From Casetext: Smarter Legal Research

U.S. v. Wal-Mart Stores

United States District Court, D. Maryland, Southern Division
Apr 15, 2002
Civil Action No. PJM-01-1521 (D. Md. Apr. 15, 2002)


applying Morgan to former high-ranking officials and noting that "[i]f the immunity Morgan affords is to have any meaning, the protections must continue upon the official's departure from public service."

Summary of this case from Dobson v. Vail


Civil Action No. PJM-01-1521.

April 15, 2002


The Court has received Plaintiff's Motion for Protective Order Barring the Deposition of Former CPSC Chairman Ann Brown ("Plaintiff's Motion") (Docket Item No. 28). The Court has reviewed Plaintiff's Motion and the opposition and reply thereto. No hearing is deemed necessary. Local Rule 105.6 (D.Md.). The Court hereby grants Plaintiff's Motion.

I. Background

During a period relevant to the claims in this matter, Ann Brown was Chair of the Consumer Product Safety Commission ("CPSC"). During Ms. Brown's chairmanship, the CPSC conducted an investigation into the distribution of exercise equipment sold through Defendants' stores under the ICON brand name. Plaintiff alleges that Defendants sold goods that were defective and failed to timely notify the CPSC of their defective nature. Plaintiff seeks significant monetary penalties. Though she is no longer Chair of the CPSC, Defendants seek to depose Ms. Brown in a number of subject areas. Plaintiff seeks a protective order under Fed.R.Civ.P. 26(c) given, inter alia, Ms. Brown's former status as the head of the CPSC. The Court in large measure agrees with Plaintiff's analysis.

II. The Morgan Doctrine Protects High-ranking Officials from Being Deposed.

As a general principle, a party can conduct the deposition of any other person who possesses information relevant to a claim or defense.

Parties may obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party,. . . . For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to discovery of admissible evidence.

Fed.R.Civ.P. 26(b)(1). As a person likely to possess relevant information "reasonably calculated to lead to discovery of admissible evidence," Ms. Brown would generally be subject to a discovery deposition. However, the Supreme Court has created an exception to this rule as it applies to high-ranking officials holding public office in the case of United States v. Morgan, 313 U.S. 409 (1941). The Morgan doctrine recognizes that, left unprotected, high-ranking government officials would be inundated with discovery obligations involving scores of cases where the public official would have little or no personal knowledge of material facts. Left unchecked, the litigation-related burdens placed upon them would render their time remaining for government service significantly diluted or completely consumed.

The Morgan doctrine arose in the context of a quasi-legislative proceeding where the Secretary of Agriculture issued an order setting rates for market agencies at the Kansas City Stockyards. Under the operative statute, the regulated agencies were entitled to a full hearing with procedural safeguards. However, due to unusual and unique circumstances, the Secretary was required to be an arbiter of rates for past years. The lower court allowed the parties to conduct a deposition of the Secretary which the Supreme Court found was inappropriate due to the proceeding before the Secretary having a quality of a judicial proceeding. Accordingly, Morgan stands for the principle that when the Secretary's duties take on a judicial quality there is no right to conduct a deposition of such a decision maker in the absence of extraordinary circumstances. See also Simplex Time Recorder Co. v. Secretary of Labor, 766 F.2d 575 (D.C. Cir. 1985). Morgan has come to stand for the notion that as for high-ranking government officials, their thought processes and discretionary acts will not be subject to later inspection under the spotlight of deposition. Decision-makers enjoy a mental process privilege. United States v. Miracle Recreation Equip. Co., 118 F.R.D. 100 (S.D.Iowa 1987); Kyle Eng'g Co. v. Kleppe, 600 F.2d 226 (9th Cir. 1979); In Re Office of Inspector General, 933 F.2d 276 (5th Cir. 1991); United States v. Merhige, 487 F.2d 25 (4th Cir.), cert. denied, 417 U.S. 918 (1974); and In Re United States of America, 985 F.2d 510 (11th Cir. 1993).

III. The Morgan Doctrine Also Protects Former High-ranking Officials from Being Deposed.

Defendants argue that there is no need to consider the applicability of the Morgan doctrine to the present facts since Ms. Brown is no longer an active high-ranking official. There is no controlling law in the Fourth Circuit, therefore Defendants rely upon U.S. Magistrate Judge Francis' decision in Sandstrom v. Rosa, 1996 U.S. Dist. LEXIS 11923 (S.D.N.Y. 1996).

