Opinion
CRIMINAL ACTION NO. 19-197
12-02-2020
UNITED STATES of America v. Khalid Ahmed SATARY
ORDER
SECTION D (4)
WENDY B. VITTER, UNITED STATES DISTRICT JUDGE
Before the Court is the Government's Motion for a Discovery Protocol. The Motion is opposed, and the Government filed a Reply. This Court referred the matter to Chief Magistrate Judge Roby. The Magistrate Judge issued a Report and Recommendation in which she recommended the Court adopt the Government's proposed protocol. Defendant filed Objections to the Report and Recommendation, and the Government filed a Response to the Objections. After careful consideration of Report and Recommendation, the parties’ memoranda, the record, and the applicable law, the Court overrules Defendant's Objections, approves the Report and Recommendation of the United States Magistrate Judge and adopts it as its opinion, and enters the Government's Proposed Discovery Protocol.
R. Doc. 62.
R. Doc. 72.
R. Doc. 77.
R. Doc. 105.
R. Doc. 132.
R. Doc. 134.
R. Doc. 136.
For judicial efficiency, the Court adopts here the Factual Background as outlined in the background section of the Report and Recommendation. Summarized briefly, the Government executed a search warrants of various offices, including those at Lazarus Services, LLC in New Orleans and various properties in Lawrenceville, Georgia. The Government uses a filter team to review all material taken from these searches. Various persons, including cooperating witnesses who have pleaded guilty and certain defendants in a related case, may have certain privileges over the material. The filter team therefore segregates "Potentially Protected Material" which may be subject to a third-party privilege claim before producing such material to the Prosecution Team or Defendant. The Government's Filter team seeks entry of a Discovery Protocol that would allow it to disclose discovery that has been or could be subject to claim of privilege, which would allow it to notify and resolve third-party claimant's privilege claims prior to producing their Potentially Protected Material. Defendant objects to the entry of the proposed Discovery Protocol, as he contends it lacks sufficient protections to protect his privilege claims over the material at issue.
See R. Doc. 132 at 1-6.
Defendant makes two primary arguments for why the Report and Recommendation should be rejected. First, he argues that the Magistrate Judge committed factual error because she did not appreciate that some of material at issue includes material over which he may assert a privilege, including his email account and communications with Victoria Nemerson. Second, he argues that the Magistrate Judge committed legal error because she found he lacked standing to assert broad privilege claims over materials taken from third-party businesses under the common interest or joint defense doctrines. The Court reviews the Magistrate Judge's legal conclusions de novo , and reviews the Magistrate Judge's factual findings for clear error.
See Floyd v. Wal-Mart Louisiana, LLC , 2010 WL 2710649, at *1 (W.D.La. Jul 07, 2010) (citing Choate v. State Farm Lloyds , No. 03-cv-2111, 2005 WL 1109432, at *1 (N.D. Tex. May 5, 2005) ).
Defendant first contends that the Magistrate Judge committed factual error by failing to appreciate that he has standing to assert a privilege over some of the potentially privileged materials because it comes from his personal email account or are communications with his attorney, Victoria Nemerson. This argument lacks merit. The Magistrate Judge specifically noted that "[t]he government states, and defendant does not dispute, that the contents of his personal email account have been produced to him for his review." And the Government has represented that "[i]n April 2020, the Filter Team produced all the material over which Defendant had standing to assert a privilege (i.e. his email account) or could access by virtue of a joint defense agreement (i.e. documents from third party businesses). This material was produced in full and contained both potentially privileged, including communications with Victoria Nemerson, Esq., and non-potentially privileged items." The Government has further represented that
R. Doc. 132 at 9.
R. Doc. 136 at 4.
As of October 2, 2020, the Filter Team as produced to Defendant: all material over which he has a standing to assert a privilege (i.e., his email account and items seized from third-party businesses that may contain communications with his personal attorney); the material he is authorized to review pursuant to a JDA (i.e. the material seized from the third-party businesses, including material from Nemerson's office); the search terms used by the Filter Team to identify and segregate Potentially Privileged Material from the Prosecution Team; the items the Filter Team identified as Potentially Privileged Material contained in Defendant's email account and from material seized from the third-party businesses; and the items the Filter Team identified as non-Potentially Privileged Material contained in Defendant's email account and from the material seized from the third-party business.
