UNITED STATES DISTRICT COURT DISTRICT OF …...LLP’S MOTION TO QUASH THE SUBPOENA ISSUED BY DEFENDANT JOSEPH SIGELMAN Michael Rato McELROY, DEUTSCH, MULVANEY & CARPENTER, LLP 1300

UNITED STATES DISTRICT COURTDISTRICT OF NEW JERSEY

_____________________________UNITED STATES OF AMERICA

v. Case No. 14-00263-1 (JEI)

JOSEPH SIGELMAN

_____________________________

MEMORANDUM IN SUPPORT OF NON-PARTY SIDLEY AUSTINLLP’S MOTION TO QUASH THE SUBPOENA ISSUED BY

DEFENDANT JOSEPH SIGELMAN

Michael RatoMcELROY, DEUTSCH,MULVANEY & CARPENTER, LLP1300 Mount Kemble AvenueP.O. Box 2075Morristown, New Jersey 07962(973) 993-8100(973) 425-0161 (fax)

John J. KusterTimothy J. TreanorSIDLEY AUSTIN LLP787 Seventh AvenueNew York, New York 10019(212) 839-5300(212) 839-5599(fax)

Attorneys for Non-Party Sidley Austin LLP

Case 1:14-cr-00263-JEI Document 85-5 Filed 10/06/14 Page 1 of 24 PageID: 770

i

TABLE OF CONTENTS

Page

I. PRELIMINARY STATEMENT...................................................................1

II. BACKGROUND ..........................................................................................3

A. PetroTiger...........................................................................................3

B. The Criminal Case Against Sigelman .................................................3

C. The Internal Investigation of PetroTiger .............................................4

D. Sidley’s Presentation to the Department of Justice and AllegedPresentation to Colombian Authorities................................................5

E. The Subpoena .....................................................................................5

III. ARGUMENT ...............................................................................................7

A. Sigelman Has Not Shown That The Subpoena Is Narrowly TailoredTo Seek Only Relevant Documents ....................................................8

B. Sigelman Has Failed To Show That The Subpoena Seeks DocumentsThat Are Not Otherwise Procurable ..................................................11

C. The Subpoena Must Be Quashed Because It Seeks DocumentsCovered By The Attorney-Client Privilege And Work ProductProtection..........................................................................................12

D. The Subpoena Must Be Quashed Because Sigelman Has NotEstablished That The Documents He Seeks Are Admissible.............18

IV. CONCLUSION ..........................................................................................20


ii

TABLE OF AUTHORITIES

Page

CASES

Banks v. Office of Senate Sergeant-At-Arms and Doorkeeper,236 F.R.D. 16 (D.D.C. 2006)...........................................................................13

F.T.C. v. Hope Now Modifications, LLC,09-cv-1204, 2011 WL 2634029 (D.N.J. July 5, 2011)......................................12

Hickman v. Taylor,329 U.S. 495 (1947).........................................................................................12

In re Cendant Corp. Securities Litigation,343 F.3d 658 (3rd Cir. 2003) ...........................................................................13

In re Merck & Co., Inc. Securities, Derivative & ERISA Litigation,05–cv–02367, 2012 WL 4764589 (D.N.J. Oct. 5, 2012) ..................................14

Morris v. Eversley,No. 00 Civ. 8166, 2004 WL 856301 (S.D.N.Y. Apr. 20, 2004)........................19

Roxbury-Smellie v. Florida Dep’t of Corrections,324 Fed.Appx. 783 (11th Cir. 2009) ................................................................19

S.E.C. v. Brady,238 F.R.D. 429 (N.D. Tex. 2006).....................................................................16

U.S. v. Betancourt,277 Fed.Appx. 708 (9th Cir. May 6, 2008) ........................................................7

U.S. v. Burger,773 F. Supp. 1419 (D. Kan. 1991) .....................................................................9

U.S. v. Cuthbertson,630 F.2d 139 (3d Cir. 1980).........................................................................7, 18

U.S. v. Eden,659 F.2d 1376 (9th Cir. 1981)......................................................................7, 11

U.S. v. Jackson,155 F.R.D. 664 (D. Kan. 1994)..........................................................................9


iii

U.S. v. Louis,No. 04-cr-203, 2005 WL 180885 (S.D.N.Y. Jan. 27, 2005) ...............................8

