190 F.3d 375 (5th Cir. 1999), 98-40870, In re In re Grand Jury Subpoena

Docket Nº:98-40870, 99-40262, and 99-40271
Citation:190 F.3d 375
Case Date:September 20, 1999
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 375

190 F.3d 375 (5th Cir. 1999)


Nos. 98-40870, 99-40262, and 99-40271


September 20, 1999

Page 376

Appeals from the United States District Court for the Southern District of Texas

Before KING, Chief Judge, and SMITH and BARKSDALE, Circuit Judges.

KING, Chief Judge:

In these consolidated appeals, Appellants, targets of an ongoing grand jury investigation, challenge three district court orders: two denying Appellants' motions to return documents turned over to Appellee in the process of complying with a grand jury subpoena (Nos. 98-40870 and 99-40271) and one granting Appellee's motion to compel production of certain documents under the subpoena (No. 99-40262). We dismiss all three appeals for want of jurisdiction and, as to No. 99-40262, grant mandamus.


Corporate Appellants 1 operate plants in south Texas and are subject to compliance with and reporting under federal regulations that set standards with regard to the emission of certain pollutants (the "Regulations").2

Page 377

Individual Appellant ("Individual Appellant" or, with Corporate Appellants, "Appellants")3 is an attorney and an employee of Corporate Appellants. In June 1996, a federal grand jury issued a subpoena duces tecum to Corporate Appellants requiring the production of all documents from January 1, 1990, onward relating to Corporate Appellants' compliance with and reporting under the Regulations. Corporate Appellants notified certain employees, including Individual Appellant, of the subpoena and requested that each employee forward to a custodian of records documents that the employee deemed responsive to the subpoena.

A. No. 98-40870

Individual Appellant forwarded to the custodian a number of files containing documents he deemed responsive. One of the forwarded files was marked, "NOTE: ALL DOC[UMENT]S SHOULD BE CONSIDERED ATTORNEY-CLIENT, WORK-PRODUCT PRIVILEGED." This file contained, among other things, a two-page document (the "Document") bearing the header, "ATTORNEY-CLIENT PRIVILEGE/WORK PRODUCT IMMUNITY; PLEASE KEEP CONFIDENTIAL AND LIMIT DISTRIBUTION."

Prior to producing any documents under the subpoena, Corporate Appellants claim to have "implemented measures reasonably calculated to locate responsive documents and remove privileged ones from production." Brief for Corporate Appellants at 9 (No. 98-40870). In October 1996, Corporate Appellants produced approximately 5,000 documents in response to the subpoena, including the Document. In May 1998, during a conversation with a Department of Justice attorney for the United States ("Appellee" or the "Government"), outside counsel for Corporate Appellants learned that the Document had been turned over more than a year-and-a-half earlier. Corporate Appellants quickly requested, in writing, return of the Document under a claim of privilege. The Government responded that the Document did not appear to be privileged, and that if privileged, the privilege was waived by intentional disclosure and by the crime-fraud exception to the attorney-client privilege.

Later that same month, Corporate Appellants filed a motion in the district court to compel return of the Document. Individual Appellant intervened and filed his own motion to compel return of the Document under a claim of work product immunity.

In July 1998, the district court issued an order denying both motions. The court found that any attorney-client privilege that may have existed was waived by Corporate Appellants' intentional production of the Document and that the Document was not prepared in anticipation of litigation and contained "only a summary of events and g[ave] no indication of [Individual Appellant's] mental impressions, opinions, conclusions, judgments or legal theories" and, therefore, was not immune from disclosure as attorney work product.4 Corporate Appellants and Individual Appellant timely appealed the district court's order. This appeal is the subject of No. 98-40870.

B. No. 99-40262

In its response to Corporate Appellants' May 1998 motion to compel return of the

Page 378

Document, the Government moved the district court to compel Corporate Appellants to produce, for in camera inspection, all evidence being withheld under a claim of privilege to determine the extent to which the crime-fraud exception defeated the claimed privilege. On July 31, 1998, the district court granted the Government's motion. Individual Appellant has asserted that many of the documents submitted for in camera review were also protected by work product immunity.

