ATTORNEY-CLIENT PRIVILEGED / WORK PRODUCT — CONFIDENTIAL
PRIVILEGE REVIEW PROTOCOL
Torchlight Mining Corp. Grand Jury Document Production
March 10, 2022
MEMORANDUM
Right-click to update Table of Contents
I. PURPOSE AND SCOPE OF THIS PROTOCOL
This Privilege Review Protocol (the "Protocol") establishes binding guidelines for the privilege review of all documents collected from Torchlight Mining Corp. ("TMC") and its wholly owned subsidiary, Torchlight Mining (U.S.) Inc. ("TMC US"), in connection with the investigation being conducted by the Antitrust Division of the United States Department of Justice ("DOJ") through the above-referenced grand jury. The investigation concerns alleged violations of Section 1 of the Sherman Act, 15 U.S.C. § 1, arising from suspected price-fixing, customer allocation, and bid-rigging in the specialty minerals market. The Protocol is designed to ensure that TMC's attorney-client privilege, work-product protections, and any other applicable privileges are rigorously identified and preserved throughout the document-production process while simultaneously ensuring that TMC's production is full, timely, and in compliance with its legal obligations.
This Protocol applies to all documents responsive to Grand Jury Subpoena No. GJ-22-0194-SD-003, which was served on TMC on February 14, 2022 (the "Subpoena"). The Subpoena calls for the production of specified categories of documents relating to TMC's pricing practices, customer relationships, competitive intelligence activities, and communications with competitors in the specialty minerals market, among other categories, for the period from January 1, 2016 through the date of the Subpoena. This Protocol governs the initial rolling productions as well as any subsequent supplemental productions that may be required in response to the Subpoena or any follow-on requests from the DOJ. In the event that additional subpoenas are served on TMC or TMC US, this Protocol will be updated and reissued as necessary to address any new production obligations, document categories, or custodians implicated by such additional process.
This Protocol governs all Calderwood & Harkness LLP ("Calderwood & Harkness" or "C&H") attorneys, including partners, associates, and any temporary or contract attorneys engaged by the firm, as well as all contract reviewers and managed-review personnel employed or engaged by Redstone Digital Forensics Inc. ("Redstone"), who are involved in any aspect of the document review. Every individual participating in the review is expected to read this Protocol in its entirety, to acknowledge their understanding of its requirements in writing (using the form attached as Appendix D), and to comply with its terms at all times. Questions regarding the application or interpretation of this Protocol should be directed to Aaron Liu or Monica Reyes.
The estimated document universe is substantial. Based on the data collection protocol and the custodian list set forth in the separate memorandum dated March 18, 2022 (the "Data Collection Protocol and Custodian List"), thirty-four (34) custodians have been identified for data collection. After processing and de-duplication, the review population is projected to comprise several hundred thousand documents. To meet TMC's production obligations, the review team will operate on a rolling-production schedule. The first rolling production is targeted for on or about April 4, 2022, and is expected to encompass approximately 42,000 documents. Subsequent rolling productions will follow at intervals to be determined in coordination with the DOJ, with the goal of completing the production within the timeframe negotiated by Elaine Forsythe with DOJ trial attorneys.
The overriding objective of this Protocol is twofold: (1) to protect TMC's legitimate privilege interests by ensuring that no privileged document is inadvertently produced to the DOJ, and (2) to ensure that TMC's production is complete, accurate, and defensible in the event of any challenge by the DOJ or review by the court. All members of the review team should approach their work with both objectives firmly in mind.
II. APPLICABLE LEGAL STANDARDS
This Section sets forth the legal standards governing the assertion of privilege in connection with the Subpoena production. All reviewers must be familiar with these standards and apply them consistently throughout the review. Where a privilege determination requires the application of nuanced legal judgment, the matter must be escalated in accordance with the procedures set forth in Section V.
II.A. Attorney-Client Privilege
General Standard. Under the federal common law of attorney-client privilege, as applied in grand jury proceedings in the Northern District of California, a communication is protected from compelled disclosure if it satisfies each of the following elements:
(1) The communication was made between a client (or the client's agent or representative) and an attorney (or the attorney's agent or representative);
(2) The communication was made in confidence — that is, with the expectation that it would not be disclosed to third parties outside the scope of the attorney-client relationship;
(3) The communication was made for the purpose of seeking or providing legal advice; and
(4) The privilege has not been waived by the client, whether through voluntary disclosure to third parties, failure to maintain confidentiality, or other conduct constituting waiver.
The burden of establishing that a communication satisfies each of these elements rests with the party asserting the privilege — in this case, TMC. Accordingly, reviewers must be able to articulate the basis for each privilege designation with specificity, as any privilege claim may be subject to challenge by the DOJ and review by the court.
Corporate Attorney-Client Privilege — The Upjohn Standard
Because TMC is a corporation, the application of the attorney-client privilege to communications by TMC employees is governed by the principles established in Upjohn Co. v. United States, 449 U.S. 383 (1981). Under Upjohn, the attorney-client privilege extends to communications made by corporate employees to corporate counsel when the following conditions are met:
(a) The communication was made at the direction of corporate superiors for the purpose of securing legal advice from counsel;
(b) The information communicated was not available from upper management;
(c) The communication concerned matters within the scope of the employee's corporate duties; and
(d) The employee was aware that the purpose of the communication was to enable the corporation's attorneys to provide legal advice to the corporation.