U.S. v. Mix,No. 12-cr-171, 2013 WL 394206 (E.D. La. Feb. 1, 2013)..................................7

U.S. v. Nixon,418 U.S. 683 (1974)..................................................................................passim

U.S. v. Onyenso,No. 12-cr-602, 2013 WL 5322651 (D.N.J. Sept. 20, 2013) ......................7, 9, 11

U.S. v. Ruedlinger,172 F.R.D. 453 (D.Kan. 1997)...........................................................................9

U.S. v. RW Prof. Leasing Servs. Corp.,228 F.R.D. 158 (E.D.N.Y. 2005) .......................................................................8

U.S. v. Shrader,716 F.Supp.2d 464 (S.D.W.Va. 2010)..............................................................10

U.S. v. Silva-Arzeta,06-cr-120, 2007 WL 2344937 (N.D.Okla. 2007) .............................................10

U.S. v. Treacy,No. 08 Cr. 366, 2009 WL 812033 (S.D.N.Y. Mar. 24, 2009).....................15, 16

U.S. v. Wittig,247 F.R.D. 661 (D. Kan. 2008)..........................................................................7

Upjohn Co. v. U.S.,449 U.S. 383 (1981).........................................................................................12

Westinghouse Elec. Corp. v. Republic of Philippines,951 F.2d 1414 (3rd Cir. 1991)..........................................................................14

OTHER AUTHORITIES

Fed. R. Evid. 502(a)..................................................................................15, 16, 17

Fed. R. Crim. Pro. 17 .....................................................................................passim


1

I. PRELIMINARY STATEMENT

Pursuant to Federal Rule of Criminal Procedure 17(c)(2), non-party Sidley

Austin LLP (“Sidley”) herein moves to quash a subpoena issued by Defendant

Joseph Sigelman (“Sigelman”) and served on Sidley on September 19, 2014 (the

“Subpoena”). Sigelman, whose misconduct has already resulted in great burden to

his former employer, PetroTiger Limited (“PetroTiger”), seeks to impose further

burden through the issuance of a subpoena that well exceeds the narrow scope of

specific, relevant, admissible, and not otherwise-procurable evidence that the

Supreme Court has deemed permissible under Rule 17. See U.S. v. Nixon, 418

U.S. 683, 699-700 (1974).

Beyond the fact that the Subpoena is impermissibly overbroad and

inconsistent with the very limited discovery allowed by Rule 17, it is Sidley’s

understanding that the documents it produced to the United States Department of

Justice (“DOJ”) already have been provided by the DOJ to Sigelman’s counsel –

which constitutes the universe of non-privileged documents requested by the

Subpoena that are even arguably relevant to Sigelman’s criminal case. If Sigelman

believes that there are more documents provided by Sidley to the DOJ that were

not produced, Sigelman must obtain those documents from the DOJ, rather than

unnecessarily burden a non-party like Sidley. Further, while the Subpoena broadly

seeks “any and all documents” relating to an internal investigation of PetroTiger


2

conducted by Sidley, the only documents that the Subpoena identifies with

specificity are the “memoranda of interview associated with the investigation” of

PetroTiger. These documents, which contain inadmissible hearsay in any event,

are classic examples of the type of attorney work product that is protected from

disclosure during discovery because, among other things, they contain the mental

impressions and legal opinions of counsel. Further, Sidley and PetroTiger have

taken substantial precautions to ensure that they have not waived that work product

protection. Sigelman should not be able to invade Sidley’s work-product as part of

his blind hunt for exculpatory evidence based on nothing more than speculation

and his hunch that the documents he seeks “no doubt” will touch on his anticipated

theory that his co-conspirators allegedly acted without his knowledge. Courts

routinely quash Rule 17 subpoenas that are based upon such speculation because

they are the very kind of impermissible “fishing expedition” that is not permitted

under that Rule.

It is Sigelman’s burden to establish that the Subpoena complies with the

Nixon factors. He has fallen far short of meeting that burden and, as set forth

below in further detail, the Court should quash the Subpoena.


3

II. BACKGROUND

A. PetroTiger

PetroTiger is a British Virgin Islands oil and gas company with operations in

Colombia. (Dkt. 1 at 8.)