After reviewing the documents submitted for in camera inspection, the district court, in an order entered on February 18, 1999, found that the documents were protected by the attorney-client privilege and assumed that they were protected by the work product doctrine. The court, however, further found that the crime-fraud exception defeated any privilege or immunity. In the alternative, the court found that Corporate Appellants waived their attorney-client privilege with regard to the documents by injecting the reasonableness of their reliance on the documents into the litigation. The court granted the Government's motion to compel production of over 200 documents and stated, "In ten days of issuance of this Order, the Court will make said documents available to the Government and will return the remaining in camera documents to [Corporate Appellants]." Both Corporate Appellants and Individual Appellant timely appealed this order in No. 99-40262.

C. No. 99-40271

On September 1, 1998, Corporate Appellants had filed a motion, which was later granted, for the return of certain documents submitted for in camera review that were non-responsive to the original grand jury subpoena. Following their points and authorities in support of this motion, Corporate Appellants inadvertently attached a memorandum (the "Memorandum") that they claim is protected by attorney-client privilege. Individual Appellant claims the Memorandum is his protected work product. Corporate Appellants and Individual Appellant each moved to compel return of the Memorandum.

In an order entered on February 22, 1999, denying Corporate Appellants' and Individual Appellant's motions to compel return of the Memorandum, the district court found that the Memorandum was the work product of the in-house attorney by whom it was prepared and that it was protected by attorney-client privilege in the hands of Corporate Appellants. However, the court found that the attorney-client privilege and work product immunity were waived by the inadvertent disclosure of the Memorandum. The court further found that the Memorandum was not the work product of Individual Appellant and that if it were, it nonetheless fell under the crime-fraud exception to work product immunity. Both Corporate Appellants and Individual Appellant timely appealed this order in No. 99-40271. On April 1, 1999, the three appeals were consolidated and ordered expedited.


The first, and conclusive, issue before us in these appeals is that of jurisdiction: Are the pre-indictment discovery orders5 of the district court appealable?6 We begin our

Page 379

discussion of this issue with first principles.

A. Finality

Except in certain circumstances not applicable here, this court's jurisdiction is limited to "final decisions" of the district court. 28 U.S.C. § 1291 (1994).7 Recently, the Supreme Court explained the finality requirement:

Section 1291 of the Judicial Code generally vests courts of appeals with jurisdiction over appeals from "final decisions" of the district courts. It descends from the Judiciary Act of 1789 where "the First Congress established the principle that only 'final judgments and decrees' of the federal district courts may be reviewed on appeal." In accord with this historical understanding, we have repeatedly interpreted § 1291 to mean that an appeal ordinarily will not lie until after final judgment has been entered in a case. . . . Consistent with these purposes, we have held that a decision is not final, ordinarily, unless it "'ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.'"

Cunningham v. Hamilton County, 119 S.Ct. 1915, 1919-20 (1999) (internal citations omitted) (quoting Midland Asphalt Corp. v. United States, 489 U.S. 794, 798 (1989); Van Cauwenberghe v. Biard, 486 U.S. 517, 521 (1988)).

Pre-trial discovery orders are generally no exception to the finality requirement. Courts have "denied [immediate] review of . . . [such orders because,] in the rare case when appeal after final judgment will not cure an erroneous discovery order, a party may defy the order, permit a contempt citation to be entered against him, and challenge the order on direct appeal of the contempt ruling." Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 377 (1981).

Three arguments are often advanced to justify the finality requirement. First, "[i]t helps preserve the respect due trial judges . . . ." Flanagan v. United States, 465 U.S. 259, 263 (1984). "Permitting piecemeal appeals would undermine the independence of the district judge, as well as the special role that individual plays in our judicial system." Firestone, 449 U.S. at 374. Second, the requirement minimizes a party's opportunities to defeat the valid claims of his opponents through an endless barrage of appeals. As Justice Frankfurter explained nearly 60 years ago, "[the finality requirement] avoid[s] the obstruction to just claims that would come from permitting the harassment and cost of a succession of separate appeals from the various rulings to which a litigation may give rise, from...

To continue reading