United States District Court, D. Idaho
MEMORANDUM DECISION AND ORDER
C. NYE, CHIEF U.S. DISTRICT COURT JUDGE
before the Court is David Hansen's Motion for a
Protective Order (Dkts. 101, 103) and Motion to Seal Filings
in Support of Motion for Protective Order (Dkt. 102). Having
reviewed the record and briefs, the Court finds that the
facts and legal arguments are adequately presented.
Accordingly, in the interest of avoiding further delay, and
because the Court finds that the decisional process would not
be significantly aided by oral argument, the Court will
decide the Motion without oral argument. Dist. Idaho Loc.
Civ. R. 7.1(d)(1)(B).
reasons set forth below, the Court DENIES Hansen's
Partners, LLC, (“Yellowstone”) is an investment
advisory firm located in Idaho Falls, Idaho. David Hansen was
the owner and Chief Executive Officer of Yellowstone. The
Government has charged Hansen with multiple counts of wire
fraud and tax violations. Broadly speaking, the Government
alleges that Hansen targeted certain Yellowstone clients in a
vast overbilling scheme.
protect any privileged documents in discovery, the Government
used a taint review process. The Court thoroughly explained
this process in a previous order (Dkt. 49) and incorporates
that explanation by reference here. To summarize, tens of
thousands of electronic documents were reviewed for
privileged information in steps by a filter team, an AUSA,
and Hansen's counsel. After the taint review process,
roughly 4, 668 documents were provided to the prosecution as
in February 2017, the Government conducted key word searches
of the “non-privileged” ESI. Among other things,
these searches revealed allegedly fraudulent billing
spreadsheets. Approximately fifteen (15) of these
spreadsheets (the “Spreadsheets”) were stored on
Hansen's desktop computer in a folder labeled
“Attorney Client workfile, ”as well as in
other locations. At the time, however, the electronic
location of the “non-privileged” ESI-including
the Spreadsheets-was unknown to both the prosecution team and
defense counsel. In other words, the prosecution team could
view the Spreadsheets themselves, but did not know if they
came from the “Attorney Client workfile” folder
or some other folder. All the prosecution team knew was that
the Spreadsheets came from Hansen's
August 2019-after multiple requests from Hansen-the
Government prepared a list of native file paths for the
documents seized from its search. It was at this time that
both the prosecution and Hansen's counsel realized these
fifteen spreadsheets had been stored in the “Attorney
Client workfile” folder. The Government responded by
filing a Notice of Intent to Continue Search of
Electronically Stored Information. Dkt. 88. Based on the
nature of the Spreadsheets and the folder Hansen stored them
in, the Government believes Hansen is hiding other
inculpatory evidence in his “Attorney Client
workfile” folder and wants to search the 250 documents
stored in that folder.
responded quite differently. He contends that the Government
impermissibly reviewed the documents contained in the
“Attorney Client workfile” folder, which
constitutes a breach of the attorney-client privilege. Based
upon this belief, Hansen now seeks to prevent the Government
from searching the contents of the “Attorney Client
16(d)(1) “Protective and Modifying Orders”
provides that “[a]t any time the court may, for good
cause, deny, restrict, or defer discovery or inspection, or
grant other appropriate relief.” Fed. R. Crim. P.
16(d)(1). The “language of Rule 16(d)(1) . . . appears
to focus on enforcing the mandatory disclosure provisions of
Rule 16 itself.” U.S. v. Grace, 526 F.3d 499,
511 (9th Cir. 2008).
it impedes full and free discovery of the truth, the
attorney-client privilege is strictly construed.”
United States v. Ruehle, 583 F.3d 600, 607 (9th Cir.
2009). The burden lies with the party claiming the privilege
to prove the existence of the privilege. Id.
Generally speaking, a client cannot transform an otherwise
unprivileged document into a privileged document simply by
transferring it to his attorney. See Fisher v. United
States, 425 U.S. 391, 403-04 (1976).