B. The Criminal Case Against Sigelman

On November 8, 2013, the DOJ filed a criminal complaint charging

Sigelman with (1) Conspiracy to Commit Wire Fraud; (2) Conspiracy to Violate

the Foreign Corrupt Practices Act (“FCPA”); (3) additional FCPA charges; and (4)

Conspiracy to Commit Money Laundering. The charges related to a scheme by

Sigelman, Hammarskjold and PetroTiger’s former general counsel, Gregory

Weisman (collectively, the “Former Managers”), “to obtain kickbacks at the

expense of their investing partners . . . and to pay bribes to a foreign official . . . in

order to secure a lucrative oil services contract in the Republic of Colombia. (See

Criminal Complaint (Dkt. 1).) In November 2013, Mr. Weisman pled guilty to

conspiracy to violate the FCPA and to commit wire fraud. (Declaration of John J.

Kuster (“Kuster Decl.”), Ex. A (Weisman plea agreement).) Mr. Hammarskjold

pled guilty to the same charges in February 2014. (Id., Ex. B (Hammarskjold plea

agreement).) Mr. Sigelman’s jury trial is currently scheduled to commence on

January 6, 2015. (Dkt. 34.)


4

C. The Internal Investigation of PetroTiger

In March 2011, after concerns arose regarding PetroTiger’s financial

performance and the Former Managers’ transparency with respect to corporate

governance, among other concerns, PetroTiger’s Board of Directors (the “Board”)

commenced an internal investigation of all financial aspects of PetroTiger. (Kuster

Decl., ¶ 3.) It has been reported that later that same month, the Board “ousted

Messrs. Sigelman and Hammarskjold.” (Dkt. 62, Ex. A.) At considerable cost to

the company, the Board retained Sidley and other advisors to assist it with respect

to the internal investigation, which involved the collection of approximately

330,000 documents from the company. (Kuster Decl., ¶ 4.)

During the investigation of the company’s financial transactions, the

improper payments that are the subject of a number of the DOJ’s charges against

Sigelman were discovered (the “Duran Payments”). (Id., ¶ 5.) PetroTiger, through

Sidley, promptly self-reported the Duran Payments to the DOJ, and subsequently

complied with the DOJ’s requests for documents. (Id., ¶ 6.) The DOJ’s

investigation, and the cooperation therewith by PetroTiger’s new management,

imposed significant expense upon PetroTiger during a time of great financial

distress. (Id.) Ultimately, Sidley produced to the DOJ every non-privileged

document in its possession, custody, or control responsive to the DOJ’s requests.


5

(Id.) Further, the DOJ represented to Sidley that it had produced all such

documents to Sigelman. (Id.)

D. Sidley’s Presentation to the Department of Justice and AllegedPresentation to Colombian Authorities

Sidley met with the DOJ several times to discuss its investigation. (Kuster

Decl., ¶ 7.) Although Sidley prepared various interview memoranda, Sidley never

shared any of those documents with the DOJ, nor provided any detailed oral

recitation of their content to the DOJ. (Id.) Further, the DOJ conducted its own

interviews of PetroTiger employees and witnesses in connection with its

investigation into Sigelman. (Id.) Ultimately, Sidley produced approximately

4,500 pages of documents to the DOJ, all of which the DOJ informed Sidley

already have been produced to counsel for Sigelman. (Id., ¶ 6.)

Sidley never met or had any communications with any Colombian

authorities, nor provided any documents to them. (Id., ¶ 9.)

E. The Subpoena

Sigelman filed a motion on September 9, 2014 before this Court seeking to

subpoena certain documents from Sidley. In his motion papers, Sigelman stated

that he sought “documents and information obtained and generated during” the

company’s internal investigation. (Mtn. at 2). Mr. Sigelman further argued that he

anticipates that part of his defense will be that his co-conspirators (both of whom

have pled guilty) acted without his knowledge, and then speculates that the


6

materials called for by the Subpoena “no doubt touch directly on the activities” of

his co-conspirators and have the “potential to exonerate him.” (Id.) Mr. Sigelman

provides absolutely no basis to support his speculation that the documents he

contends may be in Sidley’s possession would in any way exonerate him.

