Free Other Notice - District Court of Arizona - Arizona

& P.L.L.C. *Susan Martin
ATTORNEYS AT LAW women 1.. Bonnett
Jennifer Kroll
December 7, 2007
VIA FA CSIMILE
Honorable Roslyn O. Silver
Sandra Day O’Connor U.S. Courthouse, Suite 624
401 W. Washington St., SPC 59
Phoenix, Arizona 85003-21 5 8
Re: Allen et al v. Honeywell Retirement Earnings Plan et al
· Case No. CV04-0424 PHX ROS
- Joint Statement Regarding Discovery Dispute
Dear Judge Silver:
Pursuant to the Court’s Discovery Dispute Instructions, the parties submit this Joint
Statement and certify compliance with LRCiv 7.2(j) and the Court’s Rule 16 Order. After
personal consultation and sincere efforts to do so, counsel have been unable to satisfactorily
resolve the dispute. A discovery dispute exists regarding the Defendants’ pending Motion
for Reconsideration (Doc. 323) to which Plaintiffs have been ordered to respond no later than
Monday, December 10, 2007. The dispute involves whether discovery is appropriate
regarding the historical context, sequence of events and surrounding circumstances that
produced the August 7, 2007 letter attached at Tab A to Defendant’s Motion (Doc. 323) as
well as what was considered, encouraged, incorporated and/or excluded from its content by
the Treasury Department.
It is Plaintiffs’ position that the letter dated August 7, 2007 signed by Eric Solomon,
Assistant Secretary (Tax Policy), has been made relevant in this litigation because
Defendants rely entirely on the letter in their Motion for Reconsideration, which they did not
file until November 16, 2007. The Motion for Reconsideration raises the issue of how much
deference, if any, the Treasury letter should be given by the Court. Plaintiffs believe the
Court’s analysis of Mr. So1omon’s letter will necessarily require an examination of the
historical context, sequence of events and surrounding circumstances that caused Treasury to
produce the letter as well as what was considered, encouraged, incorporated and/or excluded
from its content. Edwards v. Agrrillard, 482 U.S. 578, 595, 107 S.Ct. 2573, 2583 (1987);
Ranchers Cattleman Action Legal Fund v. U.S. Dept. of Agrjculture, 415 F .3d 1078 (9th Cir.
2005). Plaintiffs further believe the timing ofthe letter, peculiar circumstances surrounding
(602) 240-6900 -Fax (602) 240-2345 · 3300 North Central Avenue, Suite 1720 -Plroenix, Arizona 85012-2517
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"‘ALSO ADMI'I’I`ED IN NEW YORK . •·•·ALSO ADMITFED IN ILLINOIS &. IOWA
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Judge Silver _
December 7, 2007
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its existence and what role Defendants may have played in the genesis and evolution of the
letter are all relevant to what deference, if any, of the Court should give to the August 27,
2007 letter.
ln this regard, "relevance" ofthe infonnation is determined in the context of discovery
rather than an evidentiary sense. See, e.g., Laub v. U.S. Dept. of Interior, 342 F.3d 1080,
1092 — 93 (9111 Cir. 2003); Jewish War Veterans ofthe United States of America v. Gates,
506 F. Supp. 2d 30, 41-42, 48-51 (D.D.C. 2007). The requested information meets the
"relevancy" standard in the context of discovery and, most probably, will also meet the
standard for admissibility.
Defendants contend that plaintiffs’ request for discovery is inappropriate both
procedurally and substantively. With respect to procedure, this Court ordered Plaintiffs to
respond to Defendants’ Motion on November 19, but Plaintiffs waited more than two weeks
(until two business days before their brief was due) to announce that they could not respond
to the Motion without discovery. ln any event, Plaintiffs’ belief that discovery is warranted
provides no basis for delaying briefing on the Motion. Plaintiffs are Hee to argue (as does
every party opposing a summary judgment motion) that the legal issue cannot be resolved
without factual development. That is an argument that belongs within an opposition to a
motion, and is not a reason to delay an opposition to a motion.
