Free Motion for Reconsideration - District Court of Arizona - Arizona

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SUSAN MARTIN (AZ#014226) DANIEL L. BONNETT (AZ#014127) JENNIFER KROLL (AZ#019859) MARTIN & BONNETT, P.L.L.C. 3300 N. Central Avenue, Suite 1720 Phoenix, Arizona 85012-2517 Telephone: (602) 240-6900 [email protected] [email protected] [email protected] Attorneys for Plaintiffs IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA
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Barbara Allen, Richard Dippold, Melvin Jones, Donald McCarty, Richard Scates and Walter G. West, individually and on behalf of all others similarly situated, Plaintiffs,

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vs.
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Honeywell Retirement Earnings Plan, Honeywell Secured Benefit Plan, Plan Administrator of Honeywell Retirement Earnings Plan and Plan Administrator of Honeywell Secured Benefit Plan, Defendants.

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) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

No. CV04-0424 PHX ROS

Motion to Reconsider Order Re: Discovery Dispute

Pursuant to LRCiv. Rule 7.2(g), Plaintiffs hereby request the Court to reconsider its
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Order dated December 18, 2007 (Doc. 349) holding that Plaintiffs will not be allowed
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discovery into the motivation of the Treasury Department regarding the letter dated August
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7, 2007 from Eric Solomon, Assistant Secretary (Tax Policy), Department of the Treasury,
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to Jim McCrery, Ranking Member, House Comm. on Ways & Means ( Solomon letter ).
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Plaintiffs do not seek discovery into the mental or thought processes of Mr. Solomon. AS
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set forth in Plaintiffs response to Defendants November 16, 2007 Motion for
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Reconsideration, the Solomon letter is clearly erroneous, is in conflict with the applicable
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regulations and purports to interpret regulations which are not ambiguous in relevant respects. It is not entitled to Auer-type deference. Because the Solomon letter lacks the force of law and does not merit Chevron-style deference, the information Plaintiffs seek will have a direct bearing on this Court s ability to assess the degree of the agency s care, its consistency, formality, and relative expertness, and the persuasiveness of the agency s position in order to determine if the Solomon letter is entitled to any respect. United States v. Mead, 533 U.S. 218, 228 (2001); Christensen v. Harris County, 529 U.S. 576, 587 (2000)(agency opinion letter lacking formal adjudication or notice and comment process not entitled to force of law or Chevron-style deference). Plaintiffs hereby present new or additional facts which they could not present to the Court in the one and one half pages allotted them in the Joint Statement filed by the parties setting forth the nature of the current discovery dispute. In accordance with LRCiv 7.2(g), Plaintiffs respectfully suggest that manifest error occurred with regard to the Order denying discovery and that specific matters in support of Plaintiffs position were overlooked or misapprehended by the Court. Accordingly, Plaintiffs believe good cause exists for the Court to reconsider its December 18, 2007 Order (Doc. 349) and permit Plaintiffs the opportunity to conduct discovery regarding the circumstances surrounding the existence and content of the Solomon letter. This motion is supported by the following memorandum of points and authorities, the exhibits attached hereto and the record presently before this Court. MEMORANDUM OF POINTS AND AUTHORITIES I. PROCEDURAL BACKGROUND

Pursuant to the Court s Discovery Dispute Instructions, the parties jointly called the Court on December 6, 2007 to advise of the current discovery dispute surrounding the Solomon letter and received instructions from the Court s clerk to submit a joint statement to Chambers not to exceed three pages in length by 8:00 a.m. on December 7, 2007. The joint statement was to outline the nature of a discovery dispute in summary fashion and set
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forth the respective position of the parties on whether discovery is appropriate concerning what Plaintiffs have described is the historical context, sequence of events and surrounding circumstances that produced the Solomon letter as well as what was considered, encouraged, incorporated and/or excluded from its content by the Treasury Department. Plaintiffs forwarded their portion of the joint statement to Defendants on December 6, 2007 at approximately 6:26 p.m. Plaintiffs did not receive Defendants portion of the joint statement until approximately 9:19 a.m. on December 7 by email. Upon receipt and review, Plaintiffs were required to advise Defendants that their portion of the statement was too long thereby exceeding the three page limit in the aggregate. Given Plaintiffs understanding of the Court s instructions to file the joint statement by 8:00am, after Defendants re-sent their portion of the statement almost two hours past 8:00 a.m. MST, Plaintiffs merged Defendants resubmitted statement into the Joint Statement (Doc.337) and faxed the document to Chambers as instructed. Accordingly, Plaintiff s had no opportunity to respond to Defendants incorrect assertion that Plaintiffs seek to explore Mr. Solomon s motives. On December 11, 2007, the Court issued an electronic text only order advising the parties that the Court would hold a telephonic conference call at 3:00 p.m. on December 18, 2007 to address the discovery dispute. On December 18, 2007, the Court entered an Order vacating the telephonic status conference and advising the parties that an order would follow. The ensuing Order (Doc. 349) denied Plaintiffs request to conduct discovery concerning the Solomon letter. Plaintiffs believe that this motion to reconsider the

