Privileges Protect OLC Memos Supporting Obama’s Recess Appointment of CFPB Director Richard Cordray 1

Citing the deliberative process privilege, SDNY Judge Rakoff thwarted the New  York Times’ attempt to obtain a copy of Department of Justice Office of Legal Counsel’s

President Obama appoints Richard Cordray as the first CFPB Director

President Obama appoints Richard Cordray as the first CFPB Director

legal memoranda allegedly supporting President Obama’s January 2012 recess appointment of Richard Cordray as Director of the Consumer Financial Protection Bureau (CFPB).  In its opinion, available at this link, Judge Rakoff ruled that the Times failed to prove that White House Press Secretary Jay Carney’s remarks or the temporal connection of the Cordray appointment (January 4) and the OLC memo (January 6) constituted presidential approval sufficient to warrant waiver of the deliberative process privilege.  New York Times Co. v. U.S. Dep’t of Justice, 2013 WL 174222 (S.D.N.Y. Jan. 7, 2013).

Recess Appointment

On January 4, 2012, while the U.S. Senate was in recess, President Obama appointed Richard Cordray as CFPB Director.  The Constitution permits recess appointments, but presidents traditionally do not make appointments during a recess lasting less than 10 days.  During the Senate’s December-January winter break, it held so-called “pro forma” sessions to prevent the recess from officially lasting more than three days.  The Cordray appointment created legal and political controversy because it came during a period when the Senate was not formally in recess.

The OLC sought to quell the controversy by publishing a legal memorandum authored by Virginia Seitz, OLC Ass’t Attorney General.  In the memo, available here, Seitz argued that the Senate’s pro forma sessions could not prevent the President’s constitutional authority to make appointments during a Senate recess.  The memo cited two prior OLC memos, authored by Jack L. Goldsmith and John P. Elwood, as precedent.

NYT FOIA Request

The Times filed suit to enforce its FOIA request for access to the Goldsmith and Elwood memoranda.  The DoJ countered that Exemption 5 protected the memoranda from disclosure because the deliberative process privilege, attorney-client privilege, and presidential communications privilege covered their contents.  The Times conceded that deliberative process privilege covered the memoranda but argued that the DoJ had waived the privilege.

Privilege Issues

The Court correctly stated that the government may waive the deliberative process privilege in two situations.  First, the so-called “working law” waiver applies when the governmental document is more properly categorized as stating or interpreting the agency’s law and policies rather than as a document containing predecisional agency deliberations.  Second, the adoption or incorporation waiver provides that a document containing predecisional deliberations loses its privileged status when the governmental agency adopts its contents as policy.

The Times argued that President Obama adopted the OLC memo–thus waiving the privilege–when he made the January 4, 2012 Cordray recess appointment.  For proof, the Times argued that the chronology between the OLC memo and the appointment proved the president’s adoption.  President Obama made the January 4 recess appointment following meetings with OLC attorneys.  Then, on January 6, 2012, the OLC sent the White House the Seitz memorandum memorializing its verbal recommendations.

The Times also argued that White House Press Secretary Jay Carney’s comments in his January 12, 2012 press briefing proved the President’s adoption.   A reporter questioned whether the President made the recess appointment without OLC approval because the appointment was made on January 4, 2012 and the Seitz memo was finalized on January 6, 2012.  In response, Mr. Carney stated that the President made the decision following receipt of a verbal opinion and that it was common for OLC memos memorializing verbal opinions to take some time to prepare.  This video clip from the January 12, 2012 White House Press Briefing shows Mr. Carney’s remarks regarding the OLC memo.

Ruling

The Court ruled that chronology alone did not prove that the president adopted the reasoning of the Seitz memo–and certainly not the reasoning set forth in the Goldsmith and Elwood memoranda. Moreover, the Court noted that Mr. Carney’s remarks did not show that the President adopted the reasoning of the Goldsmith and Elwood memoranda.  To show adoption waiver of the deliberative process privilege, the party seeking the information must show that the decisionmaker–here the President–relied on the document’s analysis and conclusions.  A decisionmaker can rely on a document’s conclusions without agreeing with the underlying reasoning.  If a decisionmaker reviews an agency recommendation and makes a “yes or no” determination without providing reasoning for the decision, then a court may not infer that she adopted the agency’s reasoning.

Here, Judge Rakoff ruled that the Times produced no evidence that President Obama expressly adopted the reasoning of the Goldsmith and Elwood memoranda in making the Cordray recess appointment. And without this evidence, the deliberative process privilege remained intact to protect the memoranda from public disclosure.

Another Victory for Obama Administration

The New York Times decision, issued on January 7, 2013, marks the second deliberative process privilege victory for the Obama Administration in the span of five days.  On January 2, 2013, the Southern District of New York, in an opinion authored by Judge Colleen McMahon, ruled that the deliberative process privilege protected from FOIA disclosure legal memoranda allegedly supporting the administration’s use of drones to unilaterally kill suspected terrorists, including American citizens.  The decision, explained in an earlier PoP post, similarly held that the administration had not waived the deliberative process privilege through comments made by President Obama and Attorney General Holder.   Consequently, the Obama Administration, in a matter of days, successfully protected from public disclosure the legal bases for its drone program decision and recess appointment decision.

