EFTA01180323.pdf

Case: 13-12923 Date Filed: 04/24/2014 Page: 1 of 46 No. 13-12923 31n tbe Einiteb *tatess Court of appeafo jfor tbe Clebentb Circuit JANE DOE NO. 1 & JANE DOE NO. 2, Plaintiffs-Appellees, v. UNITED STATES OF AMERICA, Defendant, ROY BLACK, MARTIN G. WEINBERG, & JEFFREY EPSTEIN, Intervenors-Appellants. TIME SENSITIVE MOTION FOR A STAY PENDING A RULING ON INTERVENORS' PETITION FOR REHEARING ROY BLACK G. RICHARD STRAFER MARTIN G. WEINBERG JACKIE PERCZEK G. RICHARD STRAFER, P.A. 20 Park Plaza BLACK, SREBNICK, KORNSPAN 201 South Biscayne Blvd. Boston, MA 02116 & STUMPF, P.A. Suite 1380 Tel: (617) 227-3700 201 South Biscayne Blvd. Miami, FL 33131 Fax: (617) 338-9538 Suite 1300 Tel: (305) 374-9091 [email protected] Miami, FL 33131 Fax: (305) 377-9937 Tel: (305) 371-6421 [email protected] Fax: (305) 358-2006 [email protected] [email protected] EFTA01180323  Case: 13-12923 Date Filed: 04/24/2014 Page: 2 of 46 CERTIFICATE OF INTERESTED PERSONS Pursuant to I 1 th Cir. R. 26.1, Intervenor/Appellants hereby certify that the following persons have an interest in the outcome of this case: 1. Marra, The Honorable Kenneth 2. Acosta, R. Alexander 3. Black, Roy 4. Cassell, Paul G. 5. Edwards, Bradley J. 6. Epstein, Jeffrey 7. Ferrer, Wifredo A. 8. Howell, Jay 9. Lee, Dexter 10. Lefkowitz, Jay 11. Perczek, Jackie 12. Reinhart, Bruce 13. Sanchez, Eduardo I. 14. Sloman, Jeffrey 15. Strafer, G. Richard Page C-1 of 2 EFTA01180324  Case: 13-12923 Date Filed: 04/24/2014 Page: 3 of 46 16. Villafacia, A. Marie 17. Weinberg, Martin 18. Doe No. 1, Jane 19. Doe No. 2, Jane Is/ Roy Black Attorney for Intervenor/Appellants Page C-2 of 2 EFTA01180325  Case: 13-12923 Date Filed: 04/24/2014 Page: 4 of 46 TABLE OF CONTENTS Page CERTIFICATE OF INTERESTED PERSONS C-1 TABLE OF CONTENTS i TABLE OF AUTHORITIES ii TIME SENSITIVE MOTION FOR A STAY PENDING A RULING ON INTERVENORS' PETITION FOR REHEARING 1 Memorandum 2 I. Introduction 2 II. Background 4 III. Argument 6 A. The Standard Governing The Issuance Of Time Sensitive Stays 6 B. The Likelihood Of Success On The Merits 7 C. The Intervenors Will Suffer Irreparable Injury If A Stay Is Denied 18 D. Continuing the Stay Will Not Substantially Harm the Plaintiffs 19 E. The Public Interest Will Be Served By Issuance Of the Stay 19 CONCLUSION 20 CERTIFICATE OF SERVICE 21 -i- EFTA01180326  Case: 13-12923 Date Filed: 04/24/2014 Page: 5 of 46 TABLE OF AUTHORITIES Cases Page Acosta v. James A. Gustino, P.A., 2013 U.S. Dist. LEXIS 163697 (M.D. Fla. Nov. 18, 2013) 8 Adkins v. Christie, 488 F.3d 1324 (11th Cir. 2007) 11 Baker v. Carr, 369 U.S. 186 (1962) 20 Diamond v. Charles, 476 U.S. 54 (1986) 20 Duncan v. Phoenix Supported Living, Inc., 2006 U.S. Dist. LEXIS 66742 (W.D. N.C. Sept. 12, 2006) 3 Echevarria, Mccalla, Raymer, Barrett & Frappier v. Cole, 950 So.2d 380 (Fla. 2007) 8 Florida Businessmen for Free Enterprise v. City of Hollywood, 648 F.2d 956 (11' Cir. 1981) 7 Folb v. Motion Picture Industry Pension & Health Plans, 16 F. Supp. 2d 1164 (C.D. Cal. 1998) 16 Gill v. Gulfstream Park Racing Ass'n, Ina, 399 F.3d 391 (1st Cir. 2005) 19 Goodyear Tire & Rubber Co. v. Chiles Power Supply, Inc., 332 F.3d 976 (eh Cir. 2003) passim Hickman v. Taylor, 329 U.S. 495 (1947) 14 EFTA01180327  Case: 13-12923 Date Filed: 04/24/2014 Page: 6 of 46 Cases Page In re Federal Grand Jury Proceedings, 975 F.2d 1488 (11th Cir. 1992) 7 In re General Motors Corp. Engine Interchange Litigation, 594 F.2d 1106 (7th Cir. 1979) 8 In re Grand Jury Proceedings, 43 F.3d 966 (5th Cir. 1994) 19 In re Grand Jury Proceedings, 103 F.3d 1140 (3d Cir. 1997) 15 In re: Grand Jury Subpoena, Judith Miller, 397 F.3d 964 (D.C. Cir. 2005), cert. denied, 545 U.S. 1150 (2005) 15 In re MSTG, Inc. 675 F.3d 1337 (Fed. Cir. 2012) 3, 8 In re Perrigo Co., 128 F.3d 430 (6th Cir.1997) 19 In re Professionals Direct Ins. Co., 578 F.3d 432 (6th Cir. 2009) 18-19 In re Sealed Case, 148 F.3d 1073 (D.C. Cir. 1998) 15 In re. Sealed Case (Medical Records), 381 F.3d 1205, 1210 (D.C. Cir. 2004) 18 In the Matter of Lake Utopia Paper Ltd., 608 F.2d 928 (2d Cir. 1979) 13 Jackson v. BellSouth Telecomss., 372 F.3d 1250 (11th Cir. 2004) 3, 8 EFTA01180328  Case: 13-12923 Date Filed: 04/24/2014 Page: 7 of 46 Cam Page Jaffee v. Redmond, 518 U.S. 1 (1996) passim Kelly v. Palmer, Reifler & Associates, P.A., 681 F. Supp. 2d 1356 (S.D. Fla. 2009) 3 Pledger v. Burnup & Sims, Inc., 432 So.2d 1323 (Fla. 4`h DCA 1983) 3 Santobello v. New York, 404 U.S. 257 (1971) 14 Trammel v. United States, 445 U.S. 40 (1980) 9, 11 United States v. Contra Costa County Water Dist, 678 F.2d 90 (9'h Cir. 1982) 13 United States v. Herman, 544 F.2d 791 (5th Cir. 1977) 10 United States v. Philip Morris, 314 F.3d 612 (D.C. Cir. 2003) 18, 19 University of Penn. v. EEOC, 493 U.S. 182 (1990) 15 University of Tenn. v. Elliott, 478 U.S. 788 (1986) 13 Upjohn Co. v. United States, 449 U.S. 383 (1981) 12-13 Wolfe v. Foreman, 128 So.3d 67 (Fla. 3d DCA 2013) 8 -iv- EFTA01180329  Case: 13-12923 Date Filed: 