Opinion
C.A. No. 2036-S
Date Submitted: October 24, 2001
Date Decided: February 14, 2002
Patricia A. Dailey, Esquire, Olha N.M. Rybakoff and Michael A. Undorf, Esquires of the DEPARTMENT OF JUSTICE, Wilmington, Delaware; Attorneys for Plaintiff.
Mary Robin Schrider, Esquire of TUNNELL RAYSOR, P.A., Georgetown, Delaware; Attorney for Defendants, Country Life Homes, Inc., and Elmer Fannin.
MEMORANDUM OPINION
I. INTRODUCTION AND BACKOROUND
Pending is the defendants' motion to compel discovery. In this action the State of Delaware, ex rel. M. Jane Brady, Attorney General (the "State"). challenges certain business and trade practices of Country Life Homes, Inc. That defendant, together with five other named defendants (collectively, "Country Life"), are charged with violations of the Delaware Consumer Fraud Act and the Delaware Deceptive Trade Practices Act.
The other named defendants are Ocean Farms Limited Partnership, Stephens Management Corporation, Ronald Stephens, Darlene Warner and Elmer Fannin.
During discovery certain defendants propounded to the State a first set of interrogatories and a request for production of documents. Finding the State's responses inadequate, those defendants requested supplemental responses. After conducting further limited discovery, the panics reached a stalemate on certain discovery issues. Thereafter, Country Life filed this motion to compel discovery.
Country Life filed its first motion to compel on October 25, 2000. Thereafter, the parties conducted limited voluntary discovery. The pending motion to compel addresses the remaining discovery issues not resolved since the October 2000 motion.
Count Life argues that it has received insufficient information from the State about the factual basis for the allegations of its complaint. As a result (Country Life argues), the disclosure of the report prepared by the State in connection with the investigation of the defendants (the "investigative report") is needed for County Life adequately to prepare its defense.
The State contends that the investigative report is not discoverable, on two grounds. The first is that the investigative report is protected by a governmental "executive" privilege. As to that ground I conclude that although governmental investigative reports created for a criminal court proceeding are protected by a qualified governmental privilege, there is no authority that supports the State's position that investigative reports prepared solely in connection with a civil proceeding are similarly privileged. I therefore conclude that the investigative report is not protected from discovery by a governmental privilege.
The second ground asserted by the State to oppose discovery is that the investigative report, even if not protected by a governmental privilege, is protected from discovery by the work product doctrine. In analyzing this issue, the Court must determine whether the investigative report was prepared "in anticipation of litigation." Unless the report was prepared in anticipation of litigation, it will not be protected by the work product doctrine. Because the record on that point is less than clear, the Court will inspect the investigative report in camera in order to determine which, if any, portions are protected work product.
Ct. Ch. R. 26(b)(3).
II. ANALYSIS
A. Whether the Investigative Report is Protected by a Governmental Privilege
Under this Court's liberal civil discovery rules, parties may generally "obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action." The Delaware Rules of Evidence compel this Court to recognize the existence of a "governmental privilege existing at common law or created by the Constitution, statute or court rule." Because the governmental privilege pertaining to investigative reports is not delineated in the Delaware Constitution or in any relevant statute or Court of Chancery Rule, if a privilege does exist, its contours and limitations must be found in the case law.
Ct. Ch. R. 26(b)(1) (emphasis added).
D.R.E. 508(b). That Rule states: "A governmental privilege existing at common law, or created by the Constitution, statute or court rule of this State, shall be recognized."
The parties agree that the Delaware Freedom of Information Act does not restrict the scope of discovery and does not affect the rights of the litigants in this case.
Unlike the Superior Court Criminal Rules, the Court of Chancery Rules do not specifically address whether the attorney general's investigative reports are discoverable. In contrast, the Delaware Superior Court Criminal Rules specifically state that they do not "authorize the discovery or inspection of reports, memoranda, or other internal state documents made by the attorney general . . . in connection with the investigation or prosecution of the case." Del. Super. Ct. Crim. R. 16(a)(2).
The State argues that a governmental privilege exists for information obtained in a criminal investigation. Although the case law is sparse, some cases do uphold a governmental privilege for facts obtained by the attorney general for use in a criminal prosecution. In those circumstances, the State is not "`required to disclose facts coming to [its] knowledge for the use of the state in its prosecution of the accused.'" Communications between a witness and a prosecutor are "regarded as secrets of state, or matters the disclosure of which would be prejudicial to the public interests." Such communications are protected, "and all evidence thereof [will be] excluded."
Williams v. Alexander, 1999 WL 743082, at *1 (Del.Super.Ct.); Beckett v. Trice, 1994 WL 319171 (Del.Super.Ct.); State v. Brown, 36 A. 458, 463-64 (Del. Oyer Term. 1896).
Beckett, 1994 WL 319171, at *3 (quoting Brown, 36 A. at 463).
Brown, 36 A. at 463-64.