The DOJ sent a letter to the Court on September 12, 2014 indicating that it

“took no position” on whether the Court should permit the Subpoena to be issued.

(Dkt. 64.) On September 15, 2014, the Court granted Sigelman’s unopposed

motion and permitted the subpoena to be served. (Dkt. 68.)

On September 19, 2014, Sigelman served the Subpoena on Sidley’s

Washington D.C. office.1 The Subpoena broadly requests:

1. Any and all documents referring to, related to, orcollected during an internal investigation of PetroTiger Ltd.or any of its current and former parents, subsidiaries,affiliates, predecessors and successors, employees,managers, officers, directors, partners or members,including, but not limited to, any memoranda of interviewassociated with the investigation.

2. Any and all documents related to communicationsbetween Sidley Austin LLP and the United StatesDepartment of Justice, and between Sidley Austin LLP andColombian officials in connection with the above-referencedinternal investigation, including, but not limited to,presentations made by Sidley Austin LLP.

(Kuster Decl, Ex. C (emphasis added).)

1 The investigation at issue in the Subpoena was conducted by Sidley’s New Yorkoffice and all documents in Sidley’s possession reside in New York. (KusterDecl., ¶ 11.)


7

III. ARGUMENT

Rule 17 provides that the “court may quash or modify [a subpoena issued

thereunder] if compliance would be unreasonable or oppressive.” Fed. R. Crim.

Pro. 17(c)(2). It is well-settled that “[c]ourts must be careful that Rule 17(c) is not

turned into a broad discovery device, thereby undercutting the strict limitation of

discovery in criminal cases found in [Rule 16].” U.S. v. Cuthbertson, 630 F.2d

139, 146 (3d Cir. 1980).2

The Supreme Court has held that a defendant seeking discovery under Rule

17 must show:

(1) that the documents are evidentiary and relevant; (2) thatthey are not otherwise procurable reasonably in advance oftrial by exercise of due diligence; (3) that the party cannotproperly prepare for trial without such production . . .; and(4) that the application is made in good faith and is notintended as a general ‘fishing expedition.”

United States v. Nixon, 418 U.S. 683, 698-99 (1974); see also U.S. v. Onyenso, No.

12-cr-602, 2013 WL 5322651 (D.N.J. Sept. 20, 2013) (explaining that “[t]he Nixon

2 See also U.S. v. Betancourt, 277 Fed.Appx. 708, 711 (9th Cir. May 6, 2008)(subpoena duces tecum not a discovery device and application may not be intendedas general “fishing expedition”); U.S. v. Mix, No. 12-cr-171, 2013 WL 394206, *2(E.D. La. Feb. 1, 2013) (Rule 17(c) not intended to provide discovery device forcriminal cases, and breadth of requests was deemed fishing expedition and notsufficiently narrow); U.S. v. Wittig, 247 F.R.D. 661, 664 (D. Kan. 2008) (rejectingsubpoenas that resembled discovery requests, including broad language fordocuments and communications).


8

standard has been routinely applied in this Circuit to Rule 17(c) subpoenas issued

to third parties”). Importantly, the burden is on the party who served the subpoena

to establish compliance with the Nixon factors. See U.S. v. Eden, 659 F.2d 1376,

1381 (9th Cir. 1981) (quashing subpoena where the issuing party “failed to meet

his burden”); U.S. v. RW Prof. Leasing Servs. Corp., 228 F.R.D. 158, 162

(E.D.N.Y. 2005) (“In order to meet its burden, the proponent has to show that the

documents sought are both relevant and admissible . . .”).

What Sigelman seeks via the Subpoena is exactly the type of “broad

discovery” prohibited by Nixon and its progeny. As set forth below, Sigelman has

not (and cannot) satisfy the Nixon factors and the Subpoena should be quashed.