04/24/2014 Page: 8 of 46 Circuit Rules Page 1st Cir. R. 33(c) 16 2d Cir. R. App. Part D(4) 16 3d Cir. R. 33.5(c) 16 4th Cir. R. 33 16 5th Cir. R. App. VI, Parts 8-9 16 6th Cir. R. 33(c)(4) 16 8th Cir. R. 33A(c) 16 9th Cir. R. 33-1 16 10th Cir. R. 33.1(D) 16 10th Cir. R. 33.2(D) 16 llth Cir. R. 27-1(b) 1 llth Cir. R. 27-1(b)(2) 2, 6 llth Cir. R. 27-1(b)(4) 2 Ilth Cir. R. 33-1(c)(3) 16 D.C. Cir. R. App. III 16 Federal Rules Fed. R. App. P. 8 1 Fed. R. App. P. 27 1 Federal Rules Page -v- EFTA01180330  Case: 13-12923 Date Filed: 04/24/2014 Page: 9 of 46 Fed. R. Crim. P. 11(f) 6, 10, 11 Fed. R. Evid. 408 10, 11, 12 Fed. R. Evid. 410 6 10, 11 Fed. R. Evid. 501 passim United States Code 5 U.S.C. § 574(b) 10 18 U.S.C. § 2255 4 28 U.S.C. § 652(d) 16 Miscellaneous Del. Super. Ct. Civ. R. 16.1 (2004) 16 Brazil, Wayne D., Protecting the Confidentiality of Settlement Negotiations, 39 HASTINGS L.J. 955, 990 (1988) 12 Grenig, Jay E. & Jeffrey S. Kinsler, HANDBOOK OF FEDERAL CIVIL DISCOVERY AND DISCLOSURE, § 1.62 (2d ed. 2005) 18 Kentra, Pamela A., Hear No Evil, See No Evil, Speak No Evil: The Intolerable Conflict for Attorney-Mediators Between the Duty to Maintain Mediation Confidentiality and the Duty to Report Fellow Attorney Misconduct, 1997 B.Y.U. L. REV. 715 16 Moberly, Michael D., The Discoverability of Severance Agreements in Wrongful Discharge Litigation, 20 HOFSTRA LAB. & EMP. L.J. 1, 15 (2002) 17 -vi- EFTA01180331  Case: 13-12923 Date Filed: 04/24/2014 Page: 10 of 46 TIME SENSITIVE MOTION FOR A STAY PENDING A RULING ON INTERVENORS' PETITION FOR REHEARING Pursuant to Fed. R. App. P. 8 and 27 and 11th Cir. R. 27-1(b), Intervenors Roy Black, Martin Weinberg, and Jeffrey Epstein move this Court on a time sensitive basis for the continuation of the stay pending appeal issued by this Court on September 13, 2013, see Exhibit 1, of the district court's order of June 18, 2013 (Doc. 188), see Exhibit 2, ordering disclosure to plaintiffs of the Intervenor attorneys' written communications with federal prosecutors in the Southern District of Florida made with the specific purpose of obtaining a favorable resolution of the criminal investigation of Jeffrey Epstein through attorney-to-attorney settlement negotiations. On April 18, 2014, a Panel of this Court affirmed the district court's ruling in a to-be- published Opinion, see Exhibit 3, and simultaneously lifted the stay. However, the Intervenors intend to file a timely motion for rehearing or rehearing en banc. Since production of the documents to the plaintiffs will effectively moot any relief obtained through that motion, the Intervenors seek a continuation of the stay until a petition for rehearing or rehearing en banc can be timely filed and decided by this Court. The government has informed counsel that, absent the continuation of the stay, it will turn over the documents to plaintiffs' counsel by Friday, May 2, 2014, making this motion time senstive. Accordingly, pursuant to 11th Cir. R. 27-1(b), the Intervenors request a ruling on this motion from the Court by no later than Friday, EFTA01180332  Case: 13-12923 Date Filed: 04/24/2014 Page: 11 of 46 May 2, 2014. Pursuant to 116 Cir. R. 27-1(b), the Intervenors have contacted both the Clerk's Office of this Court and opposing counsel telephonically and advised them of this time sensitive Motion. In support of this time sensitive motion, the Intervenors submit the following Memorandum. MEMORANDUM I. INTRODUCTION The Panel opinion in this case decided an issue of first impression in this Court, ordering disclosure to third party litigants of private and confidential communications from attorneys seeking to resolve a criminal matter favorably to their clients to government prosecutors. In so ruling, the Panel declined to recognize "a common law privilege for plea negotiations" under Fed. R. Evid. 501. Panel Op., p. 20. Unless rehearing is granted, the Panel' opinion will drastically reshape the landscape of criminal settlement negotiations and overturn expectations of privacy, confidentiality, and privilege on which criminal defense attorneys have reasonably relied for decades in negotiating with government attorneys on behalf of their clients. Moreover, although the Court cast its ruling only in terms of "plea negotiations" in criminal cases, the Panel's ruling necessarily implicates — and, we submit undermines — the broader, umbrella litigation privilege that is well-established in Florida and that this Court has recognized as encompassing settlement negotiations generally. See in -2- EFTA01180333  Case: 13-12923 Date Filed: 04/24/2014 Page: 12 of 46 Jackson v. BellSouth Telecomss., 372 F.3d 1250, 1274-75 (11`" Cir. 2004) (finding the litigation privilege applied to actions taken in the course of settlement negotiations because they were "inextricably linked" to the ongoing litigation, and stating, "Florida's litigation privilege affords absolute immunity for acts occurring during the course of judicial proceedings").' And, although