Grand Jury Investigation, In re
| Decision Date | 31 August 1992 |
| Docket Number | No. 91-55500,91-55500 |
| Citation | 974 F.2d 1068 |
| Parties | , Medicare & Medicaid Guide P 40,785, 36 Fed. R. Evid. Serv. 860 In re GRAND JURY INVESTIGATION. UNITED STATES of America, Plaintiff-Appellant, v. THE CORPORATION 1 , Defendant-Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Carol C. Lam, Asst. U.S. Atty., San Diego, Cal., for plaintiff-appellant.
Frank Rothman and Richard E. Drooyan, Skadden, Arps, Slate, Meagher & Flom, Los Angeles, Cal., for defendant-appellee.
Appeal from the United States District Court for the Southern District of California.
Before: POOLE, WIGGINS, and LEAVY, Circuit Judges.
The government appeals the denial of its motion for in camera review of allegedly privileged documents subpoenaed in a grand jury investigation. The district court had jurisdiction over the grand jury investigation pursuant to 28 U.S.C. § 1826 (1988). A timely notice of appeal was filed, and this court has jurisdiction under 18 U.S.C. § 3731 (1988) and 28 U.S.C. § 1291 (1988). We affirm the judgment of the district court.
This appeal stems from a grand jury investigation of an alleged criminal scheme by the Corporation to defraud Medicare. The investigation focuses on the Corporation's implementation of a ferritin program in which the Corporation billed Medicare $17.00 for a ferritin serum test while billing others only $0.65 or nothing for the same test.
During the grand jury investigation, the government subpoenaed over 250,000 documents from the Corporation. However, the Corporation refused to produce eleven documents and claimed that the documents were protected by the attorney-client privilege. The Corporation provided the government with a privilege log that briefly described the documents and their subject matter.
The government then brought a motion requesting in camera review of the eleven documents. The Corporation opposed the motion and produced a privilege log and affidavits of in-house and retained counsel as evidence that the documents are privileged. The affidavits state that the documents contain confidential information for The government argued that (1) the Corporation's privilege log and affidavits were insufficient to establish the attorney-client privilege, (2) under the crime-fraud exception to the attorney-client privilege, the government made a sufficient showing to allow in camera review, and (3) even if they were unable to meet the requirements of the crime-fraud exception, the government provided a sufficient showing to justify an in camera review of the contested materials to determine whether they were indeed privileged. The district court rejected these arguments and denied the government's motion for in camera review.
the purpose of seeking legal advice and that the contents of the documents have not been disclosed to anyone outside of the Corporation or the retained law firm.
The government contends that the district court erred in denying the government's motion for in camera review of the documents which the Corporation claims are protected by the attorney-client privilege. According to the government, the district court committed three errors in denying the government's motion: The district court (1) erred in finding that the Corporation sufficiently met its burden in establishing the attorney-client privilege so as properly to refuse to produce the documents, (2) applied the wrong legal standard in determining whether the government's crime-fraud showing was sufficient to allow in camera review, and (3) applied the wrong legal standard in determining whether an in camera review of the documents should have been conducted to determine whether privilege applies. To avoid confusing the issues on appeal, these three assignments of error are discussed separately.
The government argues that the Corporation did not meet its burden in establishing that the attorney-client privilege applied to the eleven documents. While the law regarding the scope of the attorney-client privilege is well established, the law does not clearly delineate the showing that must be made by the party asserting the privilege over particular communications. The district court explicitly noted that there is little guidance on this issue: "[A]lthough I am willing to concede that the government is correct that the burden of proving applicability of the privilege falls on the party asserting it, I have not been able to find, nor apparently Counsel, a great deal that discusses how the burden is satisfied." However, the district court found that the privilege log and accompanying affidavits constituted a sufficient showing by the Corporation that the privilege applied.
Whether the documents in question are protected by the attorney-client privilege is a mixed question of law and fact subject to de novo review. Tornay v. United States, 840 F.2d 1424, 1426 (9th Cir.1988).
