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A case before the federal appeals court in Washington could have a large impact on how lawyers attack—and defend—companies targeted by government investigators. The U.S. Court of Appeals for the District of Columbia will hear a case with origins in California’s 2001-2002 energy crisis that is expected to decide whether companies negotiating with federal regulators can keep damning documents out of the public eye. In the California case, defense attorneys for Canadian energy company EnCana Corp. say they gave documents to federal regulators conducting a price-fixing investigation with the understanding that the documents would remain confidential. Now that plaintiffs in a private suit have requested that information, EnCana says it should be kept private due to a “settlement privilege.” Wide-ranging question The privilege question is the most wide-ranging of a series of discovery spats that have arisen in the EnCana litigation. In that suit, E.&J. Gallo Winery sued EnCana in the U.S. District Court for the Eastern District of California for allegedly inflating natural gas prices. Gallo sought documents from EnCana that the gas company-with the support of a judge in Fresno, Calif.-refused to turn over. Because documents had been provided to the federal Commodity Futures Trading Commission, the winery subpoenaed the commission through the federal district court in Washington. The D.C. court issued the subpoena, and the commission turned over the documents. Now EnCana’s law firm, L.A.’s Gibson, Dunn & Crutcher, is fighting to force the plaintiff’s lawyers to give the papers back. Gallo’s lawyers, from Cotchett, Pitre, Simon & McCarthy in San Francisco, are fighting to keep the papers, resisting Gibson Dunn’s argument that the documents should be protected. Gibson Dunn lawyers, who would not comment publicly on the case, said in court filings that the regulators should not have provided the records because they are subject to a settlement privilege. Gibson Dunn partners David Battaglia and Miguel Estrada will represent EnCana in the D.C. Circuit. Oral arguments are scheduled for Nov. 29 before judges Thomas Griffith, Judith Rogers and David Tatel. Griffith was recently appointed to the appeals court. The question of whether such a privilege exists is of keen interest to the plaintiffs’ bar, which frequently obtains documents from the government, as well as defense firms that try to keep such information from getting out. And with this privilege question still unsettled, lawyers are closely watching the D.C. Circuit. “I think it’s an extremely important decision that the D.C. Circuit court is going to make here,” said Donn Pickett, a partner at Bingham McCutchen in San Francisco who defends companies in antitrust suits. Not having such material under privilege, he said, “provides a seemingly endless opportunity for plaintiffs’ lawyers to get these kinds of documents.” Robert Van Nest, a defense lawyer and partner at San Francisco’s Keker & Van Nest, agrees, and says that an appeals court decision saying there is no such privilege would have a chilling effect on companies that want to settle with regulators. “In any kind of a government investigation, if you don’t protect that kind of information, people aren’t going to be willing to talk,” he said. Steven Williams, one of the Cotchett partners working on the case, disagrees vehemently. He said that material provided to the government is inherently public and its accessibility is particularly important for parties seeking recourse in the civil courts. A privilege “would be absolutely terrible. It would hide things in the public domain,” he said. “These are public documents, and this is the U.S. government we’re talking about.” Williams said that such a rule would let companies keep vast amounts of information secret. “They could say, ‘We wanted to settle the case; therefore it’s private,’ ” he noted. “ It would keep a lot of valuable public information out of the public’s hands.” More to the point in the EnCana case, Williams said, is that-despite the spirited arguments about settlement privilege-the information at issue in the case was not provided to the government as part of settlement negotiations. “It’s a joke because there weren’t settlement talks,” Williams said. And in a brief filed with the U.S. Supreme Court in an unsuccessful attempt to stay the subpoena, the government agency in question-the Commodity Futures Trading Commission-agreed. Some documents, wrote government lawyers, “were submitted to the commission pursuant to a subpoena.” And most were produced during an investigation that predated settlement talks. The Gibson Dunn lawyers, though, argue that much of the information came out through such discussions. They are now trying to persuade the D.C. Circuit to force the plaintiff’s lawyers to give up all of the documents and destroy all copies. Williams said that is unlikely and that he is confident that the plaintiff will be allowed to use the material. But, he added, the defendants have succeeded in delaying the case, especially since the D.C. Circuit is unlikely to issue an opinion for many months.

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