Id. at 6.
The Magistrate Judge therefore did not fail to appreciate that some of the seized material could be subject to a privilege claim by Satary, but rather did not find this an appropriate reason to forgo entering the proposed Discovery Protocol because the Government has already produced this material to Satary, mooting his objection.
Satary further argues that the Magistrate Judge's order allowing Satary to review information the Filter Team has designated as non-privileged is in tension with the Report and Recommendation before the Court. The Court does not see such a conflict. In the Order allowing Satary to review information the Filter team has designated as non-privileged, the Magistrate Judge gave Satary permission to review items "seized from Defendant's Gmail account, from the Defendant's personal attorneys office, and any personal date seized from the Defendant's electronic devices that were seized from his business that the Filter Team identified as Non-Potentially Protected Material." That order, as the Court reads it, was designed to allow Satary to review the filter team's privilege calls over material that he would have standing to assert privilege. The Report and Recommendation, on the other hand, deals with Satary's Objections to the production of third-party potentially privileged materials over which the Magistrate Judge found he does not have standing to assert a privilege claim. No tension or conflict therefore exists.
R. Doc. 131.
R. Doc. 131 at 1.
Defendant also argues that the Magistrate Judge committed legal error by finding he did not have standing to assert privilege over the materials at issue as he can assert common interest or joint defense privilege. But, again, the Government represents that it has provided to Defendant "the material he is authorized to review pursuant to a Joint Defense Agreement (i.e., the material seized from the third-party businesses, including material from Nemerson's office)." This, coupled with the other material already produced to Defendant discussed above (including his email account) should account for any Potentially Protected Material over which Defendant could assert a claim of privilege.
R. Doc. 136 at 6.
In short, Defendant's objections have been mooted as the Government produced to Defendant all material over which he may assert a privilege. As such, the Court overrules Defendant's Objections and adopts the Magistrate Judge's Report and Recommendation.
IT IS HEREBY ORDERED that the Government's Motion for Discovery Protocol Governing Disclosure of Material Subject to Claims of Privilege is GRANTED . The Discovery Protocol shall be entered contemporaneously with this Order.
ORDER
Having considered the United States’ motion requesting authorization and entry of a protocol to govern the disclosure of discovery material that have been or are potentially subject to claims of privilege by Defendant and third-parties and to extend time to produce discovery pursuant to protocol, and for good cause shown,
IT IS HEREBY ORDERED THAT :
1. The United States’ motion is GRANTED , and the protocol set forth in Paragraphs 2-9, below (hereafter "Protocol"), shall govern the review and disclosure of discovery material that have been or are potentially subject to claims of privilege (hereafter "Potentially Protected Material") by Defendant and third parties in this case.
2. The Protective Order issued on December 21, 2019 (ECF No. 41) shall apply to any discovery material produced by the filter team established by the United States in this case (hereafter "Filter Team") to Defendant or a third-party pursuant to the Protocol.
3. The Filter Team shall withhold Potentially Protected Material, unless a court order or a third-party claimant authorizes the release of Potentially Protected Material to the Prosecution Team.
4. The Filter Team shall release discovery material that is not Potentially Protected Material for production to the Prosecution Team and Defendant.
