CALDERWOOD & HARKNESS LLP Attorneys at Law
555 California Street, 40th Floor San Francisco, California 94104
Elaine Forsythe Partner Direct: (415) 693-2840 Facsimile: (415) 693-2801 eforsythe@calderwoodharkness.com
June 30, 2023
VIA SECURE COURIER AND SECURE ELECTRONIC FILE TRANSFER
Denise Kowalski, Trial Attorney Marcus Reeves, Senior Trial Attorney Antitrust Division, San Francisco Field Office U.S. Department of Justice 450 Golden Gate Avenue, Room 10-0101 San Francisco, California 94102
Re: In the Matter of Grand Jury Investigation No. GJ-22-0194, U.S. District Court for the Northern District of California, San Francisco Division
Production of Documents Responsive to Grand Jury Subpoena Duces Tecum No. GJ-22-0194-SD-007
On Behalf of Torchlight Mining Corp. (CBCA Corporation No. 7841526-1) and Torchlight Mining (U.S.) Inc. (Nevada Entity No. NV20160438721; Federal EIN 83-2947106)
Calderwood & Harkness Matter No. 1039-00001
Dear Ms. Kowalski and Mr. Reeves:
I. Purpose of This Letter
This firm represents Torchlight Mining Corp. ("TMC"), a corporation organized under the Canada Business Corporations Act (CBCA Corporation No. 7841526-1), and its wholly owned subsidiary, Torchlight Mining (U.S.) Inc. ("TMC US"), a Nevada corporation (Nevada Entity No. NV20160438721; Federal EIN 83-2947106), in connection with the above-referenced grand jury investigation being conducted by the Antitrust Division of the U.S. Department of Justice (the "Division"). Calderwood & Harkness LLP was engaged by TMC on February 18, 2022, and has since served as lead outside counsel for both TMC and TMC US in all matters relating to this investigation.
This letter accompanies TMC's second document production, made on behalf of both TMC and TMC US, in response to Grand Jury Subpoena Duces Tecum No. GJ-22-0194-SD-007 (the "Second Subpoena" or "SD-007"), which was issued to TMC on May 15, 2023. The production described herein is being made on behalf of TMC, whose registered office is located at 200 Bay Street, Suite 3400, Toronto, Ontario M5J 2J2, Canada, and TMC US, whose principal office is located at 8750 West Sahara Avenue, Suite 210, Reno, Nevada 89117. As described more fully below, the enclosed production consists of approximately 68,000 documents responsive to the categories of documents specified in SD-007.
II. Background and Prior Productions
As the Division is aware, the first Grand Jury Subpoena Duces Tecum in this matter, bearing the designation GJ-22-0194-SD-003 (the "First Subpoena" or "SD-003"), was served on TMC on February 14, 2022. In response to SD-003, TMC undertook a comprehensive document collection, review, and production process, the results of which were delivered to the Division on a rolling basis over the course of approximately ten months.
Specifically, TMC's prior production history in connection with SD-003 is as follows:
• First Rolling Production (April 4, 2022): Approximately 42,000 documents were produced on April 4, 2022. That production was accompanied by a cover letter of the same date from this firm, which set forth the parameters, format, and custodian information for the initial production.
• Additional Rolling Productions (August 1, 2022 through December 15, 2022): Between August 1, 2022 and December 15, 2022, TMC made a series of supplemental rolling productions to the Division. These rolling productions, taken together with the initial April 4, 2022 production, resulted in the cumulative production of approximately 487,000 documents, comprising approximately 3.2 million pages. Each rolling production was accompanied by a cover letter from this firm summarizing the scope and content of the documents delivered at that time.
The Second Subpoena, SD-007, issued on May 15, 2023, requested additional categories of documents beyond those called for by SD-003. Specifically, SD-007 sought: (a) additional pricing data for certain specialty mineral products; (b) customer contract files, supply agreements, and bid submissions related to those products; and (c) communications relating to the North American Specialty Minerals Council ("NASMC"), including but not limited to conference attendance records, meeting agendas, presentation materials, and correspondence arising out of NASMC quarterly conferences. The Second Subpoena also requested additional electronic communications from supplemental custodians identified by the Division during the ongoing course of the investigation.