Court s December 18, 2007 Order (Doc. 349) is warranted and that the requested discovery is appropriate and necessary for the Court to determine what respect, if any, to afford the Solomon letter. II. RELEVANT MATERIAL FACTS argument in their Motion for

The Court has characterized Defendants

Reconsideration as stating that the Solomon letter purportedly explains the Department of
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the Treasury s position on the meaning of a 1977 regulation interpreting ERISA s anticutback provisions, 29 U.S.C. § 1054(g)(1), which is at the heart of this lawsuit. (Doc. 349 at p.1) The Solomon letter, however, did not exist prior to August 7, 2007, 30 years after adoption of the 1977 regulations and two years after the agency acknowledged that the 1977 regulations were completely replace[d] by the 2005 final regulations although

acknowledging that prior rules generally carried over. 70 Fed. Reg. 47109, 47110-11 (2005) ( Overview ). The only evidence in the record shows that the Solomon letter exists solely as a result of a three page letter signed by two Congressman and two Senators dated one month earlier, July 9, 2007 (the Solicitation Letter ), soliciting an opinion from the Treasury Department consistent with their own interpretation of the 1977 regulations which they labeled the simultaneous amendment rule. (Doc. 323 at Tab G ) Despite the clarity of the regulation that the 1977 rules were completely replaced by the 2005 regulations, the four Members of Congress erroneously asserted in the Solicitation Letter that the Treasury Department had made it clear that the rules articulated under the 1977 regulations were not affected by the final regulations issued in 2005. (Doc. 323, at Tab G) The Solicitation Letter asserted that the regulations have caused some confusion and proceeded to lay blame for the alleged confusion on the section of the Preamble relied on by this Court in its ruling denying Defendants original motion for reconsideration (Doc. 138 pp.10,12.) The Solicitation Letter proceeds to tell the Treasury Department what Treasury meant in the preamble to the 2005 final regulations and that the regulations (despite contrary rules and explicit language that they were being replaced) were not intended to override the standard for applying the simultaneous amendment rule as set forth in the 1977 and 2005 regulations. The four paragraph Solomon letter, responding to the Solicitation Letter, acknowledges that the 2005 final regulations were the product of a long notice and comment process which began in 1998, culminated in August 2005 and was based on the entire record, including not only the written comments received, but also testimony at a
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public hearing that was held on June 24, 2004.". See Administrative Procedures Act ( APA ), 5 U.S.C.§ 551 et. seq., describing formal administrative rule-making process as consisting of, inter alia, issuing proposed regulations, soliciting comments, holding hearings and issuing and publishing final regulations. The Solomon letter actually validates this Court s prior ruling that the 2005 regulations are prospective and apply for amendments adopted after August 11, 2005. (the date of the final regulations were published in the Federal Register) . (Doc. 323 Tab A) (Emphasis added) Without explanation or mention of the source of any authority to support its statement, the Solomon letter describes the 1977 regulations using a term appearing in neither the 1977 nor the 2005 regulations as follows: The virtually identical simultaneous amendment rule in the 1977 regulations would apply to amendments adopted and effective prior to the effective date of the 2005 final regulations. Moreover, the interpretive conclusion in the 2005 final regulations is by logic equally applicable to periods before the effective date.1 (Emphasis added) The Solomon letter was not officially made public either in the Federal Register as required by the APA for legislative regulations intended to have the force of law or in any of the myriad of other publications and systematic methods of communication utilized by