TMC is a corporation organized under the laws of the Province of Ontario, Canada, with its principal offices in Toronto. TMC US is its wholly owned U.S. subsidiary, incorporated in Delaware, with its principal U.S. office in San Francisco, California. For purposes of this review, the attorney-client privilege attaches to communications by employees of both TMC and TMC US made at the direction of corporate counsel — including Priya Anand, General Counsel of TMC, and any other in-house legal personnel — for the purpose of obtaining or facilitating legal advice for the corporation. The fact that TMC is a Canadian parent corporation does not diminish the application of the U.S. attorney-client privilege to communications with U.S. counsel (including Calderwood & Harkness) or to communications with Ms. Anand in her capacity as General Counsel providing legal advice on matters subject to U.S. law.
In-House Counsel Communications
Communications with Priya Anand, TMC's General Counsel, present unique considerations that require careful attention. Ms. Anand serves as the most senior legal officer of TMC and regularly provides legal advice to the company's officers, directors, and employees on a range of matters, including antitrust compliance, regulatory obligations, and corporate governance. Communications with Ms. Anand that involve the provision or solicitation of legal advice are privileged.
However, as an in-house attorney who participates in business meetings, serves on management committees, and is involved in corporate decision-making, Ms. Anand also engages in communications that are purely business in nature — for example, communications relating to operational decisions, financial reporting, or business strategy that do not involve any legal advice component. Such communications are not privileged simply because Ms. Anand is an attorney. Reviewers must carefully examine the content and context of each communication involving Ms. Anand to determine whether the communication, or any portion thereof, reflects the seeking or providing of legal advice.
Dual-Purpose Communications. Where a communication serves both a legal purpose and a business purpose, the Ninth Circuit has held that the communication is privileged only if the "primary purpose" of the communication was to obtain or provide legal advice. In re Grand Jury Subpoena, 357 F.3d 900, 907–08 (9th Cir. 2004); see also In re County of Erie, 473 F.3d 413 (2d Cir. 2007) (applying "primary purpose" test in similar context). This standard requires reviewers to assess, on a communication-by-communication basis, whether the legal-advice purpose was the predominant motivation for the communication, or whether the legal advice was merely incidental to a primarily business communication. In close cases, the document should be coded "Potentially Privileged — Escalate" and routed for senior review.
Crime-Fraud Exception. The attorney-client privilege does not protect communications made in furtherance of a crime or fraud. Under the crime-fraud exception, the privilege is vitiated if the client sought the attorney's assistance in committing or planning a crime or fraud, or if the communication was part of an ongoing or future criminal scheme. In re Grand Jury Proceedings, 87 F.3d 377, 381 (9th Cir. 1996); Clark v. United States, 289 U.S. 1, 15 (1933). The exception applies regardless of whether the attorney was aware that the client's purpose was unlawful.
The DOJ may seek to invoke the crime-fraud exception in this investigation. Reviewers must be vigilant in identifying communications that could be challenged on this basis, particularly communications involving Gavin Holt, TMC's former Vice President of U.S. Specialty Minerals Sales, who is the individual most directly implicated in the alleged anticompetitive conduct. Any communication in which it appears that an employee — and in particular, Holt — sought legal advice for the purpose of furthering, concealing, or facilitating the alleged price-fixing, customer-allocation, or bid-rigging schemes should be immediately escalated to Tier 3 for review by Elaine Forsythe. Under no circumstances should a Tier 1 reviewer make a final privilege determination with respect to a communication that may implicate the crime-fraud exception.
Note Regarding Gavin Holt
Gavin Holt departed TMC's employ effective September 30, 2021. His communications while employed by TMC may be privileged to the extent they involved seeking legal advice from TMC's in-house or outside counsel. However, Holt retained personal counsel — Patrick Dunleavy of Briarcliff Law Group PLLC — as of approximately June 10, 2022. This retention creates a separate attorney-client privilege belonging to Holt individually. Critically, TMC's privilege over Holt's communications with TMC's counsel belongs to TMC, not to Holt individually. TMC, as the privilege holder, retains sole authority to assert or waive the privilege over communications between Holt and TMC's counsel that occurred during the course of Holt's employment. Holt's personal counsel has no authority to assert or waive TMC's privilege. Conversely, any communications between Holt and his personal counsel (Briarcliff Law Group PLLC) that may appear in TMC's document collection — for example, forwarded emails — are not TMC's privilege to assert or waive; such communications should be flagged and escalated to Elaine Forsythe for appropriate handling.
II.B. Work-Product Doctrine
General Standard. Under the work-product doctrine, as established by Hickman v. Taylor, 329 U.S. 495 (1947), and codified in Federal Rule of Civil Procedure 26(b)(3) (applied by analogy in the grand jury context), documents and tangible things prepared in anticipation of litigation or for trial by or for a party or by or for that party's representative are protected from discovery. In the context of a grand jury investigation, the doctrine protects materials prepared by or for TMC in anticipation of the investigation, enforcement proceedings, or related litigation.
