Kave, In re

• Decision Date: 07 December 1984
• Docket Number: No. 84-1859,84-1859
• Citation: 760 F.2d 343
• Parties: 118 L.R.R.M. (BNA) 3137, 102 Lab.Cas. P 11,434, 1 Fed.R.Serv.3d 1054, 17 Fed. R. Evid. Serv. 1334 In re Martha R. KAVE, Petitioner, Appellant. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 343

760 F.2d 343

118 L.R.R.M. (BNA) 3137, 102 Lab.Cas. P 11,434,

1 Fed.R.Serv.3d 1054, 17 Fed. R. Evid. Serv. 1334

In re Martha R. KAVE, Petitioner, Appellant.

No. 84-1859.

United States Court of Appeals First Circuit.

Heard Dec. 7, 1984.

Decided March 29, 1985.

As Amended June 20, 1985.

Roger Brunelle, Worcester, Mass. with whom Richard T. Tucker, and Weinstein, Bernstein & Burwick, P.C., Worcester, Mass., were on brief for petitioner, appellant.

Joseph F. Frankl, Atty., Washington, D.C., with whom Rosemary M. Collyer, General Counsel, John E. Higgins, Deputy General Counsel, Harold J. Datz, Associate General Counsel, Joseph E. Mayer, Asst. General Counsel, and John W. Hornbeck, Deputy Asst. General Counsel, Washington, D.C., were on brief for N.L.R.B.

Before CAMPBELL, Chief Judge, BOWNES and TORRUELLA, Circuit Judges.

TORRUELLA, Circuit Judge.

This case is before us on appeal from an order adjudging appellant in civil contempt for failure to answer questions and produce documents before a special master named to determine whether an employer violated prior orders of the district court. The principal questions raised are related to the distinction between civil and criminal contempt. Also of concern are allegations that put into contention the fifth amendment privilege against self-incrimination. ¹ A detailed statement of the factual background is required before we can decide the legal issues raised thereby, which are recurring problems before trial courts.

As a result of a petition filed by the National Labor Relations Board (the Board), ² the district court issued an injunction on November 19, 1982 ordering the employer, Workroom for Designers, Inc. (Workroom), to cease and desist from engaging in numerous acts alleged to be unfair labor practices and further affirmatively requiring Workroom to recognize and bargain with the International Ladies Garment Workers Union, AFL-CIO (the Union), and to offer reinstatement to certain striking employees upon their offer to return to work. The order was directed to Workroom and "its officers, representatives, agents, servants, employees, attorneys, successors and all members and persons acting in concert or participation with it or them."

Thereafter, in May, 1983, the Board filed a petition with the district court seeking an adjudication in civil contempt and requesting the institution of criminal contempt proceedings against Workroom and additional respondents, namely Workroom's president, Sidney Sisselman (Sisselman), and his son Brian. On September 6, 1983, appellant Martha Kave (Kave) was retained by Workroom and Sisselman to represent them in this matter, and on September 13th she entered an appearance on their behalf. Shortly thereafter, during the course of the hearing on the Board's petition for adjudication of civil contempt, ³ a consent decree was entered into on September 16, 1983. In the decree it was agreed that Workroom and Sisselman would: (1) comply with the November 19, 1982 injunction order; (2) pay into Court $200,000, to be paid in monthly installments through September, 1984; ⁴ (3) put all willing employees back to work within 30 days; (4) enter into a collective bargaining agreement with the Union within 60 days; and (5) make "every bona fide effort" to retrieve work and obtain new contracts. This decree was made applicable to Workroom, "its officers, agents, successors and assigns," and to Sisselman.

On February 7, 1984, Kave filed a motion for leave to withdraw as counsel for Workroom and Sisselman, stating as grounds certain actions by Sisselman that she considered damaging to her professional reputation, ⁵ and also the fact that there was an outstanding account for her services. Kave's motion was allowed by the district court.

Thereafter, on April 3, 1984, as a result of a joint motion of the Board and the Union in which it was claimed that Sisselman was violating the September, 1983 consent decree, ⁶ the district court named a special master, with receivership duties and with power to act "to the full extent permissible" under Fed.R.Civ.P. 53. ⁷ The special master's reference required that he render a report in which he set forth his findings of fact and recommendations on the following issues:

(a) Whether this Court should hold respondents Sisselman and Workroom for Designers, Inc., their agents, employees, successors and assigns, or any persons acting in concert and participation with either or both, in civil contempt of the Order of this Court of November 19, 1982, as amended December 3, 1982, the Consent Decree issued September 29, 1983, and the Order of Reference issued this date.