Evidentiary Privileges Protect DoJ Legal Memo Allegedly Supporting U.S. Targeted Killings 2

In an opinion issued on January 2, 2013, Judge Colleen McMahon of the U.S. District Court for the Southern District of New York ruled that the Justice Department may withhold from disclosure a legal memorandum prepared for Attorney General Eric Holder that allegedly provided legal support for a U.S. program targeting terrorists, including U.S.

Staff Legal Memo to Attorney General Holder Privileged from FOIA Request

Staff Legal Memo to Attorney General Holder Privileged from FOIA Request

citizens, for assassination.  Judge McMahon held that the attorney-client and deliberative process privileges prevent disclosure even though several senior executive officials publicly commented on the strong legal authority supporting the program.  But Judge McMahon’s ruling, with citations ranging from the Federalist Papers to the Magna Charta, seriously questioned “the legality of killings unilaterally authorized by the Executive that take place otherwise than on a ‘hot’ field of battle.” The New York Times Co. v. U.S. Dep’t of Justice, 2013 WL 20543 (S.D.N.Y. Jan. 2, 2013).  Here is a link to the Court’s opinion.

FOIA Requests

The case arises from FOIA requests by two New York Times reporters and the ACLU.  These requests essentially sought documents containing the legal justification for the Obama Administration’s decision that the U.S. Government may lawfully target for killing persons, including U.S. citizens, suspected of having ties to al Qaeda or other terrorists groups.

The broad requests were effectively reduced to two legal memoranda.  The first was a legal memorandum prepared for Attorney General Eric Holder by the Justice Department’s Office of Legal Counsel (OLC).  According to DoJ, the memo contained “confidential legal advice to the Attorney General, for his use in interagency deliberations, regarding a potential military operation in a foreign country.” The second memo was from Legal Counsel to the Joint Chiefs of Staff to the National Security Advisor Legal Advisor containing legal advice regarding the effect of U.S. citizenship on targeting enemy belligerents.

Public Comments Constitute Waiver?

The Times and ACLU conceded these memoranda were privileged under the deliberative process privilege and the attorney-client privilege.  But they argued that the Government had waived these privileges due to senior executive-branch officials’ public comments on the legal basis underlying the Government’s ability to target off-the-battlefield individuals, including U.S. citizens.

The Times and ACLU cited a plethora of comments by high-level executive-branch officials, including President Obama’s comments in the Google Hangout online forum and to Jay Leno during his October 25, 2011 appearance on the Tonight Show.  In speaking with Leno, President Obama stated that U.S. citizen Anwar Al-Awlaki “was probably the most important al Qaeda threat that was out there after bin Laden was taken out, and it was important that, working with the Yemenis, we were able to remove him from the field.”

The most explicit comments, however, came from Attorney General Eric Holder during a March 5, 2012 speech he gave at the Northwestern University School of Law.  In this speech, General Holder discussed at length the legal justifications for the Government’s ability to use lethal force in a foreign country against a U.S. citizen associated with al Qaeda and actively planning to kill Americans.

Law and Order

The court correctly held that the Government waives the deliberative process privilege only when a predecisional document has been adopted as a final policy.  And the adoption of a predecisional document such as a legal memorandum occurs only where the agency expressly adopts or incorporates it as a final opinion.

The court acknowledged that the various public statements clearly reference a legal opinion that was “performed by someone for someone.”  But the court correctly observed that none of the statements specifically referenced the OLC legal memorandum.

President Obama talks with the Tonight Show's Jay Leno on October 25, 2011

President Obama talks with the Tonight Show’s Jay Leno on October 25, 2011

  The Times and ACLU had nothing more than speculation that the legal analysis referenced by Attorney General Holder and others was set forth in the OLC memorandum.  And for this reason, the court held that the Government did not waive its deliberative process privilege because it neither adopted nor incorporated by reference the OLC memorandum.  The OLC memo is privileged and not subject to the Times and ACLU’s FOIA request.

As for the Joint Chiefs of Staff legal memorandum, the court reserved judgment because the Government’s supporting affidavit contained nothing more than conclusory statements that the document was predecisional and deliberative. The court declined to uphold the privilege based on these conclusory statements but provided the Government with another opportunity to correct this proof with a supplement declaration.  A ruling on this memo awaits another day.

Judge Questions Legal Authority for U.S. Targeted Killings outside the Battlefield

Although ruling that evidentiary privileges preclude disclosure of a legal memorandum that may support the U.S. program of targeting terrorists, including U.S. citizens, for killing, Judge McMahon questioned the underlying issue—whether a legal basis actually exists for the Executive Branch to authorize unilateral killings of alleged terrorists, including U.S. citizens, outside the confines of a  battlefield.