5. The Filter Team shall produce Potentially Protected Material to Defendant under the following conditions:
a. If Defendant is the privilege holder or is entitled to access the discovery material by virtue of a Joint Defense Agreement (JDA), Defendant shall receive a full copy of the discovery material in the same format as it was provided to the Filter Team. The discovery material shall be subject to the Protective Order in this case, as well as the Protocol, and may not be further disclosed or disseminated except as provided in this Order.
b. If Defendant is not the privilege holder of the discovery material or is not entitled to access the material by virtue of a JDA, before producing any of a third-party claimant's Potentially Protected Material to
Defendant, the Filter Team shall notify the third-party claimant that their Potentially Protected Material will be produced as part of the discovery to Defendant, unless such notice would jeopardize an ongoing investigation. In that case, the Filter Team shall seek authorization from the Court as to how to release the Potentially Protected Material at issue to Defendant.
i. Contents of Notice. The notice shall identify the Potentially Protected Material to be produced, the anticipated date of production to Defendant, the criminal case number, and a copy of the Protocol Order. The Filter Team shall also provide the claimant with an electronic copy of the Potentially Protected Material scheduled for production.
ii. Procedures for Objections to Production or Asserting Privilege Claims. If a claimant objects to the Filter Team's discovery production to a Defendant, release to the Prosecution Team, or asserts a privilege claim to protect certain materials, the claimant will notify the Filter Team of their position within fourteen (14) days of receiving the Filter Team's notice. The claimant's objection will include a privilege log, setting forth the claim asserted - such as attorney-client privilege, work product doctrine protection, or other legally recognized claim - that precludes production for each document logged. The log shall also set forth the document title, subject matter, author(s), recipients(s), date, transmittal detail (if any), location of author(s) and recipient(s), and an explanation of the claim asserted against production. A third-party claimant shall email a copy of their objection and privilege log to Defendant and the Filter Team. If claimant does not respond to the Filter Team's notice within fourteen (14) days, the Filter Team will provide Defendant with information regarding the Filter Team's attempts to contact the claimant. Thereafter, Defendant may move the Court for a finding that the claimant has waived privilege claims.
iii. After the Filter Team receives the objection and required privilege log from the claimant, the parties shall have three (3) business days to meet and confer to try to resolve any areas of disagreement concerning the asserted privilege. If the objection is made by a third-party, Defendant shall be given notice of the date and time of the meet and confer, and Defendant may participate through counsel. If the parties cannot come to an agreement as to the asserted claim, the Filter Team (or Defendant if he objects) shall notify the objecting party in writing that the parties do not agree.
iv. The Filter Team or Defendant shall then have five (5) business days from the date of objection to move to compel production of the Potentially Protected Material. The moving party shall provide a copy of the privilege log provided by the claiming party, a copy of the disputed material or document(s), and a memorandum containing any factual or
legal arguments. If the moving party is Defendant, the Filter Team will provide the Potentially Protected Material in dispute to the Court ex parte for in camera review.
v. Within seven (7) business days of the filing of a motion to compel, the claiming party shall file a response supporting its claim.
vi. Any reply in support of the motion to compel will be due within five (5) business days of the responsive filing.
vii. If the Court thereafter authorizes the Filter Team to produce the disputed Potentially Protected Material to the Prosecution Team and to Defendant, the Court will retain jurisdiction to determine if, and under what circumstances, Defendant or the Prosecution Team may use the Potentially Protected Material at trial.
c. The Court retains jurisdiction to adjudicate any dispute or resolve any privilege asserted over the discovery material produced pursuant to the Protocol.
d. If Defendant or a third-party claimant fails to provide a privilege log to the Filter Team and/or Defendant sufficient to allow the reviewing party or the Court to determine the nature of the claim, or fails to meet and confer, the Court may determine that such actions constitute waiver of a claim.
e. If a privilege claim was asserted by a third-party and not later challenged by the Filter Team or Defendant, the Filter Team or the Court may direct Defendant or the Prosecution Team to return or destroy any items that were produced in discovery but remain subject to a non-challenged privilege claim. Under these circumstances, Defendant must return or destroy Potentially Protected Material at the request of the Filter Team unless they receive the Court's approval to retain the material.
f. Pursuant to Fed. R. Evid. 502(d), any Potentially Protected Material disclosed to a third-party or Defendant pursuant to this Protocol Order or subsequent disclosure order, shall not constitute, or be deemed, a waiver or forfeiture of any privilege claim in any federal or state judicial or administrative proceeding other than these federal proceedings.
