IN RE GRAND JURY PROCEEDINGS (DOE)

• Citation: 575 F. Supp. 197
• Parties: In re GRAND JURY PROCEEDINGS (John DOE). Miscellaneous.
• Decision Date: 18 November 1983
• Court: U.S. District Court — Northern District of Ohio

575 F. Supp. 197

In re GRAND JURY PROCEEDINGS (John DOE).

Miscellaneous.

United States District Court, N.D. Ohio, E.D.

November 18, 1983.

David O. Bauer, U.S. Dept. of Justice, Cleveland, Ohio, for plaintiff.

Joshua R. Treem, Baltimore, Md., for defendant.

MEMORANDUM AND ORDER

ANN ALDRICH, District Judge.

This matter calls for an examination of the scope of the attorney-client privilege in the context of a Grand Jury proceeding. An unidentified intervenor, "John Doe", moves this Court to quash a subpoena issued to his attorney ordering the attorney to appear before a Grand Jury and bring certain records related to the transfer of moneys. Upon consideration, this Motion to Quash is denied.

FACTS

Unidentified intervenor "John Doe" is the client of Arnold Weiner, an attorney from Baltimore, Maryland. Weiner was subpoenaed to appear before the Special Grand Jury sitting in this district on March 7, 1983. The subpoena compelled Weiner to testify and produce:

All records relating to the wire transfer of $61,625.00 from Metro Facilities, Amsterdam on or about August 17, 1978 to Melnicove, Kaufman & Weiner, account # 06 99 882, First National Bank of Baltimore, Maryland, Baltimore (Main branch). These records should include, but not be limited to, those relating to receipt, classification, and/or disbursement of said funds.

Weiner is a member of the law firm of Melnicove, Kaufman & Weiner. Prior to Weiner's scheduled appearance date, another attorney, Joshua Treem, contacted the government on behalf of "John Doe" and asked that Weiner's appearance be delayed. The government agreed to postpone Weiner's appearance until March 9, 1983. On that date Weiner appeared in Cleveland with Treem who filed a Motion to Intervene on Behalf of Joe Doe, as well as a Motion to Stay Weiner's Grand Jury appearance and a Motion to Quash the Grand Jury subpoena.

On the same day, the parties appeared before this Court for a hearing on the motions. The Motion to Intervene was granted and both parties presented evidence to the Court ex parte and in camera.

Weiner presented the subpoenaed documents for in camera review and asserted that John Doe is his client. He explained the nature of the work he does for John Doe and contended that complying with the subpoena and/or even revealing the identity of his client would be a breach of the attorney-client relationship.

The government offered the oral affidavit of Internal Revenue Service Special Agent Richard Rosfelder to explain the progress of the investigation and the documents and testimony which were subpoenaed as part of the Grand Jury proceeding. The government asserted that the information sought was not protected by the attorney client privilege, because the attorney's functions were purely ministerial or because the crime-fraud exception permitted the attorney-client privilege to be pierced.

At the conclusion of the parties' presentations, the Court granted the Motion to Stay Weiner's appearance before the Grand Jury pending a ruling on the Motion to Quash.

CONCLUSIONS OF LAW

I. Motion to Intervene

Through attorney Joshua Treem, and the testimony of Weiner, John Doe established that Weiner is his attorney and that the records about which Weiner is being called to testify relate to, and reveal the identity of, John Doe. To the extent that Weiner is being subpoenaed to disclose information which may fall within the attorney-client relationship, John Doe's Motion to Intervene is well taken and is granted pursuant to Fed.R.Civ.P. 24(a)(2)¹ and Perlman v. United States, 247 U.S. 7, 38 S.Ct. 417, 62 L.Ed. 950 (1917). The reasoning behind Perlman, and the cases which follow it, is that intervention of right is permitted to allow an otherwise "powerless" third party to appeal an adverse ruling on a Motion to Quash when the subpoenaed party cannot always be expected to risk a contempt citation in order to protect the intervenor's interests. In re Katz, 623 F.2d 122 (2d Cir.1980). If this Court declines to quash the subpoena issued to Weiner, he will be faced with the choice of refusing to comply and thereby risking contempt and possible incarceration, or of complying and thereby possibly jeopardizing John Doe's interests. Under these circumstances, this Court finds that John Doe's interests are not adequately protected by Weiner and the Motion to Intervene must therefore be granted.