A. Sigelman Has Not Shown That The SubpoenaIs Narrowly Tailored To Seek Only Relevant Documents

The Subpoena should be quashed because Sigelman has failed to meet his

burden of showing that the Subpoena seeks only “specific” and “relevant”

documents. As an initial matter, the Subpoena’s requests for “[a]ny and all

documents referring to, related to, or collected during an internal investigation of

PetroTiger . . .” and “[a]ny and all documents related to communications” between

Sidley and various government officials are impermissibly overbroad as a matter of

law. Indeed, such requests for “[a]ny and all” documents have been rejected by

numerous courts. See, e.g., U.S. v. Louis, No. 04-cr-203, 2005 WL 180885

(S.D.N.Y. Jan. 27, 2005) (a demand for “‘any and all’ documents relating to


9

several categories of subject matter (some of them quite large), rather than specific

evidentiary items, [] clearly indicat[es] that Defendant seeks to obtain information

helpful to the defense by examining large quantities of documents, rather than to

use Rule 17 for its intended purpose—to secure the production for a court

proceeding of specific admissible evidence’”); U.S. v. Ruedlinger, 172 F.R.D. 453,

455-56 (D. Kan. 1997) (rejecting requests for “any and all audit reports” and entire

“investigations file”); U.S. v. Jackson, 155 F.R.D. 664, 668 (D. Kan. 1994)

(rejecting requests for “any and all documents,” “all correspondence” and “all

related records”).

Further, Sigelman has not shown why “any and all documents” relating to

the internal investigation of PetroTiger even have the potential of being relevant to

his criminal case, or why PetroTiger should be burdened with the cost of reviewing

and producing all such documents. Instead of recognizing controlling Third

Circuit law, Sigelman relies throughout his motion papers on a 2006 case from the

District of D.C. for his assertion that “the Nixon requirement can ‘be satisfied if

there is a ‘sufficient likelihood,’ demonstrated through rational inferences, that the

documents being sought contain relevant and admissible evidence.’” (See Mtn. at

1-2 (citing U.S. v. Libby, 432 F. Supp. 2d 26, 31 (D.D.C. 2006).) But that is not

the law in this Circuit. See Onyenso, 2013 WL 5322651 at *2 (mere speculation

that discovery may reveal relevant material not enough because “in this Circuit, a


10

greater showing is required than a Defendant’s hope that he may find useful

information”).3 The internal investigation involved the collection of approximately

330,000 documents from the company. The Subpoena unreservedly requests all of

those documents without any indication as to why they are all even potentially

relevant.

Mr. Sigelman provides nothing more than his pure speculation that the

materials called for by the Subpoena “no doubt touch directly on the activities” of

his co-conspirators and have the “potential to exonerate him.” (Mtn. at 2.) Indeed,

he has failed to articulate any factual basis to support his speculation that the

documents he seeks would be likely to exonerate him. This is precisely the kind of

“fishing expedition” that is not permitted under Rule 17. Nixon, 418 U.S. at 699-

700; U.S. v. Shrader, 716 F.Supp.2d 464, 475 (S.D.W.Va. 2010) (“[T]he Court

finds that the subpoena is an impermissible fishing expedition. Defendant theorizes

that there might be exculpatory material in the records; such a theory is not

sufficient.”); U.S. v. Silva-Arzeta, 06-cr-120, 2007 WL 2344937, *8 (N.D.Okla.

2007) (“discovery is not to be allowed if it is a mere fishing expedition based on

3 Holdings from other jurisdictions tend to follow the Third Circuit’s higherstandard. See, e.g., U.S. v. Burger, 773 F. Supp. 1419, 1425 (D. Kan. 1991) (“thedocuments sought cannot be potentially relevant or admissible, they must meet thetest of relevancy and admissibility at the time they are sought”).


11

the defendant’s mere hopes of finding exculpatory evidence”) (internal quotation

and citation omitted).

Accordingly, the Subpoena is in violation of Nixon’s “relevance” and

“specificity” limitations and must be quashed.

B. Sigelman Has Failed To Show That The SubpoenaSeeks Documents That Are Not Otherwise Procurable

Even if Sigelman could establish that his request for all documents relating

to the internal investigation is appropriate insofar as those documents relate to the

charges against him (and are therefore at least potentially relevant), Sigelman still

would be unable to meet his burden under Nixon. In Nixon, the Court found the

subpoena at issue to be proper in part because “[t]he subpoenaed materials [were]

not available from any other source . . . .” 418 U.S. at 702 (holding that a party

seeking the production of documents through Rule 17 must demonstrate that the

documents “are not otherwise procurable . . .”); see also Eden, 659 F.2d at 1381

(“to justify a subpoena for production before trial, the proponent must also

demonstrate that the subpoenaed materials are not available from any other

source”); Onyenso, 2013 WL 5322651 at *2 (same). That is not the case here.