6. The Government or Defendant shall have the right to present to the Court any document to determine if an exception, such as the crime-fraud exception, or a waiver, such as a subject-matter waiver, applies to the Potentially Protected Material. Production pursuant to this section shall not be grounds for a waiver argument by the Government or any other party pursuant to Fed. R. Evid. 502(d).
7. If any member of the Prosecution Team inadvertently reviews an item believed to be protected by the attorney-client privilege, work-product doctrine, or any other legally recognized privilege, the Prosecution Team member shall turn the item over to the Filter Team for resolution through the filter process. The Filter Team shall promptly notify the privilege holder in the event of an inadvertent disclosure. Inadvertent review shall not automatically disqualify the Prosecution Team member from this matter. Defendant may seek further judicial review following notice of inadvertent review.
8. The notification and filing deadlines set forth in this Protocol may be extended based on the written agreement of the parties, or by any party requesting the same from the Court upon good cause shown.
9. The United States shall provide a copy of this order to all known potential third-party claimants within three (3) business day of the entry of the Order.
DONE and ORDERED in Chambers at New Orleans this 2nd day of December, 2020.
Report and Recommendation
KAREN WELLS ROBY, CHIEF UNITED STATES MAGISTRATE JUDGE
Before the Court is the United States’ Motion for Discovery Protocol Governing Disclosure of Material Subject to Claims of Privilege and Extension of Time to Produce Discovery (Rec. doc. 62) filed by the United States Filter Team on June 16, 2020 and referred to the undersigned Magistrate Judge on September 1, 2020 (Rec. doc. 105). The motion is opposed. Rec. doc. 72. The United States filed a reply to the opposition. Rec. doc. 77. This motion was referred to the undersigned for a report and recommendation pursuant to Local Rule 5.1 and Fed. R. Crim. Pro. 59(A).
I. Background
Khalid Satary is charged alone with a series of counts related to a scheme to defraud the Medicare program including conspiracy to commit money laundering. The government alleges that, beginning in January 2017, through a web of companies he purportedly controlled, Mr. Satary obtained reimbursement for cancer genomic testing ("CGx testing") that was medically unnecessary. Satary Indictment (Rec. doc. 1) at ¶¶ 21-22, 39-44. Allegedly, Mr. Satary and his web of companies improperly received $134 million from the Medicare program. Id. at ¶ 40.
This is a complex matter as can be gleaned from a reading of the indictment itself. The charges identify four separate companies, all uncharged and allegedly controlled by Mr. Satary, that were a part of the charged scheme. Id. at ¶¶ 31-34. There are other genetic testing fraud cases, not involving Satary, that are pending in the Southern District of Florida, the Middle District of Louisiana, the Western District of Pennsylvania, and the Northern District of Texas. As a result of this massive investigation, the government obtained a large amount of evidence. Consequently, it created a Filter Team whose task was to review certain evidence the Prosecution Team reasonably determined could potentially contain material protected by the attorney-client privilege, work-product doctrine, or other legally recognized privileges (hereinafter collectively referred to as "Potential Protected Material" or "PPM"). It is the Filter Team's job to segregate the PPM from the Prosecution Team. Rec. doc. 62-1.