the Panel found support for its opinion in the Federal Circuit's rejection of a privilege for settlement negotiations, see Panel Op., p. 23, citing In re MSTG, Inc. 675 F.3d 1337 (Fed. Cir. 2012), the Panel failed to note that it's opinion directly conflicted with the Sixth Circuit's ruling in Goodyear Tire & Rubber Co. v. Chiles Power Supply, Inc., 332 F.3d 976 (681 Cir. 2003), which not only recognized a settlement privilege but held that that privilege protects settlement negotiations from discovery. Accord Duncan v. Phoenix Supported Living, Inc., 2006 U.S. Dist. LEXIS 66742 (W.D. N.C. Sept. 12, 2006). In light of the potentially far-reaching impact of the Panel's opinion, the stay should be continued until the full Court has an opportunity to weigh-in. ' Florida's litigation privilege is absolute once litigation has commenced and can be invoked prior to the initiation of a judicial proceeding under certain circumstances. See Kelly v. Palmer, Reifler & Associates, P.A., 681 F. Supp. 2d 1356 (S.D. Fla. 2009), citing Pledger v. Burnup & Sims, Inc., 432 So.2d 1323 (Fla. 481 DCA 1983). -3- EFTA01180334  Case: 13-12923 Date Filed: 04/24/2014 Page: 13 of 46 II. BACKGROUND Intervenor Jeffrey Epstein entered into a Non-Prosecution Agreement ("NPA") with the government in September, 2007. Under that agreement, Mr. Epstein pled guilty to two state felony offenses and served a prison sentence and a term of community control probation. The agreement, with which he has fully complied, also required that he pay the legal fees of the attorney-representative of identified victims and that he not contest liability in any cases brought against him solely under 18 U.S.C. § 2255. Many plaintiffs sued under § 2255 and received settlements as the direct result of Mr. Epstein's agreement not to contest liability in those cases. Other plaintiffs, including the Jane Does in this case, "relied on the [NPA] when seeking civil relief against Epstein . . . and affirmatively advanced the terms of the [NPA] as a basis for relief from Epstein." United States' Reply in Support of its Motion to Dismiss for Lack of Subject Matter Jurisdiction, Doc. 205-6 at 12-13. After reaping the benefits of the NPA, the plaintiffs seek herein, among other remedies, the rescission of that agreement. While the underlying CVRA action was commenced as an emergency petition, plaintiffs shortly thereafter appeared at a status conference, knowing that Mr. Epstein was in prison, and told the district court that they saw no reason to proceed on an emergency basis. Trans. July 11, 2008 (Doc. 15) at 24-25. Then, a month later, plaintiffs withdrew their request that the district court rescind the NPA, telling the court that because of the legal consequences of -4- EFTA01180335  Case: 13-12923 Date Filed: 04/24/2014 Page: 14 of 46 invalidating the NPA, it was probably not in their interests to ask for rescission. See Trans. August 14, 2008 (Doc. 27) at 4. Plaintiffs spent the next 18 months pursuing civil remedies against Mr. Epstein, and ultimately obtaining settlements, while their CVRA action remained dormant. Indeed, so inactive were plaintiffs that the district court dismissed the case for lack of prosecution in September, 2010. Doc. 38. See also Order Denying Government's Motion to Dismiss (Doc. 189) at 5 ("Over the course of the next eighteen months, the CVRA case stalled as petitioners pursued collateral civil claims against Epstein"). During the course of civil litigation against Mr. Epstein, Mr. Epstein was ordered, over his strenuous objection, to produce documents given to him by the government during the course of his settlement/plea negotiations with it. See Jane Doe #2 v. Epstein, No. 08-80119-MARRA, Doc. 462. Once the CVRA action was reactivated — after plaintiffs had successfully pursued their civil monetary remedies against Mr. Epstein to completion — plaintiffs sought to use that correspondence in the CVRA case and thereafter also sought disclosure from the government of correspondence authored and sent to the government by Epstein's attorneys in the course of their efforts on behalf of their client to resolve the ongoing criminal investigation of him. Both Mr. Epstein and his criminal defense attorneys — Intervenor/appellants Roy Black and Martin Weinberg —filed motions to intervene for the limited purpose of challenging the use and disclosure of the settlement/plea -5- EFTA01180336  Case: 13-12923 Date Filed: 04/24/2014 Page: 15 of 46 negotiation correspondence (Doc. 56, 93), followed by supplemental briefing and motions for a protective order, contending, among other things, that the correspondence fell within the bounds of privilege under Fed. R. Evid. 501. Doc. 94, 160,161, 162. The district court granted the motions to intervene (Doc. 158, 159), but ultimately ruled that the correspondence was subject to disclosure. Doc. 188. Among other things, the district court rejected Intervenors' argument based on Rule 501 on the ground