Grand Jury Matter (Special Grand Jury Narcotics Dec. Term, 1988, Motion to Quash Subpoena), In re

• Decision Date: 01 December 1988
• Citation: 926 F.2d 348
• Parties: , 32 Fed. R. Evid. Serv. 390 In re GRAND JURY MATTER (SPECIAL GRAND JURY NARCOTICS
• Court: U.S. Court of Appeals — Fourth Circuit

Page 348

926 F.2d 348

59 USLW 2574, 32 Fed. R. Evid. Serv. 390

In re GRAND JURY MATTER (SPECIAL GRAND JURY NARCOTICS

DECEMBER TERM, 1988, MOTION TO QUASH SUBPOENA). (Two Cases)

John DOE 1; John Doe 2, Appellants, United States of America, Plaintiff-Appellee, v. UNDER SEAL, Defendant.

In the Matter of, the SEARCH OF A TWO STORY TOWNHOUSE, 2033

EAST BELVEDERE AVENUE, BALTIMORE, MARYLAND 21239,

Defendant. (Two Cases)

John DOE 3, Appellant, United States of America, Plaintiff-Appellee, v. UNDER SEAL, Defendant.

Nos. 90-5339, 90-5340.

United States Court of Appeals, Fourth Circuit.

Argued Jan. 11, 1991.

Decided Feb. 25, 1991.

As Amended March 11, 1991.

Joshua R. Treem, argued (Harry Levy, on brief), Schulman, Treem, Kaminkow & Gilden, P.A., Baltimore, Md., for appellants.

John Francis Purcell, Jr., Asst. U.S. Atty., argued (Breckinridge L. Willcox, U.S. Atty., on brief), Baltimore, Md., for plaintiff-appellee.

Before PHILLIPS and MURNAGHAN, Circuit Judges, and BUTZNER, Senior Circuit Judge.

MURNAGHAN, Circuit Judge:

An attorney and his law firm received a grand jury subpoena requiring the production of documents relating to a client whom they were representing. The district court judge denied their motion to quash the subpoena. They appeal the denial, arguing that the district court erred by denying the motion without a hearing after concluding that the subpoena did not infringe on the sixth amendment right to counsel and the attorney-client privilege. The appellants seek to resurrect In re Special Grand Jury No. 81-1 (Harvey), 676 F.2d 1005 (4th Cir.), vacated, 697 F.2d 112 (4th Cir.1982) (en banc ). As explained below, Harvey lacks precedential value and we now reexamine its reasoning.

I.

For some time, Roland Walker, Esquire, and Walker and VanBavel, P.A., had represented Kenneth Jackson, Jr. In 1989, in connection with a grand jury investigation into Jackson's possible violations of federal tax and racketeering laws, ¹ the attorneys received a grand jury subpoena directing the production of the following documents:

Any and all documents pertaining to all incoming and outgoing payments by or on behalf of Kenneth Jackson, Jr., relative to all legal and personal matters handled by the firm of Walker and VanBavel, P.A. directly, indirectly or through referral from January 1, 1983 to the present.

The attorneys filed a motion to quash the subpoena, accompanied by a thirteen-page memorandum in support of the motion. The government responded with a four-page memorandum.

The district court judge denied the motion without a hearing on February 13, 1990. He stated, "It is well settled that neither the attorney-client privilege nor the Sixth Amendment prohibits the disclosure of information concerning fee arrangements between an attorney and his clients in response to a grand jury subpoena." After Jackson intervened in the case on April 17, 1990, Jackson and his attorneys appealed. ²

The attorneys raise two arguments. First, they insist that the district court had to hold a hearing before deciding whether or not to quash the subpoena. A hearing requirement, according to the attorneys, guards against the dangers incumbent in grand jury subpoenas by forcing a district court judge to explore the relation between the information sought and the attorney-client privilege, to inquire into the documents' contents to determine whether they contain protected information, and to assess the government's purpose and need for the information. Second, the attorneys argue that the subpoena impinged on important interests. Although acknowledging that the attorney-client privilege usually does not protect fee information, the attorneys claim the relevancy and existence of an exception when the information would "implicate the client in the very criminal activity for which legal advice was sought." See In re Grand Jury Investigation (Tinari), 631 F.2d 17, 19 (3d Cir.1980), cert. denied, 449 U.S. 1083, 101 S.Ct. 869, 66 L.Ed.2d 808 (1981). The attorneys also argue that the issuance of subpoenas to attorneys raises the possibility of their withdrawal from representation, and destroys the client's constitutional right to retain counsel of choice.