The Filter Team was present for and participated in the execution of a search warrant on September 27, 2019 at the properties in Lawrenceville, Georgia—Clio Laboratories (Clio), Elite Medical Laboratories (Elite), Alpha Medical Consulting Inc. (Alpha Medical), GNOS Medical, Inc. d/b/a Laboratory Experts (GNOS), and Next Genomix Laboratories, Inc. (Next Genomix). See Rec. doc. 62-1. On that same date, search warrants were executed at Lazarus Services, LLC (Lazarus) in New Orleans, Louisiana and at Performance Laboratories, LLC (Performance) in Oklahoma without the Filter Team's participation. The Filter Team consists of different members of the Department of Justice who are members of the fraud team, with a separate reporting and supervisory chain from the Prosecution Team.
While the Filter Team participated in one location, and not the other, the Filter Team reviewed all material seized on September 27, 2019 regardless of the seizure location before releasing the items to the Prosecution Team. The Filter Team acknowledges that they reviewed consensually recorded calls made by cooperating witness, text messages, and other electronic files obtained during the Government's investigation. The Filter Team also represents that it segregated Potentially Protected Material from the Prosecution Team. Id. It also represents that no member of the Filter Team would ever be involved in the prosecution of the case and have been cautioned against disclosing information discovered during the filter process to the Prosecution Team. Id.
In connection with its work, the Filter Team reviewed documents that involved several cooperating witnesses who have pled guilty and defendants in a "related case" and who may have certain privileges over the material the government possess before its produced to Satary in this case. Rec. doc. 62-1, p. 4. Naturally, each of these witnesses, defendants, and their lawyers objected to the Filter Team blanketly producing their communications, which may be privilege. Consequently, the Filter Team has submitted a proposal to govern the production of documents and communications involving the third parties.
The cooperating witnesses are Christopher Miano and Dean Austin of eLab Partners, Mike Molz, Brett Hirsch, Joseph Ricciardi, Dean Baker, Jaime Simmons, and defendants Richard Garipoli and Mark Allen.
The Filter Team, in its reply, points out that Satary is not the privilege holder for and lacks standing to assert a privilege over the vast majority of the material in dispute. Rec. doc. 77. The team further contends that Satary is not entitled by law to review the material that he now seeks to review. Id. The Filter Team further contends that Satary's motion is moot because he was provided his personal email account, including the Potentially Privileged Material, that he is by law entitled to review. Id. The government points out that, because the corporation is the client for purposes of invoking attorney-client privilege, that the corporation should be the party considered when determining whether an exception to the privilege applies. Additionally, the government contends that giving Satary a "first pass" would obstruct the Prosecution Team's ability to adhere to the court's order in Patel and prepare for trial. Rec. doc. 77, p. 3.
United States v. Patel , 19-cr-80181-RAR (S.D. Fla.).
The government was informed that Lazarus, Performance, Alpha Medical, Clio, Elite and GNOS have entered into a Joint Defense Agreement (JDA). Consequently, counsel for these entities do not object to the disclosure of their respective documents and communications to Satary. The motion does not address the release of potentially privileged documents and communications of Satary to the Prosecution Team that were seized from the seven (7) related businesses.
The government points out that, at the time of the filing of this motion, it has made nine discovery productions. Rec. doc. 62-1, p. 6. The productions began on October 18, 2019 by the Prosecution Team. Id. It is unclear from the Government's submission whether the series of productions by the Prosecution Team included documents released to it by the Filter Team or whether the series of productions were from the September 27, 2019 search.
The government points out that the discovery material it has already produced included financial records, business records, Medicare records, digitized hard copy documents, e-mails and other electronic documents and data, text messages, consensual recordings, report of interviews, and search warrant materials that were seized from Satary.
The Filter Team admits that its production of April 2, 2020 included PPM and that Satary has authority to access the materials as a result of the JDA and may also assert his privilege over the materials pursuant to the proposed protocol. Id. Again, it is unclear whether the "copy of discovery material" it produced was also produced to the Prosecution Team without regard to Satary's rights to assert privilege in advance of the Prosecution Team having access to the information prior to a ruling of the court.
