Grand Jury Proceedings, In re

• Citation: 517 F.2d 666
• Decision Date: 30 July 1975
• Docket Number: No. 75-1990,75-1990
• Parties: In re GRAND JURY PROCEEDINGS. UNITED STATES of America, Appellee, v. Knox JONES, Roberto J. Yzaguirre, Arturo Guerra, Jr., Jose Antonio Canales, G.Rudolph Garza and Ramon Garcia, Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 666

517 F.2d 666

In re GRAND JURY PROCEEDINGS.

UNITED STATES of America, Appellee, v. Knox JONES, Roberto J. Yzaguirre, Arturo Guerra, Jr., Jose

Antonio Canales, G.Rudolph Garza and Ramon Garcia,

Appellants.

No. 75-1990.

United States Court of Appeals,

Fifth Circuit.

July 30, 1975.

Frank Maloney, Austin, Tex., for appellants.

Theodore I. Koskoff, James Diorio, Bridgeport, Conn., John A. Burgess, Montpelier, Vt., amicus curiae, for Assoc. of Trial Lawyers of America.

Marvin O. Teague, David Bires, Houston, Tex., amicus curiae, for Texas Criminal Defense Lawyers Assn Edward B. McDonough, Jr., U. S. Atty., Ronald Tonkin, James R. Gough, Asst. U. S. Attys., Houston, Tex., for appellee.

Appeal from the United States District Court for the Southern District of Texas.

Before THORNBERRY, SIMPSON and RONEY, Circuit Judges.

THORNBERRY, Circuit Judge:

With this opinion we discharge the obligation that we undertook in our earlier per curiam Order. There we reversed the judgment of the district court whereby the relators-appellants had been sentenced to jail for civil contempt. The district judge found relators in contempt after they disobeyed his directive to answer certain questions propounded by the Assistant United States Attorney before the grand jury. ¹ The relators were released on recognizance bonds pending appeal.

Our decision to reverse rests on what we conclude is the proper resolution of a discrete issue concerning the privilege of a client to require an attorney to maintain silence about the client's confidential disclosures, commonly known as the "attorney-client" privilege in the law of evidence. Our circuit has not spoken heretofore on the problem presented by this case, although situations bearing some resemblance have arisen elsewhere. In all candor, we need not and do not purport to reach a result which may be reconciled in all respects with every decision by every other court. Nevertheless, we emphasize our satisfaction that the facts and circumstances revealed by this record amply justify the availability of the privilege. Other cases must turn on their own merits.

In April of 1975 the federal grand jury for the Southern District of Texas, Laredo Division, was investigating possible narcotics and income tax violations on the part of certain suspected individuals who reside in south Texas in McAllen among other places. This investigation was conducted under the guidance of the United States Attorney's office, and it appears that one or more prosecutors were engaged in related investigations ancillary to the grand jury proceedings.

Each of the relators is a duly-licensed Texas attorney of unchallenged standing before state and federal bars. Around the first of April, each was served with a subpoena commanding him to appear and testify at the grand jury's meeting scheduled for April 7. In addition, the subpoenas directed relators to bring with them "all records, retainer agreements, books, records, and/or receipts showing payment of attorneys' fees" for the accounts of specific, named clients who had either recently been convicted or were then under arrest or indictment for large-quantity marijuana offenses.

The relators responded to the subpoenas but filed motions to quash. They asserted that compulsion of their testimony as to certain questions would disclose communications made to them in confidence by unidentified individuals whom relators claimed to represent in a professional capacity. The prosecutor disclaimed any desire to force disclosure of such communications insofar as they constituted discussions of matters which might have led to legal advice, but he maintained that the identities of unknown clients and information about their legal fee and bonding arrangements in behalf of known clients was not privileged. The government admittedly intended to use those disclosures, if obtained, in furtherance of the grand jury's and its own investigations in whatever manner proved fruitful. A hearing was held on April 7 and 8, and the district court ordered relators to testify.

Thereafter each relator appeared before the grand jury; each answered some questions for example, the amount of a given fee or who physically posted bond money for a named, known client; but each refused to answer questions regarding the identities of third parties who might have furnished bond money or paid (or promised to pay) attorneys' fees for the known clients. Each relator based his refusal on the claimed privilege of an unidentified client.

Subsequently, in another session before the district court, the prosecutor and counsel for relators reached agreement about the nature of the information which was claimed to be privileged. The court ordered relators to return to the grand jury room and answer these four questions:

(1) Did the named defendant employ you to represent him?

