On November 29, 2012, U.S. Magistrate Judge Deborah A. Robinson issued a memorandum order denying FERC’s request to compel production of certain portions of 25 email documents by J.P. Morgan Ventures Energy Corporation (“JP Morgan”).  In its petition before the court, FERC argued that JP Morgan was “overbroad” in claiming attorney-client privilege for this information.  Upon in camera review of the JP Morgan emails at issue, Magistrate Judge Robinson found that the redacted information was in fact “shielded” by attorney-client privilege.

FERC’s petition at the U.S. District Court for the District of Columbia is in connection with data requests and subpoenas issued during a formal, non-public investigation into possible market manipulation by JP Morgan in the California Independent System Operator, Inc. and Midwest Independent Transmission System Operator Inc. energy markets (see July 8, 2012 edition of the WER).  In its petition at the District Court, FERC argued that the court should view the remaining redacted portions of JP Morgan’s emails with “suspicion,” because JP Morgan initially claimed attorney-client privilege concerning certain documents and then subsequently produced those documents (citing In re Application of Veiga, 746 Supp. 2d 27 (D.D.C. 2010)).  Judge Robinson disagreed with FERC and found that JP Morgan’s redactions are protected from disclosure by attorney-client privilege.  Judge Robinson further found that the redactions are consistent with the “proffered explanation” and that to apply FERC’s proposed reading of In re Application of Veiga would “effectively penalize counsel for voluntarily revisiting the basis for withholding documents sought pursuant to administrative subpoena.”

While the immediate issue concerning JP Morgan’s assertion of attorney-client privilege has been resolved (at least initially), FERC’s investigation of possible market manipulation by the company is believed to be ongoing.

A copy of the District Court order is available here.