Grand Jury Proceedings, In re, No. 81-3019

CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)
Writing for the CourtBefore CHARLES CLARK, REAVLEY and WILLIAMS; REAVLEY
Citation641 F.2d 199
Parties8 Fed. R. Evid. Serv. 137 In re GRAND JURY PROCEEDINGS IN the MATTER OF Jeffrey FINE. Appeal of UNNAMED GRAND JURY TARGET. Summary Calendar. . Unit A
Docket NumberNo. 81-3019
Decision Date20 March 1981

Page 199

641 F.2d 199
8 Fed. R. Evid. Serv. 137
In re GRAND JURY PROCEEDINGS IN the MATTER OF Jeffrey FINE.
Appeal of UNNAMED GRAND JURY TARGET.
No. 81-3019
Summary Calendar.
United States Court of Appeals,
Fifth Circuit.
Unit A
March 20, 1981.

Page 200

Richard M. Gale, Michael A. Masin, Miami, Fla., for appellant.

John Volz, U. S. Atty., Patrick Fanning, Asst. U. S. Atty., New Orleans, La., for United States.

Julian R. Murray, Jr., New Orleans, La., for Fine.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before CHARLES CLARK, REAVLEY and WILLIAMS, Circuit Judges.

REAVLEY, Circuit Judge:

The United States sought an order from the district court to compel grand jury testimony from attorney Jeffrey Fine. An unnamed client of Fine's, a target of the grand jury investigation, intervened in the proceedings to prevent Fine from being forced to reveal the client's name. The district court granted the motion to compel, and the unnamed target appealed from that order. We vacate the order and remand for further proceedings.

I. The Background Facts

This appeal grows out of the government's efforts to ascertain the ownership of a motor vessel known as the NORDAKRUM, which was used to smuggle between 50 and 75 tons of marijuana into Louisiana in June 1979. The ship was found, scuttled and burning, off the Louisiana coast. The registered owner of the NORDAKRUM is an offshore corporation by the name of Labol Investments (Labol). Labol was formed by a parent company known as Curacao International Trust Company (Curacao), a Netherland Antilles corporation. Curacao apparently is in the business of forming and servicing private offshore corporations, and is not a subject of this investigation. Curacao formed Labol at the request

Page 201

of attorney Jeffrey Fine, acting on behalf of the unnamed client, the appellant in this case and a main target of the grand jury investigation. Mr. Fine testified that he instituted the formation of Labol and had no professional duties relating to the purchase of the NORDAKRUM or its subsequent uses. Curacao's records indicate Labol has been entirely dormant since its formation.

Independent government investigation established that the NORDAKRUM had been previously purchased from a Florida yacht dealer for $250,000 cash. The dealer accepted the cash in a suitcase at a restaurant from a person who gave a name that later proved to be fictitious. The unknown purchaser instructed the yacht dealer to have the NORDAKRUM registered in the name of Labol, and the dealer implemented those instructions. This shady transaction occurred about six months after Labol had been formed in the Netherland Antilles. The yacht dealer apparently is not under further investigation, and the government claims to be at a virtual dead end in its efforts to find out who owned the NORDAKRUM and dictated its movements in June 1979 except, of course, for the information that Fine has about the formation of Labol.

Fine was called as a witness before a grand jury impanelled in October 1979, but he refused to reveal the name of the client at whose request Labol was formed. On July 2, 1980, the government filed a motion to compel testimony, but hearings were not held until December 1980 and January 1981. On January 14, 1981, Fine's unnamed client filed a motion to intervene and a motion to quash service of the subpoena on Fine. The district court granted the motion to intervene and then required the government to make a prima facie showing that Fine could not invoke the attorney-client privilege because the professional relationship was intended to further a criminal enterprise. The government relied upon the short amount of time that elapsed between the formation of Labol and the purchase of the NORDAKRUM, as well as the suspicious events surrounding the purchase itself, to show that the formation of Labol was part and parcel of a criminal enterprise that eventuated in the use of the NORDAKRUM to smuggle marijuana. The district court accepted this as an adequate prima facie showing and granted the motion to compel Fine's testimony.

The unnamed client then filed a notice of appeal of this order, as well as petitions for a writ of mandamus or a writ of prohibition. We imposed a stay upon the order of the district court pending further action. We have earlier denied the petitions for writs of mandamus or prohibition 1 because such writs are reserved for only the most extraordinary cases, or where the error of the district court is clear and indisputable. Miller v. Connally, 354 F.2d 206 (5th Cir.1965). Neither standard was met in this case. But we now face an appeal, which need not meet such an exacting standard if the order of the district court is itself appealable. Accordingly, we turn first to that jurisdictional question.

II. Appealability of the Order

The general rule is that an order compelling testimony or denying a motion to quash a subpoena is not appealable, based on the reasoning that the expedient administration of criminal justice is best served by putting the person who seeks to resist the subpoena to a choice between compliance or first litigating his claims in contempt proceedings. If the party chooses to risk contempt, the contempt citation is immediately appealable and thus provides an opportunity for appellate review of the district court order. United States v. Ryan, 402 U.S. 530, 533, 91 S.Ct. 1580, 1582, 29 L.Ed.2d 85 (1971).