that Congress has already addressed the issue in Fed. R. Crim. P. 11(f) and Fed. R. Evid. 410 and did not see fit to recognize a privilege for plea negotiation communications. Id. at 8-9. Although the district court denied Intervenors' request for a stay pending appeal, this Court granted a stay. On April 14, 2014, however, the Panel affirmed the district court's rulings using the same rationales. III. ARGUMENT A. The Standard Governing The Issuance of Time Sensitive Stays The standards governing stays generally and stays needed on an emergency or time sensitive basis are similar. For emergency relief under 11'h Cir. R. 27-1(b)(2), a party must both state the reasons for granting that relief and specifically address four factors: (1) The likelihood that the party will prevail on the merits; (2) The prospect of irreparable injury if the stay is denied; (3) The possibility of harm to other parties -6- EFTA01180337  Case: 13-12923 Date Filed: 04/24/2014 Page: 16 of 46 if a stay is granted; and (4) The public interest in continuing the stay until the Court can rule upon a timely filed motion for rehearing or rehearing en bane. The rule codifies the holdings of numerous cases in this Circuit governing the issuance of appellate stays generally. See In re Federal Grand Jury Proceedings, 975 F.2d 1488, 1492 (11th Cir. 1992). Florida Businessmenfor Free Enterprise v. City of Hollywood, 648 F.2d 956, 957 (1 1 th Cir. 1981). An analysis of these factors justifies continuing the stay to afford the Intervenors a meaningful opportunity to seek and obtain rehearing. Unless the stay is temporarily continued for that limited purpose, they will be immediately and irreparably harmed by the disclosure of the communications at issue; the plaintiffs will suffer no harm from the granting of a stay until these critically important issues can be resolved by the full Court; and to the extent that the public has an interest in the matter, it would favor considered appellate resolution of the issues presented prior to the release of the communications at issue. B. The Likelihood of Success On the Merits Prior to the Panel's ruling, only three other circuits had addressed whether to recognize a settlement negotiation privilege. The Sixth Circuit in Goodyear Tire both recognized the privilege and extended it to bar discovery. The Sixth Circuit's ruling is consistent with this Court's decision one year later in Jackson v. BellSouth Telecomss., 372 F.3d 1250, 1274-75 (11 th Cir. 2004), which recognized that Florida's -7- EFTA01180338  Case: 13-12923 Date Filed: 04/24/2014 Page: 17 of 46 long-standing litigation privilege applied to settlement negotiations generally? The Federal Circuit in MSTG, Inc. disagreed, citing the Seventh Circuit's 35-year old precedent in In re General Motors Corp. Engine Interchange Litigation, 594 F.2d 1106, 1124 n. 20 (7' Cir. 1979), but also expressly recognized that the "District courts are divided on whether a settlement privilege exists." MSTG, Inc. 675 F.3d at 1342 n. 2 (citations omitted). The Panel's decision to side with MSTG instead of Goodyear was based on an incorrect application of the Supreme Court's seminal decision in Jaffee v. Redmond, 518 U.S. 1 (1996). In "authoriz[ing] federal courts to define new privileges by interpreting 'common law principles ... in the light of reason and experience,' Rule 501 of the Federal Rules of Evidence "did not freeze the law governing the privileges of witnesses in federal trials at a particular point in our history, but rather directed federal courts to 'continue the evolutionary development of testimonial privileges.' Jaffee, 518 U.S. at 8 (quoting Trammel v. United States, 445 U.S. 40, 47 (1980)). "[T]estimonial privileges may be justified . . . by a 'public good transcending the 2 In the years since Jackson was decided, Florida courts have continued to extend the reach of the litigation privilege. See Echevarria, Mccalla, Raymer, Barren & Frappier v. Cole, 950 So.2d 380 (Fla. 2007) (holding that the privilege extends to all causes of action in Florida); Wolfe v. Foreman, 128 So.3d 67 (Ha. 3d DCA 2013) (applying privilege even to malicious prosecution). See also Acosta v. James A. Gustino, P.A., 2013 U.S. Dist. LEXIS 163697 (M.D. Fla. Nov. 18, 2013) (extending privilege to bar claims under debt collection statutes). -8- EFTA01180339  Case: 13-12923 Date Filed: 04/24/2014 Page: 18 of 46 normally predominant principle of utilizing all rational means for ascertaining truth?" Jaffee, 518 U.S. at 9 (quoting Trammel, 445 U.S. at 50). Here, as in Jaffee, such a "public good" exists, as is made clear by a correct application of the four-step privilege methodology prescribed by the Supreme Court in Jaffee. First, "[l]ike the spousal and attorney-client privileges" a settlement/plea negotiation privilege "is `rooted in the imperative need for confidence and trust?" Id. at 10 (quoting Trammel, 445 U.S. at 51). As Judge Suhrheinrich observed for the unanimous panel of the