Grand Jury Subpoenas Dated Oct. 22, 1991, and Nov. 1, 1991, Matter of

• Decision Date: 22 October 1991
• Citation: 959 F.2d 1158
• Parties: , 35 Fed. R. Evid. Serv. 540 In the Matter of GRAND JURY SUBPOENAS DATED
• Court: U.S. Court of Appeals — Second Circuit

Page 1158

959 F.2d 1158

60 USLW 2623, 35 Fed. R. Evid. Serv. 540

In the Matter of GRAND JURY SUBPOENAS DATED OCTOBER 22 1991, AND NOVEMBER 1, 1991 UNITED STATES of America, Appellee, v. John DOE, Intervenor-Appellant.

No. 1073, Docket 91-6305.

United States Court of Appeals Second Circuit.

Argued Jan. 21, 1992.

Decided Jan. 24, 1992.

Opinion filed March 23, 1992.

Alexandra Rebay, Asst. U.S. Atty., New York City (Roger S. Hayes, Acting U.S. Atty., S.D.N.Y., Scott A. Edelman, Daniel C. Richman, Asst. U.S. Attys., on the brief), for appellee.

Jack T. Litman, New York City (Litman, Asche, Lupkin & Gioiella, Paul, Weiss, Rifkind Before: NEWMAN and KEARSE, Circuit Judges, and MARSHALL, Associate Justice Retired ^*.

Wharton & Garrison, on the brief), for intervenor-appellant.

KEARSE, Circuit Judge:

Intervenor-appellant, referred to as "John Doe," the president and sole shareholder of a corporation referred to in the present proceedings by the fictitious name "XYZ," appeals from an order of the United States District Court for the Southern District of New York, Milton Pollack, Judge, ordering Paul, Weiss, Rifkind, Wharton & Garrison ("Paul-Weiss"), a law firm representing Doe and formerly representing XYZ, to comply with a grand jury subpoena duces tecum calling for the production of certain XYZ records in Paul-Weiss's possession. Over objections by Doe and Paul-Weiss on grounds of Fifth Amendment, attorney-client, and attorney-work-product privileges, the district court granted the motion of the United States to compel compliance, finding that the documents were neither expressions of Doe, nor communications between attorney and client, nor the product of an attorney. On appeal, Doe pursues the above objections. This Court, by summary order dated January 24, 1992, affirmed the order compelling production, stating that this opinion would follow.

I. BACKGROUND

The following facts are largely uncontested. In September 1991, a federal grand jury in the Southern District of New York was conducting an investigation of Doe with respect to possible violations of various federal laws, including securities statutes and money laundering statutes. In the investigation, the government learned that XYZ, Doe's wholly-owned corporation, had paid the bills for several telephone lines, including those used by Doe in certain of his homes and in his car. In October 1991, grand jury subpoenas duces tecum were served on Doe ("Doe subpoena") and on the custodian of XYZ's records ("XYZ subpoena"). The XYZ subpoena requested "[a]ny and all telephone records for any telephone as to which [XYZ] has paid bills, including but not limited to records for phones in [specified locations] and ... cellular car phones, for the period 1985 to present." The Doe subpoena requested "[a]ll monthly telephone bills, or statement of accounts" for any of seven specified telephone numbers.

At the time these subpoenas were served, Paul-Weiss represented not only Doe but XYZ as well, in connection with the grand jury proceeding and with a separate investigation by the Securities and Exchange Commission. Paul-Weiss accepted service of the XYZ subpoena, but it subsequently informed the government that it would soon be withdrawing as counsel for XYZ and would thereafter represent only Doe. It also informed the government that neither Paul-Weiss nor XYZ had any original telephone records, and that Paul-Weiss would not disclose whether it had copies. Eventually, XYZ's new counsel produced certain telephone records pertaining chiefly to 1990 and 1991, stating that counsel was unaware of the existence of any other telephone records that might be deemed called for by the XYZ subpoena.

The government then served Paul-Weiss itself, as custodian, with a subpoena dated November 1, 1991 ("November subpoena") requesting production, for the period 1985-1989, of "[a]ll monthly telephone bills, or statements of accounts" for any of the seven telephone numbers specified in the Doe subpoena, and of all telephone records for any telephone as to which XYZ had paid the bills. Paul-Weiss refused to comply with the November subpoena, claiming that responsive documents, if any, were protected by, inter alia, (1) Doe's Fifth Amendment privilege against self-incrimination, (2) Doe's attorney-client privilege, and (3) attorney-work-product privilege. Paul-Weiss also argued that requiring the The government moved in the district court for an order compelling Paul-Weiss to comply with the November subpoena, contending principally that the requested documents were corporate records, not records belonging to or created by Doe, and that the claimed privileges were not implicated. In opposition to the motion, Doe, represented in part by new counsel, was permitted to intervene and to submit in camera affidavits and documents in support of the claims of privilege.

production of documents protected by the asserted privileges would violate Doe's right to due process.

