In re Witness before Special Grand Jury 2000-2

• Decision Date: 23 April 2002
• Docket Number: No. 01-3386.,01-3386.
• Parties: In Re: A WITNESS BEFORE THE SPECIAL GRAND JURY 2000-2.
• Court: U.S. Court of Appeals — Seventh Circuit

288 F.3d 289

In Re: A WITNESS BEFORE THE SPECIAL GRAND JURY 2000-2.

No. 01-3386.

United States Court of Appeals, Seventh Circuit.

Argued October 29, 2001.

Decided April 23, 2002.^*

Zachary Fardon (argued), Office of the U.S. Atty., Crim. Div., Chicago, IL, for Plaintiff-Appellee.

Robert M. Andalman (argued), Altheimer & Gray, Chicago, IL, for Intervenor-Appellant.

Before FLAUM, Chief Judge, and POSNER and DIANE P. WOOD, Circuit Judges.

DIANE P. WOOD, Circuit Judge.

The central question on this appeal is whether a state government lawyer may refuse, on the basis of the attorney-client privilege, to disclose communications with a state officeholder when faced with a grand jury subpoena. The district court found that in the context of a federal criminal investigation, no such government attorney-client privilege existed. We agree with this determination, and therefore affirm.

I

Roger Bickel was employed by the state of Illinois as Chief Legal Counsel to the Secretary of State's office during the first four years of former Secretary (now Governor) George Ryan's administration. Bickel provided legal counsel and advice to Ryan and other Secretary of State officials as they carried out their public duties. Bickel has also served as a personal lawyer to Ryan, his wife, and Ryan's campaign committee, Citizens for Ryan, since at least 1989.

For the past three years, federal prosecutors have been investigating a "licenses for bribes" scandal in the Illinois Secretary of State's office, dubbed "Operation Safe Road." The alleged (and in some instances admitted) corruption extends to the improper issuance of commercial drivers' licenses, specialty license plates, leases, and other contracts; the improper use of campaign funds for the personal benefit of Secretary of State employees; and obstruction of justice in connection with internal office investigations. Because of his role in advising then-Secretary Ryan, federal prosecutors sought to discuss these matters with Bickel. Initially, they tried scheduling a voluntary interview with him for this purpose, but Ryan objected to the meeting and advised both Bickel and the federal prosecutors that he had not waived and would not waive the attorney-client privilege with respect to any of his prior conversations with Bickel.

After several avenues for resolving the problem proved unsuccessful, the federal prosecutors served a subpoena from the grand jury that commanded Bickel to appear and testify before that body about all conversations he had with Ryan in his official capacity as General Counsel. They also obtained a motion to compel Bickel to testify about those matters. Finally, the United States secured a letter from Illinois' current Secretary of State, Jesse White, in which the latter purported to waive the Office's attorney-client privilege as to all of Bickel's official conversations with "all personnel and officials of the Secretary of State, regardless of their particular position or office." Ryan continued to oppose all efforts to obtain allegedly privileged information from Bickel.

On September 7, 2001, the district court granted the United States' motion to compel, finding that no attorney-client privilege attached to the communications at issue, and, alternatively, that if a privilege did attach. White had effectively waived it. While the motion to compel does not create a final judgment, we permit clients to immediately appeal a court order that their attorney testify before a grand jury under the exception recognized in Perlman v. United States, 247 U.S. 7, 38 S.Ct. 417, 62 L.Ed. 950 (1918). See United States v. Evans, 113 F.3d 1457, 1458 (7th Cir.1997); In re Grand Jury Proceeding, 68 F.3d 193, 195 (7th Cir.1995); United States v. Davis, 1 F.3d 606, 607 (7th Cir.1993). We therefore have jurisdiction over this appeal.

II

We review de novo the question whether Ryan may invoke the attorney-client privilege to shield Bickel's testimony before the federal grand jury. See Upjohn Co. v. United States, 449 U.S. 383, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981). The federal courts have authority to recognize privilege claims under the federal common law. Fed.R.Evid. 501. While Rule 501 manifests a congressional desire to grant courts the flexibility to determine privileges on a case-by-case basis. Trammel v. United States, 445 U.S. 40, 47, 100 S.Ct. 906, 63 L.Ed.2d 186 (1980), "these exceptions to the demand for every man's evidence are not lightly created nor expansively construed, for they are in derogation of the search for truth." United States v. Nixon, 418 U.S. 683, 710, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974); In re Grand Jury Proceedings, 220 F.3d 568, 571 (7th Cir. 2000).