As set forth in Plaintiffs response to Defendants motion for reconsideration filed on December 21, 2007, the 1977 and 2005 regulations are plainly not virtually identical. They differ in numerous and significant ways. First, the 1977 regulations require that in order for more than one amendment to be treated as one plan amendment, the amendments must have the same adoption and effective dates whereas the 2005 regulations require that amendments must have the same applicable amendment date, which is a defined term under the 2005 regulations and means the later of the effective date of the amendment or the date the amendment is adopted. (Emphasis added) 26 C.F.R. § 1.411(d)-3(g)(4). Unlike the 1977 regulations, the 2005 regulations apply for the first time to early retirement benefits (which are at issue in this case) and to retirement-type subsidies and optional forms of benefits. The 2005 regulations introduce a myriad of rules and clarify that the anti-cutback rule protects participants who satisfy the pre-amendment condition for the benefit. In conflict with Mr. Solomon s conclusion that the 1977 regulations were virtually identical , the Preamble to the 2005 regulations merely recites that the rules in the former regulation generally have been carried over.
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the Department of Treasury or Internal Revenue Service.2 An article about the Solomon letter was included in the Bureau of National Affairs (BNA) September 18, 2007 issue of Daily Reports for Executives in which BNA announced it had obtained the letter on September 17, 2007, but does not identify the source. (Doc. 323 Tab B.) When queried, Michael Wyand, the reporter of the BNA article, refused to disclose from whom he had obtained the Solomon letter or to clarify whether it was from a private party or a government source, saying only that such information was confidential and that keeping it confidential was his method of ensuring continued receipt of these types of documents. 3 (Declaration of Jennifer Kroll in Support of Plaintiffs Opposition to Defendants Motion for Reconsideration ( Kroll Decl. ) ¶ 3) Tthe Solomon letter appears to be the result of an intense lobbying campaign on the part of Honeywell in apparent response to Plaintiffs claims in this case and this Court s

The Treasury and IRS s Regulations, policy statements and interpretations take various forms and are issued with different degrees of formality, publicity and legal effect. IRS Prac. & Proc. ¶ 3.01, table 3.1. Among the forms of binding guidance or guidance meant to be generally relied upon are: Treasury regulations which are published in the Federal Register, Revenue Rulings which are published in the Internal Revenue Bulletin, Revenue Procedures, which are also published by the Internal Revenue Service. Id., Table 3.1. Certain forms of guidance that are meant to be binding only as to the party to whom the guidance is issued include Letter rulings and technical advice, which are publicly available for inspection under I.R.C. § 6601. Id. Sources of information and guidance that are generally not binding on the IRS or taxpayers include the Internal Revenue Manual which is not published, information letters which are issued only to the requestor, IRS publications which are published by the IRS and oral communications which are also not published. Id. Contrast this with the unsubstantiated representations in Defendants motion that on September 18, 2007, the U.S. Treasury Department made public the Solomon letter. (Defs. Br. p. 2.) Contrary to Defendants unsupported representation, there is no evidence before this Court that Treasury or any other government official either made the letter public, approved of its being made public or intended to do so. Nor is there anything in the record before this Court to support Defendants assertion that the Solomon letter was separately addressed and sent to each of the four signatories of the July 9 letter. (Defs. Br. p. 8.) As explained below, the unexplained appearance of the Solomon letter in the BNA publication does not meet the requirements of the APA.
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summary judgment ruling.

