In re Motion to Quash Bar Counsel Subpoena

• Decision Date: 27 October 2009
• Docket Number: Cum-09-226.
• Parties: In re MOTION TO QUASH BAR COUNSEL SUBPOENA.
• Court: Maine Supreme Court

982 A.2d 330

2009 ME 104

In re MOTION TO QUASH BAR COUNSEL SUBPOENA.

Cum-09-226.

Supreme Judicial Court of Maine.

Submitted on Briefs: July 29, 2009.

Decided: October 27, 2009.

William J. Kayatta, Jr., Esq., Catherine R. Connors, Esq., Benjamin W. Jenkins, Esq., Pierce Atwood LLP, Portland, ME, for Verrill Dana LLP.

J. Scott Davis, Bar Counsel, Board of Overseers of the Bar, Augusta, ME, Gisele M. Nadeau, Esq., Portland, ME, for the Board of Overseers of the Bar.

Panel: CLIFFORD, ALEXANDER, LEVY, MEAD, and GORMAN, JJ.^*

Majority: CLIFFORD, LEVY, MEAD, and GORMAN, JJ.

Dissent: ALEXANDER, J.

MEAD, J.

[¶ 1] The law firm of Verrill Dana LLP (the firm) appeals from an order entered by a single justice of this Court (Silver, J.) denying its motion to quash a subpoena issued to its former general counsel by Bar Counsel for the Board of Overseers of the Bar. The subpoena seeks records that the firm claims are protected from disclosure by the attorney-client privilege. Bar Counsel asserts that this interlocutory appeal should be dismissed, or, as he argued successfully to the single justice, that the crime-fraud exception created by M.R. Evid. 502(d)(1) acts to remove the firm's privilege claim.¹ Because we cannot determine from the single justice's order whether the correct test for applying the crime-fraud exception was employed, we vacate the order and remand for clarification, and for further findings of fact and conclusions of law that the single justice deems necessary and appropriate.

I. BACKGROUND

[¶ 2] The origins of this matter lie in the misconduct of former attorney John Duncan, a former partner in the firm. Duncan's misconduct was detailed in this Court's order disbarring him for life. Board of Overseers of the Bar v. Duncan, BAR-08-3 (July 8, 2008) (Silver, J.). This case arises from Bar Counsel's investigation into the conduct of certain other attorneys at the firm in handling the discovery and reporting of Duncan's actions.

[¶ 3] In June 2007, Duncan's former secretary reported to at least two attorneys at the firm that Duncan had stolen a significant amount of client funds. Id. She eventually left Verrill Dana, retained counsel to represent her in a potential claim against the firm, and filed a grievance complaint against Duncan and several other Verrill Dana attorneys with the Board of Overseers of the Bar (Board). The firm engaged Attorney Gene Libby, then a Verrill Dana partner and its general counsel since 1996, to represent it in the matter. Libby undertook an investigation, during which he amassed numerous e-mails and other documents; he also wrote memos to others and to the file detailing both his conclusions and how he believed the evidence he had gathered supported them. Libby resigned from Verrill Dana on November 26, 2007.

[¶ 4] Two days later, Libby wrote to Bar Counsel, reporting that "[d]uring the course of my investigation, I acquired what I believe is unprivileged knowledge of violations of the Maine Bar Rules that requires reporting." Because the firm claimed that the knowledge Libby referred to was privileged, he did not disclose any specifics. The firm eventually reached an agreement with Libby concerning the terms of his departure; under its provisions Libby agreed not to disclose any information conveyed to him as general counsel unless required to do so by court order.

[¶ 5] On September 8, 2008, Bar Counsel issued a subpoena to Libby, compelling both his testimony and the production of any documents supporting his report made ten months earlier. The firm filed a motion to quash with the Board, asserting that the subpoena sought information protected by the attorney-client privilege and the work product doctrine. Bar Counsel's response to the motion asserted that the crime-fraud exception applied and acted to remove any privilege. The parties agreed to submit the dispute to a single justice of this Court. After reviewing the disputed documents in camera, the single justice found that:

During Mr. Libby's investigation of the . . . complaint against the firm Mr. Libby may have uncovered criminal conduct by partners of Verrill Dana LLP. Pursuant to M.R. Evid. 502(d)(1) there is no privilege under Rule 502 pursuant to the furtherance of crime or fraud. This exception prevails here and all of the documents provided in camera to this Court fall under this exception.

The justice ordered that all of the disputed documents be turned over to Bar Counsel. This appeal followed.