We note that the production responsive to SD-007, as described in this letter, has been completed within the timeframe mutually agreed upon between TMC and the Division, consistent with the schedule discussed during the conference call among counsel on May 22, 2023.
III. Scope of Current Production
The current production comprises approximately 68,000 additional documents responsive to the Second Subpoena. These documents were collected from the files and records of TMC and TMC US, including, in particular, the records of the U.S. Specialty Minerals Division, which oversees TMC's domestic operations relating to the mining, processing, and sale of high-purity feldspar, industrial talc, and rare-earth concentrates.
The documents produced herein correspond to the categories of documents specified in SD-007, as follows:
Category A — Pricing Data. Documents responsive to Category A of the Second Subpoena include published price lists, internal pricing memoranda, pricing analytics reports, discount authorization records, and related pricing documentation for three product categories — high-purity feldspar, industrial talc, and rare-earth concentrates — for the period January 1, 2015 through December 31, 2022. This category encompasses both domestic (U.S.) and cross-border (U.S.–Canada) pricing information maintained by TMC US and the U.S. Specialty Minerals Division. Documents in this category include periodic pricing summaries prepared by the Pricing Analytics group, regional pricing variance analyses, and internal memoranda discussing pricing strategy, adjustments, and competitive benchmarking.
Category B — Customer Contracts and Bid Submissions. Documents responsive to Category B include executed customer contracts, supply agreements, framework agreements, amendment letters, bid submissions, requests for proposal ("RFP") responses, and related pre-contract and post-contract correspondence for the three product categories during the period specified in SD-007. These documents were drawn from the contract management files maintained by the Legal, Sales, and Commercial Operations departments of TMC US, as well as from the central document repository maintained by TMC's corporate legal department in Toronto.
Category C — NASMC-Related Communications. Documents responsive to Category C encompass all communications to, from, or referencing the North American Specialty Minerals Council ("NASMC"), a trade association in which TMC and TMC US have participated. This category includes conference attendance records, meeting agendas, presentation materials, panel discussion outlines, post-conference summary memoranda, and correspondence related to NASMC quarterly conferences held at various locations — including Arlington, Virginia; Scottsdale, Arizona; Orlando, Florida; and other locations — from 2017 through 2021. The documents in this category were collected from the files of TMC personnel who attended or were involved in NASMC events during the relevant period, as well as from TMC's central records relating to trade association activities.
Category D — Supplemental Custodian Communications. Documents responsive to Category D include additional electronic communications — including email, instant messaging, and other electronically stored information ("ESI") — from supplemental custodians identified by the Division during the course of the investigation. These supplemental custodians were identified to Calderwood & Harkness by the Division through correspondence dated March 28, 2023, and subsequently discussed during the conference call of April 5, 2023 among counsel. Documents from these custodians were collected, processed, and reviewed in the same manner as documents from the originally identified custodians.
All documents included in this production were collected, processed, and reviewed with the assistance of Redstone Digital Forensics Inc. ("Redstone"), an e-discovery services provider located at 7925 Jones Branch Drive, Suite 600, McLean, Virginia 22102. Redstone was retained by Calderwood & Harkness as TMC's e-discovery vendor for the purposes of this investigation. The document collection, processing, and review effort was conducted under the direction of Neil Ashworth, Project Director at Redstone, and was overseen at all stages by attorneys at Calderwood & Harkness.
IV. Bates-Number Ranges and Production Format
A. Bates-Number Ranges
The documents produced herewith bear the Bates prefix "TMC-" followed by sequential Bates numbers. The Bates-number range for this production is as follows:
TMC-0487001 through TMC-0555000
This Bates-number range is continuous with the prior production made in response to SD-003, which covered Bates range TMC-0000001 through TMC-0487000. Accordingly, the cumulative Bates range for all documents produced by TMC in this investigation now spans TMC-0000001 through TMC-0555000.
B. Production Format
Documents in this production have been produced in the following format:
1. Image Format. Documents have been produced in single-page Tagged Image File Format ("TIFF"), at a resolution of 300 DPI, with extracted text provided for each document. Where extracted text was unavailable (e.g., for scanned or image-only documents), optical character recognition ("OCR") text has been provided in lieu of extracted text.
