiaries as the "real client" of the legal advice of federal agencies fulfilling their fiduciary duties such that they are entitled, under the fiduciary exception, to privileged -ii-

b.

c.

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documents of the agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 d. Because legal advice or representation to the federal trustee is not paid for from the trust corpus, tribal beneficiaries should not be deemed the "real client" of the advice or representation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

3.

Application of the attorney-client privilege does not contravene the trustee's duty to disclose to the beneficiaries complete and accurate information about the administration of the trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

D.

EVEN IF THE FIDUCIARY EXCEPTION APPLIES, IT SHOULD APPLY NARROWLY SUCH THAT PRIVILEGED COMMUNICATIONS ARE NOT SUBJECT TO THE EXCEPTION WHEN THEY RELATE TO LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 1. The attorney-client privilege protects communications between trustees and their attorneys provided in anticipation of or during litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 The work product doctrine protects documents prepared by Defendants' attorneys in anticipation of litigation . . . . . . . . . . . . . . . . . . 27 The Court should uphold Defendant's assertions of attorneyclient and work product privileges for those documents prepared in the context of litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

2. 3.

E.

EVEN IF THE FIDUCIARY EXCEPTION APPLIES, IT SHOULD NOT APPLY TO ALLOW PLAINTIFF ACCESS TO PRIVILEGED DOCUMENTS OF THE TRUSTEE THAT DO NOT RELATE TO PLAINTIFF'S OWN TRUST FUNDS OR ASSETS . . . . . . . . . . . . . . . . . . . . . 31

IV.

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

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TABLE OF AUTHORITIES FEDERAL CASES American Federal Bank, FSB v. United States, 60 Fed. Cl. 493 (2004) . . . . . . . . . . . . . . . . . . . . 6 American Standard Inc. v. Pfizer Inc, 828 F.2d 734 (Fed. Cir. 1987) . . . . . . . . . . . . . . . . . . . . . . 4 Arney v. Hormel & Co., 53 F.R.D. 179 (D.Minn. 1971) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Becher v. Long Is. Lighting Co., 129 F.3d 268 (2d Cir. 1997) . . . . . . . . . . . . . . . . . . . . 11, 25, 26 Bowling v. United States, 233 U.S. 528, 535 (1914) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Cabot v. United States, 35 Fed. Cl. 442, 444 (1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 7 Citizens Progressive v. United States Bureau of Indian Affairs, 241 F.Supp.2d 1342, 1363-65 (D.N.M. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Coastal States Gas Corp. v. Department of Energy, 617 F.2d 854 (D.C. Cir. 1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 20 Cobell v. Norton, 212 F.R.D. 24 (D.D.C. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 24 Cobell v. Norton, 213 F.R.D. 1 (D.D.C. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28, 29 Cobell v. Norton, 213 F.R.D. 69 (D.D.C. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 County of Oneida v. Oneida Indian Nation of New York States, 470 U.S. 226, 241-43 (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 19 Department of the Interior v. Klamath Water Users Protective Association, 532 U.S. 1, 15-16 (2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Deuterium Corp. v. United States, 19 Cl. Ct. 697 (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 7 Duncan v. Walker, 533 U.S. 167 (2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Eagle-Picher Industries, Inc., 11 Cl. Ct. 452 (1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Everett v. USAir Group, Inc., 165 F.R.D. 1 (D.D.C. 1995) . . . . . . . . . . . . . . . . . . . . . . . 24, 26, 28 Federal Heights Bank, FSB v. United States, 46 Fed. Cl. 312 (2000) . . . . . . . . . . . . . . . . . . . . 5, 6 First Federal Savings Bank of Hegewisch v. United States, 55 Fed. Cl. 263, 266 (2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 5, 7 -iv-

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Fischel v. Equitable Life Assurance, 191 F.R.D. 606 (N.D. Cal. 2000) . . . . . . . . . . . . . . . . . . . 24 Flathead Joint Board of Control v. United States Department of the Interior, 309 F.Supp.2d 1217, 1224 (D. Mont. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970) . . . . . . . . . . . . . . . . . . . . . . . . . 11, 24, 32 Genetech, Inc. v. United States International Trade Commission, 122 F.3d 1409 (Fed. Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Heckman v. United States, 224 U.S. 413 (1912) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Hudson v. General Dynamics, 73 F. Supp. 2d 201 (D. Conn. 1999) . . . . . . . . . . . . . . . . 24, 25, 26 In re Int'l Sys. & Controls Corp. Sec. Litig., 693 F.2d 1235 (5th Cir. 1982) . . . . . . . . . . . . . . . 27 In re Sealed Case, 107 F.3d 46 (D.C. Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 6 In re Sealed Case, 146 F.3d 881 (D.C. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 In re Sealed Case, 29 F.3d 715 (D.C. Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 In re Spalding Sports Worldwide, Inc., 203 F.3d 800 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . 4 In Re: Grand Jury Investigation, 399 F.3d 527 (2d Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . 9, 10 Lawrence v. Cohn, 202 WL 109530 (S.D.N.Y. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28, 29 Martin v. Valley Nat'l Bank of Ariz., 140 F.R.D. 291 (S.D.N.Y. 1991) . . . . . . . . . . . . . . . . 24, 28 Martin v. Valley Nat'l Bank of Arizona, 140 F.R.D. 129 (S.D.N.Y. 1991) . . . . . . . . . . . . . . . . . 28 Miccosukee Tribe v. United States, 980 F. Supp. 448 (S.D. Fla. 1997) . . . . . . . . . . . . . . . . . . . 17 Nevada v. United States, 463 U.S. 110 (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Picard Chem. Inc. Profit Sharing Plan v. Perrigo Co., 951 F. Supp. 679 (W.D. Mich. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Privett v. United States, 256 U.S. 201 (1921) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Renda Marine, Inc. v. United States, 62 Fed. Cl. 371 (2004) . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 6 Shoshone-Bannock Tribes v. Reno, 56 F.3d 1476 (D.C. Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . 16 Shoshone Indian Tribe of the Wind River Reservation v. United States, No. 458a-79L (CFC May 16, 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 -v-

