Oral argument: Apr. 20, 2011
Appealed from: United States Court of Appeals for the Federal Circuit (Feb. 1, 2010)
ATTORNEY-CLIENT PRIVILEGE, FIDUCIARY EXCEPTION, JICARILLA APACHE NATION, INDIAN TUCKER ACT, TRUST BENEFICIARY
In 2002, the Jicarilla Apache Nation (“Jicarilla,” “Jicarilla Tribe” or “Tribe”) filed a breach of trust action against the United States, alleging mismanagement of funds held in trust for the Tribe. In 2008, Jicarilla moved to compel the production of a few hundred documents exchanged between the government and its attorneys, but the government refused to disclose nearly 160 documents on the ground of attorney-client privilege. The Court of Federal Claims subsequently granted Jicarilla’s motion to compel production of the documents, and the Federal Circuit affirmed. Now, the United States argues that disclosure of the documents was unwarranted because no statute or regulation specifically requires the disclosure. The Jicarilla Tribe, however, contends that the government must be treated like an ordinary private trustee and forced to disclose information exchanged with its attorneys.
Whether the attorney-client privilege entitles the United States to withhold from an Indian tribe confidential communications between the government and government attorneys implicating the administration of statutes pertaining to property held in trust for the tribe.
Can the United States invoke the attorney-client privilege to limit what information it is required to produce during discovery where an Indian tribe sues the government for its alleged mismanagement of Indian property held in trust?
The Jicarilla Apache Nation’s reservation covers a 900,000-acre area in New Mexico. See Brief for Petitioner, United States at 2. By statute, the Department of the Interior oversees the development of the reservation’s timber, gravel, oil and gas resources. See id. The United States holds all funds produced from its management in trust for the Jicarilla Tribe. See id.
In 2002, Jicarilla sued the United States in the United States Court of Federal Claims (“CFC”) under the Tucker Act and Indian Tucker Act for breach of trust. See 28 U.S.C. §§ 1491, 1505; Brief for Respondent, Jicarilla Apache Nation at 1. Specifically, Jicarilla alleged that the government “failed to maximize returns on its trust funds, invested too heavily in short-term maturities, and failed to pool its trust funds with other tribal trusts.” See Jicarilla Apache Nation v. United States, 88 Fed.Cl 1, 3 (Fed. Cl. 2009). For over five years, the parties engaged in alternative dispute resolution, during which time the United States gave Jicarilla thousands of documents. See id. However, the government also withheld nearly 160 documents. See id. at 4. At this juncture, Jicarilla requested that the case be returned to the CFC. See id. at 3–4. The CFC granted the request but divided the case into phases, limiting Jicarilla’s claims of fund mismanagement to the period from 1972 to 1992. See id.
Upon Jicarilla’s motion to compel production of the withheld documents, the United States argued that these documents were justifiably withheld under attorney-client privilege and as attorney work-product. See Jicarilla, 88 Fed.Cl. at 4. The CFC then conducted an in camera review of the documents to determine whether the government’s privilege claims were appropriate. See id. The CFC held that the United States may withhold certain documents as protected by attorney work-product. See United States v. Jicarilla, 590 F.3d 1305, 1308 (Fed. Cir. 2009). However, the CFC further held that the government could not use attorney-client privilege as a means to withhold documents from Jicarilla because the trust relationship between Jicarilla and the United States fell within the fiduciary exception. See id. at 1307. That exception, the CFC explained, provides that “fiduciaries may not shield from their beneficiaries communications between them and their attorneys that relate to fiduciary matters, including the administration of trusts.” See id. The court held that this exception readily applies to the relationship between Jicarilla and the United States where the government acts as trustee over funds derived from the Jicarilla reservation’s natural resources. See id.
Following the lower court ruling, the United States petitioned for a writ of mandamus. See Jicarilla, 590 F.3d at 1308. The United States Court of Appeals for the Federal Circuit affirmed the CFC’s decision, holding that the United States cannot use attorney-client privilege to withhold communications concerning management of the Jicarilla trust where the government has not identified a specific competing interest preventing disclosure. See id. at 1306. The Federal Circuit thus granted Jicarilla access to the previously withheld documents. See id. at 1312. The court further held that the United States, as trustee, owes a duty of disclosure to the beneficiary of the trust, namely the Jicarilla Tribe. See id. Following the Federal Circuit’s decision, the United States produced the requested documents under a protective order of nondisclosure and now appeals the decision to the Supreme Court. See Brief for Petitioners at 7.
Respondent Jicarilla Tribe motioned to compel production of certain documents during the discovery phase of its breach of trust action against Petitioner United States. See Jicarilla Apache Nation v. United States, 88 Fed.Cl 1, 4 (Fed. Cl. 2009). However, the government withheld certain documents under attorney-client privilege claims. See id. In this case, the Supreme Court will decide the applicability of the fiduciary exception to the United States’ claim of attorney-client privilege where the government manages a trust for the benefit of the Jicarilla Tribe. The Court’s decision should have broader implications on how discovery unfolds in future cases between Indian tribes and the government.
The United States argues that it has justifiably invoked the attorney-client privilege to protect the relationship between government attorneys and their “real clients,” the officials who manage the trust. See Brief for Petitioner, United States at 11. Without this protection, the United States explains, government attorneys are hampered in their ability to properly advise the officials. See id. The government argues that the issue is further complicated because, as a sovereign, it is tasked with balancing multiple party interests. See id. at 24. For instance, government attorneys would be forced to resolve potential conflicts between tribal interests and sovereign matters, and then defend the manner in which they balanced these interests. See id. at 24–25. Additionally, the United States maintains that the Jicarilla Tribe could not be the “real client” of the government attorneys because the United States is the trustee for multiple tribal trusts with competing interests. See id. Thus the government attorneys could not be considered the Tribe’s “real attorneys” without creating conflicts of interest with respect to the other tribes. See id.
Jicarilla argues that it is not unusual for trustees to face competing interests, and that it is precisely under such conditions that the need for transparency is greatest. See Brief for Respondent, Jicarilla Apache Nation at 23–24. The Tribe notes that private trustees will often have multiple beneficiaries whose interests do not align, but contends that this situation does not alter the trustee’s obligation to provide beneficiaries with information on how those interests were balanced. See id. In fact, Jicarilla believes that the United States has misdirected its argument by questioning who the “real client” is. See id. at 26–27. The Tribe points out that it does not claim to be the “real client” of the government attorneys, but rather the United States’ beneficiary. See id. Therefore, Jicarilla contends that it is entitled to know how the government manages Jicarilla’s trust, and the fiduciary exception explicitly prevents the United States from using the attorney-client privilege to hide potential mismanagement. See id.
The government argues that a fiduciary exception here would create too many practical problems and discourage decision-makers from seeking advice from counsel. See Brief for Petitioner at 41. The United States complains that imposition of such an exception would require those overseeing the trust to conduct case-by-case examinations of whether they have “balanced or will balance competing interests” before seeking advice from counsel. See id. at 43–44. The unpredictability of such an attorney-client privilege, the government insists, amounts to “no privilege at all.” See id. Moreover, the United States argues that the advice offered by government attorneys would be better informed if the trust managers seeking counsel felt protected by the attorney-client privilege. See id. at 42.
Jicarilla replies that the very purpose of imposing a fiduciary duty on the United States is to limit the government’s discretionary powers. See Brief for Respondent at 30. The Tribe insists that the United States has not provided any compelling reason to suggest that it owes some lesser form of fiduciary duty than a private trustee. See id. at 21, 23.
A tension exists between allowing the attorney-client privilege and permitting the full disclosure of probative evidence. If the United States prevails, there is a chance that probative evidence will be excluded, and such precedent will make it harder for Jicarilla and other Indian tribes to build evidentiary support in future cases. However, should Jicarilla prevail, the fiduciary exception may affect the quality of trust fund decision-making. The theory remains, if a client is shielded by the attorney-client privilege, he or she will be more likely to be candid when seeking advice from counsel. In turn, fully-informed attorneys are generally better positioned to provide quality advice and to fulfill their professional responsibilities. See Stephen M. Forte, What the Attorney-Client Privilege Really Means (2003).