Fact Work Product vs. Opinion Work Product
The work-product doctrine provides two levels of protection:
Fact Work Product. Documents that contain factual information gathered or compiled by or at the direction of counsel in anticipation of litigation are protected, but the protection may be overcome upon a showing of substantial need and inability to obtain the substantial equivalent of the materials by other means without undue hardship. Fed. R. Civ. P. 26(b)(3)(A).
Opinion Work Product. Documents that contain or reflect the mental impressions, conclusions, opinions, or legal theories of an attorney receive near-absolute protection. This protection is rarely, if ever, overcome, and courts in the Ninth Circuit have held that opinion work product is "virtually undiscoverable." Holmgren v. State Farm Mutual Automobile Insurance Co., 976 F.2d 573, 577 (9th Cir. 1992).
Reviewers should code documents as "Privileged — Withhold (Work Product)" and designate the appropriate sub-category (Fact or Opinion) in the Privilege Basis field.
Work Product Created by Counsel and Consultants
Work-product protection extends to materials prepared by Calderwood & Harkness attorneys and staff, by Hargrove Forensic Advisory LLC ("Hargrove"), a forensic accounting and economics consulting firm to be retained under the direction of counsel (retention anticipated on or about July 1, 2022), and by any other consultants, experts, or investigators retained by or at the direction of counsel in connection with this matter. Although Hargrove has not yet been formally retained as of the date of this Protocol, the review team should be aware that the engagement, once finalized, will be structured to preserve work-product and privilege protections. Materials generated by Redstone Digital Forensics Inc. in connection with the data collection, processing, and hosting are similarly protected as materials prepared at the direction of counsel in anticipation of litigation.
Kovel Doctrine. Under the Kovel doctrine, communications with non-attorney consultants retained to assist counsel in rendering legal advice may be protected under the attorney-client privilege. United States v. Kovel, 296 F.2d 918 (2d Cir. 1961). The engagements of Hargrove and Redstone have been and will continue to be structured in accordance with Kovel principles — that is, each engagement has been or will be entered into at the direction of counsel, for the purpose of enabling counsel to provide informed legal advice to TMC. Reviewers should be aware of this structure when reviewing communications involving Hargrove or Redstone personnel.
II.C. Joint Defense / Common Interest Privilege
As of the date of this Protocol, no joint defense agreement ("JDA") has been entered into by TMC or Calderwood & Harkness with counsel for co-subjects of the grand jury investigation. The known co-subjects and their respective counsel are:
• Ridgecrest Minerals Inc., represented by Davenport, Kline & Archer LLP (lead attorney: Helen Marchetti);
• Pinnacle Earth Resources Ltd., represented by Ashford Whitmore LLP (lead attorney: George Nakamura).
The common-interest privilege, also referred to as the joint defense privilege, extends the attorney-client privilege to communications between parties with a common legal interest and their respective counsel, provided the communications are made in furtherance of the common legal interest and with a reasonable expectation of confidentiality. Because no JDA is currently in effect, reviewers should NOT apply any common-interest privilege designation at this time. Any documents that might be candidates for common-interest privilege protection — for example, communications between Calderwood & Harkness and Davenport, Kline & Archer or Ashford Whitmore — should be coded "Potentially Privileged — Escalate" with a note in the Notes Field indicating the potential common-interest issue.
If a JDA is subsequently executed with one or more co-subjects, this Protocol will be amended to incorporate guidelines for the application of the common-interest privilege. A separate memorandum analyzing the considerations bearing on the potential execution of a JDA is in preparation and is expected to be issued on or about July 15, 2022.
II.D. Other Applicable Privileges and Protections
Spousal Privilege. The spousal communications privilege protects confidential communications made between spouses during the marriage. To the extent that any custodian's document collection includes communications between the custodian and his or her spouse, such communications may be privileged. Reviewers should flag any such communications for escalation to Tier 2, particularly where the communication relates to the subject matter of the investigation.
Accountant-Client Privilege. There is no accountant-client privilege under federal law. Couch v. United States, 409 U.S. 322 (1973). Accordingly, communications between TMC personnel and Calvert & Associates LLP, TMC's independent auditor (engagement partner: Daniel Moreau), are not privileged solely by virtue of the auditor-client relationship. However, communications with Calvert & Associates that were made at the direction of TMC's in-house or outside counsel, for the purpose of enabling counsel to provide legal advice to TMC, may be protected under the attorney-client privilege or the Kovel doctrine. Such communications should be reviewed carefully and escalated to Tier 2 or Tier 3 as appropriate for a determination of whether the factual predicate for privilege is satisfied.