Public records available through the Senate s website

http://sopr.senate.gov/ show that Honeywell used internal employees to lobby and spent considerable sums since 2004 retaining, inter alia, the law firm of Akin Gump Strauss & Feld LLP to lobby on its behalf including lobbying members of the U.S. Senate, the U.S. House and Treasury including, inter alia, lobbying on pension laws and Treasury regulations. Honeywell s Akin Gump lobbyists included former Congressional staff members. See records at http://sopr.senate.gov. Two of the lobbyists at Akin Gump engaged by Honeywell, Jeffrey McMillan and Jayne Fitzgerald, state on Akin Gump s website, www.akingump.com, that they had previously worked for the House Ways and Means Committee's Subcommittee on Select Revenue Measures. See www.akingump.com. Mr. McMillen was Staff Director of the Subcommittee on Select Revenue Measures chaired by Representative Jim McCrery, a Shreveport, Louisiana Congressman representing northwest and west central Louisiana. Id. Congressman McCrery is one of the authors of the Solicitation Letter and the recipient of the Solomon letter. (Doc. 323 Tabs A & G.) Ms. Fitzgerald, another Akin Gump lobbyist for Honeywell during 2007, states that she served as tax counsel to the House Ways and Means Committee s Subcommittee on Select Revenue Measures under Congressman Charles Rangel, another signatory to the Solicitation letter. (Id.) Robert Leonard, another Akin Gump lobbyist also served as chief counsel and staff director to the Committee on Ways and Means. www.akingump.com Public records on campaign contributions, available at www.fec.gov, show that from 1999 (the earliest date searchable on the FEC website) though 2005, the Honeywell Political Action Committee ( PAC ) contributed nothing toward any of Congressman McCrery s political campaigns. (Kroll Decl. ¶ 4 & Exh. A.) However, beginning on or about February 14, 2006, the Honeywell PAC made a $2,000 campaign contribution to Congressman McCrery, and thereafter, made a series of other contributions totaling $9,500 in 2006. (Id.) In 2007, the Honeywell PAC contributed a total of $10,000 to Mr. McCrery s campaign, the legal maximum. (Id.) 42 U.S.C. § 441a. Likewise, the Akin Gump PAC contributed
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$1,000 to Mr. McCrery s campaign in 1999 and again during the 2002 election cycle. In 2006, however, Akin Gump s PAC contributed $5,000 to Mr. McCrery s campaign the day before Honeywell donated the first of its 6 campaign contributions in 2006.4 After making this discovery, Plaintiffs submitted a request for documents pursuant to the Freedom of Information Act. (Exhibit A ) At the same time, Plaintiffs also wrote a letter to counsel to Defendants requesting supplementation of responses to discovery previously submitted to Honeywell during the course of this litigation. Copies of the related correspondence and excerpts of the discovery requests are attached hereto as Exhibit B. In addition, Plaintiffs also served subpoenas duces tecum on Honeywell and the law firm of Akin Gump. (Exhibit C ) Letters objecting to the subpoenas were sent by Akin Gump and Honeywell (Id.) Shortly thereafter, Plaintiffs also served subpoenas on the Department of Treasury and Eric Solomon, the purported author of the Solomon letter. (Exhibit D ). Objections to the Treasury Department subpoenas was received by Plaintiffs counsel on the morning of December 21, 2007. (Id.) These discovery requests were served because the above events raise legitimate and relevant questions about the Solomon letter, issued just one month after the Solicitation Letter, in contrast to the thirty year silence regarding the 1977 regulations and near 8 year process of study preceding the final 2005 regulations. The events also call into questions whether the Solomon letter was reasoned and considered as Defendants would have this Court believe or, whether as Plaintiffs believe, it came into existence under circumstances demonstrating an absence of thorough and reasoned review of the relevant issues that it should be afforded no respect. Plaintiffs believe they should be permitted to discover what Mr. Solomon had when he responded to the Solicitation Letter and who provided it to him so that this information may be considered by the Court in reaching its

Contributions to Mr. McCrery s campaign were also made by individual attorneys working for Honeywell from the firms of Akin Gump and from Covington & Burlington, one of whom has filed a declaration in this case. (Kroll Decl. ¶ 5.)
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decision regarding what respect, if any, the Solomon letter is entitled to receive. III. LAW AND ARGUMENT

The Court s December 18, 2007 Order misapprehends Plaintiffs discovery objectives. Plaintiffs do not seek to probe Mr. Solomon s mental processes. Instead, they seek to discover the objective evidence surrounding the creation and content of the Solomon letter. The Court s Order cites Bassiri v. Xerox Corp., 463F.3d 927, 930 (9th Cir. 2006) which states that an agency s interpretation of its own regulation is controlling unless plainly erroneous or inconsistent with the regulation. Citing also Citizens to Preserve

