803 F.2d 493 (9th Cir. 1986), 85-1044, In re Grand Jury Subpoenas

Docket Nº:85-1044.
Citation:803 F.2d 493
Party Name:Fed. R. Evid. Serv. 1192 In re GRAND JURY SUBPOENAS. UNITED STATES of America, Appellant, v. Robert J. HIRSCH, Walter B. Nash III, William G. Walker, Natman Schaye, Bertram Polis, and William J. Redondo, Appellees.
Case Date:October 27, 1986
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 493

803 F.2d 493 (9th Cir. 1986)

Fed. R. Evid. Serv. 1192

In re GRAND JURY SUBPOENAS.

UNITED STATES of America, Appellant,

v.

Robert J. HIRSCH, Walter B. Nash III, William G. Walker,

Natman Schaye, Bertram Polis, and William J.

Redondo, Appellees.

No. 85-1044.

United States Court of Appeals, Ninth Circuit

October 27, 1986

Argued and Submitted Oct. 8, 1985.

Page 494

John Roll, Asst. U.S. Atty., Tucson, Ariz., for appellant.

John W. McDonald, Chandler, Tullar, Udall & Rehair, Tucson, Ariz., for appellees.

Appeal from the United States District Court for the District of Arizona.

Before GOODWIN, ALARCON, and POOLE, Circuit Judges.

POOLE, Circuit Judge:

The United States appeals from a district court order quashing a portion of subpoenas duces tecum issued by a grand jury. The subpoenas directed appellees, six attorneys, to identify the party or parties (fee-payer) retaining their legal services to represent five defendants who had been the subject of a joint prosecution and to provide information regarding the fee arrangements associated with that representation. The district court quashed that portion of the subpoenas requiring the attorneys to identify the fee-payer, finding that disclosure would violate the attorney-client privilege. Because we conclude that the fee-payer's identity is not protected by the attorney-client privilege, we reverse and remand.

I.

On March 23, 1984, Guillermo Soto-Leal, Ricardo Bustamonte, Ruben Cruz-Sinotez, Francisco Valles-Valencia and Francisco Villa-Tapia were arrested at a residence in Tucson, Arizona. A search of the premises disclosed approximately 32,000 pounds of marijuana and numerous drug ledgers detailing a multimillion-dollar marijuana conspiracy. According to the ledgers, between June 1983 and March 1984, the organization responsible for the marijuana at the residence distributed approximately 180,000 pounds of marijuana worth an estimated $90 million.

On March 25, 1984, while those arrested were still in custody and before their identities had been publicly disclosed, William

Page 495

Redondo contacted the Drug Enforcement Administration (DEA) and indicated that he represented those arrested at the Tuscon residence. When asked the names of his clients, Mr. Redondo was unable to identify any of the five men in custody. A short time later Mr. Redondo telephoned the DEA and identified two of the five men, Soto-Leal and Bustamonte. On March 26, Mr. Redondo entered a special appearance on behalf of all five defendants at their initial appearance before the United States Magistrate.

On April 5, 1984, attorneys Robert Hirsch (for Villa-Tapia), Walter Nash (for Soto-Leal), William Walker (for Valles-Valencia), Natman Schaye (for Cruz-Sinotez), and Bertram Polis (for Bustamonte), appeared on behalf of their respective clients and completed designation of retained counsel forms. On April 23, 1984, the five defendants were indicted along with two other individuals. Trial commenced in July 1984.

Defendants Villa-Tapia and Cruz-Sinotez and the two other individuals were acquitted. Defendant Soto-Leal was found guilty of conspiracy to distribute, and possession of, over 1000 pounds of marijuana. Defendants Bustamonte and Valles-Valencia were found guilty of possession of over 1000 pounds of marijuana.

At their appearance before the magistrate, all five defendants indicated that they had minimal financial resources. Later, at trial, counsel for Cruz-Sinotez and Villa-Tapia attempted to present evidence regarding the poverty of their clients, stating that the clients had not paid their legal fees and did not know who had.

On November 14, 1984, a DEA agent testified during grand jury proceedings regarding the continuing investigation of the organization which had employed the five defendants. The grand jury indicated that it would be helpful if the government were to issue subpoenas to the six attorneys regarding the identity of the fee-payer and the fee arrangements for representation of the five defendants.

Subpoenas were subsequently served requiring the six attorneys to appear before the grand jury and to bring all records concerning the payment of fees on behalf of their respective clients in the marijuana prosecution, including the amount of fees, form of payments, and payer. Appellees filed a motion to quash the subpoenas, asserting that the requested information was protected by the attorney-client privilege and that disclosure would violate the constitutional rights granted by the Fifth and Sixth Amendments to the attorneys' clients.

The government opposed the motion to quash and the district court held a hearing. At the hearing, attorney Walker testified that he was certain indictments would be issued if the identity of the fee-payer were revealed. Thereafter, the court ordered the six attorneys to furnish in camera affidavits detailing the circumstances surrounding their employment to represent the five defendants and showing the existence of an attorney-client relationship between the attorneys and the third-party fee-payer.

On February 5, 1985, after reviewing the in camera affidavits, the district court found that to force the attorneys to reveal the name of the fee-payer would probably implicate that party in the criminal activity for which he sought legal advice. The court also found that the government had not made out a prima facie case that the attorneys were retained to promote intended or continuing criminal activity. The court...

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