Updated 2:58 p.m.
A federal magistrate judge in Washington has ruled against federal energy regulators, saying J.P. Morgan doesn't have to produce 25 unredacted emails in an investigation about manipulation in power markets.
Lawyers for the Federal Energy Regulatory Commission turned to Washington's federal trial court this summer to seek the enforcement of an administrative subpoena. The attorneys challenged J.P. Morgan Ventures Energy Corp.'s assertion of attorney-client privilege.
Magistrate Judge Deborah Robinson said she inspected, in chambers, the redacted portions of the 25 emails in dispute. In a ruling published Thursday evening, Robinson said the attorney-client privilege shields the information from disclosure. Her ruling is here.
Lawyers from the firms Sutherland Asbill & Brennan and Skadden, Arps, Slate, Meagher & Flom represent the bank. Skadden partners Michele Roberts and William Scherman are among the lawyers who represent the bank.
The redacted information includes messages between the bank and its counsel "with respect to legal advice relating to facts communicated confidentially to counsel" by J.P. Morgan, Robinson said.
FERC lawyers, including Thomas Olson, argued that the attorney-client claim was overbroad. The attorneys noted that J.P. Morgan cited the privilege to protect some documents only to later turn over some of that same information.
The "application of this proposition would effectively penalize counsel for voluntarily revisiting the basis for withholding documents sought pursuant to administrative subpoena," Robinson said in her decision.
FERC sued J.P. Morgan in July in U.S. District Court for the District of Columbia to enforce the agency's administrative subpoena.
The agency said in its petition that it's conducting a formal, nonpublic investigation of potential manipulation of the California and Midwest energy markets by J.P. Morgan Ventures Energy.
J.P. Morgan's attorneys said in response to the petition that the bank has "responded in good faith" to the commission's request for documents. The bank's lawyers said the "investigation remains in the fact-finding stage, and FERC has made no determination that respondent engaged in misconduct."
J.P. Morgan has turned over "nearly 500,000" pages of documents, Robinson noted in the decision.
Lawyers for the bank said in July that "as this case comes to this court, the only abusive litigation tactic supported by the record is the Enforcement Staff's decision to disclose its incomplete, non-public investigation by filing this petition" to enforce the administrative subpoena.
"The Enforcement Staff evidently hoped that its effort to publicize an ongoing investigation might cause Respondent to abandon the protection of the privilege, to which all other litigants are entitled," J.P. Morgan's attorneys wrote in court papers. "It has not."
Scherman, a partner in Skadden's energy department and a former general counsel for the Federal Energy Regulatory Commission, was not immediately reached for comment.