Canadian Solicitor-Client Privilege
TMC is headquartered in Toronto, Canada, and certain documents in the collection may originate from TMC's Canadian offices or involve communications with Canadian legal counsel. Canadian solicitor-client privilege protects confidential communications between a client and a solicitor made for the purpose of seeking or providing legal advice, and has been recognized by the Supreme Court of Canada as a principle of fundamental justice. To the extent that U.S. courts apply principles of international comity, documents protected by Canadian solicitor-client privilege should be identified and logged on the privilege log. Reviewers should code any document that may implicate Canadian solicitor-client privilege as "Potentially Privileged — Escalate" and include a notation in the Notes Field. All such documents will be escalated to Elaine Forsythe, who will determine the appropriate privilege designation in consultation with TMC's Canadian counsel, if any.
Tax-Practitioner Privilege Under 26 U.S.C. § 7525
The tax-practitioner privilege under 26 U.S.C. § 7525 provides limited protection for certain communications between a taxpayer and a federally authorized tax practitioner. This privilege is unlikely to be directly at issue in the current investigation, as the Subpoena is directed at antitrust conduct rather than tax matters. However, to the extent that any communications with tax advisors appear in the document collection, reviewers should flag such communications for escalation to Tier 2, where a determination will be made as to whether the § 7525 privilege or the attorney-client privilege (if the tax advisor is also an attorney) applies.
III. REVIEW PLATFORM AND TECHNOLOGY
III.A. Hosting Environment
All documents collected from TMC and TMC US in connection with the Subpoena have been or will be collected, processed, and hosted by Redstone Digital Forensics Inc. ("Redstone"). The Redstone project team is led by Neil Ashworth, Project Director, located at Redstone's principal office at 7925 Jones Branch Drive, Suite 600, McLean, Virginia 22102. All data processing, de-duplication, and hosting will be performed on Redstone's secure document review platform, which is hosted in a SOC 2 Type II-certified data center with encryption at rest and in transit.
The data sources from which documents have been or will be collected include, but are not limited to, the following:
• Email archives: Strathmore Data Systems and Ashbury Software mailboxes for all identified custodians, including archived and deleted items to the extent recoverable;
• Shared network drives: TMC and TMC US shared network drives, including departmental drives for the Sales, Legal, Finance, and Compliance departments;
• VaultChat encrypted messaging archives: Archived messages from the VaultChat encrypted messaging application used by certain TMC employees, including Gavin Holt, Sandra Chu, and Thomas Eriksen, among others;
• Personal devices: Data from personal mobile devices and personal email accounts of custodians, to the extent that such data has been obtained through custodian consent or compulsion pursuant to TMC's internal investigation authority and applicable law; and
• Cloud storage: Files stored in cloud-based platforms, including Ashbury Holdings Cobalt Ridge Systems, Aldermere Systems, and any other cloud storage services used by TMC or its employees for business purposes.
Data from all thirty-four (34) identified custodians will be processed into the review platform in accordance with the specifications set forth in the Data Collection Protocol and Custodian List memorandum dated March 18, 2022. Additional custodians may be added to the review population as the investigation progresses, at which point this Protocol and the associated appendices will be updated accordingly.
III.B. Review Workflow Configuration
The Redstone platform will be configured with a structured set of coding fields to facilitate the privilege review. The following coding fields are mandatory for every document reviewed:
Privilege Designation. Each document must be assigned one of the following privilege designations:
(a) Privileged — Withhold: The document is privileged in its entirety and will be withheld from production. The document will be logged on the privilege log.
(b) Privileged — Withhold (Work Product): The document is protected in its entirety by the work-product doctrine and will be withheld from production. The document will be logged on the privilege log.
(c) Potentially Privileged — Escalate: The reviewer has identified a potential privilege issue but is unable to make a definitive determination. The document will be routed to the senior reviewer queue for Tier 2 review.
(d) Not Privileged — Produce: The document is not privileged and, if responsive, will be produced to the DOJ.
(e) Partially Privileged — Redact: The document contains both privileged and non-privileged content. The privileged portion(s) will be redacted, the non-privileged remainder will be produced, and the document will be logged on the privilege log with notation of the redaction.
(f) Non-Responsive — Withhold: The document is not responsive to the Subpoena and will be withheld from production on responsiveness grounds, without regard to privilege.
Privilege Basis. For documents coded as privileged, potentially privileged, or partially privileged, the reviewer must select one or more of the following privilege bases:
• Attorney-Client Privilege
• Work-Product Doctrine (Fact)
• Work-Product Doctrine (Opinion)
• Joint Defense / Common Interest (reserved for future use; do not select at this time)
• Other (specify in Notes Field)
Attorney/Author Identification. The reviewer must identify the attorney or attorneys involved in the privileged communication by selecting from a pre-populated drop-down list. This list will include the following individuals, among others:
• Priya Anand (General Counsel, TMC) and any identified predecessors or deputies in the TMC Legal Department;
• Elaine Forsythe (Partner, Calderwood & Harkness LLP);
• Howard Bellamy (Partner, Calderwood & Harkness LLP);
• Aaron Liu (Associate, Calderwood & Harkness LLP);
• Monica Reyes (Associate, Calderwood & Harkness LLP); and
• Any other outside counsel identified through custodian interviews or document review as having provided legal advice to TMC during the relevant period.