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Strougo v. BEA Assocs., 199 F.R.D. 515 (S.D.N.Y. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Swidler & Berlin v. United States, 524 U.S. 399 (1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9, 10 Triax Co. v. United States, 11 Cl. Ct. 130 (1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 6 United States v. Ackert, 169 F.3d 136 (2d Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 United States v. Adlman, 134 F.3d 1194 (2d Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 United States v. Candelaria, 271 U.S. 432 (1926) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 United States v. Mett, 178 F.3d 1058 (9th Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . 11, 22, 24, 25 United States v. Minnesota, 270 U.S. 181 (1926) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 16 United States v. Navajo Nation, 537 U.S. 488 (2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 United States v. Navajo Nation, 537 U.S. 511 (2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Upjohn Co. v. United States, 449 U.S. 383 (1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Washington-Baltimore Newspaper Guild v. Washington Star Co., 543 F. Supp. 906 (D.D.C. 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 22 Wessel v. City of Albuquerque, 2000 WL 1803818 (D.D.C., Nov 30, 2000) . . . . . . . . . . . . 22, 29 Wildbur v. ARCO Chemical Co., 974 F.2d 631 (5th Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . 11, 22 Yankee Atomic Electric Co. v. United States, 54 Fed. Cl. 306 (2002) . . . . . . . . . . . . . . . . . . . . . . 5

STATE CASES Mesce v. Gradone, 1 N.J. 159, 62 A.2d 394 (1948) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Riggs National Bank v. Zimmer, 355 A.2d 709 (Del. Ch. 1976) . . . . . . . . . . . . . . . 10, 11, 13, 21, 22 FEDERAL STATUTES AND RULES 5 U.S.C. § 552 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 5 U.S.C. § 552(b)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 24 U.S.C. § 2415 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 25 U.S.C. § 162a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 -vi-

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25 U.S.C. § 4001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 25 U.S.C. § 4011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 28 U.S.C. § 2415 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 19 43 U.S.C. § 1457 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Indian Claims Limitation Act of 1982, Pub. L. 97-394, 96 Stat. 1976 . . . . . . . . . . . . . . . . . . . . 18 Indian Commerce Clause, U.S. Const. art. I, § 8, cl. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Pub. L. 101-121, 103 Stat. 701 (Oct. 23, 1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Pub. L. 103-332, 108 Stat. 2499 (Sept. 30, 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Pub. L. 108-108, 117 Stat. 1241, 1262-63 (Nov. 10, 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 RCFC 26(b)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 8 OTHER AUTHORITIES 3 Weinstein's Federal Evidence § 503.11[4][b] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 4 Austin W. Scott & William F. Fratcher, The Law of Trusts § 337 . . . . . . . . . . . . . . . . . . . . . 14 Restatement (Second) of Trusts, § 170 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Restatement (Second) of Trusts, § 173 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Talbot v. Marshfield, 12 L.T.R. 761, 762 (Ch. 1865) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

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I. INTRODUCTION Pursuant to the Court's April 15, 2005, Order, Defendant herein files this response to Plaintiff's March 31, 2005, pleading, whereby it challenges Defendant's decision to withhold from production certain documents as privileged attorney-client communications or work product. The Court should reject Plaintiff's challenge. As demonstrated in its attached privilege log (Exhibit 1), Defendant has properly invoked the attorney-client privilege to withhold those communications between federal agencies and their attorneys that involve legal advice or representation. The log also demonstrates that Defendant properly invoked the work-product privilege to protect from disclosure documents prepared by government attorneys or their representatives for pending or anticipated litigation. Plaintiff has not shown that Defendant's assertions are improper. Instead, Plaintiff asserts that the documents should be disclosed pursuant to the fiduciary exception to these privileges, which, in certain contexts, allows a beneficiary access to privileged communications between a trustee and its attorney. The Court should conclude that the fiduciary exception does not apply to the documents that Defendant seeks to withhold as privileged in this case. Although the fiduciary exception may be applicable in the context of a private or charitable trust, it should not apply in the context of a government-to-government relationship between the United States and a Tribe, which resembles a trust relationship only where Congress has placed specific fiduciary duties on a federal agency. The fiduciary exception was developed in the context of private trusts based on two primary rationales: that the beneficiary is the "real client" of any advice or work product that the trustee receives for purposes of administering the trust and that the beneficiary is entitled to complete and accurate information about the administration of the trust. As fully explained below, these rationales do not hold for the statutory trust relationship between a federal government attorney and an Indian Tribe. First, an Indian Tribe should not be deemed the "real client" of advice or work product of the government attorney due to several considerations: (a) in providing advice to a federal agency, -1-

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the government attorney's duty of loyalty is to the United States, which has a distinct and independent sovereign interest in fulfilling its statutory trust duties, (b) in providing advice to an agency concerning its statutory trust obligations, the attorney often must take into account multiple interests, including those that may be at odds with a tribal beneficiary; (c) in various contexts, courts and Congress have recognized that Indian beneficiaries are not entitled to the confidential or privileged communications of the federal trustee; and (d) tribal beneficiaries do not pay for the advice or work product received by the federal trustee. Second, unlike private trusts, Indian beneficiaries have multiple avenues for obtaining complete and accurate information about the administration of their trust. Even if the Court were to determine that some form of the fiduciary exception does apply to certain communications of federal agencies acting as trustees to the tribal beneficiary, it should not extend the exception to communications or work product created in the context of pending or anticipated litigation, particularly between the trustee and beneficiary. In those instances, it is plain that the interests of the trustee and beneficiary diverge, the advice or work product in no manner can be considered as being for the benefit of the beneficiary, and the trustee should be entitled to full and frank legal advice and representation in the adversarial proceeding. Further, the Court should continue to shield from Plaintiff those privileged communications that do not relate to Plaintiff's assets or funds held in trust; Plaintiff in no manner can be considered the "real client" of privileged documents generated in the context of a fiduciary relationship between the federal trustee and other tribal or Indian beneficiaries. For these reasons, and as fully explained below, the Court should reject Plaintiff's objections to Defendant's privilege claims. II. BACKGROUND On October 1, 2004, Defendant submitted to Plaintiff its Notice of Service of Draft Privilege Logs for Office of Trust Records ("OTR") Documents, which included two draft privilege review logs from the review of OTR documents in Albuquerque, NM conducted by the Office of the -2-