(2) Did any third party make arrangements for the attorney to represent the named defendant?

(3) If bond was posted for the named defendant, who furnished the bond money to the attorney-witness for deposit with the United States Magistrate?

(4) If attorneys' fees had been paid, who paid the attorneys' fees for the named defendant? And, if attorneys' fees had not been paid, who promised to pay the balance of the moneys owed to the attorney-witness for the named defendant?

The ensuing rounds of questioning and refusals to testify before the grand jury left essentially numbers (2), (3), and (4) unanswered. Once again the relators claimed the attorney-client privilege of an undisclosed client. The government moved the court to declare relators in contempt. Another hearing took place, at which time relators testified that they had been sought out by persons seeking legal services around the times when they were employed by the clients named in the subpoenas. It was further established or stipulated that those undisclosed persons made communications to relators in an atmosphere of confidentiality. Counsel for relators asked the court to propound additional questions to relators in chambers, with only the court reporter present. Counsel proposed to allow the court to take further testimony from the relators in order to develop in greater detail the asserted attorney-client relationships between relators and the undisclosed individuals. The district judge denied this request, and warned against further pursuit of the matter in open court on pain of full cross-examination by the government. The court also refused to allow relators' counsel to question the prosecutor about the nature of the government and grand jury investigations. The relators were found in contempt, and the district court issued its unpublished memorandum opinion shortly thereafter.

This appeal presents the narrow but always elusive problem of determining whether an attorney-client privilege attaches to such matters as the fact of retention, the identity of the client, and information surrounding fee and bonding arrangements executed by or on behalf of a client. At the outset, we agree with the parties that the question is governed in this circuit by a federal common law of criminal evidence. United States v. Woodall, 5 Cir. 1970, 438 F.2d 1317, 1327 (en banc), cert. denied, 403 U.S. 933, 91 S.Ct. 2262, 29 L.Ed.2d 712 (1971). Under F.R.Crim.P. 26, the principles of the common law, "as they may be interpreted by the courts of the United States in the light of reason and experience," govern over state law in matters of evidence, which includes privileges. See Federal Rule of Evidence 501, effective July 1, 1975. This circuit, however, has never passed on the issues sub judice, and for that reason we may look first to the decisions of other federal courts and then to state court decisions for whatever guidance they provide.

The basic elements which are necessary in order to establish a claim of the client's privilege are the following:

(1) the asserted holder of the privilege is or sought to become a client; (2) the person to whom the communication was made (a) is (the) member of a bar of a court, or his subordinate and (b) in connection with this communication is acting as a lawyer; (3) the communication relates to a fact of which the attorney was informed (a) by his client (b) without the presence of strangers (c) for the purpose of securing primarily either (i) an opinion on law or (ii) legal services or (iii) assistance in some legal proceeding, and not (d) for the purpose of committing a crime or tort; and (4) the privilege has been (a) claimed and (b) not waived by the client.

United States v. United Shoe Machinery Corp., D.Mass.1950, 89 F.Supp. 357, 358-59. We utilize this description solely because of Judge Wyzanski's comprehensiveness, and not because it is any more accurate than a number of other widely-accepted general formulations. E. g., 8 Wigmore, Evidence § 2292 (McNaughton rev. 1961); C. McCormick, Evidence §§ 87-88 (Cleary ed. 1972).

The true difficulty comes not in listing the necessary ingredients, but in applying the usual tests to unique fact situations. Along with many other courts, ² we have stated that "(t)he identity of a client is a matter not normally within the privilege, Frank v. Tomlinson, 351 F.2d 384 (5th Cir. 1965), cert. denied, 382 U.S. 1028, 86 S.Ct. 648, 15 L.Ed.2d 540 (1966), nor are matters involving the receipt of fees from a client usually privileged, see United States v. Finley, 434 F.2d 596 (5th Cir. 1970)." United States v. Ponder, 5 Cir. 1973, 475 F.2d 37, 39 (emphasis added). The court below followed this "general rule" in rejecting the relators' claims and in finding them in contempt.

Despite the general rule, we have clearly recognized, albeit in dicta, that an exception exists. "Under certain circumstances, an attorney must conceal even the identity of a client, not merely his communications, from inquiry." American Can Co. v. Citrus Feed Co., 5 Cir. 1971, 436 F.2d 1125, 1128, citing Baird v. Koerner, 9 Cir. 1960, ...