The material produced by the Filter Team included (1) the contents of Defendant's personal email account (ksatary@gmail.com ), for which Defendant can assert a privilege pursuant to the proposed protocol; and (2) digitized hard copy documents and the contents of electronic devices seized from Clio, Elite, Alpha Medical and GNOS located on Hurricane Shoals Road, Performance located in Oklahoma and Lazarus in New Orleans, and (3) audio recordings.
The Filter Team also released the digitized hard copy documents seized from Clio, Elite, Alpha Medical, GNOS, Lazarus, and Performance that were not Potentially Protected Material to the Prosecution Team on May 1, 2020. Id. The Government contends that because the investigation involves genetic testing fraud, which resulted in multiple criminal cases that its discovery obligations in each of these cases require the disclosure of the documents seized from (1) cooperating witnesses Hirsch, Miano, Austin, and Molz as well as (2) defendants Garipoli and Allen. Rec. doc. 62-1, p. 7.
The government further provides that the consensual recordings and email accounts of other third parties must be produced in multiple related prosecutions. Id. It should be noted that, other than all the cases involving genomic testing, which was allegedly medically unnecessary, it is unclear how the defendants in the other cases or the cooperating witnesses are linked to this matter at this stage of the matter.
The Government, therefore, proposes the adoption of a protocol it attached as an exhibit, which it contends would govern its obligations to Satary and any third-party claimant's privilege and the resolution of privilege disputes. The adoption of the protocol would permit the Government to disclose discovery material that has been or could potentially be subject to claims of privilege by the defendant or a third-party. Although not clearly stated, the entry of the order would permit the Filter Team to disclose the documents and communications seized to the Prosecution Team in this case and the other genomic testing cases where Satary is not a defendant. Presumably, the Filter Team implicitly would permit Satary to "assert privilege" after the release to the Prosecution Team in this case. They make no mention of the implications of any authorization to pre-release the records in the other cases or how Satary would raise any claim to privilege in the other cases.
Satary opposes the Filter Team's proposed protocol order because it lacks any meaningful protection for his confidential and privileged communications with his various attorneys. Rec. doc. 72, p. 1. Satary also contends that he is being forced into a protocol implemented by the same team of prosecutors in an unrelated case with different facts. Id. Satary contends that the proposed protocol eviscerates his privileged attorney-client communications by authorizing the transmission of those communications to the trial prosecutors without providing the defense any opportunity to assert claims of privilege over the materials. Id.
Satary points out that he proposed minor revisions to the PPO granting him 30 days to review any materials that the Filter Team proposed to transmit to the Prosecution Team and to raise objections to any documents containing privilege information. Rec. doc. 72, p. 2. Satary also points out that the Filter Team unilaterally produced documents to the Prosecution Team, without notice, a copy of the materials or an inventory of the documents produced to the Prosecution Team. Id. Satary contends that in order to not only preserve the third-party privileges but also his rights pursuant to the Sixth Amendment a pre-release review by his legal team is warranted. Id.
Satary finally complains that the Filter Team is conducting its privilege review of the seized documents and have yet to designate which documents/materials the Filter Team deems "seized" from the searches and that the proposed protocol puts Third Party Cooperator Rights above his rights in this case. Rec. doc. 72, p. 4.
II. Adequacy of Proposed Protocol
The Government contends its proposed protocol not only protects Satary's rights but also the rights of the third parties whose documents and communications were swept up in the searches. The Government proposed the adoption of the protocol as submitted, noting that a U.S. Magistrate Judge in Georgia found its protocol reasonable and adopted an identical protocol. Particularly, because the documents seized were of various corporations, the corporations themselves are the true parties in interest with the right to review for privilege and not Satary himself.