Quite the contrary, Sidley has produced to the DOJ all non-privileged documents

in its possession, custody or control that are relevant to the charges against

Sigelman, and all of those documents have already been provided to Sigelman’s

counsel by the DOJ. (See Kuster Decl., ¶ 6.) But even if Sidley had provided


12

documents to the DOJ that were not yet produced, Sigelman’s appropriate recourse

would be to obtain them from the DOJ, not from a non-party under Rule 17. The

Court should also quash the Subpoena to the extent it seeks any additional

documents from Sidley that Sigelman believes may have been provided to the DOJ

but not yet produced by the DOJ to him.

C. The Subpoena Must Be Quashed Because It Seeks DocumentsCovered By The Attorney-Client Privilege And Work ProductProtection

The only documents requested by the Subpoena with even a modicum of

specificity – “memoranda” prepared by counsel – fall squarely within the

protection of the attorney work-product doctrine. Accordingly, to the extent that

the Subpoena seeks these documents, it should be quashed.

Any interview or other investigation memoranda prepared by Sidley would

contain counsels’ mental impressions, conclusions, and opinions. (Kuster Decl., ¶

7.) Accordingly, these documents constitute protected work product. See

Hickman v. Taylor, 329 U.S. 495, 508 (1947) (“Not even the most liberal of

discovery theories can justify unwarranted inquiries into the files and the mental

impressions of an attorney.”); Upjohn Co. v. U.S, 449 U.S. 383, 399-400 (1981)

(“Forcing an attorney to disclose notes and memoranda of witnesses’ oral

statements is particularly disfavored because it tends to reveal the attorney’s

mental processes” in that the “‘statement would be [the attorney’s] language,


13

permeated with his inferences.’”) (quoting Hickman, 329 U.S. at 513, and 516-17

(Jackson, J., concurring)); see also F.T.C. v. Hope Now Modifications, LLC, 09-cv-

1204, 2011 WL 2634029, *3 (D.N.J. July 5, 2011) (“[m]emoranda summarizing

oral interviews . . . may indirectly reveal the attorney’s mental processes, his

opinion work product . . . .[S]pecial considerations . . . must shape any ruling on

the discoverability of interview memoranda . . . .[S]uch documents will be

discoverable only in a ‘rare situation.’”) (quoting In re Grand Jury Investigation,

599 F.2d 1224, 1231 (3d Cir. 1979)); In re Cendant Corp. Securities Litigation,

343 F.3d 658, 664 (3rd Cir. 2003) (explaining that discovery of such “opinion

work product. . . requires a heightened showing of extraordinary circumstance”).

These memoranda are also protected by the attorney-client privilege because they

reflect Sidley’s legal advice to PetroTiger and information provided to Sidley in

connection with same. See Banks v. Office of Senate Sergeant-At-Arms and

Doorkeeper, 236 F.R.D. 16, 20 (D.D.C. 2006) (“Counsel’s notes and memorandum

of the employee interviews and conversations clearly reveal what the employees

told counsel. These interviews and conversations were an integral part of the

process of providing information to counsel so that counsel could provide the

sought after legal representation” and are therefore “attorney-client privileged.”).

Thus, as a threshold matter, Sidley’s interview and other internal memoranda are


14

protected by the work product doctrine and attorney-client privilege from

disclosure.4

Perhaps recognizing this substantial hurdle, Sigelman asserts that “although

some of the documents generated during the Investigation may have at one time

been protected by attorney-client privilege, PetroTiger waived that privilege when

it divulged the investigation’s findings to third parties, including officials of the

United States and of Colombia.” (Mtn. at 2-3.) There are several problems with

Sigelman’s contention, however:

First, Sidley never disclosed any interview or other memoranda to the DOJ

or any third party. In fact, the DOJ conducted its own witness interviews prior to

indicting Mr. Sigelman and his co-conspirators and those statements are the ones

that have any arguable relevance to these criminal proceedings. (Kuster Decl., ¶

7.) Further, Sidley and PetroTiger took specific steps to keep confidential the

information contained in these Sidley memoranda. No interview or other

memoranda have ever been made publicly available or to Sidley’s knowledge ever

4 In light of the Subpoena’s failure to comply with the Nixon factors, Sidleyrespectfully submits that it would be unduly burdensome and inconsistent with thelimited discovery permitted under Rule 17 to require a non-party such as Sidley toundertake the significant task of preparing a detailed privilege log. The discoverySigelman seeks from Sidley is clearly an impermissible fishing expedition, andproviding a log of all privileged documents would enable Sigelman to obtaininformation about Sidley’s documents that he has no basis to discover under Rule17 in the first place.


