CALDERWOOD & HARKNESS LLP 555 California Street, 40th Floor San Francisco, California 94104
Telephone: (415) 392-8400 Facsimile: (415) 392-8401
www.calderwoodharkness.com
Elaine Forsythe Partner Direct Dial: (415) 392-8437
Email: eforsythe@calderwoodharkness.com
February 22, 2022
Via Hand Delivery and Email
Denise Kowalski, Esq. Trial Attorney, Antitrust Division U.S. Department of Justice San Francisco Field Office 450 Golden Gate Avenue, Room 10-0101 San Francisco, California 94102
Re: Grand Jury Subpoena No. GJ-22-0194-SD-003; Grand Jury No. GJ-22-0194, United States District Court for the Northern District of California, San Francisco Division — Torchlight Mining Corp.
C&H Matter No.: 1039-00001
Dear Ms. Kowalski:
I. Introduction and Purpose of Letter
We write on behalf of our client, Torchlight Mining Corp. ("TMC" or the "Company"), a corporation organized under the Canada Business Corporations Act with its registered office at 200 Bay Street, Suite 3400, Toronto, Ontario M5J 2J2, Canada, and its principal U.S. operations conducted through its wholly owned subsidiary, Torchlight Mining (U.S.) Inc., located at 8750 West Sahara Avenue, Suite 210, Reno, Nevada 89117. Calderwood & Harkness LLP ("C&H") was retained by TMC on February 18, 2022 in connection with this matter and is authorized to communicate with the Antitrust Division of the U.S. Department of Justice (the "Antitrust Division" or the "Division") on TMC's behalf regarding all issues relating to the grand jury subpoena referenced above.
The purpose of this letter is twofold. First, we write to formally acknowledge TMC's receipt of the grand jury subpoena duces tecum identified above. Second, we respectfully request an extension of the return date specified in the subpoena in order to permit TMC and its counsel to undertake the steps necessary to ensure full, complete, and orderly compliance with the subpoena's requirements. As set forth in greater detail below, this request is made in good faith and is motivated solely by the desire to produce a comprehensive, well-organized, and privilege-reviewed set of responsive documents, and not by any intent to delay or impede the grand jury's proceedings.
II. Acknowledgment of Subpoena
TMC hereby acknowledges receipt of Grand Jury Subpoena No. GJ-22-0194-SD-003 (the "Subpoena"), issued in connection with Grand Jury No. GJ-22-0194, empaneled in the United States District Court for the Northern District of California, San Francisco Division. The Subpoena was served on TMC on February 14, 2022, at the offices of Torchlight Mining (U.S.) Inc. in Reno, Nevada.
TMC understands the seriousness of this Subpoena and the obligations it imposes. The Company recognizes the authority of the grand jury and the importance of the Division's investigative work. TMC intends to comply fully with its obligations under the Subpoena and to cooperate with the Antitrust Division throughout the course of this process.
We note that the Subpoena is broad in scope and seeks documents across multiple categories relating to, among other things, the pricing, sale, and distribution of specialty minerals — including, but not limited to, high-purity feldspar, industrial talc, and rare-earth concentrates — as well as communications with competitors, participation in trade associations, and trade-association records. The document requests span multiple years of business activity and implicate a wide range of TMC's operations, personnel, and data systems. Given the breadth and complexity of the Subpoena, TMC respectfully submits the request for an extension described below.
III. Request for Extension of Return Date
TMC respectfully requests that the Antitrust Division agree to a sixty (60) day extension of the initial return date for document production specified in the Subpoena. This request is supported by the following considerations, each of which independently counsels in favor of a reasonable accommodation, and which together demonstrate that such an extension is both necessary and appropriate under the circumstances.
A. Scope and Volume of Responsive Documents
The Subpoena encompasses a broad range of document categories spanning multiple years of TMC's commercial operations. As the Division is likely aware, TMC is a significant participant in the specialty minerals industry. The Company currently operates fourteen (14) active mining operations situated across four countries — Canada, the United States, Brazil, and Australia — and six (6) downstream chemical-processing facilities that refine and process extracted minerals for commercial and industrial end-use applications.
Of particular relevance to the Subpoena, TMC's U.S. Specialty Minerals Division — the division most directly implicated by the Subpoena's document request categories — generated approximately USD $687 million in revenue during fiscal year 2021. This division alone encompasses multiple business units, product lines, regional sales teams, and operational functions, each with its own records, communications, and data repositories.
The volume of potentially responsive electronically stored information ("ESI") is substantial. TMC's data environment includes, among other systems, enterprise email platforms (Strathmore Data Systems and Ashbury Software), shared network drives, cloud-based storage systems (including Aldermere Systems and third-party document management systems), enterprise messaging platforms (including Northgate Data Systems and legacy Bramwell Software archives), customer relationship management databases, enterprise resource planning systems, and individual custodian files stored on laptops, desktops, and mobile devices. These data sources are distributed across multiple business units and geographic locations, including TMC's corporate headquarters in Toronto, its U.S. operational headquarters in Reno, and regional offices and mine sites in Nevada, Arizona, Colorado, Wyoming, and California.
