Grand Jury Subpoena for Osterhoudt, In re

Decision Date30 December 1983
Docket NumberNo. 83-5807,83-5807
Citation722 F.2d 591
Parties84-1 USTC P 9132, 14 Fed. R. Evid. Serv. 1390 In re Grand Jury Subpoena For: William Lathan OSTERHOUDT, Luxana Phaksuan. Luxana PHAKSUAN, Movant-Appellant, v. UNITED STATES of America, Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

John W. Keker, Keker & Brockett, San Francisco, Cal., for movant-appellant.

Bruce R. Castetter, Asst. U.S. Atty., argued, Peter K. Nunez, U.S. Atty., Bruce R. Castetter, Asst. U.S. Atty., on the brief, San Diego, Cal., for appellee.

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

Before BROWNING, Chief Judge, NORRIS, Circuit Judge, and SCHNACKE, * District Judge.

PER CURIAM:

The district court properly denied appellant's motion to quash the grand jury subpoena directed to his attorney.

The government stipulated that only the amount, form, and date of payment of legal fees need be disclosed. Appellant recognizes that generally "[t]he identity of an attorney's clients and the nature of his fee arrangements with his clients are not confidential communications protected by the attorney-client privilege." United States v. Hodge & Zweig, 548 F.2d 1347, 1353 (9th Cir.1977). See also In re Grand Jury Subpoenas (Lahodny), 695 F.2d 363, 365 (9th Cir.1982); In re Grand Jury Witness (Salas & Waxman), 695 F.2d 359, 361 (9th Cir.1982); United States v. Sherman, 627 F.2d 189, 190 (9th Cir.1980). He argues, however, that the subpoena fell within an exception to this general rule barring disclosure where "a strong probability exists that disclosure of such information would implicate that client in the very criminal activity for which legal advice was sought." Hodge & Zweig, 548 F.2d at 1353.

Appellant contends the exception applies in this case because he hired the attorney to represent him in a grand jury investigation of possible income tax and controlled substance violations, and the government represented in an affidavit filed with the court below that (1) the grand jury inquiry was based upon information that appellant was a "major distributor of several multi-ton loads of marijuana" in 1976, 1980 and 1981 from which he had made "substantial sums of money"; (2) that "a complete financial investigation" of appellant was relevant to the grand jury's inquiry; and (3) that the information regarding the date and amount of legal fees paid by appellant was necessary to complete that investigation.

Appellant's argument rests on the premise that the requisites of the privilege are met whenever evidence regarding the fees paid the attorney would implicate the client in a criminal offense regarding which the client sought the attorney's legal advice. That is not the law.

The purpose of the attorney-client privilege is to protect every person's right to confide in counsel free from apprehension of disclosure of confidential communications. United States v. Sherman, 627 F.2d at 192; Baird v. Koerner, 279 F.2d 623, 629-30 (9th Cir.1960). Fee arrangements usually fall outside the scope of the privilege simply because such information ordinarily reveals no confidential professional communication between attorney and client, and not because such information may not be incriminating.

In Chirac v. Reinicker, 24 U.S. (11 Wheat.) 280, 6 L.Ed. 474 (1826), an attorney objected to the question whether he was employed as counsel to conduct an ejectment suit for the benefit of Reinicker, as landlord of the premises. The Court held:

The fact [of representation] is preliminary, in its own nature, and establishes only the existence of the relation of client and counsel, and therefore, might not necessarily involve the disclosure of any communication arising from that relation, after it was created.

Id. at 295 (emphasis added). The same rationale applies to the fee arrangement. See In re Michaelson, 511 F.2d 882, 888 (9th Cir.1975). Information regarding the fee arrangement ordinarily is not part of the subject matter of the professional consultation and therefore is not privileged communication even though it may evidence wrongdoing by the client. See United States v. Sherman, 627 F.2d at 191-92.