Id.; see also 23 Am. Jur. 2d Depositions and Discovery § 81 (1983 Supp. 2001) ("[R]ecords of an ongoing criminal investigation are entitled to a qualified privilege from discovery, and the showing of necessity must be made to overcome this privilege.") (footnotes omitted).
This action, however, is a civil proceeding brought by the State under the Consumer Fraud Act and the Deceptive Trade Practices Act. No parallel or related criminal proceeding has been brought. The State asks this Court to recognize an immunity that protects investigative materials in State civil enforcement actions similar to the privilege applicable to criminal investigations. That is, the State contends that its investigative reports prepared in connection with a civil proceeding are protected by a common law governmental privilege. The state cites no case law which supports that position. Nor has the State cited any authority that would empower this Court to create a new governmental privilege in Delaware for investigative materials leading to a civil suit brought by the Attorney General. As earlier noted, this Court is mandated to recognize only those governmental privileges that exist at common law or that are created by the Constitution, statute or court rule. Because the State has not pointed to, and this Court is not aware of, any authority that recognizes a governmental privilege for a civil investigative report where there is no pending (or anticipated) criminal proceeding, the State has not met its burden of establishing that a governmental privilege exists in this case.
23 Am. Jur. 2d Depositions and Discovery § 29 ("A party objecting to discovery has the burden of establishing the existence of a privilege and must raise the objection in the first instance. It is not incumbent upon the party seeking production to allege that the material is not privileged.") (footnotes omitted).
B. Whether the Investigative Report is Protected by a Work Product Immunity
The State's alternative argument raises a second issue, namely, whether the investigative report is protected by the work product doctrine. That doctrine is embodied in Court of Chancery Rule 26(b)(3), which prohibits the discovery of otherwise discoverable materials that are prepared in anticipation of litigation, unless the party requesting discovery shows that it has a "substantial need of the materials in preparation of the party's case and that party is unable without undue hardship to obtain the substantial equivalent of the materials by other means."
To qualify for work product immunity, "`materials [must] be written specifically in preparation for threatened or anticipated litigation.'" Routine investigations are generally not protected by the work product doctrine. That is, if a document was prepared in the ordinary course of business and not in anticipation of trial, the document is discoverable.
Zirn v. VLI Corp., 621 A.2d 773, 782 (Del. 1993) (quoting Riggs Nat'l Bank of Wash.; D.C. v. Zimmer, 355 A.2d 709, 715 (Del.Ch. 1976)).
Ramada Inns, Inc. v. Drinkhall, 490 A.2d 593, 596 (Del.Super.Ct. 1985).
Cincinnati Bell Cellular Sys. Co. v. Ameritech Mobile Phone Servs. of Cincinnati, Inc., 1995 WL 347799, at *3 (Del.Ch.); Hopkins v. Chesapeake Utils. Corp., 300 A.2d 12, 14-15 (Del.Super.Ct. 1972).
The record facts do not enable me to decide whether the investigative report at issue on this motion was prepared in anticipation of litigation, or whether it was prepared routinely in the ordinary course of business. That difficulty arises because the State conducts routine investigations of complaints made to its Consumer Protection Unit; while at the same time, it also brings enforcement actions against certain offenders in civil court. Thus, at some point on the investigative process continuum, an investigation that begins as the routine exploration of a complaint brought against a Delaware business, will evolve into the preparation for a civil lawsuit against the offender. Only after the State begins preparing for a civil action does the work product immunity attach. On this record, I am unable to determine where on that continuum the investigative report at issue in this case falls. The only way to obtain that information is for the Court to review the investigative report in camera, which is what will be done here. In connection with the in camera review, the State will have the burden of demonstrating what portions (if any) of the report are protected by the work product immunity.
It is unclear how routine these investigations are. The State claims that in the year 2000, it received over 20,000 complaints; and with a staff of five special investigators and four Deputy Attorneys General the State cannot investigate every case. The State will only begin to pursue an enforcement action in certain cases "which indicate a widespread fraud against the public or where a business has falsely advertised to the community or engaged in a pattern of misconduct." State Ans. Br. at 13.
In camera inspection is a technique that is frequently used to determine whether a claim of work product immunity should be sustained. See, e.g., Greenlight Capital Qualified, L.P. v. Emerging Communications, Inc., 2000 WL 1810258, at *2 (Del.Ch.); Grimes v. LCC Int'l, Inc., 1999 WL 252381, at *3 (Del.Ch.); Cole v. Wilmington Materials, Inc., 1993 WL 257415, at *3 (Del.Ch.); see also 23 Am. Jur. 2d Depositions and Discovery § 29 ("In assessing claims of privilege or discovery, a court will often order that documents be submitted to it for an in-camera inspection. A court might then excise those parts of the documents which it finds to be privileged . . . .") (footnotes omitted).
See 23 Am. Jur. 2d Depositions and Discovery § 29 ("In the case of in camera review of documents, the burden of proof should be upon the party asserting the claim of privilege, since the adversary party, by virtue of the obvious fact that it has not seen the documents, cannot be expected to bear the burden of establishing a lack of privilege, unless it appears from the face of the document itself that it is privileged.") (footnotes omitted).