Grand Jury (Impounded), In re, 97-7347

• Decision Date: 13 March 1998
• Docket Number: No. 97-7347,97-7347
• Citation: 138 F.3d 978
• Parties: In re GRAND JURY (IMPOUNDED).
• Court: U.S. Court of Appeals — Third Circuit

Page 978

138 F.3d 978

In re GRAND JURY (IMPOUNDED).

No. 97-7347.

United States Court of Appeals Third Circuit.

Argued Feb. 11, 1998.

Decided March 13, 1998.

Charles M. Oberly, III (argued), Oberly, Jennings & Drexler, Wilmington, DE, for Appellant.

Gregory M. Sleet, United States Attorney, Colm F. Connolly (argued), Assistant United States Attorney, Wilmington, DE, for Appellee.

BEFORE: GREENBERG, NYGAARD, and MCKEE, Circuit Judges.

OPINION OF THE COURT

GREENBERG, Circuit Judge.

I. JURISDICTION

Thomas J. Capano appeals from an order entered in the district court on June 27, 1997, holding that he waived the attorney work product privilege with respect to certain documents he created which the United States seized from a third party pursuant to a subpoena. ¹ The district court had jurisdiction under 18 U.S.C. § 3231, and we have jurisdiction to review the order of the district court pursuant to 28 U.S.C. § 1291. Cf. In re Grand Jury, 111 F.3d 1066, 1073-77 (3d Cir.1997) (holding that a denial of an order to quash a subpoena not directed to a movant was a final order if the movant had no further opportunity to challenge the subpoena).

II. FACTUAL AND PROCEDURAL HISTORY

In July 1996, the Federal Bureau of Investigation ("FBI") and a federal grand jury in Delaware began a kidnaping investigation into the disappearance of Anne Marie Fahey, who last was seen alive on June 27, 1996. Capano became the major target of these investigations. At the time of Fahey's disappearance, Capano, who is an attorney, was a partner in the Wilmington office of the Saul, Ewing, Remick & Saul law firm ("Saul Ewing"), a position he held until his resignation on May 31, 1997.

On June 30, 1996, Capano retained attorneys after police officers notified him that they considered him a suspect in Fahey's disappearance. One of Capano's attorneys, Charles M. Oberly, III, directed him to prepare "a time-line of everything he could remember concerning his whereabouts on June 27, 1996 and immediately thereafter," and to "write down his thoughts and notes, as he remembered them, of anything he could recall about his relationship with Ms. Fahey." App. at 42. Following his attorney's instructions, Capano created a time-line and wrote down other notes regarding his relationship with Fahey and placed them in a legal file.

Capano then put the file on a bookshelf in the office adjacent to his own office at Saul Ewing occupied by of one of his law partners, Timothy A. Frey, because he was concerned that there could be an unauthorized search of his own office leading to an unauthorized seizure of the file. Initially Frey was unaware that Capano placed the file in his office; however, in August or September of 1996, Capano informed Frey about the location of the file. Within the next month, Frey found the file in his office, read it, and returned it to its prior location on his bookshelf.

The file remained in Frey's office until the United States seized it on November 4, 1996. On that day, Assistant United States Attorney Colm F. Connolly telephoned Frey to inform him that an FBI agent would serve him with a grand jury subpoena for Capano's file. Frey then re-examined the file and determined that it was the same file he had examined previously. Connolly also telephoned the chairman of Saul Ewing, J. Clayton Undercofler, to notify him about the subpoena. Undercofler expressed a concern that the production of the file might reveal information relating to the law firm's representation of its clients. Connolly and Undercofler then agreed that the file would be produced under seal, and that the law firm would have an opportunity to screen the file for any confidential information.

After these phone calls, FBI Special Agent Kevin Shannon arrived at Frey's office and served the subpoena. The file was placed in an envelope, sealed, and delivered to Assistant United States Attorney Patricia Hannigan, who had been "walled off" from the investigation to avoid any possibility of taint. On November 5, 1996, Hannigan met with Undercofler and Saul Ewing's executive partner, Frederick D. Strober. After unsealing the envelope, the two attorneys from Saul Ewing examined the file and determined that it did not contain any information relating to the law firm's representation of its clients. Hannigan then examined the file and determined that nothing in it arguably was privileged or protected. She then made a copy of the file which she gave to Connolly. She, however, retained the original file.