Under the doctrine of attorney-client privilege, an attorney must keep confidential certain client information revealed in the course of representation. See Mohawk Indus., Inc. v. Carpenter, 130 S. Ct. 599, 606 (2009). There are, however, a number of exceptions to this privilege. One such exception is the “fiduciary exception,” which, under certain circumstances, may require a trustee to disclose to his or her beneficiary otherwise privileged information. See Restatement (Third) of the Law Governing Lawyers § 84 (2000). Here, the Supreme Court must decide whether the privilege protects certain information exchanged between the United States and its attorneys, especially as the information relates to the government’s management of trust funds belonging to the Jicarilla Tribe. The United States primarily argues that the government may keep the information confidential because no statute or regulation explicitly requires disclosure. See Brief for Petitioner, United States of America at 9–10. Jicarilla, on the other hand, contends that despite its sovereign status, the government in this case bears fiduciary and disclosure duties similar to those of a private trustee. See Brief for Respondent, Jicarilla Apache Nation at 7.
Is Disclosure Governed by Federal Statutes and Regulations or by Common-Law Principles?
According to the United States, the Federal Circuit erred in holding that the government had a common-law duty to disclose privileged information to the Jicarilla Tribe. See Brief for Petitioner at 30. The government argues that only federal statutes and regulations, as opposed to judge-made common law, can force government agencies to disclose privileged information to Indian tribes. See id. at 30–31. The United States points to two recent Supreme Court decisions, United States v. Navajo Nation, 537 U.S. 488 (2003) (Navajo Nation I) and United States v. Navajo Nation, 129 S. Ct. 1547 (2009) (Navajo Nation II), in support of its contention that common-law trust principles cannot create enforceable obligations for the government. See id. at 31. Additionally, the United States emphasizes that Congress is the entity bestowed with exclusive authority over Indian affairs. See U.S. Const. art I, § 8, cl. 3; Brief for Petitioner at 40. The government thus concludes that Congress’s extensive legislation in the area of Indian affairs has left courts with little room to apply common-law principles, especially on an issue such as government document disclosure. See Brief for Petitioner at 40.
Jicarilla counters that the issue of disclosure is governed by Federal Rule of Evidence 501, which allows federal courts to use common-law principles in deciding questions of government privilege. See Fed. R. Evid. 501; Brief for Respondent at 10–11. By ignoring Rule 501, Jicarilla contends, the United States assumes a contradictory position: rejecting the common law on the issue of disclosure, but using the common law to justify its claim of attorney-client privilege. See Brief for Respondent at 11–12. Furthermore, the Tribe asserts, the United States misapplies the Navajo Nation decisions. See id. at 29. According to Jicarilla, those decisions were concerned with narrow issues of judicial jurisdiction. See id. Because jurisdiction is not in question in this case, Jicarilla adds, the Federal Circuit was free to apply common-law trust principles not found in any specific statute or regulation. See id. at 30.
Is the Government the “Real Client” in this Case?
With regard to the actions of the government attorneys, the United States argues that the government itself, and not the Jicarilla Tribe, must be viewed as the “real client” in this case. See Brief for Petitioner at 13. Citing a number of Supreme Court decisions, the United States asserts that the government’s sovereign duty to manage Indian property makes it the real party in interest, even when the government acts on behalf of Indian tribes. See United States v. Minnesota, 270 U.S. 181, 194 (1926); Brief for Petitioner at 13–14. The United States further notes that no act of Congress expressly designates Indian tribes as the actual clients of government attorneys. See Brief for Petitioner at 21–22. Moreover, in case of need, the United States points out, both tribes and individual Indians are free to retain their own private attorneys, undermining any argument that the government attorneys are beholden to the Jicarilla Tribe. See id. at 26. The United States also observes that government attorneys are paid from separate government funds, as opposed to funds held in trust for Indian tribes, strengthening the view that government attorneys never serve particular Indian tribes. See id. at 27–28.