"The attorney-client privilege protects confidential disclosures made by a client to an attorney in order to obtain legal advice," In re Grand Jury Subpoenas (Hirsch), 803 F.2d 493, 496 (9th Cir.1986), correction printed 817 F.2d 64 (9th Cir.1987), as well as an attorney's advice in response to such disclosures. In re Fischel, 557 F.2d 209, 211 (9th Cir.1977). To prevent abuse and assure the availability of relevant evidence to the prosecutor, the privilege is limited to "only those disclosures--necessary to obtain informed legal advice--which might not have been made absent the privilege." Fisher v. United States, 425 U.S. 391, 403, 96 S.Ct. 1569, 1577, 48 L.Ed.2d 39 (1976).
The party asserting the attorney-client privilege has the burden of proving that the privilege applies to a given set of documents or communications. In re Grand Jury Subpoenas (Hirsch), 803 F.2d at 496. To meet this burden, a party must demonstrate that its documents adhere to the essential elements of the attorney-client privilege adopted by this court. Fischel To make its prima facie showing that the attorney-client privilege applied to the eleven documents, the Corporation submitted a privilege log and affidavits regarding their confidential nature. The government argues that these are insufficient to fulfill the Corporation's burden. However, in Dole v. Milonas, we found that the privilege log was a means by which a party could protect its confidential communications without frustrating the prosecutor's legitimate inquiries. 889 F.2d at 890. The log submitted by the Corporation provides essentially the same--and in some aspects more--information as the one described in Dole which we found to be sufficient to establish the attorney-client privilege.
557 F.2d at 211. 2 In essence, the party asserting the privilege must make a prima facie showing that the privilege protects the information the party intends to withhold. We have previously recognized a number of means of sufficiently establishing the privilege, one of which is the privilege log approach. Dole v. Milonas, 889 F.2d 885, 888 n. 3, 890 (9th Cir.1989)
In Dole, the log identified (a) the attorney and client involved, (b) the nature of the document, (c) all persons or entities shown on the document to have received or sent the document, (d) all persons or entities known to have been furnished the document or informed of its substance, and (e) the date the document was generated, prepared, or dated. Id. at 888 n. 3. The log submitted by the Corporation in this case fulfilled conditions (a), (b), (c), and (e). Furthermore, the Corporation's privilege log went beyond the Dole standards to provide information on the subject matter of each document. Whatever questions the Corporation's log might leave open with regard to whom the documents were shown or were intended to be shown are answered to our satisfaction by the affidavits of the attorneys responsible for preparing the documents. Therefore, the Corporation has met its burden in demonstrating the applicability of the attorney-client privilege.
It is well settled that the attorney-client privilege does not extend to attorney-client communications which solicit or offer advice for the commission of a crime or fraud. Clark v. United States, 289 U.S. 1, 15, 53 S.Ct. 465, 469, 77 L.Ed. 993 (1933); 8 John H. Wigmore, Evidence § 2298 (McNaughton Rev.1961 and Supp.1991). In United States v. Zolin, 491 U.S. 554, 565, 109 S.Ct. 2619, 2627, 105 L.Ed.2d 469 (1989), the Supreme Court held that in camera review of privileged information may be used to establish whether the crime-fraud exception applies. The Court set forth a two-step analysis for determining whether in camera review is appropriate in a given case. First, there must be a minimal showing that the crime-fraud exception could apply. Id. at 572, 109 S.Ct. at 2631. If this initial hurdle is overcome, then the district court has the discretion to conduct an in camera review. Id.
The government argues that there is a reasonable basis for believing that some of the Corporation's privileged documents or portions thereof may fall within the crime-fraud exception and requests an in camera review of those documents. The government focuses on certain language that the district court used in making its oral decision from the bench. Specifically, the government asserts that the court's refusal to engage in "speculation" and its imprecise phrasing of the Zolin test led to a misapplication of the test.
Whether an evidentiary showing is sufficient to allow in camera review under the Zolin test is a mixed question of law and fact subject to de novo review. See United The district court's exercise of discretion is reviewed for abuse. See United States v. Yarbrough, 852 F.2d 1522, 1545 (9th Cir.1988) (...
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