Sixth Circuit: In order for settlement talks to be effective, parties must feel uninhibited in their communications. Parties are unlikely to propose the types of compromises that most effectively lead to settlement unless they are confident that their proposed solutions cannot be used on cross examination, under the ruse of "impeachment evidence," by some future third party. Parties must be able to abandon their adversarial tendencies to some degree. They must be able to make hypothetical concessions, offer creative quid pro quos, and generally make statements that would otherwise belie their litigation efforts. Goodyear, 332 F.3d at 980. In the course of negotiating settlements, parties to threatened or ongoing litigation need to be able to bargain creatively, acknowledge past wrongdoing, and propose monetary and other compromises of their respective claims and defenses in a way that they simply would not if those communications were subject to discovery by third parties. Reason and experience counsel that our system of sentencing laws, ethical rules, federal court dockets, and constitutional considerations will not function if plea negotiation communications are not privileged. -9- EFTA01180340  Case: 13-12923 Date Filed: 04/24/2014 Page: 19 of 46 After all, "it is immediately apparent that no defendant or his counsel [would] pursue [plea negotiations] if the remarks uttered during the course of it are to be admitted in evidence as proof of guilt." United States v. Herman, 544 F.2d 791, 797 (5th Cir. 1977). Given the essentiality of promoting these kinds of candid settlement discussions, a number of statutory provisions preserve the confidentiality of these discussions. See, e.g., Fed. R. Evid. 408 (offers to compromise civil claims); Fed R. Evid. 410 (offers to compromise criminal claims); 5 U.S.C. § 574(b) (mandating that "[a] party to a dispute resolution proceeding shall not voluntarily disclose or through discovery or compulsory process be required to disclose any dispute resolution communication" occurring as part of "the administrative process"). The Panel, however, rejected Intervenors' request to recognize a common law privilege for communications made in the course of settlement/plea negotiations on the ground that Congress has already addressed the issue in Fed. R. Crim. P. 11(f) and Fed. R. Evid. 410 and did not see fit to recognize a privilege for plea negotiation communications. However, neither the Rules of Evidence nor the Rules of Criminal Procedure have ever dealt with specifying the privileges which will and will not be recognized; instead, they leave that function to the courts under Rule 501. Nothing in Rules 11(0 or Fed. R. Evid. 408 and 410 suggest that Congress rejected (or even thought about) a litigation privilege for settlement/plea negotiation communications when framing -10- EFTA01180341  Case: 13-12923 Date Filed: 04/24/2014 Page: 20 of 46 those provisions. Rules 11(f), 408 and 410 deal only with what is admissible; they do not purport to extend to what is discoverable. Rules 408 and 410 begin with the assumption that the litigants themselves are already in possession of settlement/plea negotiation materials, and thus the Rules describe the circumstances in which those materials may either be admitted or excluded from consideration at trial. It says nothing, however, about whether a nonparticipant in the negotiations is entitled to obtain those materials in discovery in the first instance to advance interests distinct from those at issue during the settlement/plea negotiations. That question must be answered by reference to Fed. R. Evid. 501, which "empower[s] the federal courts to `continue the evolutionary development of [evidentiary] privileges.' Adkins v. Christie, 488 F.3d 1324, 1328 (11'h Cir. 2007), quoting Trammel, 445 U.S. at 47/ While the literal terms of Rules 408 and 410 speak to the inadmissibility of such evidence at trial, it seems clear that the policy animating these rules would be seriously undermined if the settlement/plea discussions are routinely discoverable. For example, if pre-indictment settlement communications with the U.S. Attorney's Office are not privileged from third-party discovery, then the chilling effect on internal investigations of corporate wrongdoing would be dramatic and unacceptably deleterious. As one commentator has explained: A strong argument in favor of viewing rule 408 [of the Federal Rules of Evidence] as creating a privilege can be built from the principal purpose of this rule. Because its principal purpose is to encourage settlement by -11- EFTA01180342  Case: 13-12923 Date Filed: 04/24/2014 Page: 21 of 46 encouraging "freedom of communication with respect to compromise, even among lawyers," rule 408 has something very important in common with traditionally recognized privileges. The principal reason the law cloaks communications between attorney and client with confidentiality, for example, is to encourage clients to "tell