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Solicitor of the Department of the Interior.1/ The October 1, 2004 Notice suggested a process for addressing privilege claims that had been made by the Solicitor's Office. Defendant requested that Plaintiff review the draft logs; identify by document number the privilege assertions with which Plaintiff disagreed; and supply Defendant with the basis for Plaintiff's disagreement. Defendant would then reconsider whether to continue or withdraw its assertion of privilege.2/ Id. at 2; see also Joint Status Report Pursuant to Court's Order of October 22, 2004 at 12 (explaining proposed process); Transcript, December 28, 2004, Status Conference, at 64-65, 70 (explaining proposed process). Pursuant to the Court's March 25, 2005, Order, Plaintiff, on March 31, 2005, provided a list of documents contained in Defendant's draft privilege logs that it believes should be produced. The list contains 200 challenged items. Some of these items (Defendant's document number 772 and 808) referred to folders that were withheld in their entirety and consisted of numerous documents, which have now been separated into individual documents for purposes of determining privilege assertions.3/ After accounting for such single listings that actually contained multiple documents and instances where Plaintiff identified the same document in more than one of the draft privilege logs attached to its Objection, the total number of documents subject to Plaintiff's challenge is 244.4/

1/

These privilege logs also contained the entries in logs that had been previously provided to Plaintiff in May 2004.
2/

In the October 1, 2004 Notice, Defendant explained that the Department of Justice has the authority to make formal assertions of privilege on behalf of Defendant and proposed the process above as an informal and efficient manner to resolve disagreements about the Solicitor's Office privilege assertions. (See id. at 2.)
3/

In one instance, an entire box from the Minerals Management Service was withheld and was listed as one item on a draft privilege log. On further review, no documents in this box are privileged and none are being withheld. Nevertheless, it appears that the contents of this box are not relevant to Plaintiff, for which MMS does not have involvement in collecting royalties. Defendant is still in the process of locating four documents that were listed on the draft privilege logs. For two of these documents, the draft privilege log inadvertently excluded information to identify the box within which the document is contained. The boxes have been identified, but Defendant has not yet obtained images of the privileged documents from the boxes. (continued...) -34/

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On further review of these documents, Defendant has determined that 112 are not privileged. On the date of this filing, Defendant will produce these non-privileged documents to Plaintiff. As to the remaining privileged documents, Defendant has attached a final privilege log (Exhibit 1) with the following fields: Defendant's document identification number (hereinafter "document number"), Plaintiff's document number, document date, addressees, recipients, document title, privilege assertion, privilege category, and basis for the privilege assertion. Although the privilege log should serve as a sufficient basis for evaluating Defendant's claims of privileges, Defendant has also, under seal, submitted copies of the privileged documents to the Court for in camera review. III. ARGUMENT A. LEGAL STANDARDS FOR ASSERTIONS OF PRIVILEGE 1. Attorney-Client Privilege

The basic contours of the attorney-client privilege are familiar. The attorney-client privilege protects confidential communications from a client to an attorney, legal advice from the attorney to the client, attorney requests for "relevant information" from the client, and communications between attorneys. See Renda Marine, Inc. v. United States, 62 Fed. Cl. 371, 372 (2004); In re Spalding Sports Worldwide, Inc., 203 F.3d 800, 805 (Fed. Cir. 2000), Triax Co. v. United States, 11 Cl. Ct. 130, 132 (1986). The privilege "encourages complete disclosure" between clients and their attorneys. First Federal Savings Bank of Hegewisch v. United States, 55 Fed. Cl. 263, 266 (2003) (citation omitted); see also American Standard Inc. v. Pfizer Inc, 828 F.2d 734, 745 (Fed. Cir. 1987) (stating the purpose of the privilege is to "encourage full and frank communications" between attorneys and their clients). The essential elements of the privilege are: (1) the asserted holder of the privilege is or sought to become a client; (2) the person to whom the communication was made (a) is a member of the bar of a court [and]... (b) in connection with this communication is acting as a lawyer; (3) the communication relates to a fact of which the attorney was informed (a) by his client
4/

(...continued) The final two documents are contained in one box that has been unavailable for imaging. As soon as these four documents are obtained, Defendant will submit the documents for which it will continue to assert a privilege to the Court under seal along with a final privilege log. -4-

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(b) without the presence of strangers (c) for the purposes of securing primarily either (i) an opinion on law or (ii) legal services or (iii) assistance in some legal proceeding [and] ... (4) the privilege has been (a) claimed and (b) not waived by the client. First Federal Saving Bank of Hegewisch, 55 Fed. Cl. at 266 (citing United States v. United Shoe Machinery Corp., 89 F. Supp. 357, 358-59 (D. Mass. 1950)). Although the party claiming the privilege bears the burden of establishing the privilege, Cabot v. United States, 35 Fed. Cl. 442, 444 (1996) (citations omitted), the burden is satisfied if "the overall tenor of the document indicates that it is a request for legal advice or services[,]" Federal Heights Bank, FSB v. United States, 46 Fed. Cl. 312, 315 (2000) (quoting In re Spalding Sports Worldwide, Inc., 203 F.3d at 806). Moreover, a communication between a client and his or her attorney is "presumptively a request for legal advice[.]" Yankee Atomic Electric Co. v. United States, 54 Fed. Cl. 306, 315 (2002). "It is well established that communications between government agencies and agency counsel are protected by the privilege so long as they are made confidentially and for the purpose of obtaining legal advice for the agency." Sparton Corp. v. United States, 44 Fed. Cl. 557, 566 (1999). The privilege may apply to communications between an agency and its attorneys, regardless of whether the attorney is an agency counsel, a Department of Justice attorney, or an outside private counsel. Yankee Atomic Electric Co., 54 Fed. Cl. at 313. The privilege applies to communications between "Government employees at all levels." Renda Marine, 62 Fed. Cl. at 373 (finding e-mail sent by a senior attorney in Office of Counsel for the Corps of Engineers to subordinate attorneys and non-attorney employees in the same office was protected by attorney-client privilege). Communications from a government attorney to a client may be protected by the attorney-client privilege if they "reveal, directly or indirectly, the substance of a confidential communication by the client[.]" Yankee Atomic Electric Co., 54 Fed. Cl. at 313 (quoting American Standard, 828 F.2d at 745 (Fed. Cir. 1987)); see also Deuterium Corp. v. United States, 19 Cl. Ct. 697, 700 (1990). 2. Attorney-Work Product Privilege

