In a decision by Judge Richard Posner, the U.S. Court of Appeals for the Seventh Circuit has ruled that the work-product protection applies to pretrial discovery work exchanged among Justice Department lawyers representing federal agencies with opposing interests. Were the court to rule otherwise, he wrote, "The Justice Department’s ability to formulate a position that would reconcile competing interests within our vast federal government would be severely hampered." 

The court issued the unanimous panel ruling in Menasha Corp. v. U.S. Department of Justice on February 20.

The ruling reversed a denial of the government’s summary judgment motion by Chief Judge William Griesbach of the Eastern District of Wisconsin. Griesbach wrote that because "the agencies at issue have adverse interests," communications between their lawyers were not protected by attorney work-product rules.

The conflict concerns a case filed jointly by the U.S. Environmental Protection Agency, the Department of the Interior and the state of Wisconsin in October 2010 against public and private entities over pollution in Green Bay and the Lower Fox River in Wisconsin.

The plaintiffs sought an estimated $1.5 billion. Menasha Corp., which operated a paper mill, and Neenah Menasha Sewerage Commission were two of the defendants.

That December, the Justice Department filed a consent decree offering $4.5 million in cleanup funds from the United States. It negotiated the decree with Wisconsin, two other defendants and Indian tribal trustees.

In November 2011, the Menasha defendants filed an opposition to the proposed decree. They have also filed counterclaims against the United States for remediation costs they would incur if they are found liable for polluting. Those counterclaims would be voided by court approval of the consent decree in the Superfund case.

Separately in 2010, the defendants obtained documents from the Justice Department through a Freedom of Information Act request. Dissatisfied with the materials, they filed a separate FOIA lawsuit in July 2011 seeking 440 documents exchanged between the environmental enforcement and environmental defense sections of the Justice Department’s Environment and Natural Resources Division about the Superfund litigation.

In their appeal, the Menasha companies claimed that memos and emails exchanged between the two sections are tantamount to sharing between adverse parties, which means that the Justice Department should forfeit its attorney work-product privilege.

Posner was joined in his opinion by Judge Ann Claire Williams and Judge Charles Norgle of the Northern District of Illinois, who heard the case by designation.

Posner noted, "Menasha’s argument is simple: the enforcement and defense sections are adversaries; communications between adversaries are not privileged. But as Einstein is reputed to have said, ‘Everything should be made as simple as possible, but not simpler.’ "

He continued, "Doubtless the two sections, having prosecutorial and defense responsibilities respectively, often disagree.… All this is of no moment. Neither the EPA nor the Corps of Engineers is a party to the Superfund litigation. The United States, represented by the Justice Department, is the only federal party and the lawyers in the enforcement and defense sections have no authority to determine its negotiating aim and strategy."

Posner compared the Justice Departments’ work product to that produced by lawyers at a large corporation who represent different internal departments. Even though a general counsel in such a case chooses between adversaries within the company that "would not entitle the plaintiff’s malpractice lawyer to information exchanged among the defendant’s battling subordinate lawyers," Posner wrote.

"Were [the appellees'] position sound, the Justice Department could never shield attorney work product in a case like this — a case, not unusual, in which the federal government by virtue of its size and diversity has internal conflicts — without a crippling reorganization of the Department…The Justice Department’s ability to formulate a position that would reconcile competing interests within our vast federal government would be severely hampered," Posner wrote.

David Rabbino, a partner at Hunsucker Goodstein in Lafayette, Calif. who argued for Menasha said, "We’ve read [the opinion] and are evaluating our options."

Neenah Menasha and its attorney, William Mulligan, a partner at Milwaukee’s Davis & Kuelthau, did not respond to a request for comment.

The Justice Department also did not respond to a request for comment. Samantha Chaifetz, an appellate staff attorney in the department’s civil division, argued for the government.

Sheri Qualters can be contacted at squalters@alm.com.