Counsel anticipates that it will be necessary to identify and collect data from a significant number of custodians within TMC's U.S. Specialty Minerals Division. In addition, the scope of certain document categories within the Subpoena — particularly those relating to communications with competitors and trade-association participation — may require the identification and collection of data from custodians in other TMC business units, including its corporate development, legal, regulatory affairs, and executive leadership functions. Preliminary assessments suggest that the number of potentially relevant custodians could be substantial, and that the total volume of potentially responsive ESI may encompass multiple terabytes of raw data prior to processing, de-duplication, and review.
B. Recent Retention of Counsel
Calderwood & Harkness LLP was retained by TMC only on February 18, 2022 — just four (4) days after the Subpoena was served on the Company. While TMC moved promptly to engage experienced antitrust defense counsel upon receipt of the Subpoena, the compressed time frame between the retention of counsel and the original return date presents significant practical challenges.
Counsel requires a reasonable period of time to familiarize itself with TMC's organizational structure, governance framework, business operations, and data systems. This includes, but is not limited to, developing a thorough understanding of the Company's corporate hierarchy and reporting relationships, its document retention and records management practices, the architecture and configuration of its information technology infrastructure, the identities and roles of key custodians who are most likely to possess responsive materials, and the scope and nature of TMC's participation in trade associations and industry groups that are the subject of the Subpoena's inquiries.
TMC's General Counsel, Priya Anand, has been cooperating fully with outside counsel since our engagement and has made herself and members of her team available to facilitate the onboarding process. Notwithstanding these commendable efforts, the complexity of TMC's operations and data environment is such that the compressed timeline between the date of counsel's retention and the original return date renders full compliance with the Subpoena by the original return date impracticable.
C. Document Preservation and Collection Process
Immediately upon our retention, C&H began working with TMC's legal department and information technology personnel to implement a comprehensive litigation hold and document preservation protocol. This protocol is designed to ensure that the integrity of all potentially responsive materials — including ESI in all of its forms — is preserved throughout the pendency of this matter. TMC has issued written litigation hold notices to relevant personnel and business units instructing them to preserve all documents and data that may be responsive to the Subpoena, to refrain from deleting, altering, or destroying any such materials, and to suspend any routine document destruction or data purging processes that might affect potentially responsive materials.
In addition to the litigation hold, TMC intends to engage a specialized electronic discovery and digital forensics vendor to conduct forensic data collection, processing, and hosting of ESI. The use of a qualified forensic vendor is essential to ensuring that the collection of ESI is conducted in a manner that is defensible, preserves the integrity and metadata of collected files, and maintains a complete and verifiable chain of custody. TMC is currently in the process of evaluating and selecting an appropriate vendor, and anticipates finalizing the engagement within the near term.
Once the vendor is engaged, the forensic collection process itself — including the imaging of custodian devices, the extraction of data from enterprise systems, and the ingestion of collected data into a document review platform — will require a period of weeks to execute properly, particularly given the number of custodians, data sources, and geographic locations involved. Any attempt to compress this process into an unreasonably short time frame would risk compromising the quality and defensibility of the collection, which would serve the interests of neither the Company nor the Division.
D. Privilege Review Requirements
Given the volume of anticipated responsive documents, TMC will need to conduct a thorough and responsible review for materials protected by the attorney-client privilege and the work-product doctrine before any production is made to the grand jury. TMC takes its obligation to protect legitimately privileged communications and materials seriously, and recognizes that the inadvertent production of privileged documents can have significant and potentially irreversible consequences.
A responsible privilege review process — one that meets the standards expected of counsel in federal grand jury proceedings — necessitates reasonable time for a document-by-document assessment of potentially privileged materials, a quality control process to ensure the accuracy and consistency of privilege determinations, and the preparation of an accompanying privilege log that identifies each document withheld on the basis of privilege and provides sufficient information to permit the Division to evaluate the claimed privilege. TMC is committed to producing a privilege log that is complete, accurate, and compliant with all applicable legal requirements.
In order to balance the Division's legitimate interest in receiving responsive documents as promptly as possible with the need for a thorough privilege review, TMC proposes to produce documents on a rolling basis, commencing as soon as reasonably practicable. This rolling production approach will allow the Division to begin reviewing responsive, non-privileged materials well in advance of the completion of TMC's overall document review, while preserving TMC's ability to conduct a careful and deliberate privilege review across the full body of responsive materials.