The drop-down list will be maintained by Monica Reyes and updated as additional attorneys are identified.
Escalation Flag. A binary (yes/no) field. If set to "yes," the document is automatically routed to the senior reviewer queue for Tier 2 review.
Clawback Flag. A binary (yes/no) field, to be used in the event that a previously produced document is subsequently identified as privileged and subject to clawback. This field should be set to "no" during the initial review and modified only in accordance with the clawback procedures set forth in Section VIII.
Notes Field. A free-text field in which the reviewer may record observations, questions, or the basis for the privilege determination. The Notes Field should be used to document the reasoning behind any privilege call that is not straightforward, as well as to record any information relevant to escalation.
III.C. Technology-Assisted Review (TAR)
Technology-Assisted Review ("TAR"), also known as predictive coding, may be employed during the first-pass responsiveness review to identify documents that are likely responsive to the Subpoena. TAR algorithms may also be used to prioritize batches of documents for review based on relevance scores. However, TAR will not be used as the sole or primary basis for making privilege determinations. The identification and protection of privileged communications requires the exercise of individualized legal judgment that cannot be adequately replicated by machine-learning algorithms.
All documents tagged as potentially responsive by the TAR model that contain one or more hits on the privilege search terms described in Section IV below must receive manual privilege review by a qualified attorney. No document may be produced to the DOJ without having undergone a manual privilege review by at least a Tier 1 reviewer, and all documents identified as potentially privileged must receive the escalated review described in Section V.
The privilege search terms referenced in Section IV will be developed and maintained by Monica Reyes. The initial search term list is attached as Appendix B and is subject to update as the review progresses and as new information becomes available through custodian interviews, DOJ communications, or the review itself. Any proposed modifications to the privilege search term list must be approved by Aaron Liu before implementation.
III.D. Quality Control
Quality control is a critical component of the privilege review process. The following quality-control procedures will be implemented:
Random Sampling. A random sample of reviewed document batches will be subjected to quality-control review by a senior reviewer (Aaron Liu or Monica Reyes). The sampling rate will be ten percent (10%) of all batches reviewed by Tier 1 reviewers. The purpose of the random sampling is to identify coding errors, inconsistencies in the application of privilege standards, and any systemic issues that may require additional training or guidance.
Secondary Review of Privileged Documents. All documents coded "Privileged — Withhold" or "Partially Privileged — Redact" by a Tier 1 reviewer will undergo secondary review by Aaron Liu or Monica Reyes before the privilege designation is finalized. This secondary review is mandatory and serves as a safeguard against both over-designation (which could result in the unnecessary withholding of responsive documents) and under-designation (which could result in the inadvertent production of privileged materials).
Escalation Review. All documents coded "Potentially Privileged — Escalate" will be routed to Aaron Liu for initial assessment. If Mr. Liu is able to resolve the privilege question, he will enter a final determination and document his reasoning in the Notes Field. If the privilege question cannot be resolved at the Tier 2 level — for example, because it involves a complex dual-purpose communication, a potential crime-fraud exception issue, or a question of Canadian solicitor-client privilege — the document will be further escalated to Elaine Forsythe at Tier 3, as described in Section V.C.
IV. PRIVILEGE SEARCH TERMS AND KEY CUSTODIANS
IV.A. Privilege-Indicative Search Terms
The following categories of search terms will be applied to the document population to identify documents that may contain privileged content and that therefore require heightened scrutiny during the privilege review. The initial comprehensive search term list is attached as Appendix B. The categories below are illustrative and are intended to guide reviewers in understanding the rationale for the search terms used:
Names and variations of TMC's General Counsel: "Priya Anand," "P. Anand," "Anand," "GC," "General Counsel," "Legal Department," "Legal Dept," "TMC Legal," and any known email addresses or internal aliases associated with Ms. Anand or the TMC Legal Department.
Names of Calderwood & Harkness attorneys: "Forsythe," "Elaine Forsythe," "Bellamy," "Howard Bellamy," "Liu," "Aaron Liu," "Reyes," "Monica Reyes," "Calderwood & Harkness," "Calderwood and Harkness," "C&H," "outside counsel," "external counsel," and any known email domains associated with the firm (e.g., @calderwoodharkness.com).
Names of any prior outside counsel: TMC may have previously consulted with other outside counsel regarding antitrust compliance or related matters. The identities of such counsel will be confirmed through custodian interviews and, once identified, their names will be added to the search term list.
Generic legal terms: "privileged," "privilege," "attorney-client," "attorney client," "work product," "legal advice," "litigation," "investigation," "subpoena," "grand jury," "DOJ," "Department of Justice," "antitrust," "compliance," "Sherman Act," "Section 1," "per se," and similar terms indicative of legal consultation or litigation awareness.
Privilege-related disclaimers or markings: Many emails contain footer disclaimers stating that the communication is privileged and confidential. While the presence of such a disclaimer does not, standing alone, establish that the communication is privileged, it may indicate that the sender intended the communication to be confidential and that the communication involved legal advice. Reviewers should evaluate the substance of the communication regardless of the presence or absence of a disclaimer.
