Grand Jury Proceedings, In re, No. 79-1481

CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)
Writing for the CourtBefore HUNTER, WEIS and GARTH; WEIS
Citation604 F.2d 798
Parties, 9 Envtl. L. Rep. 20,553, 4 Fed. R. Evid. Serv. 1330 In re GRAND JURY PROCEEDINGS. Appeal of FMC CORPORATION, Douglas E. Kliever and Cleary, Gottlieb, Steen & Hamilton.
Docket NumberNo. 79-1481
Decision Date18 July 1979

Page 798

604 F.2d 798
13 ERC 1519, 9 Envtl. L. Rep. 20,553,
4 Fed. R. Evid. Serv. 1330
In re GRAND JURY PROCEEDINGS.
Appeal of FMC CORPORATION, Douglas E. Kliever and Cleary,
Gottlieb, Steen & Hamilton.
No. 79-1481.
United States Court of Appeals,
Third Circuit.
Argued June 8, 1979.
Decided July 18, 1979.

Page 799

Thomas A. Bergstrom (argued), Philadelphia, Pa., for appellant FMC corp.

James D. Crawford (argued), Joseph A. Tate, Schnader, Harrison, Segal & Lewis, Philadelphia, Pa., for Douglas E. Kliever and Cleary, Gottlieb, Steen & Hamilton.

Peter F. Vaira, U. S. Atty., Walter S. Batty, Jr. (argued), Asst. U. S. Atty., Chief, Appellate Div., William B. Lytton (argued), Asst. U. S. Atty., Jane Barrett McEvoy, Paul Laskow, Sp. Asst. U. S. Attys., Philadelphia, Pa., for appellee.

Before HUNTER, WEIS and GARTH, Circuit Judges.

OPINION OF THE COURT

WEIS, Circuit Judge.

The crime-fraud exception to the attorney-client privilege permits the disclosure of otherwise protected material. In this case, the district court applied the same rule of disclosure to documents covered by the work product privilege. Finding that the government had presented a prima facie case to support the allegation of the commission of a crime, the district court ordered counsel for the corporate client to produce the documents for a grand jury's inspection. We agree with the court's reasoning but remand for a more specific factual determination as to when the alleged crime occurred.

In 1977, a grand jury sitting in Philadelphia began an investigation into allegations that FMC Corporation had made false statements to the Environmental Protection Agency (EPA) in connection with the discharge of carbon tetrachloride into the Kanawha River in West Virginia. No indictments

Page 800

were returned by that grand jury but a new one was convened in January, 1979. It issued subpoenas Duces tecum and Ad testificandum to Douglas Kliever, an attorney and partner in the firm of Cleary, Gottlieb, Steen & Hamilton, which had been retained by FMC. The firm represented FMC in its negotiations with the EPA bearing on pollution problems in the Kanawha River near South Charleston, West Virginia, the site of the corporation's carbon tetrachloride manufacturing facilities.

Kliever produced a number of the subpoenaed documents for the grand jury but asserted the attorney-client and work product privileges as to 31 of them. The government filed a motion to compel production of the withheld documents, to which FMC and Kliever responded. Although FMC did not file a formal petition, it was treated as an intervenor by the district court. The documents were submitted to the district judge for his review In camera, and he heard an ex parte In camera presentation by the government. Following these proceedings, the court directed that all of the documents be produced. In his bench opinion, the district judge assumed for purposes of his ruling that the attorney-client privilege had been properly claimed by FMC. He denied the use of the privilege, however, because the government had "presented prima facie evidence that a crime has been committed by FMC personnel."

The district judge expressed some doubts about the applicability of the work product privilege because the documents were prepared in anticipation of civil matters rather than the grand jury investigations. 1 Assuming that issue in favor of the appellants, the court nonetheless ruled that the work product privilege could not be recognized because of the crime-fraud exception, and because the government had "made a showing of substantial need" for the documents. Both FMC and Kliever promptly filed appeals and petitioned this court for a stay of the order directing Kliever to testify, asserting that the attorney would not disobey the district court nor would FMC ask him to do so. We granted the stay, and consolidated this appeal with two others growing out of the same grand jury investigation. 2

I.

We turn first to the question of appealability and the standing of the parties to raise certain privileges. Mr. Kliever has not been adjudged in contempt and thus comes within the ambit of United States v. Ryan, 402 U.S. 530, 91 S.Ct. 1580, 29 L.Ed.2d 85 (1971), and Cobbledick v. United States,309 U.S. 323, 60 S.Ct. 540, 84 L.Ed. 783 (1940). Those cases hold that unless and until a witness has been held in contempt, he has no standing to appeal from an order directing him to testify or produce documents before a grand jury. The policy, though at times a harsh one, was formulated to discourage appeals in all but the most serious cases. Indeed, in this instance the candid representation by Mr. Kliever that he would not disobey the court order is an example of the prudential considerations underlying the rule. We conclude, therefore, that we have no jurisdiction to consider the appeal on Mr. Kliever's behalf.

