Petro-Hunt, L.L.C. v. United States

In the United States Court of Federal Claims

No. 00-512L

(Filed: December 19, 2013)

_________

PETRO-HUNT, L.L.C., *

*

*

Plaintiff,

* Motion to compel production; Judicial

* takings case; Stop the Beach; Documents

v.

* sought not relevant within the meaning of

* RCFC 26(b)(1); Motion denied.

THE UNITED STATES,

*

*

Defendant.

*

*

_________

OPINION

__________

Joseph Ralph White, White Law Firm, New Orleans, LA, for plaintiff.

William James Shapiro, Environment and Natural Resources Division, United States

Department of Justice, Washington, D.C., with whom was Assistant Attorney General Ignacia S.

Moreno, for defendant.

ALLEGRA, Judge:

On June 21, 2013, Petro-Hunt, L.L.C. (plaintiff) filed a motion seeking an order

compelling defendant to produce seven documents. On July 2, 2013, defendant filed its

opposition to this motion, together with a privilege log, asserting that the requested documents

are irrelevant and privileged. On August 19, 2013, defendant, per court order, submitted the

seven documents for en camera review. 1 Subsequently, briefing on the motion was completed.

On December 3, 2013, the court granted plaintiff’s motion for leave to file a variety of

supplemental exhibits. On December 5, 2013, the court conducted oral argument on the

1

The Supreme Court has recognized the important role that en camera inspection of

disputed documents often plays in determining the existence of a privilege. See United States v.

Zolin, 491 U.S. 554, 568-69 (1989); see also United States v. Nixon, 418 U.S. 683, 714 (1974).

motions. On December 11, 2013, per the court’s order, plaintiff filed supplemental authorities.

For the reasons that follow, the court DENIES the motion to compel.

The Federal Circuit has instructed that “[q]uestions of the scope and conduct of discovery

are, of course, committed to the discretion of the trial court.” Florsheim Shoe Co. v. United

States, 744 F.2d 787, 797 (Fed. Cir. 1984). In deciding either to compel or quash discovery, this

court must balance potentially conflicting goals. It “‘must be careful not to deprive a party of

discovery that is reasonably necessary to afford a fair opportunity to develop and prepare the

case.’” Heat & Control Inc. v. Hester Indus., Inc., 785 F.2d 1017, 1024 (Fed. Cir. 1986)

(quoting Fed. R. Civ. P. 26(b)(1), advisory comm. notes (1983)); see also Epstein v. MCA, Inc.,

54 F.3d 1422, 1423 (9th Cir. 1995). As the Supreme Court once famously indicated, “[n]o

longer can the time-honored cry of ‘fishing expedition’ serve to preclude a party from inquiring

into the facts underlying his opponent's case.” Hickman v. Taylor, 329 U.S. 495, 507 (1947).

On the other hand, Hickman cautioned that “discovery, like all matters of procedure, has ultimate

and necessary boundaries . . . [L]imitations come into existence when the inquiry touches upon

the irrelevant or encroaches upon the recognized domains of privilege.” Id. at 507-08; see also

Vons Cos. v. United States, 51 Fed. Cl. 1, 5 (2001); Planning Research Corp. v. United States, 4

Cl. Ct. 283, 296 (1983).

Encapsulating these considerations, RCFC 26(b)(1), like its Federal rules counterpart,

provides that a “party may obtain discovery regarding any nonprivileged matter that is relevant

to any party’s claim or defense.” See also In re EchoStar Comm. Corp., 448 F.3d 1294, 1300

(Fed.Cir.2006); Vons, 51 Fed. Cl. at 5. Consistent with the goal of promoting the “just and

complete resolution of disputes,” the Federal Circuit has stated that “[r]elevancy for purposes of

Rule 26 is broadly construed.” Katz v. Batavia Marine & Sporting Supplies, Inc., 984 F.2d 422,

424 (Fed. Cir. 1993); see also Centurion Indus., Inc. v. Warren Steurer and Assocs., 665 F.2d

323, 326 (10th Cir.1981); Evergreen Trading, LLC ex rel. Nussdorf v. United States, 80 Fed. Cl.

122, 144 (2007). Moreover, as RCFC 26(b)(1) emphasizes, relevant information for purposes of

discovery also includes information “reasonably calculated to lead to the discovery of admissible

evidence.” Brown Bag Software v. Symantec Corp., 960 F.2d 1465, 1470 (9th Cir.1992); see

also Eggleston v. Chicago Journeymen Plumbers’ Local Union, 657 F.2d 890, 903 (7th

Cir.1981), cert. denied, 455 U.S. 1017 (1982); Petro-Hunt LLC v. United States, 113 Fed. Cl. 80,

83 (2013). At the same time, “discovery, like all matters of procedure, has ultimate and

necessary boundaries,” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978) (quoting

Hickman, 329 U.S. at 507), and does not validate enquiries that are “wholly speculative,” Micro

Motion, Inc. v. Kane Steel Co., Inc., 894 F.2d 1318, 1326 n.7 (Fed. Cir. 1990).