The government responds by noting that the local rules for the district court state that motions submitted with memoranda are to be decided without a hearing. More importantly, the government contends that the attorneys bore the burden of showing that "the fee and payment information sought by the grand jury subpoena would in fact cause the disclosure of protected confidential communications." The government argues that the Fourth Circuit case suggesting a hearing requirement lacks precedential value in this circuit and was based on a Ninth Circuit case which since has been repudiated by that circuit. According to the government, the attorneys failed to offer specific reasons in their memorandum for quashing the subpoena. With respect to the claimed attorney-client privilege, the government insists that it attaches only when the confidential nature of the documents is at issue, not merely because documents may have the potential to harm the client. The government emphasizes that neither it nor the court construed the subpoena to demand anything more than fee arrangements; no confidential documents were requested. The government also states that, as it suggested to the district court, alternatives existed to the actual appearance of the attorney at the grand jury hearing. The subpoena did not force the client to obtain new counsel, and, therefore, the government concludes that the subpoena did not violate the sixth amendment.

II.

At the outset, we note that appellants base their argument that a hearing must be held to determine whether the government has shown "a purpose, relevance, and an important need" on In re Special Grand Jury No. 81-1 (Harvey), 676 F.2d 1005 (4th Cir.), vacated, 697 F.2d 112 (4th Cir.1982). In Harvey, the court held that the government must show, inter alia, "an important need for the information sought." Id. at 1011. Harvey is but a shaky foundation for the attorneys.

A subsequent Fourth Circuit case has cast doubt upon Harvey. See United States v. Ricks, 776 F.2d 455, 465 (4th Cir.1985), reh'g granted on other grounds, 784 F.2d 544, reh'g, 802 F.2d 731 (4th Cir.), cert. denied, 479 U.S. 1009, 107 S.Ct. 650, 93 L.Ed.2d 705 (1986); see also In re Grand Jury Subpoena Served Upon Doe, 781 F.2d 238, 247 n. 4 (2d Cir.1985), cert. denied, 475 U.S. 1108, 106 S.Ct. 1515, 89 L.Ed.2d 914 (1986) (discussing an unpublished Fourth Circuit opinion addressing Harvey ). Another circuit's opinion, In re Osterhoudt, 722 F.2d 591, 593-95 (9th Cir.1983), has rejected United States v. Hodge and Zweig, 548 F.2d 1347 (9th Cir.1977), the principal support for Harvey. See also In re Grand Jury Subpoenas (Anderson), 906 F.2d 1485, 1495 (10th Cir.1990) (reinterpreting other support for Harvey ).

We believe that the cases correctly have signalled the position the Fourth Circuit should adopt with respect to an automatic hearing requirement. Once vacated, Harvey lost precedential value within this circuit. More importantly, as the other courts have concluded, a grand jury subpoena for fee arrangement information does not create a per se obligation by a district court judge to conduct a hearing. Unless the district court judge decides to hold a hearing, the appellant asserts at least a somewhat compelling basis for the motion, or some exceptional circumstances require a hearing, the district court is not required to hold one. As the dissent in Harvey stated, "If the attorney, like any other grand jury witness, shows that the materials are privileged, or overcomes the grand jury's presumption of regularity, then he is entitled to have the subpoena quashed." 676 F.2d at 1013. Attorneys, like all others, have "the initial task of demonstrating ... some valid objection to compliance." United States v. R. Enterprises, --- U.S. ----, ----, 111 S.Ct. 722, 730, 112 L.Ed.2d 795 (1991) (Stevens, J., concurring); see id. at ----, 111 S.Ct. at 728 (holding that "the burden of showing unreasonableness must be on the recipient who seeks to avoid compliance").

The attorneys offered a thirteen-page memorandum and, as discussed below, did not manage to assert any very convincing reason for their motion to quash. They did not carry their burden in the written memorandum and did not deserve a special hearing merely because of their "attorney" status. The government has agreed that the subpoena only will apply to fee arrangements; the more questionable documents that the attorneys may feel present problems are not at issue. The judge acted within his discretion in deciding not to conduct a hearing prior to refusing to quash the subpoena.

III.

One reason that the attorneys offered in support of their motion to quash was a sixth amendment claim. The argument that serving a subpoena on a client's attorneys violates the sixth amendment has been previously addressed and repudiated. The Fifth and Tenth Circuits have stated that " 'a subpoena served upon counsel during representation of a client ... should be quashed only upon a showing that the subpoena would create actual conflict between the attorney and client.' " In re Grand Jury Subpoena for Attorney Representing Reyes-Requena, 913 F.2d 1118, 1130 (5th Cir.1990) (quoting In re Grand Jury Subpoenas (Anderson), 906 F.2d 1485, 1494 (10th Cir.1990)). The court continued, "Only the showing of actual conflict, rather than mere speculative assertions, may overcome the concrete 'obligation of every person to appear and give his evidence before the grand jury.' " Id. (quoting, United States v. Dionisio, 410 U.S. 1, 9-10, 93 S.Ct. 764, 769-770, 35 L.Ed.2d 67 (1973)).

The Fourth Circuit has adopted a similar approach by refusing to hold that "fee payments [are] ... never ... discoverable by a grand jury so long as there remain[s] a possibility of further...