(b) Whether this matter should be referred to the United States Attorney as to whether criminal contempt shall issue against respondents Sisselman and Workroom for Designers, Inc., or any agents, employees, successors, assigns, or persons acting in concert and participation with either or both.

The special master commenced his inquiry, as part of which a subpoena was issued by the court and served upon Kave commanding her to appear before the master and produce a series of documents, ⁸ some of which directly related to Workroom, Sisselman, or close relatives of Sisselman. Kave, through counsel, attempted to quash the subpoena, principally on attorney-client and work-product privilege grounds, but the court ruled that the matter should be raised in the first instance before the master. At an initial hearing held on August 22, 1984, Kave's lawyer indicated to the master that "[t]here are other grounds for declining to produce the documents which we can go into now or if you want to do it at the resumption of the formal hearings. I'll leave that to you."

The formal hearings resumed on August 27th, Kave having been served with a subpoena identical to that served earlier and considered at the August 22th hearing. Her motion to quash was denied by the master, who ruled regarding the attorney-client issue that:

Inasmuch as the evidence demonstrates that Ms. Kave represented Mr. Sisselman in the contempt proceedings and assisted in the settlement of the action in September, 1983 (and, in any event, the Court could take judicial notice of that fact), there has been a prima facie showing that Mr. Sisselman sought or utilized Ms. Kave's advice and assistance in order to further a fraud upon the Court.

On the basis of this finding the master concluded that Kave's communications with Sisselman came within the "crime-fraud" exception to the attorney-client privilege. See Clark v. United States, 289 U.S. 1, 15, 53 S.Ct. 465, 469, 77 L.Ed. 993 (1933) ("The privilege takes flight if the relation is abused. A client who consults an attorney for advice that will serve him in the commission of a fraud will have no help from the law"). He ruled, therefore, that the documents and Kave's related testimony were not privileged.

Kave was then questioned by the master. After identifying herself and indicating her occupation she declined to answer any further questions put to her, claiming either attorney-client privilege, on which issue the master again ruled against her, or, after said rulings, the fifth amendment privilege, which also was rejected. ⁹ Kave, through counsel, also asserted a fifth amendment privilege with respect to the subpoenaed documents, contending that any acknowledgment of their existence or non-existence might in itself tend to incriminate her.

On September 28, 1984, the master filed a comprehensive report and recommendation in which he made detailed findings and rulings with respect to Kave's allegations of privilege. Regarding the attorney-client privilege, he determined that the communications relating to the settlement of the contempt action in the district court fell within the purview of the crime-fraud exception to that privilege. He further held that the privilege did not apply to the examination of Kave regarding the fact of representation and identity of various clients. Cf. United States v. Strahl, 590 F.2d 10, 12 (1st Cir.1978), cert. denied, 440 U.S. 918, 99 S.Ct. 1237, 59 L.Ed.2d 468 (1979).

As to Kave's claim to protection against self-incrimination, the master held that "it was perfectly clear, in light of the circumstances, that her answer to the questions as framed could not possibly have had the tendency to incriminate her." Central to this holding, at least by implication, was the master's perception to the effect that most of the information sought through the interrogation was already a matter of public record. ¹⁰ Thus in effect the master was saying that Kave could not possibly incriminate herself further than she already had by other acts.

Regarding Kave's fifth amendment response to the production of documents, the master concluded that said protection was not at issue because testimonial communication was not involved, see Fisher v. United States, 425 U.S. 391, 408, 96 S.Ct. 1569, 1579, 48 L.Ed.2d 39 (1976); United States v. Doe, 465 U.S. 605, 104 S.Ct. 1237, 79 L.Ed.2d 552 (1984), even with respect to documents that could have been authored by Kave herself. The master ruled that the documents did not come within the First Circuit's exception of "personal self-created business records in the possession of a sole proprietor or practitioner," see In re Grand Jury Proceedings (Martinez), 626 F.2d 1051, 1056 (1st Cir.1980), because Kave had failed to meet the burden of demonstrating her entitlement to the exception. See Hoffman v. United States, 341 U.S. 479, 71 S.Ct. 814, 95 L.Ed. 1118 (1951); United States v. Doe, 628 F.2d 694 (1st Cir.1980). The master thus concluded that Kave's actions were "unjustified and without excuse ... and were contemptuous of [the] Court." He recommended the issuance of an order to show cause, and upon a finding of merit by the court, that various actions be taken by Kave, ¹¹ including, as more pertinent to the principal issues before us, that:

She be assessed as a compensatory...