2. Native Files. Certain documents — specifically, spreadsheets (e.g., Ashbury Holdings Excel files) and presentations (e.g., e.g. Northgate Services Inc. files) — have been produced in their native file format where such format is necessary to preserve the functionality, formulas, embedded data, or formatting of the documents.
3. Metadata. Metadata fields have been produced for each document and include, at a minimum, the following fields: custodian name, date sent and/or date received, author, recipients (including "to," "cc," and "bcc" fields, where applicable), subject line, file type, and original file path.
4. Load Files. Production load files have been provided in concordance DAT format and Opticon OPT format to facilitate ingestion of the produced documents into the Division's review platform.
5. Delivery Method. The production has been delivered on an encrypted external hard drive via secure courier service, with a duplicate copy uploaded to the Division's secure file-transfer platform in accordance with the Division's data-submission protocols.
The production format described above is consistent in all material respects with the format agreed upon between the parties for the initial production made in response to SD-003, as set forth in the correspondence between Calderwood & Harkness and the Division dated March 8, 2022, and with the production specifications set forth in the Second Subpoena.
V. Custodians
Documents in this production were collected from multiple custodians within TMC and TMC US. Specifically, the production includes documents from the thirty-four (34) custodians previously identified in connection with SD-003, as well as from additional custodians who were identified by the Division or through the course of TMC's internal investigation subsequent to the initial custodian identification. The supplemental custodians were agreed upon by the parties through the correspondence and conference calls referenced in Section III above.
Custodian identification information is included in the metadata accompanying each produced document, and a custodian list is maintained by Calderwood & Harkness for reference. The custodian list includes, among others, personnel from TMC's U.S. Specialty Minerals Division, including Sandra Chu, Director of Pricing Analytics, and Thomas Eriksen, Regional Sales Manager for the Western Region. Both Ms. Chu and Mr. Eriksen held positions during the relevant period that are pertinent to the categories of documents requested in SD-007.
Should the Division require any additional information regarding the custodians from whom documents were collected, or should the Division wish to discuss the scope of the custodial collections, we are available to address such inquiries at the Division's convenience.
VI. Privilege Withholdings
Certain documents responsive to SD-007 have been withheld from production on the basis of the attorney-client privilege and/or the work-product doctrine, as applicable. TMC has asserted these privileges and protections in good faith and in accordance with applicable law.
A privilege log is being produced contemporaneously with this production, bearing the date June 30, 2023, which identifies each withheld document by the following information: date of the communication or document, author, recipients, a general description of the subject matter sufficient to evaluate the privilege claim without disclosing privileged content, and the specific privilege basis asserted for each withholding (i.e., attorney-client privilege, work-product doctrine (fact), work-product doctrine (opinion), or a combination thereof).
The privilege review was conducted in accordance with the Privilege Review Protocol established by Calderwood & Harkness, dated March 10, 2022, which was provided to the Division at the outset of the first production. The review is also consistent with any applicable order entered under Federal Rule of Evidence 502(d), as well as any clawback agreement or non-waiver arrangement in place between the parties. TMC reserves the right to assert additional privilege claims and to supplement or amend the privilege log as additional responsive documents are identified or as the privilege review is finalized with respect to any outstanding document categories.
TMC does not waive any privilege or protection — whether based on the attorney-client privilege, the work-product doctrine, or any other applicable privilege, immunity, or protection — by producing documents in this production or in any prior or subsequent production in this matter. In the event that any document protected by the attorney-client privilege, the work-product doctrine, or any other applicable privilege or protection is inadvertently produced, such inadvertent production shall not constitute a waiver of any privilege or protection with respect to the inadvertently produced document or with respect to any other document or communication concerning the same or related subject matter. TMC reserves all rights to seek the prompt return or destruction of any inadvertently produced privileged material.
VII. Continuing Cooperation
TMC reaffirms its commitment to cooperating fully and in good faith with the Antitrust Division's investigation. As previously communicated in the letter from Calderwood & Harkness to the Division dated June 8, 2022, TMC has voluntarily committed to a posture of cooperation and has endeavored throughout this investigation to respond to the Division's requests in a timely, thorough, and transparent manner.
Consistent with this commitment, TMC has made, and will continue to make, current employees available for interviews and voluntary proffer sessions with the Division. By way of example, TMC facilitated the voluntary proffer sessions of Sandra Chu, Director of Pricing Analytics, which took place on March 10, 2023, and Thomas Eriksen, Regional Sales Manager for the Western Region, which took place on April 22, 2023. Both proffer sessions were conducted in accordance with the terms and protections set forth in the proffer agreements executed by the Division and the respective employees. TMC remains willing to make additional personnel available for interviews or proffer sessions as may be requested by the Division.
TMC's internal investigation, conducted under the direction of Calderwood & Harkness, is now substantially complete. That investigation has encompassed the review of approximately 555,000 documents (cumulative, including this production) and the conduct of interviews of twenty-three (23) current and former employees of TMC and TMC US. TMC remains prepared to share additional information and the results of its internal investigation with the Division as appropriate and in accordance with the cooperation framework discussed between the parties.
As the Division is aware, Calderwood & Harkness submitted a cooperation proffer on behalf of TMC to the Division on February 15, 2023, followed by a supplemental cooperation submission on May 1, 2023. TMC will continue to supplement its cooperation as the investigation progresses and will promptly advise the Division of any material developments arising from TMC's ongoing compliance and monitoring efforts.
VIII. Reservations and Limitations
TMC's production of documents described herein, and any prior or subsequent production in connection with this investigation, is made subject to and without waiver of all rights, privileges, objections, and defenses available to TMC and TMC US under applicable law, including but not limited to the attorney-client privilege, the work-product doctrine, the joint defense privilege, and any other applicable privilege, immunity, or protection.
The production of any document in this or any other production does not constitute, and shall not be construed as, an admission by TMC or TMC US regarding the relevance, authenticity, accuracy, completeness, or admissibility of any document produced, nor shall it constitute an admission regarding the truth or accuracy of any statement contained in any produced document.
TMC expressly reserves the right to supplement, correct, or amend this production as additional responsive documents are identified through the continuation of TMC's document collection, processing, and review efforts, or as may otherwise be appropriate.
This production is made without prejudice to TMC's and TMC US's rights, claims, and defenses in any proceeding, whether judicial, administrative, or otherwise, and nothing in this production or in this letter shall be deemed to limit or waive any such rights, claims, or defenses.
IX. Closing and Contact Information
We trust that the foregoing provides the Division with a clear overview of the scope, format, and content of TMC's second document production. Calderwood & Harkness is available to discuss this production, or to address any questions regarding the documents, the production format, or the privilege log, at the Division's convenience. We would be pleased to arrange a telephone conference or an in-person meeting to walk through the production categories in greater detail and to address any questions or concerns that may arise during the Division's review of the produced materials.
Please do not hesitate to contact the undersigned or the members of the Calderwood & Harkness team identified below with any questions or requests:
Elaine Forsythe, Partner Direct: (415) 693-2840
Email: eforsythe@calderwoodharkness.com
Aaron Liu, Associate (Lead Associate Managing Document Production) Direct: (415) 693-2917
Email: aliu@calderwoodharkness.com
Calderwood & Harkness LLP 555 California Street, 40th Floor San Francisco, California 94104 Main: (415) 693-2000 Facsimile: (415) 693-2801
We look forward to continuing to work with the Division cooperatively as this matter proceeds.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Elaine Forsythe Partner 555 California Street, 40th Floor San Francisco, California 94104
Enclosures:
1. Document Production (Bates Nos. TMC-0487001 through TMC-0555000) — on encrypted external hard drive
2. Privilege Log (Second Production), dated June 30, 2023
3. Production Load Files (Concordance DAT format and Opticon OPT format)
cc:
Priya Anand, General Counsel, Torchlight Mining Corp., 200 Bay Street, Suite 3400, Toronto, ON M5J 2J2, Canada
Aaron Liu, Associate, Calderwood & Harkness LLP
Monica Reyes, Associate, Calderwood & Harkness LLP
Neil Ashworth, Project Director, Redstone Digital Forensics Inc., 7925 Jones Branch Drive, Suite 600, McLean, Virginia 22102