IV. Proposed Production Schedule
In light of the foregoing considerations, TMC proposes the following production schedule in lieu of the original return date specified in the Subpoena:
1. First Rolling Production (on or about April 4, 2022). TMC will make its first rolling production of responsive, non-privileged documents on or about April 4, 2022, which is approximately six (6) weeks from the date of this letter. This initial production will consist of the most readily accessible and responsive document categories identified in the Subpoena, including those categories for which TMC anticipates the collection and review process can be completed most expeditiously. TMC will endeavor to prioritize for inclusion in this first production those documents that are most likely to be of immediate interest to the Division's investigation.
2. Subsequent Rolling Productions (every two to three weeks). Following the first rolling production, TMC will make subsequent rolling productions on a regular basis, at intervals of approximately every two (2) to three (3) weeks, until the document production is complete. The precise timing and scope of each subsequent production will depend on the progress of the collection, processing, review, and privilege analysis, but TMC is committed to maintaining a consistent and regular production cadence.
3. Periodic Status Updates. TMC will provide the Antitrust Division with periodic written status updates regarding the progress of the document production, including information regarding the volume of documents collected, reviewed, and produced, as well as any issues that arise during the course of the production process. TMC will promptly notify the Division of any unforeseen circumstances that may affect the production timeline.
4. Prioritization of Key Document Categories. TMC commits to prioritizing the identification, collection, review, and production of documents that are most likely to be of immediate interest to the investigation. TMC welcomes the Division's input regarding the prioritization of particular document categories or custodians and is prepared to adjust the order and focus of its production efforts in response to the Division's guidance.
TMC believes that this proposed schedule represents a reasonable and good-faith approach to compliance with the Subpoena, one that balances the Division's need for timely access to responsive materials with the practical realities of undertaking a production of this scale and complexity.
V. Assurance of Good Faith and Cooperation
TMC takes this matter with the utmost seriousness and is committed to cooperating fully with the Antitrust Division's investigation. The Company and its counsel are mindful of the important governmental interests served by the grand jury process and have no intention of impeding or obstructing the Division's work in any way.
As noted above, TMC has already taken affirmative steps to preserve all potentially relevant documents and ESI, including the issuance of written litigation hold notices, the suspension of routine document destruction processes, and the initiation of discussions with forensic e-discovery vendors. TMC will continue to take all steps necessary to ensure the preservation and integrity of potentially responsive materials throughout the pendency of this matter.
This request for an extension of the return date is made in good faith and solely for the purpose of ensuring a complete, organized, and privilege-reviewed production of responsive documents. It is not intended to delay, obstruct, or otherwise interfere with the grand jury's proceedings or the Division's investigation. TMC recognizes that compliance with the Subpoena is not optional and does not view this request as an occasion to contest or narrow the Subpoena's requirements. Rather, TMC seeks only a reasonable period of additional time to fulfill its obligations in a thorough and responsible manner.
TMC is also willing to discuss the scope and categories of the Subpoena with the Antitrust Division to ensure that the production is targeted and efficient. If there are particular document categories, custodians, or time periods that the Division considers to be of the highest priority, TMC is prepared to focus its initial collection and review efforts accordingly. TMC welcomes any guidance the Division may wish to provide in this regard and is open to any discussion that would facilitate a more efficient and productive compliance process. TMC and its counsel are likewise prepared to address any questions or concerns the Division may have regarding TMC's compliance efforts, including questions about the Company's organizational structure, data systems, document retention practices, or any other aspect of the production process.
VI. Request for Confirmation and Discussion
We respectfully request that Ms. Kowalski confirm the Division's agreement to the proposed extension and rolling production schedule described herein at her earliest convenience. TMC's compliance planning and vendor engagement process is ongoing, and a prompt confirmation of the extended timeline will assist TMC in structuring its collection and review efforts in a manner that is most efficient and responsive to the Division's needs.
I am personally available to discuss this request by telephone or in person at any time, and I welcome the opportunity to confer with you or any member of your team regarding any aspect of TMC's subpoena compliance. Please do not hesitate to contact me directly at (415) 392-8437 or by email at eforsythe@calderwoodharkness.com. We would also suggest that it may be appropriate for any discussions regarding the Subpoena's scope, document categories, or production logistics to include Senior Trial Attorney Marcus Reeves, to the extent the Division believes his involvement would be helpful in facilitating the process.
We appreciate the Division's consideration of this request and look forward to working cooperatively with your office throughout this process. TMC is committed to a productive and transparent working relationship with the Antitrust Division and is confident that the proposed approach will serve the interests of all parties.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Elaine Forsythe Partner
Direct Dial: (415) 392-8437
Email: eforsythe@calderwoodharkness.com
555 California Street, 40th Floor San Francisco, California 94104
cc: Priya Anand, General Counsel, Torchlight Mining Corp. (via email)
cc: Marcus Reeves, Senior Trial Attorney, Antitrust Division, U.S. Department of Justice, San Francisco Field Office (via email)
cc: Howard Bellamy, Partner, Calderwood & Harkness LLP (via email — internal copy)