FMC, however, stands in a different posture because it has not been subpoenaed to produce the documents and therefore would not be held in contempt were they not produced. The company contends that it comes within the exception to the Cobbledick rule applicable to the owner of a privilege or property who may appeal a production order as an intervenor. As we said in In re Grand Jury Proceedings (Cianfrani), 563 F.2d 577, 580 (3d Cir. 1977), "(r)easoning pragmatically that a witness will not usually

Page 801

undergo the penalties of contempt in order to preserve someone else's privilege, the courts permit appeal by an intervenor without the necessity of a sentence for contempt." See United States v. Nixon, 418 U.S. 683, 691, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974); Perlman v. United States, 247 U.S. 7, 15, 38 S.Ct. 417, 62 L.Ed. 950 (1918); Velsicol Chemical Corp. v. Parsons, 561 F.2d 671, 673-74 (7th Cir. 1977), Cert. denied, 435 U.S. 942, 98 S.Ct. 1521, 55 L.Ed.2d 538 (1978); In re Grand Jury Empanelled January 21, 1975 (Freedman), 541 F.2d 373, 377 (3d Cir. 1976); United States v. Doe, 455 F.2d 753, 756- 57 (1st Cir.), Vacated and remanded sub nom., Gravel v. United States, 408 U.S. 606, 92 S.Ct. 2614, 33 L.Ed.2d 583 (1972). See generally National Super Spuds, Inc. v. New York Mercantile Exchange, 591 F.2d 174, 176-81 (2d Cir. 1979). 3

FMC appeals as the nonsubpoenaed holder of the attorney-client privilege and asserts a right to raise the work product privilege as well. It is clear that the attorney-client privilege is one that is owned by the client, Garner v. Wolfinbarger, 430 F.2d 1093, 1096 n.7 (5th Cir. 1970), Cert. denied, 401 U.S. 974, 91 S.Ct. 1191, 28 L.Ed.2d 323 (1971); Tillotson v. Boughner, 350 F.2d 663, 665 (7th Cir. 1965), and that he has standing to appeal an order directed to his attorney that affects the privilege. Velsicol Chemical Corp. v. Parsons, supra at 674. We thus conclude that the court has jurisdiction to entertain this appeal.

Although FMC owns the attorney-client privilege, its entitlement to the work product privilege is not as clear. We discussed the work product doctrine in In re Grand Jury Investigation (Sun Co.), 599 F.2d 1224 (3d Cir. 1979), noting its...

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203 practice notes
  • Grand Jury, In re, No. 79-2221
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • April 17, 1980
    ...to recognize the distinction between the Perlman and the Alexander-Cobbledick-Ryan rule. E.g. In re Grand Jury Proceedings (FMC I), 604 F.2d 798, 800 (3d Cir. 1979) (order denying client's application to quash grand jury subpoena to attorney is final); United States v. RMI Co. (N.L. Industr......
  • Grand Jury, In re, Nos. 97-7016
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • April 25, 1997
    ...to appeal denial of motion to quash subpoena); District Council 33, 770 F.2d at 39 (same); In re Grand Jury Proceedings (FMC Corp.), 604 F.2d 798, 801 (3d Cir.1979) (allowing nonsubpoenaed client to intervene and appeal order directed to subpoenaed attorney that affected attorney-client pri......
  • Ford Motor Co., In re, Nos. 96-2092
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • May 2, 1997
    ...litigation, not necessarily in anticipation of the particular litigation in which it is being sought. See In re Grand Jury Proceedings, 604 F.2d 798, 803 (3d Cir.1979) (holding that the work product doctrine will protect material prepared in anticipation of civil proceedings from discovery ......
  • Baylson v. Disciplinary Bd. of Supreme Court of Pa., Civ. A. No. 89-5264.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • April 22, 1991
    ...logic of their principles." In re Grand Jury Investigation (Sun Co.), 599 F.2d at 1235. Accord In re Grand Jury Proceedings (FMC Corp.), 604 F.2d 798, 802-03 (3d Cir.1979); In re Grand Jury Investigation, 557 F.Supp. 1053, 1055 Of more immediate concern, if the district courts have adopted ......
  • Request a trial to view additional results
202 cases
  • Grand Jury, In re, No. 79-2221
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • April 17, 1980
    ...to recognize the distinction between the Perlman and the Alexander-Cobbledick-Ryan rule. E.g. In re Grand Jury Proceedings (FMC I), 604 F.2d 798, 800 (3d Cir. 1979) (order denying client's application to quash grand jury subpoena to attorney is final); United States v. RMI Co. (N.L. Industr......
  • Grand Jury, In re, Nos. 97-7016
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • April 25, 1997
    ...to appeal denial of motion to quash subpoena); District Council 33, 770 F.2d at 39 (same); In re Grand Jury Proceedings (FMC Corp.), 604 F.2d 798, 801 (3d Cir.1979) (allowing nonsubpoenaed client to intervene and appeal order directed to subpoenaed attorney that affected attorney-client pri......
  • Ford Motor Co., In re, Nos. 96-2092
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • May 2, 1997
    ...litigation, not necessarily in anticipation of the particular litigation in which it is being sought. See In re Grand Jury Proceedings, 604 F.2d 798, 803 (3d Cir.1979) (holding that the work product doctrine will protect material prepared in anticipation of civil proceedings from discovery ......
  • Baylson v. Disciplinary Bd. of Supreme Court of Pa., Civ. A. No. 89-5264.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • April 22, 1991
    ...logic of their principles." In re Grand Jury Investigation (Sun Co.), 599 F.2d at 1235. Accord In re Grand Jury Proceedings (FMC Corp.), 604 F.2d 798, 802-03 (3d Cir.1979); In re Grand Jury Investigation, 557 F.Supp. 1053, 1055 Of more immediate concern, if the district courts have adopted ......
  • Request a trial to view additional results
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