In Sandstrom, one party sought to depose former New York Governor Mario Cuomo. The Court permitted the deposition since former Governor Cuomo was no longer an active, high-ranking official, was a named defendant in his individual capacity, and because "it is critical that the Plaintiffs prove Governor Cuomo's personal involvement in order to recover damages." Id. at 5 (emphasis added). Allowing the deposition given the alleged "personal involvement" on a material point is consistent with other case law, irrespective of whether the official is in active service or has left the public arena. Several other District Court opinions were considered by the Court. In the principal cases relied upon, it is equally clear that the former high-ranking official was in personal possession of information critical to the litigation. For example, in Gibson v. Carmody, 1991 WL 161087 (S.D.N.Y. 1991), the Court allowed the deposition of a former New York City Police Commissioner, principally because "it is clear that Commissioner Ward personally participated in proceedings related to or stemming from the investigation of the facts underlying this case (including disciplinary action with respect to Defendant Carmody). . . ." Id. (emphasis added). Yet, in the same opinion, the court refused to allow the deposition of the New York County District Attorney. The court refused to do so even though the local media had attributed statements about the case to the District Attorney since there was no claim that he possessed any "personal knowledge" of the case. Similarly, in American Broadcasting Co. v. U.S. Information Agency, 599 F. Supp. 765 (D.D.C. 1984), the Court determined that the United States Information Agency Director should be subjected to deposition given that he was "the sole person responsible for the creation of the documents in question. He contrived the procedures implemented for the development, maintenance and distribution of the transcripts at issue." Id. at 770. The Court found that Plaintiffs were not seeking information regarding an exercise of discretion, but merely the discovery of facts that only the Director possessed.

Accordingly, Sandstrom, when read closely and in conjunction with the cases cited in support thereof, points to the need for the high-ranking official, active or former, to have personal involvement in a material aspect of the claim presented before a deposition will be required. Mere knowledge or awareness of information that may be helpful if discovered is insufficient. In this respect, Sandstrom does not change the analysis for determining when a high-ranking official may be deposed, whether currently or formerly in office.

The Court has found one case from West Virginia which stands for the proposition that former high-ranking officials, like those in active service, should be protected from depositions in the absence of extraordinary circumstances. In Arnold Agency v. West Virginia Lottery Commission, 206 W. Va. 583, 526 S.E.2d 814 (1999), the Court clearly laid out the rationale for its approach.

Former high-ranking government administrators, whose past official conduct may potentially implicate them in a significant number of related legal actions, have a legitimate interest in avoiding unnecessary entanglements in civil litigation. That interest obviously survives leaving office, thus we hold that the standard enunciated in Paige continues to apply in instances where a party seeks to orally depose a former high-ranking government official pursuant to West Virginia Rules of Civil Procedure 30.

Id. at 599, 830. The Court finds this reasoning persuasive.

One of the driving principles of the Morgan decision is that the indiscriminate depositions of high-ranking government officials would be unduly burdensome upon said officials and likely discourage them from accepting positions as public servants. Plaintiff correctly notes that this concern should apply with "equal force to situations in which the depositions of former high government officials are sought." Subjecting former officials decision-making processes to judicial scrutiny and the possibility of continued participation in lawsuits years after leaving public office would serve as a significant deterrent to qualified candidates for public service.

A closer reading of Morgan and its progeny, reveals two principals. The courts will require the high-ranking official submit to deposition in litigation not specifically directed at his conduct if: 1) extraordinary circumstances are shown; or 2) the official is personally involved in a material way. The courts are cognizant of the fact that high-ranking officials will be privy to a wide range of information due solely to their positions. However, there comes a point when their involvement becomes less supervisory and directory and more hands-on and personal, that it is considered so intertwined with the issues in controversy that fundamental fairness requires the discovery of factual information held by the official by way of deposition. Given that the courts, in light of Morgan, give some level of immunity to such officials to avoid the demands upon their ability to carry out their administrative responsibilities, the question becomes, "Should the courts allow and encourage such officials to be subject to such demands when their terms of office come to an end?" If so, such public servants should very well expect a mailbag full of deposition subpoenas on the day they depart office. If the immunity Morgan affords is to have any meaning, the protections must continue upon the official's departure from public service. Accordingly, the party seeking to depose a former high-ranking official must still demonstrate the existence of extraordinary circumstances or the personal involvement of the former official in a material way.

In the absence of controlling case law to the contrary, this Court is of the opinion that the Morgan doctrine is applicable to efforts by parties to depose former high-ranking officials. Accordingly, Defendants are required to make a preliminary showing of extraordinary circumstances or the personal involvement of Ms. Brown in a material way before the Court will allow her deposition to be taken.