all" to their lawyers. The traditional privileges, in short, have been designed to open up lines of communication in certain settings in which full communication will serve important societal interests. The fact that rule 408 is designed to serve a closely analogous function is a major argument in favor of viewing it as creating a privilege. Wayne a Brazil, Protecting the Confidentiality of Settlement Negotiations, 39 HASTINGS L.J. 955, 990 (1988) (quoting Fed. R. Evid. 408 Advisory Committee's Note)? Given this "'imperative need for confidence and trust" between parties attempting to settle their respective claims, Jaffee, 518 U.S. at 10, it seems clear that, absent a settlement privilege, "the entire negotiation process collapses upon itself, and the judicial efficiency it fosters is lost." Goodyear, 332 F.3d at 980. Second, Jaffee "make[s] clear that an asserted privilege must also `serve public ends.'" 518 U.S. at 11 (quoting Upjohn Co. v. United States, 449 U.S. 383, 389 (1981)). Fostering such "judicial efficiency" undoubtedly "sery[es] public ends," 3 See also Brazil, supra, at 999 ("I have hosted many settlement conferences during which parties have expressed concerns about related cases or parallel situations involving nonparties, or in which one party has been unwilling to settle unless it is assured that the terms will not be disclosed to others who might be encouraged to file new claims or hold out for more money in cases already docketed. It is naive not to recognize that lawyers and litigants are constantly concerned about how their statements or actions in one setting might come back to haunt them in other settings."). -12- EFTA01180343  Case: 13-12923 Date Filed: 04/24/2014 Page: 22 of 46 given the burden on the federal judiciary and the delays in the prompt delivery of justice to litigants — both civil and criminal — caused by the ever-mounting docket of the federal courts. "The ability to negotiate and settle a case without trial fosters a more efficient, more cost-effective, and significantly less burdened judicial system." Goodyear, 332 F.3d at 980; see also, e.g., University of Tenn. v. Elliott, 478 U.S. 788, 798 (1986) (noting "the public's interest in conserving judicial resources"); United States v. Contra Costa County Water Dist, 678 F.2d 90, 92 (9th Cir. 1982) (noting "the public policy favoring the compromise and settlement of disputes") (footnote omitted). As the Second Circuit has explained: It is essential to the proper functioning of the Civil Appeals Management Plan that all matters discussed at these conferences remain confidential . . . . If participants cannot rely on the confidential treatment of everything that transpires during these sessions then counsel of necessity will feel constrained to conduct themselves in a cautious, tight-lipped, non-committal manner more suitable to poker players in a high-stakes game than to adversaries attempting to arrive at a just resolution of a civil dispute. This atmosphere if allowed to exist would surely destroy the effectiveness of a program which has led to settlements.. ., thereby expediting cases at a time when the judicial resources of this Court are sorely taxed. In the Matter of Lake Utopia Paper Ltd., 608 F.2d 928, 930 (2d Cir. 1979). These general principles are at their zenith in criminal cases since the overwhelming majority of criminal cases are resolved through plea bargaining. Such bargaining should be "encouraged" because "[i]f every criminal charge were subjected to a full-scale trial, the states and the federal government would need to multiply by many times the -13- EFTA01180344  Case: 13-12923 Date Filed: 04/24/2014 Page: 23 of 46 number of judges and court facilities." Santobello v. New York, 404 U.S. 257, 260 (1971). Third, as in Jaffee, "the likely evidentiary benefit that would result from the denial of the privilege is modest." 518 U.S. at 11. "If the privilege were rejected," many of the candid and comparatively uninhibited communications that are essential to effective settlement negotiations "would surely be chilled." Id. at 1-12. "Without a privilege, much of the desirable evidence to which litigants such as [Jane Does] seek access . . . is unlikely to come into being. This unspoken `evidence' will therefore serve no greater truth-seeking function than if it had been spoken and privileged." Id. at 12. See also Hickman v. Taylor, 329 U.S. 495, 510-511 (1947) (recognizing that if an attorney's work product was "open to opposing counsel on mere demand, much of what is now put down in writing would remain unwritten" and "[i]nefficiency, unfairness and sharp practices would inevitably develop in the giving of legal advance and in the preparation of cases for trial"). Even if this chilling effect were only partial, it is doubtful whether much legitimate probative evidence could be gained from permitting settlement communications to be discoverable, given "the inherent questionability of the truthfulness of many