II. Motion to Quash

A. Attorney-Client Relationship

John Doe contends the subpoena should be quashed because the information sought is protected by the attorney-client privilege. This Court was satisfied, by the testimony at hearing, that Weiner is, in fact, John Doe's attorney. The focus of the inquiry here is whether that relationship should prevent Arnold Weiner from appearing before the Grand Jury to produce the subpoenaed documents and testify concerning them, even if compliance with the subpoena may implicate John Doe. Determination of this troublesome issue requires this Court to balance the competing purposes served by the Grand Jury on the one hand, and by the attorney-client privilege on the other.

The Grand Jury is fundamental to our system of criminal justice. It has the dual function of determining whether there is probable cause to believe a crime has been committed, while protecting citizens from unfounded criminal prosecutions. Branzburg v. Hayes, 408 U.S. 665, 686-687, 92 S.Ct. 2646, 2659-60, 33 L.Ed.2d 626 (1972). The attorney-client privilege is fundamental to our adversarial system of prosecution and defense. It was developed to promote full and open consultation between client and legal advisor. To that end, the privilege protects from disclosure confidential communications made by a client to an attorney regarding legal advice. In re Special Grand Jury No. 81-1 (Harvey), 676 F.2d 1005 (4th Cir.1982). Hence, the ultimate purpose of both the Grand Jury and the attorney-client privilege is the ascertainment of truth. The Grand Jury seeks to prosecute the culpable and shield the innocent from persecution. The attorney seeks to learn all the facts in order to exonerate the righteous and adequately defend the rest from unduly harsh consequences. To reconcile the competing values served by the attorney-client privilege and the grand jury, the privilege must be upheld only where necessary to achieve its purpose. Fisher v. United States, 425 U.S. 391, 403, 96 S.Ct. 1569, 1577, 48 L.Ed.2d 39 (1976). Since the privilege may be invoked in derogation of the truth, it must not be lightly created or expansively construed. United States v. Nixon, 418 U.S. 683, 710, 94 S.Ct. 3090, 3108-09, 41 L.Ed.2d 1039 (1974). Rather, the general and time-honored proposition of law is that the public has a right to every man's evidence. Id. at 709, 94 S.Ct. at 3108 (citing Branzburg v. Hayes, supra).

To be exempted from this general rule, the party invoking the attorney-client privilege bears the burden of proving the existence of that privilege. Simply establishing the fact of an attorney-client relationship does not automatically activate the privilege. Matter of Walsh, 623 F.2d 489, 493 (7th Cir.1980); United States v. Bartone, 400 F.2d 459, 461 (6th Cir.1968).

B. Three-Prong Test

John Doe contends that, once the attorney-client privilege is invoked, it is incumbent upon the government to demonstrate, by affidavit, that: 1) the information sought is relevant and necessary to the investigation; 2) the investigation is within the Grand Jury's jurisdiction; and 3) the information sought is not for some other purpose. The Sixth Circuit has not directly considered this argument, and other circuits which have considered the propriety of compelling the government to make a preliminary showing to justify a subpoena are not in agreement. See, In re Grand Jury Proceedings, (Schofield), 486 F.2d 85, 93 (3d Cir.1973) ("... we think it reasonable that the Government be required to make some preliminary showing by affidavit that each item is at least relevant to an investigation being conducted by the grand jury and properly within its jurisdiction and not sought primarily for another purpose."); But see, Matter of Walsh, supra at 493, ("... since there is no privilege to refuse to appear before the grand jury, there can be no privilege to refuse to appear before the grand jury until the government demonstrates some compelling need for the counsel's testimony."); In re Special Grand Jury No. 81-1 (Harvey), supra at 1011, ("We reiterate, however, that we do not adopt the Schofield rule that a preliminary showing must be made for every grand jury subpoena."

This Court agrees with the Harvey court and the Fifth Circuit that each case must turn on its own facts and circumstances. In re Grand Jury Proceedings (Jones), 517 F.2d 666, 668, 671 (5th Cir.1975). Accordingly, this Court declines to hold that the Schofield requisites must be met in all cases, or even in this particular dispute. However, considering the fact that this Court already determined at the hearing that the government had established the first two prongs of the Schofield test,² in an abundance of caution, it is appropriate to inquire now whether the third prong of Schofield is met.

John Doe claims the third prong of Schofield is not met. In his brief, John Doe contends that the government is impermissibly using the Grand Jury investigation as a shortcut to learn the identity of Weiner's client and as a means for a fishing expedition. "... Given the stated nature of the investigation, the government can include virtually every activity within its suspected tax and fraud investigation." John Doe's Reply Brief at p. 6. The government's in camera affidavit³ clearly establishes that the identity of Weiner's client is known by the government. John Doe's briefs also raise, in the Memorandum at p. 2 and the Reply at pp. 4-6, the concern that more than one of Weiner's clients may be identified. He hints that these clients may now, or will in the...