"The protection for attorney work product is broader than the attorney-client privilege, but less absolute." In re Sealed Case, 107 F.3d 46, 51 (D.C. Cir. 1997). "Work product immunity -5-

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covers not only confidential communications between the attorney and client [but] also attaches to other materials prepared by attorneys (and their agents) in anticipation of litigation." Id. The longstanding work product doctrine is designed to protect the adversarial process. See American

Federal Bank, FSB v. United States, 60 Fed. Cl. 493, 497 (2004) (citing Hickman v. Taylor, 329 U.S. 495 (1947)); Eagle-Picher Industries, Inc., 11 Cl. Ct. 452, 457 (1987). Under the attorney work product privilege, a party may obtain only documents prepared by or for another party for litigation if "the party seeking discovery has substantial need of the materials in the preparation of the party's case and . . . the party is unable without undue hardship to obtain the substantial equivalent of the materials by other means." RCFC 26(b)(3). The work product doctrine extends to documents prepared in anticipation of litigation. First Height Bank, FSB v. United States, 46 Fed. Cl. 312, 320 (2000) (ruling privilege applied to Internal Revenue Service ("IRS") documents that discussed potential litigation and were created by and circulated among counsel at the IRS). The privilege also applies to documents prepared in anticipation of terminated litigation in an unrelated proceeding. Eagle-Picher Industries, 11 Cl. Ct. at 457. Even when the required showing is made and discovery of such materials is allowed, "the court shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation." Id. Thus, the rules distinguish fact work product from opinion work product. Eagle-Picher Industries, Inc., 11 Cl. Ct. at 457. Fact work product may be discoverable under RCFC 26(b)(3), id., whereas opinion work product is "nearly absolutely protected" and can only be discovered in "extraordinary circumstances." Renda Marine, Inc., 62 Fed. Cl. at 375 (citation and internal quotation marks omitted). The opinion work product doctrine prohibits discovery of an attorney's mental

impressions, conclusions, opinions, or legal theories. See Sparton Corp., 44 Fed. Cl. at 564; Genetech, Inc. v. United States International Trade Commission, 122 F.3d 1409, 1415 (Fed. Cir. 1997) (stating work product privilege protects an attorney's legal recommendations and thoughts). Material in this category also includes an attorney's notes and impressions concerning witness -6-

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interviews in preparation for litigation and documents compiled by an attorney in preparation for litigation. Sparton Corp., 44 Fed. Cl. at 564. Extra protection is granted to opinion work product to allow attorneys to work in an "atmosphere of privacy" because intrusions into an attorney's work product and mental impressions would hamper "the interests of clients and the cause of justice." Deuterium Corp., 19 Cl. Ct. at 700 (quoting Hickman v. Taylor, 329 U.S. 495, 510 (1946)). B. DEFENDANT PROPERLY INVOKED THE ATTORNEY-CLIENT AND WORK PRODUCT PRIVILEGES TO PROTECT DOCUMENTS As explained in the attached privilege log, each of the documents that Defendant has withheld from production is protected by either the attorney-client privilege, the work product privilege, or both.5/ In the privilege log, Defendant has utilized a field titled "privilege category" to categorize, as explained below, various documents that have similar characteristics. Many of the documents protected by the attorney client privilege are communications that do not directly relate to pending or anticipated litigation (listed as category 1). These include communications from the client (primarily personnel of the Department of the Interior) to an attorney of the Interior Solicitor's Office or the Department of Justice seeking legal advice (listed as category 1-a in the privilege log). Although many of these documents do not bear confidentiality or privilege stamps, it is plain from the context of the communications and the addressees that they were "without the presence of strangers," First Federal Saving Bank of Hegewisch, 55 Fed. Cl. at 266 (citation omitted), and thus were confidential and protected by the attorney-client privilege. Other withheld documents are communications from an attorney to the client or to another attorney

Citing Cabot v. United States, 35 Fed. Cl. 442, 446 (1996), Plaintiff asserts that the Court should order the release of those documents for which Defendant failed to demonstrate the validity of its privilege claims in its draft privilege logs. Cabot is inapposite. In Cabot, plaintiff failed to comply with two court orders requiring plaintiff to identify each document withheld as privileged and provide a full and clear basis for the assertion of privilege. Id. at 445. Plaintiff failed to produce the requested documents, failed to produce revised logs, and simply claimed that the documents were "plainly" or "obviously" protected by the work product or attorney-client privilege. Id. at 446. In this case, by contrast, Defendant is not in violation of Court orders and has submitted a final privilege log to Plaintiff that indicates which privilege it is asserting for each document. Moreover, unlike the plaintiff in Cabot, Defendant has been attempting to resolve the issues relating to its privilege assertions with Plaintiff for several months. -7-

5/

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that note the request for legal advice to which the communication is responding and, thus, directly reflect the confidential communications of the client (listed as category 1-b in the privilege log). It is, again, clear from the context of these communications and addresses that these communications were also made in confidence and are privileged. Also, a number of withheld documents are communications from an attorney to the client or to another attorney that do not specifically note the request for legal advice to which they respond (listed as category 1-c in the privilege log). The context and subject matter of these communications and the addressees show that these communications are legal advice that indirectly reveal the substance of confidential communications by the client and, therefore, are privileged. In addition, a number of documents withheld under the attorney-client privilege involve communications between a client and attorney for purposes of obtaining or providing legal advice in the context of pending or anticipated litigation (categories 2 and 3 in the privilege log).6/ Many of these documents are also protected by the work product privilege (also listed as category 2 and 3 in the privilege log). As to each of the documents protected by the work product privilege, the log notes the anticipated or pending litigation for which it was prepared. Plaintiff has made no showing that it has a substantial need for these work-product protected documents or that they are unable to obtain the substantial equivalent of the materials without undue hardship. RCFC 26(b)(3). Even if such a showing had been made, most of the work-product documents would still be protected because they reflect the "mental impressions, conclusions, opinions, or legal theories of an attorney" concerning litigation. Id. Thus, Plaintiff is not entitled, under RCFC 26(b)(3), to the documents protected by the work-product privilege.7/ In sum, Defendant's privilege log demonstrates that it has properly withheld the identified