statements made in at least the early phases of settlement negotiations which, in civil cases in particular, "are typically punctuated with numerous instances of puffing and posturing since they are `motivated by a desire for -14- EFTA01180345  Case: 13-12923 Date Filed: 04/24/2014 Page: 24 of 46 peace rather than from a concession of the merits of the claim.'" Goodyear, 332 F.3d at 981 (citations omitted). And, in criminal cases, defense counsel negotiating a favorable plea may offer concessions on facts or compromises on charges that, absent a bargain, would be vigorously contested.4 Fourth, Jaffee urges courts to examine whether a broad consensus of support exists amongst the States for recognizing the asserted privilege. The Panel claimed that this factor did not support the Intervenors but ignored the fact that "all 50 States and the District of Columbia have enacted into law some form of settlement privilege 4Cases declining to recognize various asserted privileges are distinguishable because the cost-measured in terms of the loss of probative evidence-of recognizing the asserted privilege was disproportionately high. See, e.g., University of Penn. v. EEOC, 493 U.S. 182 (1990) (academic peer-review privilege, where the privilege would have blocked disclosure of the most direct evidence of whatever racial or sexual discrimination may have tainted the defendant's refusal to grant tenure to the complainant); In re: Grand Jury Subpoena, Judith Miller, 397 F.3d 964 (D.C. Cir. 2005), cert. denied, 545 U.S. 1150 (2005) (reporter's privilege, where the very act of leaking the identity of a covert CIA operative to a reporter was the criminal act being investigated); see also id. (only one of the three members of the panel, Judge Sentelle, rejected a common-law reporter's privilege on the merits); In re Sealed Case, 148 F.3d 1073 (D.C. Cir. 1998) (rejecting a "protective function privilege" that would have prevented Secret Service agents from testifying about criminal conduct they witnessed first-hand while protecting the President). In contrast, a plea negotiation/settlement privilege is much closer to traditional privileges such as the attorney-client, priest-penitent, and psychotherapist-patient privileges, which entail the loss of evidence of secondary and often litigation-related conduct, rather than primary conduct giving rise to the underlying lawsuit. In re Grand Jury Proceedings, 103 F.3d 1140 (3d Cir. 1997), is distinguishable because the privilege asserted there — a "parent-child privilege" — had been "rejected" by "[t]he overwhelming majority of all courts," including eight federal Courts of Appeals. Id. at 1146. -15- EFTA01180346  Case: 13-12923 Date Filed: 04/24/2014 Page: 25 of 46 protecting the confidentiality of settlement communications that take place in the context of mediation. Jaffee, 518 U.S. at 12.5 Indeed, 11 of the 13 federal Courts of Appeals (including this Circuit) and the vast majority of federal district courts have adopted comparable rules protecting the confidentiality of mediation. See, e.g., 1st Cir. R. 33(c); 2d Cir. R. App. Part D(4); 3d Cir. R. 33.5(c); 4th Cir. R. 33; 5th Cir. R. App. VI, Parts 8-9; 6th Cir. R. 33(c)(4); 8th Cir. R. 33A(c); 9th Cir. R. 33-1; 10th Cir. R. 33.1(D), 33.2(D); 1 1 th Cir. R. 33- 1(c)(3); D.C. Cir. R. App. III; 28 U.S.C. § 652(d) (directing "each district court" to adopt "local rule[s]" "provid[ing] for the confidentiality of the alternative dispute resolution processes and ... prohibit[ing] disclosure of confidential dispute resolution communications."). The Panel discounted this nationwide consensus regarding the importance of protecting the confidentiality of settlement communications taking place in other contexts, such as mediation, and focused narrowly upon a plea negotiation privilege 5 See, e.g., Folb v. Motion Picture Industry Pension & Health Plans, 16 F. Supp. 2d 1164, 1179 (C.D. Cal. 1998) ("every state in the Union, with the exception of Delaware, has adopted a mediation privilege of one type or another") (citing Pamela A. Kentra, Hear No Evil, See No Evil, Speak No Evil: The Intolerable Conflict for Attorney-Mediators Between the Duty to Maintain Mediation Confidentiality and the Duty to Report Fellow Attorney Misconduct, 1997 B.Y.U. L. REV. 715, Appendix A (collecting statutes)); see also Del. Super. Ct. Civ. R. 16.1 (2004) (mandating that communications made in or in connection with court-affiliated mediation "are not subject to disclosure"). -16- EFTA01180347  Case: 13-12923 Date Filed: 04/24/2014 Page: 26 of 46 between criminal defense attorneys and prosecutors. However, in Jaffee, the Supreme Court rejected such an approach and relied heavily upon the nationwide consensus for apsychiatrist/psychologist-patient privilege in recognizing a psychotherapist- patient privilege broad enough to encompass the social worker at issue in Jaffee. See 518 U.S. at 12-18 and n.l 1; see also id. at 19-22 (Scalia, J., dissenting) (explaining