While it concedes that it may not be the “real client” of the government attorneys, Jicarilla contends that its status as a trust beneficiary entitles it to certain information given to the trustee—the United States. See Brief for Respondent at 24–25. Jicarilla notes that the government sought out legal advice from its attorneys to advance the Tribe’s interests, not to promote a government interest. See id. at 26. As such, Jicarilla asserts, the government is subject to the heightened disclosure requirements that exist in ordinary trustee-beneficiary relationships. See id. at 27. Addressing professional ethics concerns, Jicarilla rejects the United States’ argument that disclosing the privileged information may place the government attorneys in murky ethical waters. See id. According to Jicarilla, the Federal Circuit did not aim to establish an attorney-client relationship between the government attorneys and the Tribe, and the court’s decision did not place additional professional obligations upon government attorneys. See id. Finally, Jicarilla finds no importance in the fact that the government attorneys in this case were paid out of public funds as opposed to the Tribe’s own trust corpus. See id. The source of the payment, Jicarilla argues, does not change the purpose of the legal advice, which was ultimately sought to help the Jicarilla Tribe, the trust beneficiary. See id. at 28.
Can the Government Be Likened to an Ordinary Private Trustee of the Tribe?
The United States posits that the government cannot be seen as an ordinary common-law trustee of the Tribe’s fund. See Brief for Petitioner at 35. The government notes that it has management responsibilities for both tribal and individual Indian properties, including over 380,000 Individual Indian Money (IIM) accounts. See Cobell v. Norton, 392 F.3d 461, 463 (D.C. Cir. 2004); Brief for Petitioner at 35. If disclosure were required here on the basis of common-law trust principles, the United States argues, it may be similarly responsible to disclose privileged information for thousands of IIM accounts, potentially contradicting those statutes that specifically limit the government’s ability to furnish information to Indian tribes and individuals. See Brief for Petitioner at 35. In addition, the United States contends that the wide-ranging nature of many government obligations exempts it from the requirements of an ordinary private fiduciary. See id. at 42. For example, the government points out that it is required to oversee the treatment of endangered wildlife and the use of natural resources on tribal properties, obligations that occasionally create friction between the government and particular tribes. See id. at 41. This friction, the United States argues, may cause the government and particular tribes to disagree on the best way to manage tribal trust assets. See id. Thus, the government may occasionally choose to subordinate beneficiary tribal interests, something an ordinary private trustee is not allowed to do. See id.
In response, Jicarilla argues that, if anything, the government has a lesser claim to the protections of the attorney-client privilege than does a private party. See Brief for Respondent at 12. According to Jicarilla, courts that have considered the relationship between the government and Indian tribes have, like the Federal Circuit, found sufficient similarity to private trusts to justify using the fiduciary exception. See id. at 16. Jicarilla also notes that, unlike private practitioners, government attorneys owe continuing loyalty to the public at large, making the need for the secretive attorney-client privilege weaker in the government context. See id. at 14–15. The Tribe adds that disclosure and transparency are especially important when a trustee such as the government is responsible for multiple beneficiaries, several of whom may have competing economic interests. See id. at 23–24. Furthermore, Jicarilla denies that the elimination of attorney-client privilege in this case will harm the government’s ability to communicate effectively with its attorneys. See id. at 13. Government confidentiality, Jicarilla asserts, is protected by executive privilege and other distinct doctrines, which, unlike the attorney-client-privilege, are tailored to government functions and unavailable to private persons. See id.
Here, the Supreme Court will decide whether the United States can use the attorney-client privilege to withhold documents in a breach of trust case brought by the Jicarilla Tribe. The government argues that the privilege applies because Congress has issued no statutes or regulations requiring disclosure. Furthermore, disclosing the documents, the United States asserts, may harm its ability to act as a trustee for other parties. Jicarilla, however, argues that the government may be subjected in this case to ordinary common-law trust principles, including the fiduciary exception to the attorney-client privilege. Jicarilla emphasizes that the withheld documents concern the Tribe’s trust fund, and as such, should be made known to the trust beneficiary—the Tribe itself.
Edited by: Joanna Chen
The authors would like to thank former Supreme Court Reporter of Decisions Frank Wagner for his assistance in editing this preview.
· Second Circuit Blog: The Attorney Client Privilege Extends to Communications Between Government Officials and Their Government Lawyers (Feb. 24, 2005)
· Stephen M. Forte: What the Attorney-Client Privilege Really Means (Oct. 1, 2003)