Defendant argues that the materials in question are irrelevant to plaintiff’s judicial takings

claim. That claim finds its roots in the Supreme Court’s recent decision in Stop the Beach

Renourishment, Inc. v. Florida Dept. of Environmental Protection, 130 S. Ct. 2592 (2010). That

case addressed whether a Florida Supreme Court decision upholding Florida’s Beach and Shore

Preservation Act effected an unconstitutional taking of private property rights. Id. In sustaining

that statute, a plurality of four Justices held that the Fifth Amendment should apply to the

judiciary. The plurality maintained that if “a court declares that what was once an established

right of private property no longer exists, it has taken that property.” 130 S. Ct. at 2602; see also

2

Smith v. United States, 709 F.3d 1114, 1116-17 (2013). 2 State court decisions that “merely

clarify and elaborate property entitlements” are not judicial takings. Stop the Beach, 130 S. Ct.

at 2609. The plurality proposed that if the Supreme Court finds that a state court has eliminated

an established property right, the Court should invalidate the decision as applied to the litigants.

The state legislature would then have the option to “either provide compensation or acquiesce in

the invalidity of the offending features of the Act.” Id. at 2607; see also Stephanie Stern,

“Protecting Property Through Politics: State Legislative Checks and Judicial Takings,” 97 Minn.

L. Rev. 2176, 2224 (2013).

Plaintiff argues that the documents in question bear on whether its rights in the leases in

question were “established” prior to the Fifth Circuit’s decision in the earlier case. See

Assuming arguendo that the plurality’s judicial takings analysis in Stop the Beach applies to

decisions of Federal courts, it is difficult to grasp how any of the documents in question would

be relevant either to whether plaintiff’s property interests were “established” or to whether the

Fifth Circuit’s decision articulates a new rule of law. The resolution of such questions requires

the court to look to the law as it existed before and after the decision, not to the views of

individual attorneys within the government agencies that were tasked with handling litigation

involving similar claims. Moreover, a review of the particular documents in question reveals

that they provide essentially no insight into whether the drafters felt that the any of the legal

principles associated with this case were “established,” at least within the meaning of the

Supreme Court’s formulation in Stop the Beach. Accordingly, the court concludes that, despite

the broad range of allowable discovery under RCFC 26(b)(1), the documents in question are

plainly irrelevant to the case at hand.

In arguing otherwise, plaintiff relies heavily upon United States v. Nebo Oil Co., 90 F.

Supp. 73 (W.D. La. 1950), the decision rendered by the district court in the quiet title action filed

by the United States to determine the owner of a particular mineral servitude within the 180,000

acre tract Bodcaw Lumber and Grant Timber granted to the United States. Plaintiff claims that,

in holding that the mineral servitudes were imprescriptible and belonged to Nebo Oil, the district

court considered various documents generated by the National Forest Reservation Commission

and the Secretary of Agriculture. To be sure, various internal memoranda were considered by

2

In this regard, the plurality observed:

The Takings Clause (unlike, for instance, the Ex Post Facto Clauses, see Art. I, §

9, cl. 3; § 10, cl. 1) is not addressed to the action of a specific branch or branches.

It is concerned simply with the act, and not with the governmental actor (“nor

shall private property be taken” (emphasis added)). There is no textual

justification for saying that the existence or the scope of a State's power to

expropriate private property without just compensation varies according to the

branch of government effecting the expropriation. Nor does common sense

recommend such a principle. It would be absurd to allow a State to do by judicial

decree what the Takings Clause forbids it to do by legislative fiat.

130 S. Ct. at 2601.

3

the district court in rendering its opinion. See id. at 91-92. Of course, Nebo Oil, which predates

the Supreme Court’s opinion in Stop the Beach by sixty years, was not a judicial takings case.

Rather, the documents referenced in that opinion were considered as parol evidence bearing on

the interpretation of the parties to the contract that transferred the property interest in question.

Id. at 92. They were in no way considered in interpreting the scope of Louisiana Act 315 or any

of the other laws at issue in that case and certainly were not used in a fashion remotely

comparable to how plaintiff would like to use the documents in question. See id. at 92; see also

Petro-Hunt, L.L.C. v. United States, 105 Fed. Cl. 37, 40 (2012). That case thus avails plaintiff

naught. Nor do any of the other cases cited by plaintiff persuade the court in the least that the

documents in question are relevant.

Accordingly, based on the foregoing, the court finds that the documents in question are

irrelevant and, under RCFC 26(b)(1), need not be produced. 3 The court hereby DENIES

plaintiff’s motion to compel. 4

IT IS SO ORDERED.

s/Francis M. Allegra

Francis M. Allegra

Judge

3

Even if this were not the case, defendant has mounted a strong argument that six of the

seven documents at issue are protected by either the attorney-client privilege or the work product

doctrine. The document that would not appear to be subject to those privileges – Document 7 –

is merely a list of documents that had been assembled in a binder and represents not even a close

case on relevancy grounds. As to the six documents subject to privileges, there does not appear

to be a waiver under Federal Rule of Evidence 502(a). In that regard, plaintiff has not

demonstrated that fairness requires these documents to be considered together with other

documents that defendant has released in this and the prior case. See Fed. R. Evid. 502(a); see

also Fed. R. Evid. 502, adv. comm. notes (2007).

4

Given the nascent state of the law on judicial takings, the court finds that plaintiff’s

motion was substantially justified and that costs under RCFC 37(a)(f)(B) are not owed.

4