In re Green Grand Jury Proceedings

• Decision Date: 20 July 2007
• Docket Number: No. 06-4030.,No. 06-3938.,06-3938.,06-4030.
• Citation: 492 F.3d 976
• Parties: In re GREEN GRAND JURY PROCEEDINGS.
• Court: U.S. Court of Appeals — Eighth Circuit

492 F.3d 976

In re GREEN GRAND JURY PROCEEDINGS.

No. 06-3938.

No. 06-4030.

United States Court of Appeals, Eighth Circuit.

Submitted: March 15, 2007.

Filed: July 20, 2007.

Counsel who presented argument on behalf of the appellant/cross-appellee was Joseph T. Dixon III, AUSA, of Minneapolis, MN.

Counsel who presented argument on behalf of Appellee/cross-appellant M.A. was Joseph G. Petrosinelli of Washington, D.C. Counsel who presented oral argument on behalf of Appellee/cross-appellant S & H was David A. Vicinanzo of Manchester, NH.

Before WOLLMAN, JOHN R. GIBSON, and MURPHY, Circuit Judges.

WOLLMAN, Circuit Judge.

The district court¹ granted in part and denied in part the government's motion to compel the production of documents and an attorney's testimony before a federal grand jury. The government appeals that portion of the district court's order denying its motion to compel. The client cross-appeals, contesting the order insofar as it granted the motion. We affirm.

I.

In light of the need to observe the requirements of grand jury secrecy, we will provide only a basic recitation of the facts. In the course of earlier, unrelated proceedings, the client was the target of an investigation into whether he had received improper payments. The client received the assistance of the attorney in responding to these accusations and provided the attorney with an alternate, non-criminal explanation for his conduct. The attorney relied upon this explanation in formulating his legal advice and drafted documents that memorialized what the client said had taken place. The government contends that the client knowingly lied to the attorney by providing the attorney with a false back-story for the monies the client had allegedly improperly received.

In November 2005, a federal grand jury issued subpoenas to the client's attorney and the attorney's law firm, seeking documents as well as the attorney's testimony. In response to the subpoena, the law firm produced a privilege log, identifying 1,604 documents that it claims are protected under the attorney-client or work product privileges. The attorney declined to answer the grand jury's questions, citing attorney-client privilege. In June 2006, the grand jury indicted the client and another party.

The government moved to compel the production of the documents and the attorney's testimony. The government argued that because the client had used his attorney's services to perpetrate a fraud, the attorney-client and attorney work product privileges were vitiated under the crime-fraud exception to these privileges.

The district court reviewed 179 documents in camera, 139 of which the government had asked the court to examine. Following a hearing and briefing by the parties, the district court concluded that, under the crime-fraud exception, the client could not assert the attorney-client or work product privileges because the government had presented a prima facie case that the client had used his attorney's counsel in furtherance of a fraud. The court also concluded that because there was no evidence that the attorney had known of the client's fraud, the crime-fraud rule did not preclude the attorney from asserting his own work product privilege. The district court ordered the disclosure of thirty-six documents that it determined had been generated in furtherance of the fraud, but permitted the attorney to assert his work product privilege as to any opinion work product that might be contained therein. The district court determined that the rest of the documents it had reviewed were not discoverable under the crime-fraud exception because they were not generated in furtherance of any fraud.² The district court also permitted the attorney to decline to answer the grand jury's questions, except for questions relating to the origins of documents. The government contests the redactions and the restrictions on the attorney's grand jury testimony. The client appeals that portion of the district court's order requiring the production of the thirty-six documents and the attorney's limited testimony.

II.