Overton Park, Inc. v. Volpe, 401 U.S. 402, 420 (1971), Auer v. Robbins, 519 U.S. 452 (1997) and Checkosky v. SEC, 23 F.3d 452, 489 (D.C. Cir. 1994), the Court determined that inquiry into the mental processes of administrative decision-makers is inappropriate absent a strong showing of bad faith or improper behavior. The objective circumstances involving the Solomon letter, however, are relevant because that letter purports to interpret unambiguous terms of the 1977 and 2005 regulations. Furthermore, Auer deference is not appropriate because the Solomon letter is inconsistent with the regulations and is plainly erroneous. Plaintiffs believe Bassiri is distinguishable and not controlling. Unlike this case, Bassiri dealt with an ambiguous term appearing in a regulation that was clarified by the Department of Labor in eleven separate opinion letters officially published at various times over a 15 year period. Because the court of appeals found the regulation at issue in Bassiri to be ambiguous, it deemed Auer applicable and gave deference to the Department of Labor s earlier opinion letters which defined the term normal compensation which appeared in the language and context of the regulation.5 Curiously, in reaching its result, the three-judge appellate court panel sidestepped explicit language found in a post-Auer United States Supreme Court decision. See Christensen V. Harris County, 529U.S. 576, 577 (2000) (explaining why agency opinion letters are not entitled to Chevron-style deference because they lack the formality of the notice and comment process required by the APA: Interpretations such as those in
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As explained more fully in Plaintiffs response to Defendants motion for reconsideration, the 2005 and 1977 regulations are not ambiguous in relevant respects. Solomon s conclusion that the regulations are virtually identical and his use of

terminology not contained in either the 1977 or 2005 regulations are in conflict with the regulations and are plainly erroneous. After nearly eight years of notice and comment, solicitation and consideration (following a thirty year period of silence regarding the 1977 regulations), the Solomon letter is inconsistent with the regulations he purports to explain.6 In fact, this Court has already found that the preamble to the 2005 regulations could not be more clear with regard to the fact that the regulations apply only prospectively (i.e after August 12, 2005). (Doc. 138 p. 12) Consequently, there is no ambiguity with regard to the 2005 regulations or their application to the facts of this case. Accordingly, it is likely the Court will conclude that neither Bassiri nor Auer are applicable. Rather, the Court will need to independently analyze the Solomon letter to see if it is entitled to any respect and, if so, to what degree.

opinion letters like interpretations contained in policy statements, agency manuals and enforcement guidelines, all of which lack the force of law do not warrant Chevron-style deference. (Citations omitted) Instead, interpretations contained in formats such as opinion letters are entitled to respect, under our decision in Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89L Ed. 124 (1944), but only to the extent that those interpretations have the power to persuade. (Citations omitted)(Emphasis added)). For example, the Solomon letter utilizes the term applicable effective date. This term appears in neither the 1977 nor the 2005 regulations nor do the words simultaneous amendment rules. Notwithstanding, Mr. Solomon states, [t]hus the IRS would not challenge an amendment as a prohibited cutback if it has the same applicable effective date as another amendment... . Given the letter s novel formulation and reliance on terminology not contained in the referenced regulations, it should be entitled to no deference. See Hemp Industries Association v. Drug Enforcement Administration, 333 F.3d 1082, 1091 (9th Cir. 2003)( An agency is not allowed to change a legislative rule retroactively through the process of disingenuous interpretation of the rule to mean something other than its original meaning. ); Oregon Natural Resource Council Fund v. Brong, 492 F.3d 1120, 1125 (9th Cir. 2007)( administrative agency s interpretation of its own regulation does not control where . . . it is plainly inconsistent with the regulation at issue. ).
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The Supreme Court in United States v. Mead Corp., 533U.S. 218, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001), citing Skidmore v. Swift & Co., 323 U.S. at 139-140, instructs that the weight to be given to the category of agency action into which the Solomon letter clearly falls will, [V]ary with circumstances, and courts have looked to the degree of the agency s care, its consistency, formality, and relative expertness, and to the persuasiveness of the agency s position . . . . and will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control. 533U.S. at 228. Consequently, discovery is needed in order to properly analyze the Skidmore criteria. Justice Souter explains that the merit of administrative conduct such as Mr. Solomon s will surely require consideration of the writer s thoroughness, logic, and expertness, its fit with prior interpretations, and any other sources of weight. 533U.S. at 235. Courts also consider statements made by the administrative agency at the time the regulations are promulgated to determine what an agency meant or intended with regard to a particular regulation or administrative rule. Here, Treasury chose to remain silent on the intent of the so called simultaneous amendment rule under the 1977 regulation, for 30 years. To purport to clarify its meaning two years after it has been replaced certainly warrants consideration of the evidence Plaintiffs seek. In Southeast Alaska Conservation Counsel v. U. S. Army Corp of Engineers, 486 F.3d 638 (9th Cir. 2007), the Ninth Circuit reversed and remanded a lower court decision upholding the issuance of a permit by the Environmental Protection Agency based upon the EPA s arbitrary application of a surmised intent regarding a regulatory definition as justification for issuing the permit. The dispute centered around language contained in the Clean Water Act and regulations defining fill material and its application to frothfloatation mill operations. In reconciling two different regulations, each equally applicable but seemingly in conflict and attempting to determine their intent, the court stated,