15

disseminated beyond PetroTiger’s Board and legal counsel, nor have any of these

documents been shared with the DOJ. (Id., ¶¶ 7-8.) Thus, there is no evidence of

waiver with respect to these particular documents.

Second, to the extent that Sigelman is attempting to argue that Sidley waived

the attorney-client privilege or work-product protection over undisclosed

documents in light of its discussions with the DOJ, such a theory is not supported

by the decisions cited in Sigelman’s motion papers. See Westinghouse Elec. Corp.

v. Republic of Philippines, 951 F.2d 1414. 1423-27 (3rd Cir. 1991) (rejecting the

waiver defense of “selective disclosure” and finding that particular documents

disclosed to the government were thereafter discoverable, but not addressing

waiver of undisclosed documents); In re Merck & Co., Inc. Securities, Derivative

& ERISA Litigation, 05–cv–02367, 2012 WL 4764589, *2 (D.N.J. Oct. 5, 2012)

(same).

But even assuming that Sigelman was attempting to make a broader

argument that Sidley somehow made a “subject-matter waiver” because it shared

certain documents or information with the DOJ, neither the law nor the facts here

support it. Indeed, Rule 502 of the Federal Rules of Evidence provides that, if

privileged material is disclosed to the Government, any waiver that occurs only

extends to additional, undisclosed material if, in the case of an intentional waiver,

the disclosed and undisclosed materials concern the same subject matter and


16

“ought in fairness to be considered together.” Fed. R. Evid. 502(a). The Advisory

Committee Notes to Rule 502 state that a finding of waiver should be “reserved for

those unusual situations in which fairness requires a further disclosure of related,

protected information, in order to prevent a selective and misleading presentation

of evidence to the disadvantage of the adversary.” Id. at advisory committee’s

note (emphasis added).

In U.S. v. Treacy, No. 08 Cr. 366, 2009 WL 812033 (S.D.N.Y. Mar. 24,

2009), a law firm moved to quash a Rule 17(c) subpoena on the grounds that the

documents sought, which included interview memoranda relating to an internal

investigation of the law firm’s client, were both attorney-client privileged and

protected work product. After the defendant asserted that the law firm had waived

privilege in light of certain disclosures to the government, the court explained that,

in the absence of a “detailed oral recitation” of an interview memorandum’s

contents, “courts have routinely declined to find that waiver has occurred.” Id. at

*1 (citing SEC v. Beacon Hill Asset Mgmt. LLC, 231 F.R.D. 134, 143

(S.D.N.Y.2004) and In re Qwest Commc’ns Int’l Inc., 450 F.3d 1179, 1181, 1196

(10th Cir.2006)); see also S.E.C. v. Brady, 238 F.R.D. 429, 444 (N.D. Tex. 2006)

(limiting waiver with respect to documents disclosed to the SEC to “the documents

actually disclosed”).


17

Further, even though the law firm in Treacy had, in fact, disclosed certain of

its actual interview memoranda to the government, the court rejected an argument

that the law firm “was using the privilege as both a ‘sword and a shield’ by

choosing which memoranda it disclosed” because “such a concern is not

implicated where, as here, the holder of the privilege is not a party to the action

and seeks no advantage against its adversary.” Id. at *2. The court ultimately

quoted from Rule 502 and found that because the law firm (and the Board

committee it represented) had “no adversary in th[e] action,” and because there

was “no suggestion of ‘selective’ or ‘misleading’ conduct” (as evidenced by the

fact that “all of the interview memoranda that were disclosed to the Government

ha[d] now been provided to defendant”), the case did “not present any of the

‘unusual circumstances’ that otherwise would require a finding of waiver.” Id.