IV. Defendants Have Not Made a Preliminary Showing Sufficient to Justify a Deposition.

The Morgan doctrine protects the mental processes of administrative agency decision-makers. It stems from the proposition that high-ranking government officials should not, in the absence of extraordinary circumstances, be called upon to testify regarding their reasons for official conduct. "The mental process rule protects the secret mental processes of those who, acting in a judicial or quasi-judicial capacity make decisions as to facts or as to law. . . . The rule has been applied to federal administrative officials who act in a quasi-judicial capacity." Singer Sewing Machine Co. v. NLRB, 329 F.2d 200 (4th Cir. 1964) (citations omitted). Interestingly, Defendants rely on two cases for the proposition that when the agency decision is not supported by an administrative record then depositions are permitted for the purpose of judicial review. A plain reading of the cases relied upon, namely Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971), and Community Federal Savings and Loan Ass'n. v. Federal Home Loan Bank Bd., 96 F.R.D. 619 (D.D.C. 1983), reveals that Defendants' reliance is misplaced.

Plaintiff correctly points out that these cases are based upon quasi-legislative decisions by administrative agencies and are subject to a slightly different analysis. Plaintiff correctly notes that depositions of such officials are allowed if: a) an administrative record is required, but is nonexistent or woefully inadequate; or b) the moving party makes a prima facie showing of bad faith or improper behavior if such is not apparent from the administrative record. On such occasions, the deposition will be permitted because there would be no other way for effective judicial review. In the present case, an administrative record was not required. The CPSC was acting in an executive capacity, not as a quasi-legislative entity, while making its decision to refer this matter to the Justice Department for prosecution. Therefore, Defendants are left with the burden of making a prima facie showing that Ms. Brown was acting in bad faith or improperly in her role as Chair of the CPSC, without regard to the lack of an administrative record.

In Singer Sewing Machine Co. v. NLRB, 329 F.2d 200 (4th Cir. 1964), the Court concluded that where a prima facie case of misconduct is shown, justice requires that the mental process rule be held inapplicable. Such a showing must go to the activities and conduct of former Chairman Brown as opposed to the agency in general. The alleged misconduct must go to the material determinations as opposed to collateral matters of a general bias. In this vein, the Court is not convinced that the alleged misconduct of notifying the press of the Government's decision to pursue this action prior to notifying Defendants rises to the level sufficient to justify a deposition. Similarly, the nexus between the supposed retaliatory nature of the investigation on the heels of a complaint to legislators by Defendants is not persuasive. The Court lastly does not see the perceived "procedural irregularity in failing to allow Wal-Mart an opportunity to argue to the full Commission" as a "rush to judgment by the Chair in the waning days of her influence" since Plaintiff had no such obligation. As for Ms. Brown's statements to the press, Plaintiff has provided an interrogatory response which articulates the reasons supporting her statements to the press which are not tantamount to misconduct. The second proposed area of inquiry — Ms. Brown's understanding "of the scope of a retailer's duty to report under Section 15(b) of the CPSC" — is irrelevant and immaterial. The Court also finds the communications between Ms. Brown and former agency counsel regarding any decision to refer this matter for litigation protected by the attorney-client and mental process privileges. Plaintiff also contends that there were at least two other persons from whom Defendants have had opportunity to obtain this information. The remaining areas of inquiry are similarly vulnerable to such an extent that Defendants are not entitled to conduct Ms. Brown's deposition.

V. Conclusion.

The Court finds that the Morgan doctrine, which protects high-ranking government officials from being subjected to deposition in the absence of a showing of extraordinary circumstances, is applicable to protect said officials to the same degree upon their departure from public service. Defendants have failed to make a prima facie showing of extraordinary circumstances, bad faith, improper behavior or personal involvement. Since Plaintiff has demonstrated good faith for the issuance of a protective order, the Court shall issue the protective order preventing the deposition of former CPSC Chairperson, Ann Brown.

Accordingly, it is so ordered this ___ day of March, 2002, that Plaintiff's Motion for Protective Order is hereby GRANTED.

Summaries of

U.S. v. Wal-Mart Stores

United States District Court, D. Maryland, Southern Division
Apr 15, 2002
Civil Action No. PJM-01-1521 (D. Md. Apr. 15, 2002)

applying Morgan to former high-ranking officials and noting that "[i]f the immunity Morgan affords is to have any meaning, the protections must continue upon the official's departure from public service."

Summary of this case from Dobson v. Vail
Case details for

U.S. v. Wal-Mart Stores

Case Details

Full title:UNITED STATES OF AMERICA, Plaintiff, v. WAL-MART STORES, et al., Defendants

Court:United States District Court, D. Maryland, Southern Division

Date published: Apr 15, 2002


Civil Action No. PJM-01-1521 (D. Md. Apr. 15, 2002)

Citing Cases

New Castle County v. Christiana Town Center

See also Sandstrom v. Rosa, 1996 U.S. Dist. LEXIS 11923 (S.D.N.Y.).United States v. Wal-Mart Stores, 2002 WL…

Energy Capital Corp. v. U.S.

Other courts have persuasively argued for the application of the Morgan doctrine to former high-ranking…