6/

Category 2 relates to attorney-client communications or work product related solely to litigation matters, while category 3 relates to such documents prepared for pending or anticipated litigation that also address fiduciary matters. See, infra, III.D.3.
7/

In addition, categories 4 and 5 relates to legal advice or work product that does not relate to the trust assets of the Osage Tribe. See, infra, III.E. -8-

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documents under the attorney-client privilege, work product privilege, or both privileges. C. THE FIDUCIARY EXCEPTION DOES NOT APPLY TO ATTORNEY-CLIENT PRIVILEGED COMMUNICATIONS OF FEDERAL AGENCIES ACTING IN THEIR ROLES AS TRUSTEES In its Objections to Defendant's Privilege Claims, Plaintiff asserts that Defendant may not withhold any attorney-client privileged documents because they are subject to the fiduciary exception to the privilege.8/ Through its challenge, Plaintiff is requesting that this Court narrow or eliminate a well-established and long-standing privilege on which the government has relied in providing advice and representation to federal agencies. Reason and experience counsels against granting Plaintiff's request. In light of the "principle that safeguarding client confidences promotes, rather than undermines, compliance with the law [it is] best to proceed cautiously when asked to narrow the privilege's protections in a particular category of cases." In Re: Grand Jury Investigation, 399 F.3d 527, 531 (2d. Cir. 2005); see also Swidler & Berlin v. United States, 524 U.S. 399, 402-04 (1998) (concluding that the attorney-client privilege "encourage[s] `full and frank communication between attorneys and their clients, and thereby promote[s] broader public interests in the observance of law and the administration of justice.'") (quoting Upjohn Co. v. United States, 449 U.S. 383, 389 (1981)). That it is the government that is asserting the privilege does not dilute the purposes that the privilege is designed to protect: We believe that, if anything, the traditional rationale for the privilege applies with special force in the government context. It is crucial that government officials, who are expected to uphold and execute the law and who may face criminal prosecution for failing to do so, be encouraged to seek out and receive fully informed legal advice. Upholding the privilege furthers a culture in which consultation with government lawyers is accepted as a normal, desirable, and even indispensable part of conducting public business. Abrogating the privilege undermines that culture and thereby impairs the public interest. 399 F.3d at 534; see also Coastal States Gas Corp. v. Department of Energy, 617 F.2d 854, 863 (D.C. Cir. 1980) (where "the Government is dealing with its attorneys as would any private party
8/

Plaintiff's assertions that the work product privilege is subject to the fiduciary exception is addressed infra III.D.2. -9-

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seeking advice to protect personal interests, [it] needs the same assurance of confidentiality so it will not be deterred from full and frank communications with its counselors."). Particularly where, as here, many of Interior's decisions related to the administration of the Indian trust have historically been, and continue to be, closely scrutinized in litigation -- at present, most prominently in Cobell v. Norton, but also in dozens of other cases brought by tribes in the Court of Federal Claims and in other district courts -- the ability of the Secretary of the Interior and her delegates to freely seek and receive fully informed legal advice is critical. The Court should be reluctant to upset a long-established privilege on which the government has depended to ensure government officials seek and receive frank legal advice.9/ "[C]ourts have by reason and experience concluded that a consistent application of the privilege over time is necessary to promote the rule of law by encouraging consultation with lawyers, and ensuring that lawyers, once consulted, are able to render to their clients fully informed legal advice." 399 F.3d at 531 (emphasis added). Recognizing a fiduciary exception would erode the privilege, thus undermining its important value in assisting the government in upholding its trust responsibilities. "A `no harm in one more exception' rationale could contribute to the general erosion of the privilege, without reference to common-law principles or `reason and experience.'" Swidler & Berlin v. United States, 524 U.S. at 410. For these and the reasons explained below, the Court should decline to apply the fiduciary exception to Defendant in this matter. 1. Background and legal standards for the fiduciary exception a. Application of the fiduciary exception to private trusts

The so-called fiduciary exception is a comparatively recent development that has been applied by a relatively small number of courts. The seminal case applying the exception was Riggs National Bank v. Zimmer, 355 A.2d 709 (Del. Ch. 1976). There, a trustee had obtained a legal Despite decades of litigation between Indian tribes and the United States, no Court had held that the fiduciary exception negates the government's privileges until recently in Cobell and Shoshone-Arapaho. See infra III.C.1.b. -109/

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opinion in anticipation of bringing litigation on behalf of the trust, and had paid for that opinion with funds from the trust corpus. The trust beneficiaries sued for reimbursement of the legal fees, and, in connection with that claim, sought to obtain the opinion itself. The trustee claimed that it was privileged, but the court disagreed. It reasoned that the opinion was really procured for the benefit of the trust beneficiaries, "not for the purpose of the trustees' own defense in any litigation against themselves." Id. at 711. In that context, the court decided that it was more important to preserve "the full disclosure necessary in the trustee-beneficiary relationship" than it was to protect the trustees' confidence in the attorney for the trust. Id. at 714. Other decisions have generally issued in the context of shareholder derivative suits, see, e.g., Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970), or with respect to claims under the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. ("ERISA"). See, e.g., Becher v. Long Is. Lighting Co., 129 F.3d 268 (2d Cir. 1997). These cases generally hold that, when acting in a fiduciary capacity, a party cannot assert the attorney-client privilege against a beneficiary about legal advice dealing with its acts as a fiduciary. See 3 WEINSTEIN'S FEDERAL EVIDENCE § 503.11[4][b] at 503-22. The case law suggests two main rationales for the fiduciary exception to the attorney-client privilege. First is the notion that "`as a representative for the beneficiaries of the trust which he is administering, the trustee is not the real client in the sense that he is personally being served.'" United States v. Mett, 178 F.3d 1058, 1063 (9th Cir. 1999) (citation omitted); Riggs, 355 A.2d at 713. Second, the exception has been deemed appropriate where assertion of the attorney-client privilege would contravene the trustee's general duty to disclose to the beneficiaries complete and accurate information about the administration of the trust.10/ Mett, 178 F.3d at 1063; Wildbur v. ARCO Chemical Co., 974 F.2d 631, 645 (5th Cir. 1992); Riggs, 355 A.2d at 714;