The government also points out that its Filter Team previously produced all of Satary's potentially privileged material over which he has standing to assert privilege, i.e. his personal email account. Additionally, the government contends that Satary can gain access to the documents seized from the businesses because they are parties to the joint defense agreement. Further, the government points out that it was aware of Nemerson being corporate counsel for Alpha Medical Consulting, GNOS Medical Inc. d/b/a/ Laboratory Experts, and Clio Labs. Nemerson is also listed as an owner of Next Genomix Labs where she owns a 30% interest, a third-party who would be subject to the protocol. Id. The government also points out that it provided a list of more than 780 terms, including terms associated with Nemerson, which they review and used to determine if privileged material was captured or not. Id.
In a Notice of Supplemental Authority filed by the government, the Filter Team advises that in United States v. Kevin Hanley and Mark Allen, Case No. 19-cr-120-BAJ (M.D. La.) the court authorized a substantially similar protocol to the one offered in this case. The Filter Team further indicated that Satary is identified as a "Co-Conspirator 3" in the Hanley and Allen Case, which has rendered the corporate documents (emails and other documents) seized relevant in that case
Satary, on the other hand, opposes the adoption of the submitted protocol noting that his rights were not protected. Satary, however, seeks the inclusion of a provision requiring the Filter Team to provide non-PPM material to him for review before release to the prosecution team. Satary suggests that he should be given thirty (30) days to conduct a review and raise any privilege objections, and, if no agreement can be reached, submission of the material for the Court's review and determination by the Court. Satary did not respond to the government's reply that he has no attorney-client privilege regarding the documents seized during the search of the various corporations.
The defendant does not object to the use of a Filter Team. According to the defendants, the Filter Team in this case has determined that there are 597,075 documents consisting over 1,000,000 pages including documents from at least 100 outside law firms and approximately 250 attorneys plus documents from Ms. Nemerson, the general counsel of Alpha Medical Consulting, GNOS Medical Inc. d/b/a Laboratory Experts, Clio Labs and part owner of Next Genomix Labs.
The proposed language in Item No. 3 of the protocol is the central issue before the court. It reads:
The Filter Team shall release discovery material that is not Potentially Protected Material for production to the Prosecution Team and the Defendant.
See Rec. doc. 62-2, p. 2, ¶ 3.
A broad review of Satary's contention is that the search of the corporations in Georgia, Louisiana, and Oklahoma should entitle him to a pre-release review of the documents seized because the release of the records may violate his attorney client privilege. However, federal case law clearly holds that a corporation's attorney-client privilege belongs to the corporation, not to the corporation's officers and directors or shareholders. Commodity Futures Trading Comm'n v. Weintraub , 471 U.S. 343, 349, 105 S.Ct. 1986, 85 L.Ed.2d 372 (1985) ; Upjohn Co. v. United States, 449 U.S. 383, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981).
Accordingly, the fact that Satary was a member or shareholder of either of the companies does not provide him with an independent ground to access privileged communications because the privilege belongs to Clio, Elite, Alpha Medical, GNOS, and Next Genomix.
If Satary is the privilege holder, according to the proposal, he gets a full copy of the discovery material in the same format as it was provided to the Filter Team. (Rec. doc. 62-2, ¶ 5(a)). However, only if the Filter Team determines the documents are Potentially Protected.
The documents the Filter Teams deems not PPM are then automatically released to Prosecution Team and Defendant. Rec. doc. 62-2, ¶ 3. The agreement further has an inadvertent disclosure provision that protects the Filter Team from its error in the case a member of the Prosecution Team inadvertently reviews an item believed to be PPM. Rec. doc. 62-2, ¶ 7. The provision provides that where the Prosecution Team determines or believes that a document might be privileged then the Prosecution Team member shall return the document to the Filter Team, not the defendant. Id. It is the Filter Team's obligation to notify the privilege holder of the inadvertent disclosure. Id. Inadvertent disclosure by the Filter Team to the Prosecution Team does not result in an automatic disqualification but maybe submitted to the court for review. Id.