Likewise, here, Sidley is not a party to this action, and thus is not an

adversary to Sigelman. Nor has Sidley engaged in any “misleading” conduct of

the kind that could give rise to the concerns described in the advisory committee

notes to FRE 502. Moreover, Sidley has not provided the DOJ with a “detailed

oral recitation” of the contents of any of its interview memoranda. Nor did Sidley

produce any interview or other memoranda to the DOJ. (Kuster Decl., ¶ 7.)

Indeed, the circumstances here are particularly removed from the advisory

committee concerns, because as noted above, the DOJ conducted its own


18

interviews of the potential witnesses involved, and the DOJ has produced all of the

documents Sidley provided to the DOJ pursuant to its requests to Sigelman’s

counsel. (Id., ¶ 6). Finally, Sidley’s limited disclosures to the DOJ hardly present

the “unusual circumstance” that would make subject matter waiver appropriate.

Rather, Sidley’s investigation of PetroTiger and subsequent voluntary disclosures

were of the type that are routinely conducted by conscientious businesses in light

of the fact that “both the DOJ and SEC place a high premium on self-reporting,

along with cooperating and remedial efforts, in determining the appropriate

resolution of FCPA matters.”5 It would be contrary to Rule 502 to apply such

waiver to a situation of routine self-reporting. Accordingly, the Subpoena should

be quashed to the extent that it requests documents not disclosed to the DOJ.

D. The Subpoena Must Be Quashed Because SigelmanHas Not Established That The Documents He Seeks AreAdmissible

Finally, Sigelman has failed to show that the Subpoena seeks admissible

documents, as required by Nixon. Mr. Sigelman baldly asserts that the Subpoena

calls for documents that “no doubt touch directly on the activities of [his] co-

conspirators” and, because they have “the potential to exonerate him” they are

“properly a subject of the subpoena.” (Mtn at 2.) In support, Sigelman contends

5 See A Resource Guide to the U.S. Foreign Corrupt Practices Act, by the CriminalDivision of the U.S. Department of Justice and the Enforcement Division of theU.S. Securities and Exchange Commission.


19

that “the Third Circuit has explicitly held that ‘exculpatory evidence in the

possession of third parties’ is ‘retrievable under a Rule 17(c) subpoena.’” (Id.

(citing Cuthbertson, 651 F.2d at 195).) But Sigelman’s misleading citation fails to

include the Third Circuit’s very next line: “naked exculpatory material held by

third parties that does not rise to the dignity of admissible evidence simply is not

within the rule.” Id. (emphasis added). In Cuthbertson, the court reversed a

contempt order for failure to comply with a subpoena because the documents

sought were “[o]n their face . . . simply hearsay” and because “[n]either the

government nor defendants have asserted a relevant exception to the hearsay rule.”

Id.

Likewise, here, the interview and any other internal memoranda sought by

Sigelman constitute inadmissible hearsay and cannot become evidence at trial to

prove the truth of the matters asserted therein. See Roxbury-Smellie v. Florida

Dep’t of Corrections, 324 Fed.Appx. 783, 785 (11th Cir. 2009) (interview notes

constitute inadmissible hearsay); Morris v. Eversley, No. 00 Civ. 8166, 2004 WL

856301, *2 (S.D.N.Y. Apr. 20, 2004) (interview memorandum is “pure hearsay”).

Further, to the extent Sigelman seeks the opinions of counsel as set forth in

Sidley’s internal memoranda, those opinions are not relevant evidence. The

determination of Sigelman’s culpability is for a jury of his peers to make, not

Sidley or PetroTiger’s in-house counsel.


20

IV. CONCLUSION

For the foregoing reasons, Sidley respectfully requests that the Court quash

the Subpoena.

Dated: Morristown, New JerseyOctober 6, 2014 By: /s/ Michael Rato _

Michael RatoMcELROY, DEUTSCH,MULVANEY & CARPENTER, LLP1300 Mount Kemble AvenueP.O. Box 2075Morristown, New Jersey 07962(973) 993-8100(973) 425-0161 (fax)

John J. KusterTimothy J. TreanorSIDLEY AUSTIN LLP787 Seventh AvenueNew York, New York 10019Tel: (212) 839-5300