A. Issues Pertaining Primarily to the Government's Appeal

Attorney-client communications and attorney work product are privileged and are not ordinarily discoverable — even by the grand jury. See In re Grand Jury Subpoenas Duces Tecum, 773 F.2d 204, 206 (8th Cir.1985) (noting that the grand jury's "broad investigatory powers do not require production of evidence protected by a valid claim of privilege"); In re Grand Jury Proceedings (Duffy), 473 F.2d 840, 845 (8th Cir.1973) (work product privilege applies in grand jury proceedings). Neither the attorney-client privilege nor the work product privilege is absolute, however. Under the crime-fraud exception, attorney-client privilege "does not extend to communications made for the purpose of getting advice for the commission of a fraud or a crime." United States v. Zolin, 491 U.S. 554, 563, 109 S.Ct. 2619, 105 L.Ed.2d 469 (1989) (quotation omitted). Accordingly, we have recognized that, under the crime-fraud exception, "`[a]ttorney-client communications lose their privileged character when the lawyer is consulted not with respect to past wrongdoings but rather to further a continuing or contemplated criminal fraud or scheme.'" Gundacker v. Unisys Corp., 151 F.3d 842, 848 (8th Cir.1998) (quoting In re Berkley & Co., 629 F.2d 548, 553 (8th Cir.1980)). We have not yet explicitly held that the crime-fraud exception applies to the work product privilege as well. See In re Murphy, 560 F.2d 326, 337 (8th Cir. 1977) (stating that the applicability of the crime-fraud exception to the work product privilege is an unresolved question). We so hold today. As set forth in greater detail below, a client who has used his attorney's assistance to perpetrate a crime or fraud cannot assert the work product privilege as to any documents generated in furtherance of his misconduct. We also hold that an attorney who does not knowingly participate in the client's crime or fraud may assert the work product privilege as to his opinion work product.

The work product privilege is "distinct from and broader than the attorney-client privilege." In re Murphy, 560 F.2d at 337 (quotation omitted). While the purpose of the attorney-client privilege "is to encourage clients to make a full disclosure of all favorable and unfavorable facts to their legal counsel," id., the work product privilege "functions not merely and (perhaps) not mainly to assist the client in obtaining complete legal advice but in addition to establish a protected area in which the lawyer can prepare his case free from adversarial scrutiny." In re Special September 1978 Grand Jury (II), 640 F.2d 49, 62 (7th Cir.1980). "Because the work product privilege protects not just the attorney-client relationship but the interests of attorneys to their own work product," both the attorney and the client hold the privilege. United States v. Under Seal (In re Grand Jury Proceedings # 5), 401 F.3d 247, 250 (4th Cir.2005) (citation omitted).

Other circuits have concluded that a client who has used an attorney's assistance in furtherance of a fraud may not assert the work product privilege. See, e.g., In re Special September 1978 Grand Jury (II), 640 F.2d at 63 ("When the case being prepared involves the client's ongoing fraud, however, we see no reason to afford the client the benefit of this doctrine."). We agree. "Although there is a societal interest in enabling clients to get sound legal advice, there is no such interest when the communications or advice are intended to further the commission of a crime or fraud." United States v. Richard Roe, Inc. (In re Richard Roe, Inc.), 68 F.3d 38, 40 (2d Cir.1995).

An attorney's independent assertion of his work product privilege, on the other hand, stands on a very different footing because the attorney's privilege is based on the attorney's interest in protecting his opinions and thought processes from disclosure. This is a protection that benefits all of the attorney's clients because it accords the attorney a measure of privacy within which he can candidly compose his thoughts.

To determine the proper scope of an attorney's work product privilege when the client has committed a crime or a fraud, it is necessary first to distinguish between two kinds of work product: ordinary work product, which includes "raw factual information," and opinion work product, which encompasses "counsel's mental impressions, conclusions, opinions or legal theories." Baker v. General Motors Corp. (In re GMC), 209 F.3d 1051, 1054 (8th Cir.2000). We have recognized that opinion work product enjoys "substantially greater protection than ordinary work product." In re Murphy, 560 F.2d at 336. Ordinary work product is generally discoverable "upon a showing of substantial need and an inability to secure the substantial equivalent of the materials by alternate means without undue hardship." Id. Opinion work product, by contrast, "enjoys a nearly absolute immunity and can be discovered only in very rare and extraordinary circumstances." Id. We suggested, for example, that opinion work product might be discoverable if it contained evidence of the attorney's misconduct. Id. at 336 n. 19. The central question regarding opinion work product, then, is whether client misconduct (of which the attorney is unaware) is a "rare and extraordinary circumstance" warranting an exception to the "nearly absolute immunity" adhering to opinion work product.

Other circuits recognizing the ordinary/opinion work product distinction have concluded that an attorney may assert the work product privilege with regard to opinion work product even if the client has used the attorney's services to commit a crime or perpetrate a fraud, so long as the attorney was unaware that the client was doing so. In re Grand Jury Proceedings # 5, 401 F.3d at 252 (holding that "while the attorney-client privilege may be...