Fairholme Funds, Inc. v. United States
134 Fed. Cl. 680
Fed. Cl.2017Background
- Plaintiffs (Fairholme Funds et al.) moved to compel defendant (United States) to allow a "quick peek" review under Federal Rule of Evidence 502(d) of ~1,500 documents withheld as deliberative‑process and bank‑examination privileged.
- Discovery had been piecemeal: earlier productions prompted plaintiffs to challenge privilege assertions and defendant produced additional documents after further review.
- Parties previously negotiated and the court entered a protective order containing an FRE 502(d) clawback provision and procedures governing access to protected materials.
- Plaintiffs argued quick peek was needed to avoid repeated rounds of challenges and to obtain segregable factual material defendant had withheld.
- Defendant opposed compelled quick peek, asserting (1) it had already conducted comprehensive privilege review, (2) quick peek should not be forced over a producing party’s objection, and (3) relevant information was available elsewhere.
- The court granted plaintiffs’ motion, ordering defendant to make the 1,500 documents available for plaintiffs’ review under FRE 502(d) confidentiality/clawback terms and directing procedures for identification, further meet‑and‑confer, and in camera submissions if disputes remain.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court may order a "quick peek" review under FRE 502(d) over defendant's objection | Court may and should enter an FRE 502(d) order to allow review and preserve clawback protection | FRE 502(d) should not be used to compel disclosure absent producing party's consent; courts rarely order quick peek over objection | Court: Yes—has discretion to order quick peek absent consent and did so to expedite discovery and conserve resources |
| Whether quick peek is inappropriate because defendant already conducted a comprehensive privilege review | Plaintiffs contend piecemeal releases show further review is warranted; quick peek will end repeated disputes | Defendant says it already reviewed documents multiple times and quick peek would "ring the bell" on privileged info | Court: Prior review does not preclude quick peek; protective order and FRE 502(d) clawback mitigate concerns |
| Whether protective measures/clawback are sufficient to protect privileges once documents are viewed | Quick peek coupled with FRE 502(d) and protective order will protect privileged material and nonparty exposure | Defendant argues viewing privileged material cannot be undone and quick peek is risky despite clawback | Court: Protective order (including 502(d) clawback) and controlled access are adequate; ordered quick peek with procedures for objections and in camera review |
Key Cases Cited
- White Mountain Apache Tribe of Ariz. v. United States, 4 Cl. Ct. 575 (trial court has broad discretion to fashion discovery orders)
- Schism v. United States, 316 F.3d 1259 (Fed. Cir. 2002) (trial court has wide discretion setting discovery limits)
- Florsheim Shoe Co. v. United States, 744 F.2d 787 (Fed. Cir. 1984) (scope and conduct of discovery committed to trial court discretion)
- Hickman v. Taylor, 329 U.S. 495 (1947) (discovery rules construed broadly; work‑product principles)
- Evergreen Trading, LLC v. United States, 80 Fed. Cl. 122 (discovery balancing of conflicting goals)
- Salem Financial, Inc. v. United States, 102 Fed. Cl. 793 (court authorized quick peek after producing party had withheld documents)