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Courts consider contemporaneous explanations of regulations, such as those published in the Federal Register through noticeand-comment rulemaking, in order to determine an agency s intent. (Citations omitted) And courts will not defer to an agency s interpretation of a regulation that contradicts the agency s intent at the time it promulgated the regulation. 486 F.3d at 648.Instead, the appellate court looked at the definitions found in the current regulations as the proper source for determining the agency s intent. When the agencies promulgated the current definition in 2002, they foresaw and specifically addressed the potential conflict between the effects-based definition of fill material and performance standards already in place. To that end, the agencies explicitly stated that wastes subject to performance standards and effluent limitations would not be considered fill material. The Corp s application of the fill rule in this case, therefore, contradicts its interpretation at the time the regulation was promulgated. 486 F.3d at 648-649. Similarly, in this case, when the 2005 regulations were finalized by the Department of Treasury following the formal notice and comment period under the APA, a process explicitly recognized in the Solomon letter, a preamble was included in the 2005 regulations which unambiguously states that the relevant regulations apply prospectively and only to amendments adopted after the effective date (i.e., August 12, 2005). For amendments adopted prior to that date, however, the preamble makes it unambiguously clear that issues involving the so-called simultaneous amendment rule are to be resolved under applicable authority. In this Circuit, the applicable authority is Michael v. Riverside Cement, as this Court has recognized on repeated occasions. To the degree Defendants claims that the Solomon letter permits a contrary conclusion, it is inconsistent with the 2005 regulations. Despite this clear inconsistency and contradiction of the plain meaning of the language in the 2005 Preamble, Defendants argue that the Solomon letter should be afforded some respect by this Court. Plaintiffs respectfully disagree. The Solomon letter is nothing more than a solicited response to a letter that offers its own interpretation of an unambiguous regulation in a manner clearly inconsistent with the plain language of the 2005

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regulations and prior application of the 1977 regulations.7 On June 22, 2004, during the notice and comment period preceding the final 2005 regulations, the ERISA Industry Committee ( ERIC ) submitted comments regarding the Proposed §411(d)(6) Regulations which included, inter alia, a request for interpretation of the so-called simultaneous amendment rule and requested that clarification appear in the 2005 final regulation. (Kroll Decl. ¶ 6 Exhibit B) Notwithstanding ERIC s request, the Treasury Department, after full notice and comment and a hearing, elected not to do so choosing instead to state in the preamble that application of the anti-cutback rule and the simultaneous amendment rule for amendments effective prior to August 12, 2005 would be enforced according to applicable authorities. Despite Treasury s official position to remain silent, the Solomon letter seeks to offer an interpretation the agency declined to issue during the notice and comment period. Only after Plaintiffs had prevailed on summary judgment in this case, did the Solomon letter appear out of thin air purporting to interpret for the first time a regulation no longer in existence. It is for these reasons that Plaintiffs described the circumstances surrounding the existence of the Solomon letter as peculiar. Obviously, these facts can best be developed by permitting Plaintiffs the discovery they seek. Plaintiffs discovery efforts target Skidmore criteria.8 It is noteworthy that in the approximate 30 year period preceding the 2005 current regulations and in the seven year period from 1998 through 2005 that Asst. Secy. Solomon recites constituted the long process resulting in the 2005 regulations, the post hoc interpretation of the 1977 regulations now offered in the Solomon letter was not preceded by a single Treasury interpretation of the supposedly simultaneous amendment rule. Even if Plaintiffs were required to show bad faith or improper behavior, associated with the Solomon letter (a requirement absent from Mead and seemingly more properly associated with adjudicatory agency decisions imposing punitive measures under the APA as in Checkosky v. SEC, 23 F.3d 452 (D.C. Cir 1994)( Checkosky I ) (subsequent appeal following remand, 139 F.3d 221 (D.C.Cir. 1998)( Checkosky II )), the source and timing of the campaign contributions to Congressman McCrery; the apparent lobbying efforts of the
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The case with facts most closely parallel to those presented by this case is Jewish War Veterans of the United States of America v. Gates, 506 F. Supp. 2d 30 ( D.D.C. 2007). There, a motion to compel was filed to force the production of subpoenaed documents believed to be in the possession of three Members of Congress in an effort to discover what attempts, if any, had been made to influence Executive Branch officials to exercise federal control over a memorial located in San Diego. As the district court recognized: The Federal Rules of Civil Procedure permit broad access to relevant information at the discovery stage. Litigants may obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party . . . . ( citation and footnote omitted) Generally speaking, relevance for discovery purposes is broadly construed. ( Citations omitted) . . . . Information sought may be relevant even if it is not admissible at the merits stage, so long as the discovery appears reasonably calculated to lead to the discovery of admissible evidence. (Citation omitted) . . . The term relevant thus has a different meaning and a broader scope under Fed.R. Civ. P. 26 (b) than it does under Rule 401 of the Federal Rules of Evidence. 506 F. Supp. 2d at 41-42. Plaintiffs have presented sufficient facts warranting discovery of Skidmore criteria because this evidence lends support to Plaintiffs claim that the Solomon letter should be afforded no respect under Auer or Mead. Even if the Court were to determine that Auer applies, a point with which Plaintiffs respectfully disagree, the Court may still determine not to give the Solomon letter any weight if the letter is the product of a post hoc