Although the parties dispute exactly when Capano learned of the seizure, they agree that Capano and his attorneys did not know that the government intended to seize the file prior to the service of the subpoena and that they were informed of the seizure only after it had occurred. Capano asserts that his attorney first learned of the disclosure on November 6, 1996, two days after the seizure. See br. at 27. In any event, on November 12, 1996, one of Capano's attorneys, Bartholomew J. Dalton, sent a letter to the United States Attorney advising the government that the file contained privileged information. The United States, through Connolly, responded on November 26, 1996, by telephone and informed Dalton that the United States did not believe that the attorney-client privilege or the attorney work product doctrine protected the materials contained in the file. Connolly told him to "take the issue up with the Court." App. at 138.

On at least two occasions between December 30, 1996, and February 1997, Connolly also had telephone discussions with Oberly regarding the applicability of the attorney work product and the attorney-client privileges to the seized documents. In a second letter to the United States dated January 22, 1997, Oberly requested that the government either return the documents in the file or send him a letter stating its opposition to the assertion of the privileges. In response, Connolly formally denied the production request in a letter dated February 25, 1997, contending that the documents were not privileged and that, in any event, Capano waived any privilege when he placed them in Frey's office. Finally, on March 14, 1997, Capano, citing both the attorney-client and the attorney work product privileges, filed a motion in the district court seeking an order compelling the government to return the file.

In a memorandum opinion dated June 27, 1997, the district court denied Capano's motion. While the district court held that the attorney-client privilege did not offer any protection to the file, it nevertheless held that the file was attorney work product, because Capano acted as his attorney's agent in creating the file in preparation of litigation. However, the district court determined that Capano waived this work product protection based on both disclosure and timeliness grounds. In particular, because Capano had revealed the presence of the file to Frey and had stored it in Frey's unlocked and easily accessible office, the district court held that Capano disregarded the risk that an adversary might obtain the file, and thus had waived the work product privilege. Alternatively, the district court held that Capano waived the work product privilege by waiting nearly four months to file a motion to compel the return of the seized materials. Finally, the district court noted in a footnote in its opinion that even if Capano did not waive the attorney work product protection of the file, the United States had demonstrated sufficient cause to overcome that protection.

Capano filed a timely appeal to this court on July 7, 1997. Neither party has challenged the district court's holdings regarding the applicability of the attorney-client or the attorney work product privileges; therefore, we accept its determination that the seized file was attorney work product, but was not protected by the attorney-client privilege. Because we will affirm the district court's holding that Capano waived his attorney work product privilege with regard to the seized file based on his delay in seeking a judicial determination, we do not determine whether Capano waived the privilege by disclosing the documents. Nor do we decide whether the United States demonstrated sufficient cause to overcome the work product protection.

III. WAIVER OF THE WORK PRODUCT PROTECTION

In examining the district court's holding that Capano waived his work product privilege, we use an abuse of discretion standard of review. Cf. Livingstone v. North Belle Vernon Borough, 91 F.3d 515, 524 (3d Cir.1996), cert. denied, --- U.S. ----, 117 S.Ct. 1311, 137 L.Ed.2d 474 (1997) (using an abuse of discretion standard to review a waiver of an attorney-client privilege). ²

The work-product doctrine, first recognized by the Supreme Court in Hickman v. Taylor, 329 U.S. 495, 67 S.Ct. 385, 91 L.Ed. 451 (1947), "shelters the mental processes of the attorney, providing a privileged area within which he can analyze and prepare his client's case." United States v. Nobles, 422 U.S. 225, 238, 95 S.Ct. 2160, 2170, 45 L.Ed.2d 141 (1975). The privilege thus promotes the adversarial system by protecting the confidential nature of materials prepared by attorneys in anticipation of litigation and "enabl[es] attorneys to prepare cases without fear that their work product will be used against their clients." Westinghouse Elec. Corp. v. Republic of the Philippines, 951 F.2d 1414, 1428 (3d Cir.1991). This protection also can extend to materials prepared by an attorney's agent, if that agent acts at the attorney's direction in creating such documents. See Nobles, 422 U.S. at 238-39, 95 S.Ct. at 2170.

The attorney work product privilege, however, is not absolute, and it may be waived. See id. at 239, 95 S.Ct. at 2170. Thus, we have held that a party may waive the attorney work product privilege by disclosing protected documents in certain circumstances. See Westinghouse, 951 F.2d at 1428-29. It has been held that a disclosure...