that nearly all of the Court's analysis pertains to the question whether there should be a privilege for communications with "'a person authorized to practice medicine' or `a person licensed or certified as a psychologist,'" rather than with the social worker at issue in Jaffee) (citations omitted). After all, the considerations favoring the recognition of a privilege under the first three prongs of Jaffee are similar, if not identical, for settlement communications that take place outside of formal mediation. As the Sixth Circuit succinctly observed: "There exists a strong public interest in favor of secrecy of matters discussed by parties during settlement negotiations. This is true whether settlement negotiations are done under the auspices of the court or informally between the parties." Goodyear, 332 F.3d at 980 (emphasis added); see also Michael 11 Moberly, The Discoverability of Severance Agreements in Wrongful Discharge Litigation, 20 HOFSTRA LAB. & EMP. L.J. 1, 15 (2002) ("mediation is merely a specialized form of settlement negotiation") (footnote and citations omitted). Consequently, "[d]iscovery generally should not be allowed as to settlement -17- EFTA01180348  Case: 13-12923 Date Filed: 04/24/2014 Page: 27 of 46 negotiations between the parties." Jay E. Grenig & Jeffrey S. Kinsler, HANDBOOK OF FEDERAL CIVIL DISCOVERY AND DISCLOSURE, § 1.62 (2d ed. 2005). C. The InterveneorsWill Suffer Irreparable Injury If A Stay Is Denied Absent a stay from this Court, the Intervenors will suffer irreparable injury from the imminent destruction of the privilege that they properly have claimed over their sensitive attorney work-product and other materials that Intervenors confided in government lawyers in furtherance of their settlement efforts The government has informed counsel that it will produce the materials to the private third parties absent a continuation of the stay this Court had previously ordered pending the outcome of the appeal. If this Court denies the prayed-for stay, then "the issue of privilege" would become "effectively moot." United States v. Philip Morris, 314 F.3d 612, 619 (D.C. Cir. 2003) (citations omitted). "As our prior cases have repeatedly noted, `appeal after final judgment is obviously not adequate in [privilege] cases-the cat is out of the bag?" In re. Sealed Case (Medical Records), 381 F.3d 1205, 1208, 1210 (D.C. Cir. 2004) (citation omitted). Whatever relief this Court might be able to fashion after the fact would be practically ineffective, given the nature of the documents at issue, because "[i]t would be impossible for a court to sort out and redress the harm caused by the incorrect disclosure." Philip Morris. 314 F.3d at 619.6 6 See also In re Professionals Direct Ins. Co., 578 F.3d 432, 438 (6th Cir. (continued...) -18- EFTA01180349  Case: 13-12923 Date Filed: 04/24/2014 Page: 28 of 46 Et Continuing the Stay Will Not SubstantiallLHarm the Plaintiffs Given the procedural history of this case, any claim of "substantial harm" by the plaintiffs would ring hollow. Whatever effects that a stay of short duration may have on other parties would be insubstantial and, at most, a mere inconvenience. See Philip Morris, 314 F.3d at 622 ("A mere assertion of delay does not constitute substantial harm. Some delay would be occasioned by almost all interlocutory appeals."). E. The Public Interest Will Be Served By Issuance Of The Stay As recited above, the public-interest factor militates more strongly in favor of a stay here than in Philip Morris. Because this Circuit had not yet squarely held whether a settlement privilege exists, continuing the stay pending rehearing would give the entire Court the opportunity to resolve this important question of federal common law in the context of a concrete case or controversy presenting the kind of adversity called for by Article III and by well-established precepts of common-law 6 (...continued) 2009)(finding risk of irreparable harm because "a court cannot restore confidentiality to documents after they are disclosed"); Gill v. Gulfstream Park Racing Ass'n, Inc., 399 F.3d 391, 398 (1st Cir. 2005)("once the documents are turned over to Gill with no clear limitation on what he may do with them, the cat is out of the bag, and there will be no effective means by which TRPB can vindicate its asserted rights after final judgment"); In re Perrigo Co., 128 F.3d 430, 437 (6th Cir.1997)("We find . . . that forced disclosure of privileged material may bring about irreparable harm"); In re Grand Jury Proceedings, 43 F.3d 966, 970 (5th Cir. 1994)(forced disclosure of privileged documents would cause irreparable harm). -19- EFTA01180350  Case: 13-12923 Date Filed: 04/24/2014 Page: 29 of 46 adjudication. See, e.g., Diamond v. Charles, 476 U.S. 54, 61-62 (1986) (the Article III case-or-controversy requirement "ensures the presence of the `concrete adverseness which sharpens the presentation of issues . . .' Baker v. Carr, 369 U.S. 186, 204 (1962)."). Counsel has