Following a hearing at which the court heard oral argument and received evidence as to XYZ's payment, maintenance, and tax treatment of the telephone bills at issue, the government's motion was granted. The court stated, in pertinent part, as follows:

The documents sought by the grand jury in possession of the witness subpoenaed for them are copies of records created by a telephone company for certain telephone numbers.

....

[I]t is the Court's ruling that the items that have been tendered to the Court are not the product of any attorney; they are not a communication between an attorney and client, and as a third party's records, there is no self-incrimination therein by John Doe covered by the Fifth Amendment. They are not an expression of John Doe.

The documents are not personal papers but are XYZ Corporation's records of payments made by it. John Doe is not compelled by their production to testify against himself. The documents, in the Court's judgment, were necessary to the conduct of the corporation's business and the filing of its tax returns.

....

The telephone records contain no testimonial declarations by John Doe. They were not prepared by John Doe but by the Telephone Company.

A witness has testified here that the telephone numbers mentioned in the record were listed in the name of John Doe and that, so far as he could see, the bills were addressed by the phone company to John Doe but came to the premises occupied by XYZ Corporation and John Doe, to the secretary employed by the corporation; that the bills were paid with corporate funds, and the evidence is that the bills were stored in corporate files on corporate premises. John Doe did not pay for the phone service, and there was no reimbursement by him for any noncorporate usage.

....

The net of the whole matter, as presented to the Court, indicates to the Court very clearly that the motion to compel production of the disputed documents should be granted, and the attorney in possession of the same is directed to turn them over to the grand jury.

(Hearing Transcript, December 9, 1991, at 84-87.)

The district court stayed its order compelling production pending argument of the present appeal. This Court continued the stay until January 24, 1992, when it entered a summary order affirming the district court's order, stating that this opinion would follow.

II. DISCUSSION

On appeal, Doe principally renews his claims that Fifth Amendment privilege, attorney-client privilege, and attorney-work-product privilege permit him to cause Paul-Weiss to refuse to produce the documents called for by the November subpoena. We conclude that the claims of privilege were properly rejected.

A. Fifth Amendment Privilege

Doe contends that enforcement of the November subpoena would violate his Fifth Amendment privilege principally on the ground that the act of producing the documents would tend to incriminate him. We conclude that enforcement of the subpoena does not violate his Fifth Amendment privilege.

Preliminarily, we note that the Fifth Amendment in and of itself would not permit Doe to bar disclosures by Paul-Weiss of information given it by Doe. The Fifth Amendment protects a person against compelled self-incrimination, not against the compelled disclosure of his private information by his attorneys. See Fisher v. United States, 425 U.S. 391, 401-02, 96 S.Ct. 1569, 1576, 48 L.Ed.2d 39 (1976) ("compelled production of documents from an attorney does not implicate whatever Fifth Amendment privilege the taxpayer might have enjoyed from being compelled to produce them himself"); Couch v. United States, 409 U.S. 322, 328, 93 S.Ct. 611, 616, 34 L.Ed.2d 548 (1973) ("The Constitution explicitly prohibits compelling an accused to bear witness 'against himself'; it necessarily does not proscribe incriminating statements elicited from another."). Where, however, preexisting documents have been transferred to the attorney for the purpose of obtaining legal advice and the client claims attorney-client privilege, the attorney may refuse to produce the documents if the client, had he retained possession of them, would have had a Fifth Amendment privilege to refuse production. Fisher v. United States, 425 U.S. at 404-05, 96 S.Ct. at 1578. Accordingly, though prior to submitting the subpoenaed records to the court in camera Paul-Weiss had possession of them, we examine Doe's Fifth Amendment arguments as if Doe himself were custodian.

The district court found that the subpoenaed records were not Doe's personal records but rather XYZ records. Artificial entities are not protected by the Fifth Amendment's prohibition against compelled self-incrimination. Braswell v. United States, 487 U.S. 99, 102, 108 S.Ct. 2284, 2286, 101 L.Ed.2d 98 (1988); Bellis v. United States, 417 U.S. 85, 88, 94 S.Ct. 2179, 2183, 40 L.Ed.2d 678 (1974); Hale v. Henkel, 201 U.S. 43, 74-75, 26 S.Ct. 370, 379, 50 L.Ed. 652 (1906). A corporation thus may not claim the privilege for the contents of its...