In reviewing the proposed order, the Court notes the protocol was crafted to address the disclosure and production of documents obtained during the September 27, 2019 searches of the corporate entities. The government states, and the defendant does not dispute, that the contents of his personal email account have been produced to him for his review. However, while Satary claims entitlement to a review of the documents seized during the September 27, 2019 searches, the authority he cites does not support his position.
Courts in this circuit require the pre-review process before non-PPM can be released to the Prosecution Team where the party or owner of the documents has a privilege to protect. For example, in In re Search of 5444 Westheimer Road Suite 1570, 2006 WL 1881370 at *2 (S.D. Tex. July 6, 2006), the offices of a corporation located at 5444 Westheimer were subject to an FBI search and the corporation claimed entitlement to the return of the seized documents because they were potentially privilege. While the court denied the corporation's request to return the documents, it authorized the use of a filter team to guard against the disclosure of the corporations privileged documents to the prosecution team. Id.
Also, in Heebe v. U.S. , the court considered a protocol to protect the release of documents from the offices of the River Birch Landfill. Heebe v. United States , No. CIV.A. 10-3452, 2012 WL 3065445, at *1 (E.D. La. July 27, 2012). In Heebe , individual defendants and corporations filed a motion to compel seeking the return of privileged documents and the implementation of a protocol for the segregation and return of the documents. The Court did not address the issue of attorney client privilege but fashioned a protocol.
The Court held the proper method for determination of privilege is actually that the clean team will identify and return to the original owner all documents that are "potentially privileged." The Court held that the dispute should be heard before a court before the document is turned over to any prosecution team. Id. This protocol is consistent with owner of the documents being entitled to review the privileged documents.
Also, in In re Ingram, 915 F. Supp. 2d 761 (E.D. La. 2012), the Court considered the implementation of a filter team protocol where evidence was seized from Bay Ingram, the target of a federal grand jury investigation and purported owner of the two e-mail addresses. The Ingram protocol provided that the non-privileged documents would be reviewed by Ingram's lawyers who would be given the opportunity to challenge the clean team's determination.
The Ingram protocol provided that if the filter teams’ attorneys and Ingram's attorneys could not agree that the Court would resolve the dispute. The protocol provided that, only when all privilege determinations were final, would the non-privileged documents be submitted to the case agent for use in the investigation and that copies of the privileged documents were to be sequestered within the filter agent's and prosecution team's files.
While the lawyers in Ingram challenged the use of the filter team, the Court not only approved the filter team but also the pre-review before release process, which is absent in the subject protocol. Again, the approved protocol involved the owner of the documents to whom the privilege may have applied.
Consequently, the Court finds that, because the subjects of the September 27, 2019 search warrants were Alpha Medical Consulting, GNOS Medical Inc. d/b/a/ Laboratory Experts, and Clio Labs, and not Satary individually, that Satary lacks standing to object to the disclosure.
The defendant does not oppose the other provisions of the Proposed Order. Having determined that Satary has not established that he individually is the owner of the documents seized on September 27, 2019, he has failed to show that he had privilege that is not adequately protected by the proposed protocol. III. Recommendation
Accordingly,
IT IS RECOMMENDED THAT the United States’ Motion for Discovery Protocol Governing Disclosure of Material Subject to Claims of Privilege and Extension of Time to Produce Discovery (Rec. doc. 62) be GRANTED.
A party's failure to file written objections to the proposed findings, conclusions, and recommendation in a magistrate judge's report and recommendation within fourteen (14) days after being served with a copy shall bar that party, except upon grounds of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal conclusions accepted by the district court, provided that the party has been served with notice that such consequences will result from a failure to object. Douglass v. United Servs. Auto. Ass'n , 79 F.3d 1415, 1430 (5th Cir. 1996).
Douglass referenced the previously applicable ten-day period for the filing of objections. Effective December 1, 2009, 28 U.S.C. § 636(b)(1) was amended to extend the period to fourteen days.
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New Orleans, Louisiana, this 25 th day of September 2020.