Grand Jury Proceeding, Matter of, 95-1720
| Citation | 68 F.3d 193 |
| Decision Date | 03 November 1995 |
| Docket Number | No. 95-1720,95-1720 |
| Parties | In the Matter of GRAND JURY PROCEEDING. Appeal of Marty BARTON. |
| Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
Ronald A. Niemann, Jack S. Parker, Chris Daniel (argued), Niemann & Parker, Centralia, IL, for Appellant.
Frank J. Marine (argued), Bond Edward Rhue, United States Department of Justice, Organized Crime and Racketeering Section, Washington, DC, for Appellee.
Before CUMMINGS, ROVNER and DIANE P. WOOD, Circuit Judges.
Barry Short acted as attorney for appellant Marty Barton in relation to federal grand jury subpoenas issued to Barton in 1991. In his 1994 appearance before the grand jury, Short asserted the attorney-client privilege, refusing to answer five questions regarding the production of documents pursuant to the 1991 subpoena. The district court issued an order granting the government's motion to compel Short's testimony. Barton, as holder of the attorney-client privilege and intervenor in the government's motion, seeks review of the district court's order. We affirm.
In 1991, the United States Department of Labor and a federal grand jury sitting in the Southern District of Illinois began investigating an alleged scheme in which certain union members, including Barton, were paid "retainers" by a lawyer, Stephen Tillery, for referring injured union members to the lawyer. Barton, a layman, maintained throughout that he was employed by the attorney's law firm as an expert in the railroad industry to investigate client matters. Nonetheless, a subpoena duces tecum dated June 26, 1991 was issued to Barton in his personal capacity. The subpoena required production of "Any written correspondence or memorandum between [Barton] and any member, associate or employee of [the law firm], pertaining to any services [Barton] provided to the firm, its members, associates or employees and its clients." Barton moved to quash the subpoena on the grounds that he was the subject of a grand jury investigation and that the Fifth Amendment privilege protected him from producing the documents.
A second subpoena duces tecum was issued to Barton on August 1, 1991, but this time in his capacity as General Chairman of the United Transportation Union. The subpoena sought "Any correspondence sent and prepared by [Barton] in your capacity as General Chairman or Local Chairman, to union members regarding Stephen Tillery" and "Any correspondence received by [Barton] in your capacity as General Chairman or Local Chairman, from Stephen Tillery [and two other members of the law firm]." Barton, through his attorney Short, submitted documents Bates-stamped 1 through 35 in response to the second subpoena on August 16.
The district court on April 23, 1992 granted Barton Doe immunity, see United States v. Doe, 465 U.S. 605, 104 S.Ct. 1237, 79 L.Ed.2d 552, for "the act of producing" documents pursuant to the first subpoena and ordered Barton to produce the documents. Barton, again through Short, delivered numerous documents to the government on May 20. The documents produced included the same documents Bates-stamped 1 through 35 produced under the second subpoena and additional documents stamped 36 through 48.
On July 22, the grand jury returned two indictments, including one against Barton and others for interstate travel in aid of racketeering, mail fraud, and conspiracy. During the trial, the district court relied on the Doe immunity to deny the government's motion to admit some of the memoranda produced by Barton as false exculpatory evidence. Barton was acquitted on all counts except two, on which the jury was hung. Thereafter, the grand jury initiated an investigation to determine in part whether the documents, Bates-stamped 1 through 48, concerning Barton's alleged investigative work with the law firm were false and fraudulent.
After the testimony of two witnesses before the grand jury cast at least some doubt on the authenticity of Barton's documents, Short was called to testify. Short was questioned regarding the production of documents under the two subpoenas; he refused to answer five of the questions based on the attorney-client privilege:
Q. For the purpose of either of those subpoenas did you yourself conduct a search?
A. I did not.
Q. Did you direct someone else to do so?
A. I did.
1. Q. Whom did you direct?
A. * * * I respectfully decline to answer that question because it would call on me to violate attorney/client privileges put upon me by the State of Missouri.
Q. Did those documents eventually come into your hands?
A. Yes.
2. Q. From whom did you get them?
A. I respectfully decline to answer on the basis of attorney/client privilege.
* * * * * *
3. Q. * * * Did [the person who supplied the documents to you] understand they were given in response to a subpoena?
A. * * * I respectfully decline to answer that based on attorney/client privilege, conversations he had with me.
4. Q. Did that person understand you were to forward them to the Grand Jury in response to a subpoena?
A. Once again I have to respectfully decline to answer that question.
5. Q. Did you tell your client, Mr. Barton, you were going to convey them to the government pursuant to Grand Jury subpoena?
A. Once again I have to respectfully decline to answer based on attorney/client privilege.
Subsequently, the government moved to compel Short's testimony. Barton was allowed to intervene in the matter, and both he and Short submitted memoranda opposing the motion. The district court granted the motion in a written order dated March 7, 1995. The court found that questions 1, 2, and 5 were not covered by the attorney-client privilege, relying principally on In re Feldberg, 862 F.2d 622 (7th Cir.1988). According to Chief Judge Mihm, the privilege may have covered the answers to questions 3 and 4, but because Barton and Short failed to request an in camera hearing, the court was forced to assume the answers were not privileged. Alternatively, the court held that the government made a prima facie showing under the crime-fraud exception to the attorney-client privilege. The district court also stayed enforcement of the order compelling testimony pending this appeal.
We have jurisdiction under 28 U.S.C. Sec. 1291 to hear an appeal from an order rejecting the assertion of the attorney-client privilege by an attorney and compelling the attorney to testify before the grand jury. Perlman v. United States, 247 U.S. 7, 38 S.Ct. 417, 62 L.Ed. 950; United States v. Davis, 1 F.3d 606 (7th Cir.1993).
Barton principally argues on appeal that Feldberg, relied upon by the district court, is distinguishable from the case at bar. We disagree and find that Feldberg is controlling. Because we hold that the attorney-client privilege does not cover all five questions asked of Short, we need not address Barton's second argument that the district court improperly found a prima facie case under the crime-fraud exception.
Feldberg, supra, presented this Court with a situation comparable to the instant case. Feldberg was the attorney for World Sports and its president. Both were subjects of a grand jury investigation of amateur athlete contracts. A subpoena was issued for the production of all contracts between World Sports and college football players. Feldberg turned over 51 such contracts to the grand jury; when the grand jury made a further request, Feldberg produced seven additional contracts. The additional contracts, which were dated subsequent to the initial production by Feldberg, revealed that World Sports was engaged in a fraudulent post-dating scheme to affect the eligibility of college players. The grand jury, suspecting obstruction of justice, wanted to know why the seven additional contracts were not originally produced in response to the subpoena. The grand jury called Feldberg to testify. When Feldberg asserted the attorney-client privilege in response to questions about the production of documents, the district court ordered Feldberg to answer. World Sports and its president intervened and appealed the order. At issue was the application of the attorney-client privilege to eight questions:
1. Did you direct someone else to [conduct a search of the files for purposes of gathering the information responsive to this subpoena]?
2. How did you come to [the] understanding [that the 51 names were a complete list of the players under contract]?
3. And to the best of your recollection, what was said [when the president of World Sports talked with Feldberg after receiving the subpoena]?
4. Did you have a conversation with anyone affiliated with World Sports Entertainment in which you...
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