Judge McMahon, citing James Madison and French philosopher Montesquieu, noted the Founders’ tyrannical fear of placing executive and judicial power in a single individual or institution.  The judge rejected the Hamiltonian view of due process as limited to the judicial branch, and stated that the Constitutional due process right, emanating from the Magna Charta’s “by the law of the land” provision, requires the government to give notice of a proposed action and opportunity to be heard before imposing an adverse action.

Judge McMahon, citing the hundreds of thousands of American citizen deaths during the Civil War, conceded that these due process requirements do not apply to combatants actively engaged in armed combat against the United States.  But she countered that the 2011 killings of U.S. citizens Anwar Al-Awlaki, his son, Abdulrahman Al-Awlaki, and Samir Khan, were hundreds of miles away from any battlefield.  The court observed that the activities in which these three were alleged to have engaged constituted treason, but that “the Founders contemplated that traitors would be dealt with by the courts of law, not by unilateral action of the Executive.”

Acknowledging that the matter is not “straightforward,” the court stated that “there are indeed legitimate reasons, historical and legal, to question the legality of killings unilaterally authorized by the Executive that take place otherwise than on a ‘hot’ field of battle.  The judge sympathized with the Times and the ACLU and would clearly prefer the DoJ’s legal basis for the program be publicly disclosed to “allow for intelligent discussion and assessment of a tactic that (like torture before it) remains hotly debated.” The court lamented the “Alice-in-Wonderland” nature of her ruling, stating:

I can find no way around the thicket of laws and precedents that effectively allow the Executive Branch of our Government to proclaim as perfectly lawful certain actions that seem on their face incompatible with our Constitution and laws, while keeping the reasons for their conclusion a secret.

Major Decision on Subject Matter Waiver Doctrine 3

In a major decision concerning privilege waiver, the Illinois Supreme Court, in Center Partners, LTD v. Growth Head GP, LLC, ruled that the subject matter waiver doctrine does not apply to privileged communications disclosed in an extrajudicial context.  The Court’s decision, which can be accessed here, answered a question of first impression in Illinois and will serve as influential authority when other states consider the scope of subject matter waiver.

Question at Issue

The precise question before the Court was whether, as a matter of law, the subject matter waiver doctrine applies to the disclosure of privileged information made outside of a litigation or judicial setting (an extrajudicial setting).

Illinois Supreme Court

Illinois Supreme Court

Where a privileged communication is voluntarily disclosed, the subject matter waiver doctrine extends this waiver to all other communications pertaining to the same subject matter.  The purpose of the doctrine is to prevent a party from selectively disclosing favorable information while simultaneously withholding unfavorable information under the cloak of privilege. The question in Center Partners was whether the subject matter doctrine, and its underlying purpose, should apply in non-litigation contexts.

Facts of Case

The Center Partners case involved a complicated business transaction.  In short, three companies negotiated the purchase of  Rodamco North America, N.V., including the General Partner of one of Rodamco’s holdings.  During the purchase negotiations, the purchasing entities and their lawyers exchanged privileged information concerning the legal implications of the transaction, rights and obligations of the parties to the transaction, and legal concerns and conclusions about the structure of a new partnership agreement.  A couple of years after the transaction was complete, a group of minority limited partners sued for breach of contractual and fiduciary duties, and sought all communications actually disclosed between the purchasing entities and all privileged, non-disclosed communications concerning the same subject matter.

Court’s Ruling

In an issue of first impression in Illinois, the Court ruled that the subject matter waiver doctrine does not apply where privileged communications are disclosed in an extrajudicial setting. The Court based its decision in large part on the doctrine’s underlying purpose.  The purpose is to prevent a party from using an evidentiary privilege offensively (sword) to disclose favorable information and later defensively (shield) to withold unfavorable information pertaining to the same subject matter.

The Court reasonsed that, outside the litigation context, parties generally do not decide to disclose privileged information for sword and shield purposes.  In many non-litigation settings, such as business transactions, parties disclose privileged information before litigation is initiated or even contemplated.  And expanding the subject matter waiver doctrine to non-litigation contexts would produce a perverse result: parties may “leave attorneys out of commercial negotiations for fear that their inclusion would later force wholesale disclosure of confidential information.” Consequently, the Court found that the purpose of the subject matter waiver doctrine is simply not served by expanding it to non-litigation contexts.

The Court placed one limitation on its ruling.  It stated that, if a disclosure is made during a business negotiation to gain a later tactical advantage in anticipated litigation, then the subject matter waiver doctrine would still apply if such a disclosure is later used by the disclosing party at any point during the litigation to gain a tactical advantage.

PoP Analysis

Most states have not addressed the issue whether the subject matter waiver doctrine applies in extrajudicial contexts, and this area of evidentiary privileges needs more development.  The Illinois Supreme Court’s decision in Center Partners is based on sound reasoning and will likely serve as persuasive authority when the issue arises in other states.  And while the decision was made in the non-litigation context of business transactions, it will likely serve as persuasive authority for disclosures made in other non-litigation contexts such as disclosures made during settlement negotiations, government investigations, regulatory compliance filings, or for public relations/media purposes.  For a more detailed analysis of these issues, see an earlier PoP post recommending an IADC article by Andrew Kopon and M.C. Sungaila.