10/

Even under the exception, the beneficiary is not, however, entitled to all information about the administration of the trust, only to "such information as is reasonably necessary to enable him to enforce his rights under the trust or to prevent or redress a breach of trust." Restatement (Second) of Trusts § 173, comment c. -11-

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Washington-Baltimore Newspaper Guild v. Washington Star Co., 543 F. Supp. 906, 909 (D.D.C. 1982) (citing Riggs). b. Extension of the fiduciary exception to the Department of the Interior, acting as trustee

This Court extended the fiduciary exception to the relationship between the Department of the Interior, acting as a trustee, and a tribal beneficiary. Order, Shoshone Indian Tribe of the Wind River Reservation v. United States, No. 458a-79L (CFC May 16, 2002). The Court relied on the two rationales addressed above, stating that "the exception derives from a trustee's duty to disclose all information about a plan's administration to the plan's beneficiaries," and that "a trustee, as the representative for the beneficiaries of a trust, is not the `real client' when he seeks advice about the administration of the trust." Id. at 3. The Court concluded that the attorney-client "privilege does not apply to prevent disclosure to beneficiaries of communications between a trustee and its counsel concerning management and administration of the trust." Id. at 3.11/ The United States District Court for the District of Columbia in Cobell v. Norton, 212 F.R.D. 24 (D.D.C. 2002), relied on by Plaintiff in its Objection, held that the attorney-client privilege did not bar Plaintiffs' attorneys from questioning a trustee representative regarding his understanding of advice given to him by trustee's counsel regarding the nature and scope of the trustee's fiduciary duty. The Court stated that the trustee is not entitled to claim the attorney-client privilege except when he "seeks legal advice solely in his own personal interest or where the discovery material has been shown to relate exclusively to non-fiduciary matters." 212 F.R.D. at 30. In holding that the fiduciary exception is inapplicable only when privileged communications relate exclusively to nonfiduciary matters, the Court extended the doctrine beyond prior judicial precedent, which traditionally has found that confidential communications for purposes of seeking legal advice or representation related to the trustee's own liability are privileged, whether or not they also relate to
11/

The documents that the Court addressed related to non-litigation matters. The Court suggested that attorney-client privileged communications related to the trustee's defense of itself against liability are not subject to the fiduciary exception. Id. at 4. Further, the Court did not address whether the fiduciary exception applies to documents protected as work-product. Id. -12-

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fiduciary matters. See infra III.D. This Court should decline to follow Cobell's extension of the fiduciary exception. Indeed, for the reasons explained below, this Court should reconsider its conclusions in Shoshone Indian Tribe and should hold that the fiduciary exception does not apply to the federal agencies acting in their trustee roles. Application of the fiduciary exception to deprive the Secretary of the Interior, the Secretary of the Treasury, and their delegates in their trustee role of the protections generally afforded by the attorney-client and work-product privileges would not further the rationales of the fiduciary exception. Although the rationales may have a basis for private trusts, including trusts governed by ERISA, multiple factors distinguish the trust relationship between federal agencies as trustee and tribal beneficiaries from the private trust relationship making the rationales inapt. 2. The fiduciary exception should not apply to the federal government because the tribal beneficiary is not the "real client" of legal advice provided to the trustee in the same sense as beneficiaries to private trusts a. Even in Trust Matters, Interior receives advice regarding its own federal interests together with advice concerning its responsibilities to the beneficiaries, and thus the tribal beneficiaries cannot be deemed to be the "real client" of the legal advice or representation obtained by the trustee

Cobell and other cases adopting the fiduciary exception have relied extensively on the reasoning in Riggs National Bank v. Zimmer. Riggs' primary rationale for adopting the fiduciary exception was that the beneficiary, not the trustee, was the attorney's client: "As a representative for the beneficiaries of the trust which he is administering, the trustee is not the real client . . . ." 355 A.2d at 713. The Delaware court emphasized that it was following several nineteenth-century English precedents, especially Talbot v. Marshfield, 2 Drew & Sm. 549, 62 Eng. Rep. 728 (Ch. 1865). See 355 A.2d at 712. The court remarked that "Delaware is a State with a strong English common law tradition, and English authorities, both at law and in equity, even as to matters of persuasion, perhaps have more weight here than elsewhere." Id. The court's reliance upon English law for this point was misplaced, however, because English trust law differs fundamentally from American trust law on the underlying question of the -13-

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scope of the beneficial interest in the trust. In English law the beneficiaries are regarded as equitable owners of the trust property.12/ Hence, they are entitled to terminate the trust at will. American law, by contrast, gives great weight to the intention of the settlor: Where its [the trust's] continuance is necessary to carry out a material purpose of the trust, . . . it is held in most jurisdictions in the United States that the beneficiaries cannot compel the termination of the trust. In England, on the other hand, it is immaterial whether the purposes of the trust have been carried out or not; the beneficiaries, if they all agree and are all sui juris, can at any time insist on its termination. 4 AUSTIN W. SCOTT & WILLIAM F. FRATCHER, THE LAW OF TRUSTS § 337, at 432-33 (4th ed. 1989). Accordingly, in American trust law involving private and charitable trusts, because the trustees owe a fiduciary duty to carry out the intentions of the settlor, a court should not treat trustees as mere representatives for the beneficiaries. The need to avoid treating the trustee as the mere representative of the beneficiaries is even more stark where a federal agency is acting as a trustee. The federal agencies responsible for fulfilling fiduciary obligations toward Indian tribes owe, in the first instance, a duty to carry out the direction of Congress as set forth in legislation specifying the agencies' statutory trust duties.13/ The government's duties and powers concerning trust matters, particularly those of the Department of the Interior, are thus not merely derivative of the property interests of the beneficiaries; the protection of Indian interests is a distinct and sovereign governmental function.14/ See United States
12/

