Grand Jury Proceedings, In re

• Decision Date: 02 July 1982
• Docket Number: No. 80-3742,80-3742
• Parties: 11 Fed. R. Evid. Serv. 51 In re GRAND JURY PROCEEDINGS. In the Matter of Andrew C. PAVLICK. United States of America, Appellant. . Unit A *
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1026

680 F.2d 1026

11 Fed. R. Evid. Serv. 51

In re GRAND JURY PROCEEDINGS In the Matter of Andrew C. PAVLICK United States of America, Appellant.

No. 80-3742.

United States Court of Appeals, Fifth Circuit.

Unit A ^*

July 2, 1982.

Michael Schatzow, Veta M. Carney, Asst. U. S. Attys., New Orleans, La., Mervyn Hamburg, Appellate Sec., Crim. Div., U. S. Dept. of Justice, Washington, D. C., for appellant.

Andrew C. Pavlick, Miami, Fla., Louis B. Merhige, New Orleans, La., for appellee.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before BROWN, CHARLES CLARK, GEE, RUBIN, GARZA, REAVLEY, POLITZ, RANDALL, TATE, SAM D. JOHNSON,

WILLIAMS, and GARWOOD, Circuit Judges.

GEE, Circuit Judge:

This case is about the attorney-client privilege. It concerns whether, on the facts presented, a lawyer can refuse to disclose the identity of one who paid fees and furnished bond money for third persons. The court below sustained his refusal to do so, and a panel of our court affirmed. 663 F.2d 1057. Sitting en banc, we vacate the panel opinion finally and reverse.

Willis, Love, and Pieser, apprehended on a shrimper with eighteen tons of marihuana, were tried and convicted in the Eastern District of Louisiana. Appellee Andrew C. Pavlick, a Miami practitioner, represented them. Thereafter each was granted immunity and brought before a grand jury investigating the transaction. Each waived the attorney-client privilege and testified that he knew nothing of where the funds came from that were used to post bond and compensate Pavlick. Willis added that when he was recruited for the drug-smuggling venture, he was promised that he would be "taken care of" if arrested. At his bond hearing, Pavlick, whom Willis had never seen or heard of before, appeared, introduced himself, stated that an unidentified person had put up funds for him to represent the three and secure their release on bond, and proceeded to do so.

When the grand jury called Pavlick, he refused to identify the smugglers' benefactor, maintaining that he also was a client and invoking the attorney-client privilege. Specifically, Pavlick engaged in the following exchange with the court below:

Q You were retained by somebody who told you to represent these people?

A And him and someone who was also worried about his own culpability. ¹

For several reasons, we conclude that in these circumstances the benefactor's identity may not be concealed.

We have long recognized the general rule that matters involving the payment of fees and the identity of clients are not generally privileged. In re Grand Jury Proceedings (United States v. Jones ), 517 F.2d 666 (5th Cir. 1975); see cases collected id. at 670 n.2. There we also recognized, however, a limited and narrow exception to the general rule, one that obtains when the disclosure of the client's identity by his attorney would have supplied the last link in an existing chain of incriminating evidence likely to lead to the client's indictment. In so holding, we expressly noted that our decision rested on the peculiar facts of that case and "should not be taken as any indication of how we would decide a similar question if the inculpatory value of sought-after testimony were less obvious or largely attenuated." Id. at 675. Among those "peculiar facts" was that the six attorneys drawn before the grand jury in Jones represented a generous portion of the criminal law bar of the lower Rio Grande Valley area, and the project was a rather broad attempt to canvass that portion for information detrimental to certain of its clients: that each had paid an attorney or attorneys amounts greater than his reported gross income during the year of payment. This and other features distinguish Jones from our case, including that the identity sought here was by no means the last link in any chain of inculpatory events or transactions, rather the contrary. ² The critical distinction, however, is the presence and redemption of the outstanding promise-the understanding by which in part the three sailors were recruited-that if arrested they would be "taken care of." In this respect our case closely resembles that of United States v. Hodge & Zweig, 548 F.2d 1347 (9th Cir. 1977). There, as noted in the dissent from our panel opinion, ³ the court held that once the government made a prima facie showing that the attorney was retained in order to promote intended or continuing criminal or fraudulent activity, the privilege could not be asserted. See Clark v. United States, 289 U.S. 1, 15, 53 S.Ct. 465, 469, 77 L.Ed. 993 (1933); United States v. Friedman, 445 F.2d 1076, 1086 (9th Cir. 1971). In Hodge & Zweig, as here, the government made such a prima facie showing by presenting evidence that an integral part of the conspiracy was the agreement by participants to furnish bail and legal expenses for conspirators who were apprehended by law enforcement officials. Thus, though the appellate court determined that the existence of the privilege was established, it refused to countenance its assertion:

Our inquiry is not at an end, however. Because the attorney-client privilege is not to be used as a cloak for illegal or fraudulent behavior, it is well established that the privilege does not apply where legal representation was secured in furtherance of intended, or present, continuing illegality. United States v. Friedman, 445 F.2d 1076, 1086 (9th Cir. 1971); see Clark v. United States, 289 U.S. 1, 15, 53 S.Ct. 465 (469), 77 L.Ed. 993 (1933); O'Rourke v. Darbishire, (1920) A.C. 581, 604 (Eng.) (per Vixcount Finlay); 8 J. Wigmore, supra, § 2298. The crime or fraud exception applies even where the attorney is completely unaware that his advice is sought in furtherance of such an improper purpose. United States v. Friedman, 445 F.2d at 1086; see Clark v. United States, 289 U.S. at 15, 53 S.Ct. 465 (at 469).

.... The guilty pleas further demonstrate that as an integral part of the conspiracy the participants agreed to furnish bail and legal expenses for conspirators who might be apprehended by law enforcement officials. Presumably, such an agreement was designed to hinder any criminal drug prosecution arising out of the conspiracy; as such, the agreement constituted part of the consideration for engaging in the conspiratorial activity.

In light of the above, we conclude that a prima facie case exists that payments to appellants, if any, made during the years 1970, 1971, and 1972 by and on behalf of Sandino were made pursuant to the conspiratorial agreement and thus in furtherance of the continuing drug conspiracy. We therefore hold that disclosure of the information requested in the IRS summons is required.

United States v. Hodge & Zweig, 548 F.2d at 1354-55 (footnote omitted).

Like our brethren of the Ninth Circuit, we decline to permit the promise of legal services to be made a fringe benefit for use in recruiting criminal conspirators. To draw the cloak of privilege across such an arrangement would be to shield the performance of an undertaking on which, in part, the conspiracy was based. In such circumstances, the act of furnishing bail and counsel was an act done in furtherance of the illegal scheme itself, carried out at a time when its beneficiaries were hors de combat to be sure, but exactly as contemplated. Trust in the undertaking was what gave it value; had it been bilked, the promise and like outstanding ones would have been rendered valueless. Thus the criminal enterprise itself was served by its performance.

Lawyers' skills may not be employed, even without their knowledge, in furthering crimes. The transaction by which Mr. Pavlick delivered legal services pursuant to the conspirators' prior agreement stands on no different legal footing than had he been employed to deliver any other portion of the conspiracy's fruits. Even if we conceded an attorney-client privilege as existing between him and, say, one who gave him loot to deliver, it would not protect the giver's identity. No more should it do so here. We therefore adopt the holding of the Ninth Circuit in Hodge & Zweig as our own: where the government makes a prima facie showing that an agreement to furnish legal assistance was part of a conspiracy, the crime or fraud exception applies to deny a privilege to the identity of him who foots the bill-and this even though he be a client of the attorney and the attorney unaware of the improper arrangement. Such an agreement, of course, need only be an effective one, need not be express, and might in a proper case be found to arise even from a custom or a prior course of conduct toward other apprehendees. Our case is an easy one, the agreement being express and Mr. Pavlick's services having rather clearly been furnished in redemption of it. The government's motion to compel disclosure should have been granted.

REVERSED.

ALVIN B. RUBIN, Circuit Judge, joined by CHARLES CLARK (first two paragraphs only) and RANDALL, Circuit Judges, concurring in the result:

Because no attorney-client privilege between Mr. Pavlick and the anonymous fee-payer has been established, Mr. Pavlick must answer the questions put to him, and I see no reason to discuss whether or not he was employed to fulfill a promise made as part of a conspiracy. The party who invokes the attorney-client privilege has the burden of establishing both the existence of an attorney-client relationship and the confidential nature of the communication. ¹ See United States v. Flores, 628 F.2d 521, 526 (9th Cir. 1980); United States v. Kelly, 569 F.2d 928, 938 (5th Cir.), cert. denied, 439 U.S. 829, 99 S.Ct. 105, 58 L.Ed.2d 123 (1978). Even if the anonymous fee-payer sought personal legal advice from Mr. Pavlick and became his client in regard to the matters about which he sought counsel, he was not Mr. Pavlick's client in the matter for which the fee was paid and about which Mr. Pavlick was interrogated. In that matter, Mr. Pavlick's clients were...