The Supreme Court has recognized that this reasoning does not hold as firmly when the subpoenaed party is one who has no direct and personal interest in the suppression of the information desired by the grand jury. Such a party would be unlikely to risk a contempt citation in order to allow

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immediate review of the district court order compelling testimony that will injure only a third party. Perlman v. United States, 247 U.S. 7, 38 S.Ct. 417, 62 L.Ed. 950 (1918). In such circumstances, the order of the district court is considered final as to the injured third party who is otherwise powerless to prevent the revelation. Id. at 13, 38 S.Ct. at 419.

The Perlman exception to the general rule was confirmed in United States v. Nixon, 418 U.S. 683, 691, 94 S.Ct. 3090, 3099, 41 L.Ed.2d 1039 (1974), and has been followed by at least four Courts of Appeals. See, e.g., In Re Berkley and Company, Inc., 629 F.2d 548, 550-52 (8th Cir.1980); In Re Matter of Grand Jury Applicants, 619 F.2d 1022, 1024-26 (3rd Cir.1980); In Re Grand Jury Investigation of Ocean Transportation, 604 F.2d 672, 673-74 (D.C.Cir.), cert. denied, 444 U.S. 915, 100 S.Ct. 229, 62 L.Ed.2d 169 (1979); 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...

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69 practice notes
  • International Horizons, Inc., Matter of, No. 82-8024
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • October 21, 1982
    ...a privilege of non-disclosure relating to materials that another party has been directed to produce. See In re Grand Jury Proceedings, 641 F.2d 199, 202 (5th Page 1002 Cir. 1981) (party claiming attorney-client privilege may appeal from order compelling his attorney to disclose allegedly co......
  • In re Grand Jury ABC Corp., Nos. 12–1697
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • July 19, 2012
    ...R. 1.6(6) & cmt. 13 (2010); Pa. Rules of Prof'l Conduct R. 1.6 & cmt. 19 (2011); see also In re Grand Jury Proceedings in Matter of Fine, 641 F.2d 199, 202 (5th Cir.1981) (stating that an attorney may ethically reveal client confidences pursuant to a court order). Because the District Court......
  • In re Grand Jury, Nos. 12–1697
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • December 11, 2012
    ...R. 1.6(6) & cmt. 13 (2010); Pa. Rules of Prof'l Conduct R. 1.6 cmt. 19 (2012); see also In re Grand Jury Proceedings in Matter of Fine, 641 F.2d 199, 202 (5th Cir.1981) (stating that an attorney may ethically reveal client confidences pursuant to a court order). Because the District Court's......
  • Grand Jury Subpoena Served Upon Doe, In re, No. 638
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • July 16, 1985
    ...grand jury indicted target and he became fugitive, 697 F.2d 112 (4th Cir.1982) (en banc); In re Grand Jury Proceedings (Jeffrey Fine), 641 F.2d 199 (5th Cir.1981); In re Grand Jury Proceedings (Gary Katz), 623 F.2d 122 (2d Cir.1980); In re November 1979 Grand Jury, 616 F.2d 1021 (7th Cir.19......
  • Request a trial to view additional results
69 cases
  • International Horizons, Inc., Matter of, No. 82-8024
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • October 21, 1982
    ...a privilege of non-disclosure relating to materials that another party has been directed to produce. See In re Grand Jury Proceedings, 641 F.2d 199, 202 (5th Page 1002 Cir. 1981) (party claiming attorney-client privilege may appeal from order compelling his attorney to disclose allegedly co......
  • In re Grand Jury ABC Corp., Nos. 12–1697
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • July 19, 2012
    ...R. 1.6(6) & cmt. 13 (2010); Pa. Rules of Prof'l Conduct R. 1.6 & cmt. 19 (2011); see also In re Grand Jury Proceedings in Matter of Fine, 641 F.2d 199, 202 (5th Cir.1981) (stating that an attorney may ethically reveal client confidences pursuant to a court order). Because the District Court......
  • In re Grand Jury, Nos. 12–1697
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • December 11, 2012
    ...R. 1.6(6) & cmt. 13 (2010); Pa. Rules of Prof'l Conduct R. 1.6 cmt. 19 (2012); see also In re Grand Jury Proceedings in Matter of Fine, 641 F.2d 199, 202 (5th Cir.1981) (stating that an attorney may ethically reveal client confidences pursuant to a court order). Because the District Court's......
  • Grand Jury Subpoena Served Upon Doe, In re, No. 638
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • July 16, 1985
    ...grand jury indicted target and he became fugitive, 697 F.2d 112 (4th Cir.1982) (en banc); In re Grand Jury Proceedings (Jeffrey Fine), 641 F.2d 199 (5th Cir.1981); In re Grand Jury Proceedings (Gary Katz), 623 F.2d 122 (2d Cir.1980); In re November 1979 Grand Jury, 616 F.2d 1021 (7th Cir.19......
  • Request a trial to view additional results

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