Important note: The presence of a privilege search-term hit does not establish that a document is privileged. Conversely, the absence of a search-term hit does not establish that a document is not privileged. Privilege search terms are a screening mechanism designed to ensure that potentially privileged documents are identified and subjected to careful manual review. The ultimate privilege determination must be based on the substance and context of each individual communication, as assessed by a qualified attorney applying the legal standards set forth in Section II.
IV.B. Key Custodians with Elevated Privilege Sensitivity
Certain custodians in the review population have been identified as having a heightened likelihood of possessing documents that raise privilege issues. The following custodians require particular attention during the privilege review:
Priya Anand — General Counsel, Torchlight Mining Corp. Ms. Anand's document collection is expected to contain a high volume of communications involving the provision and solicitation of legal advice. As discussed in Section II.A, communications with Ms. Anand that involve legal advice are privileged, while purely business communications are not. Dual-purpose communications involving Ms. Anand are expected to be common and will require careful analysis under the "primary purpose" test. All privilege calls on dual-purpose communications involving Ms. Anand that cannot be resolved at Tier 2 should be escalated to Tier 3.
Gavin Holt — Former Vice President, U.S. Specialty Minerals Sales. Mr. Holt is the individual most directly implicated in the alleged anticompetitive conduct under investigation. His communications with TMC's in-house counsel (principally Ms. Anand) may be privileged to the extent they involved seeking or receiving legal advice in connection with TMC's business operations. However, the crime-fraud exception risk is significantly elevated with respect to Mr. Holt's communications. If any communication suggests that Mr. Holt sought legal advice to further, conceal, or facilitate the alleged price-fixing, customer-allocation, or bid-rigging schemes, the crime-fraud exception may apply. All privilege calls on communications involving Gavin Holt must be escalated to Elaine Forsythe at Tier 3. No final privilege determination for Holt communications may be made below the Tier 3 level.
Sandra Chu — Director, Pricing Analytics. Ms. Chu reported to Gavin Holt during the relevant period and was responsible for pricing analyses and recommendations for TMC's specialty minerals product lines. Ms. Chu's documents may include communications with TMC's legal department regarding pricing compliance, antitrust training, or inquiries from counsel about pricing practices. Such communications may be privileged if they were made for the purpose of seeking or providing legal advice. Reviewers should pay careful attention to communications in which Ms. Chu provides factual information to counsel, as such communications may be privileged under Upjohn.
Thomas Eriksen — Regional Sales Manager, Western Region. Mr. Eriksen's documents may include communications with TMC's legal department regarding attendance at industry conferences, including conferences organized by the North American Specialty Minerals Conference ("NASMC"), where competitor contacts are alleged to have occurred. Communications reflecting compliance inquiries or legal guidance regarding conference conduct should be reviewed for privilege.
Søren Dalmqvist (CEO) and Richard Fong (CFO). Communications between Mr. Dalmqvist or Mr. Fong and TMC's General Counsel regarding the grand jury investigation itself (i.e., communications occurring after February 14, 2022, the date of the Subpoena) are privileged and must be withheld. Communications predating the investigation may also be privileged to the extent they involved the seeking or provision of legal advice regarding TMC's business operations, antitrust compliance, or other legal matters.
Margaret Caldwell (Board Chair) and Janet Moreau-Shaw (Audit Committee Chair). Communications between Board members and TMC's in-house or outside counsel involving the provision of legal advice are privileged, including communications regarding the Board's oversight of the investigation, the establishment of litigation reserves, and the engagement of outside counsel. Board and Audit Committee communications are discussed further in Section IX.D.
V. REVIEW TIERS AND ESCALATION PROCEDURES
The privilege review will be conducted in a three-tier structure designed to ensure that privilege determinations are made by reviewers with the appropriate level of experience and authority, that complex or high-risk privilege questions are escalated for senior review, and that the review process is efficient enough to meet the rolling production schedule.
V.A. Tier 1 — First-Level Review
Tier 1 review constitutes the initial, first-level review of documents in the review population. Tier 1 review will be conducted by contract review attorneys managed by Redstone and supervised by Calderwood & Harkness. All Tier 1 reviewers must have completed the mandatory privilege training described in Section XI before commencing any review work.
During the Tier 1 review, each reviewer will examine the documents assigned to his or her batch and code each document using the coding fields described in Section III.B. The Tier 1 reviewer's responsibilities include:
(a) Determining whether the document is responsive to the Subpoena;
(b) Identifying any privilege indicators, including but not limited to the involvement of attorneys, the presence of legal advice, the use of privilege-related language, and the presence of privilege search-term hits;
(c) Coding the document with the appropriate Privilege Designation and, where applicable, the Privilege Basis and Attorney/Author Identification fields;
(d) Flagging any document that contains one or more privilege search-term hits for further review;
(e) Coding any document about which the reviewer is uncertain as "Potentially Privileged — Escalate" and setting the Escalation Flag to "yes," with a description of the uncertainty in the Notes Field; and
(f) Refraining from making final privilege determinations on documents involving the key custodians or categories identified as requiring Tier 2 or Tier 3 review.