Cases recognizing the exception to the general rule that the client's identity and the amount of the fee paid the attorney are not within the privilege rely upon Baird v. Koerner, 279 F.2d 623 (9th Cir.1960). Appellant's confusion as to the meaning of the exception is based upon a misstatement of the Baird rule in subsequent opinions. See, e.g., In re Grand Jury Subpoenas (Lahodny), 695 F.2d at 365; In re Grand Jury Witness (Salas & Waxman), 695 F.2d at 361-62; United States v. Hodge & Zweig, 548 F.2d at 1353.

In Baird the client had engaged the lawyer for advice in tax matters and, on the attorney's recommendation, had anonymously tendered to the United States Treasury through the attorney sums due for unpaid taxes. The government sought disclosure of the client's name. This court held the general rule that the identity of the client was not protected by the attorney-client privilege was inapplicable. The exception to the general rule stated in Baird was that the identification of the client was not within the privilege when the identification "conveys information which ordinarily would be conceded to be part of the usual privileged communication between attorney and client." Id. at 632 (emphasis added). As an illustration of this principle (and one on all fours with the facts of Baird ), the court quoted the following passage from 97 C.J.S. Witnesses, Sec. 283e, at 803:

The name of the client will be considered privileged matter where the circumstances of the case are such that the name of the client is material only for the purpose of showing an acknowledgment of guilt on the part of such client of the very offense on account of which the attorney was employed ....

279 F.2d at 633 (emphasis added).

Hodge & Zweig and other subsequent cases have mistakenly formulated the exception not in terms of the principle itself, but rather in terms of this example of circumstances in which the principle is likely to apply. The principle of Baird was not that the privilege applied because the identity of the client was incriminating, but because in the circumstances of the case disclosure of the identity of the client was in substance a disclosure of the confidential communication in the professional relationship between the client and the attorney. See generally 8 J. Wigmore, Evidence Sec. 2292, at 554 (McNaughton rev. 1961).

Another source of the confusion may be that applying the label "general rule" to the doctrine that client identity and fee arrangements must be disclosed has distracted attention from the fact that the governing principle is that only professional communications are privileged. The case upon which Baird relied, Ex parte McDonough, 170 Cal. 230, 149 P. 566 (1915), did not speak in terms of the "general rule" and its "exception" but rather whether the facts disclosed the presence of the requisites of the privilege: a...

To continue reading

Request your trial
54 cases
  • U.S. v. Ricks
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • October 10, 1985
    ...was displaced by our in banc order, 697 F.2d 112, and Hodge & Zweig may no longer be good law in the Ninth Circuit. See In re Osterhoudt, 722 F.2d 591, 593 (9 Cir.1983). Certainly its purported teaching has been rejected by other circuits. See In re Shargel, 742 F.2d 61 (2 Cir.1984); In re ......
  • In re Williams, GJ 85-7(MIA).
    • United States
    • U.S. District Court — Southern District of Florida
    • August 3, 1987
    ...968, 971 (2d Cir.1985); United States v. Liebman, 742 F.2d 807 (3d Cir.1984); In re Shargel, 742 F.2d 61 (2d Cir.1984); In re Ousterhoudt, 722 F.2d 591 (9th Cir.1983); In re Grand Jury Proceedings (Gordon), 722 F.2d 303 (6th Cir.1983), cert. denied, 467 U.S. 1246, 104 S.Ct. 3524, 82 L.Ed.2d......
  • Magill v. Superior Court
    • United States
    • California Court of Appeals
    • January 10, 2001
    ...242.) C. Limitation of Baird The Ninth Circuit sought to clarify and limit the Baird rule in another series of cases. In In re Osterhoudt (9th Cir. 1983) 722 F.2d 591, the court reviewed the cases which followed Baird, and concluded Baird had been misstated and misapplied: "The principle of......
  • Grand Jury Subpoenas, In re
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • July 2, 1990
    ...relationship between the client and the attorney. See In re Grand Jury Subpoenas, 803 F.2d 493, 497 (9th Cir.1986); In re Osterhoudt, 722 F.2d 591, 593 (9th Cir.1983). We need not decide whether this exception will be adopted in this circuit because it does not apply to this case. In order ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT