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United States v. Hansen

United States District Court, D. Idaho

June 6, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
DAVID HANSEN, Defendant.

          AMENDED MEMORANDUM DECISION AND ORDER

          David C. Nye, Chief U.S. District Court Judge

         I. INTRODUCTION

         This matter comes before the Court on Defendant David Hansen's Motion for Protective Order. Dkt. 18. In his Motion, Hansen moves for a protective order prohibiting the Government's filter team from disclosing potentially privileged materials to members of its prosecution team.

         For the reasons set forth below, the Court DENIES Hansen's Motion for Protective Order.

         II. BACKGROUND

         Yellowstone Partners, LLC, is an investment advisory firm located in Idaho Falls, Idaho. On November 9, 2016, the Government executed a warrant to search Yellowstone Partners' premises. Dkt. 26, at 3. At that time, David Hansen was the owner and Chief Executive Officer of Yellowstone Partners, and his computer hard drive was forensically imaged during the search. Dkt. 18-1, at 2; Dkt. 26, at 3. The Chief Compliance Officer's computer hard drive and the Yellowstone Partners' server were also forensically imaged. Dkt. 26, at 3.

         A few weeks later, on November 30, 2016, Hansen's counsel sent an email to Joshua Hurwit, the Government's lead attorney on this case. Dkt. 18-1, at Ex. 2. In that email, Hansen's counsel provided names of law firms and attorneys so that the Government could search the hard drives and server for privileged materials. Id. Hansen's counsel explicitly elected for the Government to use a taint review process: “It is our expectation that the government will comply with its obligations under the law for the handling and return of such materials including through the use of a taint process and team.” Id.

         Using the provided names, an FBI Information Technology Specialist-Forensic Examiner flagged 56, 000 “presumptively protected items” for the filter team to review for privilege. Id. at Ex. 1; Dkt. 26, at 3.

         Then in February 2017, the Government created a filter team and a four-stage filter review process:

1. The filter team would review the items and label them “protected, ” “potentially protected, ” or “non-protected.”
2. The AUSA would take the items identified in stage one as “potentially protected” and sort them as “protected” or “non-protected.” Then the AUSA would conduct a quality control review of the items labeled “protected” and “non-protected.”
3. The AUSA would give Hansen's counsel the “non-protected” items so that they could make privilege objections.
4. The AUSA would give the prosecution the “non-protected” items for which Hansen's counsel did not assert privilege objections.

Dkt. 26, at 3-4.

         The filter team completed stage one between March 2, 2017, and July 7, 2017. Id. at 4; Dkt. 18-1, at Ex. 1. In August 2017, the AUSA, James Schaefer, completed sorting the “potentially protected” items. Dkt. 26, at 4. Between September 2017, and June 2018, Schaefer conducted a quality control review. Id. at 5. He reviewed the “non-protected” items on Hansen's computer and concluded that 30% of those should have been labeled “protected.” Id. Because of that error rate, Schaefer had the filter team review again the Chief Compliance Officer's hard drive and the server. Id.

         Since he had completed the review of the “non-protected” items found on Hansen's computer, Schaefer provided Hansen's counsel with those 5, 473 documents on September 7, 2018. Id. at 6; Dkt. 18-1, at 4, Ex. 3. The document production was accompanied with a letter explaining that the documents came from only Hansen's hard drive though documents that were also seized from the Chief Compliance Officer's hard drive and the server. Dkt. 26, at 6; Dkt. 18-1, at Ex. 3. That letter also set an October 5, 2018, deadline for Hansen's counsel to make any privilege objections. Dkt. 18-1, at Ex. 3.

         Hansen's counsel wrote back to Schaefer explaining that the October 5, 2018, deadline was unreasonable. Dkt. 26-2. However, Hansen's counsel still agreed to “review the materials provided in a timely fashion.” Id. Hansen and his counsel thereafter reviewed those “non-protected” items for privilege objections and returned documents and interim privilege logs on October 29, November 5, November 21, and December 20, 2018. Dkt. 26-3, 26-4, 26-5, & 26-6. Of the 5, 473 documents, Hansen's counsel deemed 805 privileged. Dkt. 18-1, at 5. The remaining documents were provided to the prosecution. Dkt. 26, at 6.

         Hansen was indicted on November 15, 2018, on 23 counts of tax and wire fraud.

         On December 20, 2018, Schaefer gave Hansen's counsel the “non-protected” documents from the Chief Compliance Officer's hard drive and the server. Id. at 7. There were 20, 463 documents comprising this production. Dkt. 18-1, at 5. Schaefer asked that Hansen make any privilege objections to this second set of documents by February ...


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