rationalization seeking to defend past agency action against attack (citation omitted) . . . [or] does not reflect the agency s fair and considered judgment on the matter in question. Auer, 519 U.S. at 462. Discovery of the information Plaintiffs request is relevant in either Akin Gump law firm, one of Honeywell s registered lobbyists; the date and content of the Solicitation Letter; and the date of the Solomon letter in response are relevant reasons for the Court to delve into the facts and circumstances surrounding the existence of the Solomon letter before deciding what level of respect, if any, to give it.
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regard in both the discovery and evidentiary sense. For purpose of this motion, however, the Court need consider only the former. CONCLUSION For the reasons stated herein, the Solomon letter is not entitled to Chevron-style deference. In fact, Plaintiffs believe it is entitled to no respect at all. If, on the other hand, the Court is inclined to consider the Solomon letter, discovery of Skidmore criteria is appropriate and will assist the Court in deciding what weight, if any, the Solomon letter may be entitled to receive. Plaintiffs respectfully request that the Court reconsider its Order of December 18, 2007 and grant Plaintiffs requests to conduct discovery so that relevant evidence may be presented to the Court. Accordingly, Plaintiffs respectfully request the Court to enter the appropriate orders compelling Defendants to supplement their written discovery responses, respond to the subpoena duces tecum served on Honeywell and direct Honeywell to instruct its registered lobbyist, the law firm of Akin Gump, to release the materials sought by subpoena directed to that firm. Plaintiffs request such other relief as the court deems equitable and just. Respectfully submitted this 21st of December, 2007. MARTIN & BONNETT, P.L.L.C. By: s/ Daniel L. Bonnett Susan Martin Daniel L. Bonnett Jennifer L. Kroll 3300 North Central Avenue, Suite 1720 Phoenix, AZ 85012-2517 (602) 240-6900 Attorneys for Plaintiffs CERTIFICATE OF SERVICE I hereby certify that on December 21, 2007, I electronically transmitted the attached document to the Clerk s Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the Following CM/ECF registrants:
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David B. Rosenbaum Dawn L. Dauphine Osborn Maledon, P.A. 2929 North Central Ave., Suite 2100 Phoenix, AZ 85012-2794 Michael Banks Azeez Hayne Morgan Lewis & Bockius LLP 1701 Market Street Philadelphia, PA 19103 Howard Shapiro Proskauer Rose LLP 909 Poydras Street, Suite 1100 New Orleans, LA 70112 Amy Covert Proskauer Rose LLP One Newark Center, 18th Floor Newark , NJ 07102-5211 Christopher Landau Eleanor R. Barrett Craig Primis Kirkland & Ellis LLP 655 Fifteenth Street, N.W. Washington, D.C. 20005 Attorneys for the Defendants s/.J. Kroll

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Case 2:04-cv-00424-ROS

Document 357

Filed 12/22/2007

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