II. DISCUSSION

A. Jurisdiction

[¶ 6] Before addressing the merits of the firm's appeal, we must first decide whether we have the authority to entertain it. Ordinarily, the Maine Bar Rules require that a motion to quash a subpoena issued by Bar Counsel be resolved by the Board:

The Board, the Grievance Commission or the Chair of any panel thereof, upon motion made promptly and in any event at or before the time specified in the subpoena for compliance therewith, may quash or modify any subpoena issued for appearance before Bar Counsel, the Board, the Grievance Commission or panels thereof, if the subpoena is unreasonable or oppressive.

M. Bar R. 7.3(m)(1). The Rule does not contemplate this Court ruling on a motion to quash, at least before the Board has done so, regardless of the parties' wishes or agreement to use an alternate procedure.

[¶ 7] Furthermore, we have said that "we do not permit appeal from the denial of a motion to quash. Instead, the witness must appear . . . and testify or risk a finding of contempt. Only upon a judgment of contempt . . . is the issue ripe for appeal." In re Willoughby, 487 A.2d 636, 638 (Me.1985); see State v. Grover, 387 A.2d 21, 22 (Me.1978). In this case, however, notwithstanding the required procedure that a party seeking to challenge a subpoena issued by Bar Counsel must ordinarily follow, we find, as both Bar Counsel and the firm urge, that we have the inherent authority to decide this appeal. We further conclude that in these unusual circumstances we should do so.

[¶ 8] Absent "exceptional circumstances," we will honor our procedural rules. In re Application of Feingold, 296 A.2d 492, 496 (Me.1972). Nevertheless, this Court has the inherent and ultimate authority, independent of any rule, to regulate the practice of law and the conduct of attorneys in this State. See id.; Board of Overseers of the Bar v. Lee, 422 A.2d 998, 1002 (Me.1980) ("the ultimate power to regulate the conduct of attorneys is inherently in the judicial department"). The Rules themselves recognize this fundamental principle: "Any attorney admitted to, or engaging in, the practice of law in this State shall be subject to the Court's supervision and disciplinary jurisdiction. . . ." M. Bar R. 1(a). Ordinarily, the Court's authority with respect to the Bar Rules may be exercised by a single justice, "subject to appropriate review by the Law Court." M. Bar R. 1(d). The more uncertain issue before us is not whether we have the authority to decide the firm's appeal but whether we should choose to exercise that power under these circumstances.

[¶ 9] For several reasons, we conclude that given the unusual procedural posture of this case, and the importance of the privilege at issue, we should reach the merits. See Fiber Materials, Inc. v. Subilia, 2009 ME 71, ¶ 31, 974 A.2d 918, 928 (discussing importance of attorney-client privilege). In most cases, the person or entity interested in quashing a subpoena is the one compelled to act, either by testifying or by producing documents or other evidence. Here the person subpoenaed by Bar Counsel, Attorney Libby, is willing to comply. The firm, which is the entity with the claim of attorney-client privilege at stake, cannot disobey the subpoena because it did not receive a subpoena. The only procedural mechanism for effectively protecting the firm's privilege claim is the one it chose—moving to quash Libby's subpoena before he could comply with it.²

[¶ 10] Bar Counsel, having agreed to bring the motion to quash before the single justice, argues that even though this Court has the power to hear the firm's appeal from the single justice's decision, we should nonetheless dismiss it as interlocutory. It is well-established that "[o]rdinarily, the final judgment rule prevents a party from appealing a . . . court's decision on a motion before a final judgment has been rendered." Id. ¶ 12, 974 A.2d at 924. However, one of the recognized exceptions to the rule, the death knell exception, allows an interlocutory appeal to be heard "if substantial rights of a party will be irreparably lost if review is delayed until final judgment." Id. ¶ 14, 974 A.2d at 924 (quotation marks omitted). "A right is irreparably lost if the appellant would not have an effective remedy if the interlocutory determination were to be vacated after a final disposition of the entire litigation." Id. (quotation marks omitted). Stated differently, if an interlocutory order "has the practical effect of permanently foreclosing relief on a claim, that order is appealable." Id. (quotation marks omitted).

[¶ 11] Here, the firm seeks to protect information it claims is privileged, and that is not yet known to anyone outside of the firm other than its former general counsel. If we do not address the denial of the firm's motion to quash now, the information will become known to Bar Counsel. That is a result that cannot be undone on direct appeal following a final judgment. This situation is not analogous to the one we analyzed in Lewellyn v. Bell, where, in the face of a claim that documents sought pursuant to a motion to compel were protected by attorney-client privilege, we held that no exception to the final judgment rule applied, in part because "it is uncertain what information, if any, will be required to be disclosed . . . [therefore] the asserted harms are merely speculative." 635 A.2d 945, 947 (Me.1993). In this case, the single justice reviewed all of the documents sought by Bar C...