Grand Jury Proceeding (Schofield), In re

• Decision Date: 13 December 1983
• Docket Number: Nos. 83-1743,83-1748,s. 83-1743
• Citation: 721 F.2d 1221
• Parties: 14 Fed. R. Evid. Serv. 964 In re GRAND JURY PROCEEDING. Stephen W. SCHOFIELD and North Shore Porsche and Volkswagen Repair, Intervenors/Appellants/Cross Appellees, v. UNITED STATES of America, Appellee/Cross Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1221

721 F.2d 1221

14 Fed. R. Evid. Serv. 964

In re GRAND JURY PROCEEDING Stephen W. SCHOFIELD and North Shore Porsche and Volkswagen Repair, Intervenors/Appellants/Cross Appellees, v. UNITED STATES of America, Appellee/Cross Appellant.

Nos. 83-1743, 83-1748.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Oct. 6, 1983.

Decided Dec. 13, 1983.

Paul A. Tomar, Honolulu, Hawaii, for intervenors/appellants/cross appellees.

Michael Chun, Asst. U.S. Atty., Honolulu, Hawaii, for appellee/cross appellant.

Appeal from the United States District Court for the District of Hawaii.

Before CHAMBERS, SNEED and ANDERSON, Circuit Judges.

J. BLAINE ANDERSON, Circuit Judge:

The district court granted in part and denied in part attorney Robert J. LeClair's motion to quash a grand jury subpoena. Intervenors Stephen W. Schofield and North Shore Porsche and Volkswagen Repair appeal, arguing that a preliminary showing of need and relevance must be made by the government before a subpoena duces tecum will be enforced against the prior attorney of a subject of grand jury investigation. The United States appeals, urging that the district court erred when it required this preliminary showing as to fees and expenses paid by Schofield to a prior attorney. That part of the district court's decision denying the motion to quash is affirmed, and that part of the decision granting the motion to quash is reversed and remanded.

I. BACKGROUND

Robert J. LeClair was served with a subpoena duces tecum requiring his appearance at a grand jury hearing. The subpoena directed him to testify and bring "any records or documents pertaining to any financial transaction with STEPHEN W. SCHOFIELD and/or NORTH SHORE PORSCHE AND VOLKSWAGEN REPAIR" during a particular time period. Although Schofield and North Shore (hereinafter together referred to as Schofield) had retained LeClair as their attorney during the time specified in the subpoena, at the time of the grand jury investigation he was no longer in their employ.

LeClair filed a motion to extend time for compliance with the subpoena and to quash in part. The extension was granted. Schofield subsequently filed a petition to intervene. This petition was also granted. Following filing of memoranda by both parties, the district court granted the motion to quash to the extent that it related to fees and expenses paid to LeClair by Schofield. To obtain this information, the government would be required to make a preliminary showing, by affidavit, of legitimate need and relevance. The motion to quash was, in all other respects, denied.

Immediate appeal is proper because the subpoena was directed to a third party. In re Grand Jury Subpoena Duces Tecum (Lahodny), 695 F.2d 363, 365 (9th Cir.1982).

II. DISCUSSION

In the instant matter, the district court determined that before a grand jury subpoena duces tecum could be enforced against the prior attorney of the target of a grand jury investigation, the government would be required to make a preliminary showing of legitimate need and relevance. ¹ The district court believed that this showing, to be made by affidavit, was necessary to assist it in determining whether the attorney-client privilege applied to the subpoenaed testimony and documents regarding fees and expenses paid to the attorney by the target. Based on the law of this circuit, we disagree.

The general principles applicable to the attorney-client privilege in this circuit are well settled. The privilege protects only those confidential communications made by a client to an attorney in order to obtain legal assistance. Fisher v. United States, 425 U.S. 391, 403, 96 S.Ct. 1569, 1577, 48 L.Ed.2d 39 (1976). It extends to the client's ulterior motive for litigation or retention of an attorney. In re Grand Jury Witness (Salas), 695 F.2d 359, 362 (9th Cir.1982). "The purpose of the privilege is to protect and foster the client's freedom of expression. It is not to permit an attorney to conduct his client's business affairs in secret." Matter of Fischel, 557 F.2d 209, 211 (9th Cir.1977).

The existence of an attorney-client relationship, or the fee arrangement between an attorney and his client, is generally not privileged or protected by the privilege. In re Michaelson, 511 F.2d 882, 888 (9th Cir.1975). This general rule is subject to what has been characterized as the Baird exception: "A client's identity and the nature of that client's fee arrangements may be privileged where the person invoking the privilege can show that a strong probability exists that disclosure of such information would implicate that client in the very criminal activity for which legal advice was sought." United States v. Hodge and Zweig, 548 F.2d 1347, 1353 (9th Cir.1977) (citing Baird v. Koerner, 279 F.2d 623, 630 (9th Cir.1960)).

Initially, the party seeking information must demonstrate a legitimate interest in the requested information. Hodge and Zweig, 548 F.2d at 1354. No affidavit of relevance and need must be introduced; legitimate purpose may be derived from the fact that the subpoena is necessary to a legitimate pursuit and the presumption that the government obeys the law. See id. at 1355; In re Grand Jury Proceedings (Hergenroed...