With respect to substance, there is simply no basis for discovery into motivation. The
issue here is whether the Treasury Letter is entitled to judicial deference as an interpretation
of the 1977 Treasury regulation. As the Ninth Circuit has explained, "[w]here an agency
interprets its own regulation, even if through an informal process, its interpretation of an
ambiguous regulation is controlling under Auer unless ‘plainly erroneous or inconsistent with
the regulation."’ Bassiri v. Xerox Corp., 463 F.3d 927, 930 (9th Cir. 2006) (citing Auer v.
Robbins, 519 U.S. 452, 461-62 (1997)). Motivation is legally irrelevant to that inquiry.
Plaintiffs have cited no case in the history of American law holding that motivation is legally
relevant to the judicial deference due an agency’s interpretation of its own regulation. Under
Auer and Bassiri, the only legally relevant issue is whether the Treasury Letter is
(1) inconsistent with the 1977 Regulation, or (2) a plainly erroneous interpretation of it. 519
U.S. at 461. That inquiry involves examining the Treasury Letter and the 1977 Regulation,
see ia'.-—not motivation. Cf Trunk v. City of San Diego, 2007 WL 3001679 (S.D. Cal. 2007)
("The Ninth Circuit has also made clear that any lobbying action cannot, from a legal
standpoint, be viewed as ‘causing’ the legislation .... ”). And because plaintiffs’ requested
discovery will have no bearing on the question at hand, the Court should not allow it. See
Cacique, Inc. v. Robert Reiser & Co., 169 F.3d 619, 622 (9th Cir. 1999) ("Enforcing a
discovery request for irrelevant information is a per se abuse of discretion."); Epstein v.
MCA, 54 F .3d 1422, 1423 (9th Cir.l995) (error to allow discovery that "would have no
bearing" on the case).
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Judge Silver
December 7, 2007
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n The cases on which plaintiffs rely to justify discovery, in contrast, are plainly
distinguishable. In both Edwards v. Aguillard, 482 U.S. 578, 595 (1987), and Ranchers
Cattleman Action v. USDA, 415 F.3d 1078, l093—94 (9th Cir. 2005), the legal inquiries were
much different, and in those different legal inquiries the motivations and circumstances
surrounding the challenged legislation or regulation were at issue. Thus, in Edwards, 482
U.S. at 595, the Supreme Court examined the legislative purpose of a statute subject to an
Establishment Clause challenge. And in Ranchers, the Ninth Circuit conducted a fact-
intensive Administrative Procedure Act review of a USDA regulation promulgated pursuant
to a statute, see 415 F.3d at 1094, not a purely legal review ofthe agency’s interpretation of
its own regulation. See Bassiri, 463 F.3d at 930 (differentiating between the deference owed
to "an agency’s interpretation of a statute that is not reached through normal notice—and-
comment procedures" versus the deference owed "where an agency interprets its own
regulation"). By contrast, in this case the motivations and surrounding circumstances for the
Treasury Letter do not inform the inquiry under Aaer and Bassiri.
Similarly, the cases plaintiffs cite for the proposition that the relevance standard is
lower for discovery than for admissibility do not support plaintiffs’ requested discovery
where, as here, the relevant inquiry is purely legal. Thus, although inLaub vs. Department of
the Interior, 342 F.3d 1080 (9th Cir. 2003), the Ninth Circuit held additional discovery would
have been useful "to establish federal subject matter jurisdiction," id. at 1093, that question
turned on a fact-intensive and contested analysis regarding the federal govemment’s
involvement in several state agencies’ land and water acquisitions, see id. at 1092-93. And in
Jewish War Veterans ef the United States 0fAmerica, Inc. v. Gates, 506 F . Supp. 2d 30, 48-
51 (D.D.C. 2007), another Establishment Clause case, the court granted the requested
discovery because it was potentially relevant and admissible to determine the legislative ·
purpose of the challenged statute. See id. at 48. ln short, whether discovery is warranted
turns on the nature of the issue, and the purely legal issue presented here does not warrant
· discovery.
Respectfully Submitted,
Daniel L. Bonnett, Attorney for Plaintiff
Christopher Landau, P.C.;, Attorney for Defendants
DLB:sko
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