Tier 1 reviewers should err on the side of escalation. If a reviewer has any doubt as to whether a document is privileged, the reviewer should code the document as "Potentially Privileged — Escalate" rather than make a potentially incorrect final determination. Over-escalation is preferable to the inadvertent production of a privileged document.
V.B. Tier 2 — Senior Associate Review
Tier 2 review will be conducted by Aaron Liu (Lead Associate) and Monica Reyes (Working Associate). The Tier 2 reviewers are responsible for the following:
(a) Reviewing all Tier 1 escalations — i.e., all documents coded "Potentially Privileged — Escalate" by Tier 1 reviewers;
(b) Conducting the mandatory secondary review of all documents coded "Privileged — Withhold" or "Partially Privileged — Redact" by Tier 1 reviewers, as described in Section III.D;
(c) Making final privilege determinations for straightforward privilege calls, including clear-cut instances of attorney-client privilege, work-product protection, and non-privilege;
(d) Documenting the basis for each Tier 2 privilege determination in the Notes Field, with sufficient detail to support the privilege log entry and to defend the determination in the event of a DOJ challenge;
(e) Escalating complex or high-risk privilege calls to Tier 3, as described below; and
(f) Participating in the quality-control random sampling of Tier 1 batches, as described in Section III.D.
The following categories of documents must be escalated from Tier 2 to Tier 3 for partner review:
• All communications involving Gavin Holt and TMC in-house counsel that raise potential crime-fraud exception issues;
• Dual-purpose communications involving Priya Anand where the "primary purpose" cannot be clearly determined;
• Documents reflecting TMC's antitrust compliance program that contain both responsive and potentially privileged content;
• Communications with Calvert & Associates LLP (Daniel Moreau) that may implicate privilege under a Kovel or related theory;
• Documents raising questions of Canadian solicitor-client privilege;
• Any disputed privilege call that, in the judgment of the Tier 2 reviewer, could be the subject of a DOJ challenge or court review.
V.C. Tier 3 — Partner Review
Tier 3 review will be conducted by Elaine Forsythe, the Responsible Partner for this matter. Howard Bellamy, the Billing Partner, will provide support as needed, particularly on questions involving engagement economics and the scope of the review. Tier 3 review encompasses the following:
(a) All escalations from Tier 2 involving the categories described above;
(b) Crime-fraud exception determinations, particularly with respect to communications involving Gavin Holt;
(c) Complex dual-purpose communication determinations involving Priya Anand;
(d) Privilege determinations regarding TMC's pre-existing antitrust compliance program documents — TMC adopted an initial antitrust compliance policy circa 2014, and the last annual antitrust compliance training was conducted circa 2018 — which may be partially privileged (to the extent they reflect legal advice from counsel) and partially responsive (to the extent they constitute general corporate policies);
(e) Privilege determinations regarding communications with Calvert & Associates LLP and other third-party advisors;
(f) Privilege determinations involving Canadian solicitor-client privilege; and
(g) Any other privilege call that, in the judgment of the Tier 2 reviewer, requires partner-level resolution.
Elaine Forsythe holds final authority on all privilege determinations. Her decisions will be documented in the Notes Field of the review platform and will be reflected on the privilege log. In the event that Ms. Forsythe is unavailable, Howard Bellamy is authorized to make interim privilege determinations, subject to Ms. Forsythe's subsequent review and confirmation.
V.D. Escalation Timeline
To maintain the rolling production schedule and avoid bottlenecks in the review workflow, the following escalation timelines will be observed:
• Tier 1 to Tier 2: All documents coded "Potentially Privileged — Escalate" by a Tier 1 reviewer must be routed to the Tier 2 senior reviewer queue within forty-eight (48) hours of the initial coding.
• Tier 2 to Tier 3: All documents escalated from Tier 2 to Tier 3 must be routed to Elaine Forsythe within twenty-four (24) hours of the Tier 2 reviewer's determination that escalation is required.
• Tier 3 Determinations: Tier 3 privilege determinations should be made within seventy-two (72) hours of receipt, absent extraordinary circumstances. If a Tier 3 determination requires additional research, investigation, or consultation (e.g., with TMC's Canadian counsel regarding Canadian solicitor-client privilege), Ms. Forsythe will communicate the anticipated timeline to Aaron Liu so that production scheduling can be adjusted accordingly.
Aaron Liu is responsible for monitoring escalation queues and ensuring compliance with these timelines. Any systemic delays or backlogs will be reported immediately to Elaine Forsythe.
VI. PRIVILEGE LOG REQUIREMENTS
VI.A. Logging Obligations
TMC is obligated to provide a privilege log identifying all documents withheld from production on the basis of privilege. The privilege log serves as the primary vehicle by which the DOJ and, if necessary, the court can assess the validity of TMC's privilege claims. Accordingly, the privilege log must be prepared with care and precision.
The following logging obligations apply:
(a) All documents withheld in whole on the basis of attorney-client privilege, work-product protection, or any other applicable privilege must be identified on the privilege log with all required fields completed.