See Mesce v. Gradone, 1 N.J. 159, 165, 62 A.2d 394, 396 (1948) ("The English authorities are of no force here because of our fundamentally divergent view of the power of the settlor and the beneficiaries of a trust over the trust res. In England the beneficiaries of the trust may by united action terminate, notwithstanding the fact that to do so may nullify the intention of the settlor. . . . In this State it is the intention of the settlor of the trust that governs and not the desire of the beneficiaries.").
13/

Indeed, because the trust of the Osage Tribe is a statutory trust wherein the trustee's duties must be founded, in the first instance, in statutes, regulations or treaties, see United States v. Navajo Nation, 537 U.S. 488, 506 (2003) (citing Mitchell v. United States, 463 U.S. 206, 216-17, 219 (1983)), the Secretary must comply with federal law governing her fiduciary duties, not with a trust instrument such as in private trusts.
14/

Even if one considered the private trust context as an analogy to the federal trust relationship with Indian tribes, the beneficiaries should not be deemed the "real client" of legal advice. Under (continued...) -14-

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v. Candelaria, 271 U.S. 432, 443-444 (1926); United States v. Minnesota, 270 U.S. 181, 194 (1926); Heckman v. United States, 224 U.S. 413, 437 (1912); see also Indian Commerce Clause, U.S. Const. art. I, § 8, cl. 3. And, when the United States acts to fulfill its statutory duties, it has a governmental interest independent of the interests of the tribes or individual entities. For example, in Heckman, the United States brought an action to cancel conveyances of restricted fee allotments by individual Cherokee Indians. The defendants challenged the standing of the United States to bring an action to enforce the restrictions on the alienation of these allotments. The Court reasoned that "[a] transfer of the allotments is not simply a violation of the proprietary rights of the Indian. It violates the governmental rights of the United States . . . . The authority to enforce restrictions of this character is the necessary complement of the power to impose them." Heckman, 224 U.S. at 438. Based on this analysis, the Court held that the United States had standing to bring such an action in its own right, independent of the rights or participation of the Indian allottees. Id. at 444.15/ In subsequent cases, the Supreme Court has clarified that the United States' governmental interests in Indian allotments are legally distinct from those of the allottees. In United States v. Minnesota, 270 U.S. at 195, the United States sought to invalidate the conveyance of lands set aside for Indians to the State of Minnesota by patent. The Court concluded that the fact that the 11th

(...continued) such an analogy, Congress would be, in essence, acting as a settlor. As explained above, the trustee, under American private trust law, should be obliged to carry out the intentions of the settlor, not the beneficiaries, undermining the concept of the federal trustee acting as the mere representative of the tribal beneficiaries.
15/

14/

The Court stated that the "presence [of the allottees] . . . could not add to, or detract from, the effect of the proceedings to determine the violation of the restrictions and the consequent invalidity of the conveyances. As by act of Congress they were precluded from alienating their lands , they were likewise precluded from taking any position in the legal proceedings instituted by the Government to enforce the restrictions which would render such proceedings ineffectual or give support to the prohibited acts."

Id. at 445. -15-

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Amendment would bar suits by Indians to cancel unlawful land transactions does not bar such a suit by the United States. The Court stated that the interest of the United States entitling it to pursue the case against the state "arises out of its guardianship over the Indians, and out of its right to invoke the aid of a court of equity in removing unlawful obstacles to the fulfillment of its obligations, and in both aspects the interest is one which is vested in the sovereign." Id. at 194 (citations omitted). See also Privett v. United States, 256 U.S. 201, 202-03 (1921) (an earlier suit by the allottee regarding the conveyance is not binding on the United States); Bowling v. United States, 233 U.S. 528, 535 (1914) (same). The independence of the governmental interests from those of tribal beneficiaries is underscored in situations where the United States considers bringing a lawsuit to fulfill the interests of a Tribe. Even in such a situation ­ a context analogous to that facing the court in Riggs when it adopted the fiduciary exception ­ no attorney-client relationship between the federal government and the Tribe is established such that the Tribe may receive confidential government communications related to its consideration of whether to bring the suit. In Shoshone-Bannock Tribes v. Reno, 56 F.3d 1476 (D.C. Cir. 1995), for example, the Tribe sued the Department of Justice for declining to bring a suit to establish certain water rights on behalf of the Tribe. The Court held, inter alia, that "there was no attorney-client relationship between the United States and the Tribes with respect to the off-reservation water claim." 56 F.3d at 1483. It found that neither an express agreement, conduct of the United States, nor legislation created such a relationship. Id. Thus, in contrast to a private trustee, who has no interest separate from the beneficiary, when federal agencies perform a fiduciary function derived from legislation, they are, first and foremost, fulfilling congressional direction and upholding independent governmental interests and rights, even if individual Indians or tribes are the beneficiaries of the fiduciary function. Accordingly, when the United States obtains legal advice in furtherance of these statutory functions, the "real client" of such advice should not be deemed to be individual Indians or tribes, but the Secretary of the Interior or other federal agencies. For this reason, the fiduciary exception should not apply to the United -16-

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States. b. Federal agencies owe a duty to fulfill the many directives of Congress, not only those involving Indian tribes, thus the Indian tribes cannot be deemed the "real client" of legal advice or representation obtained by federal agencies acting as trustees