One of the oldest and most widely recognized privileges is the attorney-client privilege, which protects confidential communications made between clients and their attorneys for the purpose of securing legal advice. Swidler & Berlin v. United States, 524 U.S. 399, 403, 118 S.Ct. 2081, 141 L.Ed.2d 379 (1998). It is well established that a client may be either an individual or a corporation. See, e.g., Upjohn, 449 U.S. at 390, 101 S.Ct. 677 (1981). But here, we have a special case: the client is neither a private individual nor a private corporation. It is instead the State of Illinois itself, represented through one of its agencies. There is surprisingly little case law on whether a government agency may also be a client for purposes of this privilege, but both parties here concede that, at least in the civil and regulatory context, the government is entitled to the same attorney-client privilege as any other client. See Green v. IRS, 556 F.Supp. 79, 85 (N.D.Ind.1982) (privilege "unquestionably" applies to conversations between government lawyers and administrative personnel), aff'd, 734 F.2d 18 (7th Cir. 1984); Restatement (Third) of Law Governing Lawyers § 74 (2000) ("[T]he attorney-client privilege extends to a communication of a governmental organization."). We therefore proceed on that basis.

In the case of private parties, the privilege functions identically in both civil and criminal proceedings. Swidler, 524 U.S. at 408-09, 118 S.Ct. 2081 (finding "no case authority for the proposition that the privilege applies differently in criminal and civil cases"). The United States, however, contends that the privilege between a government attorney and her official client does not extend to criminal proceedings, such as a grand jury investigation. It is supported in that position by decisions of two courts of appeals (both with thoughtful dissents) arising from Independent Counsel investigations of President Clinton. See In re Lindsey, 158 F.3d 1263 (D.C.Cir.1998); In re Grand Jury Subpoena Duces Tecum, 112 F.3d 910 (8th Cir.1997). Ryan argues that those cases were wrongly decided, at least insofar as they might apply here to support a distinction between governmental clients and private clients.

The first question we face is whether recognizing a privilege in this case would be an expansion of the current scope of the attorney-client privilege, or if a refusal to recognize the privilege would amount to a contraction of an existing privilege. Although this may seem like two sides of the same coin, it is not: the Supreme Court has instructed us, in developing a federal common law of privileges, to avoid either derogating existing privileges or extending privileges to new, uncharted waters absent compelling considerations. Jaffee v. Redmond, 518 U.S. 1, 116 S.Ct. 1923, 135 L.Ed.2d 337. 9 (1996). Unfortunately, there is no clear-cut answer to this question because, outside of former Secretary Ryan and the Clinton administration, only one government body, the Detroit City Council, has ever attempted to claim such a privilege in the criminal context. In re Grand Jury Subpoena, 886 F.2d 135 (6th Cir.1989). Thus, one could argue either that, since historically the privilege has never been claimed, recognizing it would be an extension, or that, since no court has ever recognized a civil-criminal distinction to the privilege, creating one here would constitute an exception.

While Swidler rejected a civil-criminal distinction for the privilege as to individuals, other courts have recognized that the governmental context is different, even after that decision, and have limited the privilege for governmental agencies in the criminal context. See Lindsey, 158 F.3d at 1272. This position is supported by the leading treatise. 24 Charles Alan Wright & Kenneth W. Graham, Jr., Federal Practice and Procedure § 5475, at 125-27. Furthermore, the pedigree of the privilege recognized in Swidler was far more impressive than the governmental privilege for which Ryan argues here. Swidler focused on whether the privilege survived the death of the individual client, a proposition that the common law had assumed for over a century. Swidler, 524 U.S. at 404, 118 S.Ct. 2081, citing Russell v. Jackson, 68 Eng. Rep. 558 (V.C.1851). The government attorney-client privilege has no such deep historical roots. We therefore reject Ryan's contention that Swidler compels us to find an absolute privilege in the criminal context just because we acknowledge a government attorney-client privilege in the civil context. Even the dissenting judges in the Clinton cases were unwilling to go so far as this. Lindsey, 158 F.3d at 1283 (Tatel, J., dissenting) ("[G]overnment lawyers working in executive departments and agencies enjoy a reduced privilege in the face of grand jury subpoenas"); Duces Tecum, 112 F.3d at 935-38 (Kopf, J., dissenting) (finding that in criminal context government could overcome privilege through procedural protections and specific showing of need). Compare Branzburg v. Hayes, 408 U.S. 665, 92 S.Ct. 2646, 33 L.Ed.2d 626 (1972) (no First Amendment-based reporter's privilege to refuse to testify before grand jury). Our decision here instead must rest on whether the policy reasons for recognizing an attorney-client...