(b) All documents produced to the DOJ with redactions on the basis of privilege must be identified on the privilege log, with notation that the document has been produced in redacted form and a description of the redacted content sufficient to allow the DOJ to assess the privilege claim.
(c) The privilege log will be produced to the DOJ concurrently with each rolling production. The first privilege log will accompany the first rolling production, targeted for April 4, 2022, and will be updated and supplemented with each subsequent production.
VI.B. Required Log Fields
Each entry on the privilege log must include the following fields:
VI.C. Descriptions
The subject-matter descriptions on the privilege log are of particular importance. The DOJ will scrutinize the descriptions to evaluate whether TMC's privilege claims are legitimate and sufficiently supported. To that end, the following standards apply:
(a) Each description must identify the attorney involved in the privileged communication, either by name or by role (e.g., "General Counsel," "outside counsel").
(b) Each description must identify the nature of the legal advice sought or provided in general terms — for example, "Communication between TMC employee and General Counsel seeking legal advice regarding antitrust compliance obligations in connection with pricing decisions" — without revealing the substance of the advice itself.
(c) Each description must indicate whether the communication was between TMC personnel and in-house counsel, between TMC personnel and outside counsel, or between in-house counsel and outside counsel.
(d) Boilerplate descriptions are insufficient and will not be used. Each privilege log entry must be individually drafted to reflect the specific content and context of the document being logged. Generic descriptions such as "Privileged communication between attorney and client" do not meet TMC's obligations and will expose the privilege log to challenge.
(e) For documents withheld on work-product grounds, the description must identify the nature of the work product (e.g., "Memorandum prepared by outside counsel reflecting legal analysis of potential antitrust exposure") and, where applicable, whether the work product is fact work product or opinion work product.
Monica Reyes is responsible for quality control of all privilege log entries before submission to the DOJ. No privilege log may be transmitted without her review and approval, or in her absence, the review and approval of Aaron Liu.
VI.D. Ongoing Maintenance
The privilege log will be maintained as a spreadsheet within the Redstone platform, with export capability to Ashbury Holdings Excel for production to the DOJ. The privilege log template is attached as Appendix C.
The privilege log is a running document that will be updated and supplemented with each rolling production. Entries corresponding to documents withheld or redacted in a given production will be included in the privilege log accompanying that production. The running log will be maintained cumulatively so that the complete privilege log reflects all privilege claims asserted across all productions.
The first privilege log is to accompany the first rolling production, targeted for April 4, 2022. Subsequent privilege logs will be produced concurrently with each subsequent rolling production. Aaron Liu and Monica Reyes are jointly responsible for ensuring that the privilege log is complete, accurate, and ready for production on schedule.
VII. REDACTION PROTOCOL
VII.A. When Redactions Are Appropriate
Redactions are appropriate in the following circumstances:
(a) Partially privileged, partially responsive documents. Where a single document contains both content that is responsive to the Subpoena and non-privileged, and content that is privileged, the privileged content should be redacted and the non-privileged, responsive content should be produced. A common example is an email chain in which some messages consist of business discussions responsive to the Subpoena and other messages within the same chain consist of communications between TMC personnel and counsel seeking or providing legal advice. In such cases, the legal-advice portions of the email chain should be redacted, and the remaining responsive portions should be produced.
(b) Opinion work product embedded in otherwise responsive documents. Where an otherwise responsive document contains embedded opinion work product — for example, margin notes or comments reflecting an attorney's mental impressions or legal theories — the opinion work product should be redacted and the remainder of the document produced.
Redactions should be used judiciously. Over-redaction may invite challenge from the DOJ and undermine the credibility of TMC's privilege claims. Reviewers should ensure that each redaction is narrowly tailored to protect only the specific privileged content and that no more content is redacted than is necessary to preserve the privilege.
VII.B. Redaction Standards
The following standards govern all redactions:
(a) All redactions must be made using the native redaction tools available in the Redstone review platform. The redaction must render the redacted text permanently unrecoverable in the production copy. "Soft" redactions — i.e., redactions that can be removed or reversed by the recipient — are not acceptable and must not be used.
(b) Each redaction must be stamped with a notation identifying the basis for the redaction. The notation must read: "REDACTED — ATTORNEY-CLIENT PRIVILEGE" or "REDACTED — WORK PRODUCT", as applicable. If both bases apply, both notations should appear.
(c) The corresponding privilege log entry for any redacted document must note that the document has been produced in redacted form and must describe the basis for the redaction, as set forth in Section VI.
(d) All redacted documents require Tier 2 review by Aaron Liu or Monica Reyes before the document is included in any production to the DOJ. No redacted document may be produced without Tier 2 approval.
VIII. CLAWBACK PROVISIONS — FRE 502(d) ORDER
VIII.A. Seeking an FRE 502(d) Order
Given the volume and complexity of the document production, the risk of inadvertent disclosure of privileged material is significant. To mitigate this risk and to preserve TMC's privilege claims in the event of inadvertent production, Calderwood & Harkness will seek a Federal Rule of Evidence 502(d) order from the United States District Court for the Northern District of California, San Francisco Division.