The protection of Indian interests is not the only sovereign governmental function that the United States must statutorily undertake and other duties may, in fact, compete with federal obligations to Indian tribes. The Supreme Court has stated that the United States does not have an undivided duty of loyalty to Indian tribes. Nevada v. United States, 463 U.S. 110, 142 (1983). In Nevada, the Supreme Court considered whether an Indian Tribe was bound under res judicata to a previous judicial decree. The prior judgment involved a case in which the United States brought suit to fulfill its duties to both an Indian tribe and a water-reclamation-project organization. The Tribe argued that it was not bound by the judgment because the government had compromised its duty of undivided loyalty by representing adverse interests. The Court rejected the argument, explaining that, "where Congress has imposed [other duties] upon the United States, in addition to its duty to represent Indian tribes, the analogy of a faithless private fiduciary cannot be controlling for purposes of evaluating the authority of the United States to represent different interests." 463 U.S. at 142; cf United States v. Navajo Nation, 537 U.S. 511, 512-14 (2003); compare Restatement (Second) of Trusts 170 (in a private trust context, "[t]he trustee is under a duty to the beneficiary to administer the trust solely in the interest of the beneficiary."). Likewise, in Miccosukee Tribe v. United States, 980 F. Supp. 448 (S.D. Fla. 1997), a district court addressed whether Interior, acting through the National Park Service, breached its trust duties when it refused to alleviate flooding on the Tribe's reservation. The Court held that "Congress authorized the Park Service to weigh competing interests" before taking action and, thus, Interior had not breached its trust duties to the Tribe. 980 F. Supp. at 460-62. See also 43 U.S.C. § 1457 (setting forth the duties of the Secretary of the Interior). Of course, the fact that federal agencies have other duties or conflicting responsibilities does not relieve them of their obligations to fulfill their legal duties related to the Tribe. But, Congress -17-

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accords the agencies the discretion they need to decide how to fulfill all of their duties, and the exercise of such discretion would certainly be among the subjects for which the agencies must seek and obtain legal advice. Protection for the confidentiality of such advice is at the heart of the purpose for which the attorney-client privilege is recognized. For that reason, application to the federal agencies of the fiduciary exception cannot be based solely on consideration of trust law, but also must be construed in light of the agencies' other obligations and their need for legal advice in determining how to carry out competing duties. Because federal agencies are often charged with protecting competing interests, including some potentially adverse to a Tribe's interests, the fiction cannot hold that the "real client" of the agencies' attorneys is the Tribe. The fiduciary exception should, therefore, not apply to the federal agencies. c. Congress has not recognized tribal beneficiaries as the "real client" of the legal advice of federal agencies fulfilling their fiduciary duties such that they are entitled, under the fiduciary exception, to privileged documents of the agencies

Congress has neither recognized nor countenanced a trust relationship whereby a tribal beneficiary is the "real client" in interest of legal advice or representation provided to the federal trustee. Congress has not directly spoken to the application of a fiduciary exception to Interior or other agencies, but legislation addressing privileges show that Congress did not intend the fiduciary exception to apply to the United States as a matter of course and did not intend Indian tribes to have free and unconditional access to governmental attorney-client communications. For example, Congress has, at least on one occasion, specifically prohibited the disclosure to Indians of privileged documents of Interior. In 1966, Congress enacted legislation that provided a statute of limitations period for pre-1966 contract and tort suits for damages brought by the United States on behalf of Indians. 24 U.S.C. § 2415; County of Oneida v. Oneida Indian Nation of New York States, 470 U.S. 226, 241-43 (1985). On four occasions between 1966 and 1982, Congress extended the time within which the United States could bring suits on behalf of Indians. 470 U.S. at 242. In the Indian Claims Limitation Act of 1982, Pub. L. 97-394, 96 Stat. 1976, Congress established a method for final resolution of the pre-1966 claims. See notes to 28 U.S.C. § 2415. The -18-

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Act established a system whereby the Secretary of the Interior would compile and publish in the Federal Register a list of all Indian claims to which the statute of limitations provided in 28 U.S.C. § 2415 applied. Pub. L. 97-394, § 3(a). The Secretary would also notify those Indians who might have an interest in any such claims and give them an opportunity to submit additional claims to be compiled and published on a second list. Id. § 4. No statute of limitations would run on the claims on the lists until the Secretary acted upon them or formally rejected them. 470 U.S. at 243. If the Secretary rejected a claim, he was obligated to send a report advising Indians whose rights would be affected by the rejection, which report would identify the nature and location of each rejected claim, the reason for the rejection of the claim, and other information. Pub. L. 97-394, § 5(b). Even though the Secretary of the Interior was fulfilling a statutory fiduciary duty by exercising his discretion regarding the listing or rejection of claims that the United States could bring on an individual Indian's or Tribe's behalf, Congress did not require Interior to share privileged information with the individual Indian or Tribe: "Upon the request of any Indian claimant, the Secretary shall, without undue delay, provide to such claimant any nonprivileged research materials or evidence gathered by the United States in the documentation of such claim." Id. (emphasis added). From Congress' perspective, a Tribe's status as beneficiary and Interior's fiduciary obligations did not require disclosure to the Tribe of Interior's privileged communications. Congress specifically recognized Interior's privileges vis a vis individual Indians and tribes.16/ The Freedom of Information Act ("FOIA") also shows that Congress has not deemed established privileges inapplicable when governmental programs involve trust responsibilities. Upon request, FOIA requires federal agencies to disclose records, 5 U.S.C. § 552, unless the documents fall within an enumerated exemption, id. § 552(b). Exemption 5 of FOIA protects from disclosure "inter-agency or intra-agency memorandums or letters which would not be available by
16/

Congress's use of the term "nonprivileged" would make no sense in this context, if the fiduciary exception barred any claim of privilege by the United States. Moreover, if the fiduciary exception applied, the term "nonprivileged" would be rendered surplusage, in violation of the canon that courts should not treat statutory terms as "surplusage." Duncan v. Walker, 533 U.S. 167, 167 (2001). -19-

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law to a party other than an agency in litigation with the agency." 5 U.S.C. § 552(b)(5). Courts have incorporated civil discovery privileges, including the attorney-client privilege, attorney work product, and the deliberative process privilege, into the protections of Exemption 5. See, e.g., Coastal States Gas Corp., 617 F.2d at 862. Normally, exemption 5 allows federal agencies to withhold privileged documents related to its trust duties from the public.17/ But such privileged documents may not be withheld under exemption 5 if they have already been produced to a Tribe. The Supreme Court has held that communications between Interior and a Tribe, who is acting as an interested party in a matter as opposed to an uninterested consultant, are not protected under Exemption 5 because they are not inter-agency or intra-agency communicatio