Grand Jury Subpoena 92-1(SJ), In re
| Decision Date | 28 July 1994 |
| Docket Number | No. 93-10537,93-10537 |
| Citation | 31 F.3d 826 |
| Parties | , 40 Fed. R. Evid. Serv. 1456 In re GRAND JURY SUBPOENA 92-1(SJ). Appeal of the CORPORATION. 1 |
| Court | U.S. Court of Appeals — Ninth Circuit |
Richard G. Seeborg, Asst. U.S. Atty., San Jose, CA, for appellees.
Appeal from the United States District Court for the Northern District of California.
Before: WALLACE, Chief Judge, CHOY, Circuit Judge, and McGOVERN, * Senior District Judge.
Opinion by Senior District Judge McGOVERN.
The Corporation appeals the district court's denial of its motion to quash a grand jury subpoena served on its corporate counsel. The Corporation also challenges the district court's order to submit the subpoenaed documents for in camera review to establish whether they fall within the crime-fraud exception to the attorney-client privilege. This case presents a novel issue in applying United States v. Zolin, 491 U.S. 554, 109 S.Ct. 2619, 105 L.Ed.2d 469 (1989): In determining whether a party requesting in camera inspection has made a sufficient threshold showing under the crime-fraud exception, must a district court consider countervailing evidence presented by the party asserting the privilege?
For over two years, the Corporation has been the focus of a federal grand jury investigation of potential export control violations. The Corporation manufactures and exports global positioning systems (GPS) units. These units, which receive and process satellite signals, may be used for both civilian and military purposes.
In February 1988, the Corporation asked its corporate counsel for assistance in obtaining export licenses to ship GPS units to Iran and to the United Arab Emirates (UAE). The Department of Commerce issued the export license for the UAE on April 24, 1989, but did not issue the license for Iran until March 28, 1990. The government alleges that, prior to the March 28, 1990 date, the Corporation illegally exported GPS units to Iran via a front company in the United Arab Emirates (UAE).
The government served a subpoena duces tecum on the Corporation's counsel on July 31, 1992. The subpoena requested all documents generated between January 1, 1988 and July 15, 1991 in relation to the Corporation's allegedly illegal exports. The Corporation moved to intervene, and both the Corporation and its counsel invoked the attorney-client privilege and moved to quash the subpoena. The government opposed the motions to quash, arguing that the subpoenaed documents fell within the crime-fraud exception to the attorney-client privilege.
After a hearing, the district court granted the Corporation's unopposed motion to intervene but denied its motion to quash. Citing United States v. Zolin, 491 U.S. 554, 572, 109 S.Ct. 2619, 2630-31, 105 L.Ed.2d 469 (1989) (quotation omitted), the district court found the government's affidavit sufficient "to support a good faith belief by a reasonable person that in camera review of the materials may reveal evidence to establish the claim that the crime-fraud exception applies." The court therefore ordered the Corporation's counsel to submit the subpoenaed documents for in camera review. The Corporation timely appeals.
The district court had subject matter jurisdiction of this federal grand jury proceeding We review de novo "[w]hether an evidentiary showing is sufficient to allow in camera inspection under the Zolin test." In re Grand Jury Investigation, 974 F.2d 1068, 1071 (9th Cir.1992). If the requisite evidentiary showing is made, we review the district court's decision to allow inspection for abuse of discretion and cannot reverse absent a "definite and firm conviction that the district court committed a clear error of judgment." Id. at 1072. The district court's decision regarding the scope of in camera review of privileged documents is a mixed question of law and fact reviewed de novo. See id. at 1071; In re Grand Jury Subpoenas Dated Dec. 10, 1987, 926 F.2d at 858-59 ().
under 18 U.S.C. Sec. 3231 and Federal Rule of Criminal Procedure 17(c). Where, as here, a subpoena is directed to a third party who cannot be expected to risk contempt in order to protect the interests of the persons whose papers are to be seized, the district court's order denying the motion to quash the subpoena is a final order appealable to this Court under 28 U.S.C. Sec. 1291. In re Grand Jury Subpoenas Dated Dec. 10, 1987, 926 F.2d 847, 852-53 (9th Cir.1991); see Perlman v. United States, 247 U.S. 7, 13, 38 S.Ct. 417, 419-20, 62 L.Ed. 950 (1918).
On appeal, the Corporation contends that the district court misapplied the Zolin test in determining that the government had made a sufficient crime-fraud showing to allow in camera review. The Corporation also argues that the district court erred by ordering in camera review of documents created after the completion of its alleged criminal activities.
The attorney-client privilege protects confidential communications between a client seeking legal advice and an attorney providing such advice. In re Grand Jury Investigation, 974 F.2d at 1070. However, the privilege does not extend to "communications which solicit or offer advice for the commission of a crime or fraud." Id. at 1071.
In Zolin, 491 U.S. at 565, 109 S.Ct. at 2627, the Supreme Court held that a district court may, in appropriate circumstances, conduct in camera review of privileged documents to assess whether they fall within this crime-fraud exception. Noting that in camera review "is a smaller intrusion upon the confidentiality of the attorney-client relationship than is public disclosure," the Zolin Court concluded that the evidentiary showing necessary to trigger in camera review "need not be a stringent one." Id. at 572, 109 S.Ct. at 2631 (emphasis added).
Zolin requires a district court to conduct a two-step analysis. First, the court must " 'require a showing of a factual basis adequate to support a good faith belief by a reasonable person,' that in camera review of the materials may reveal evidence to establish the claim that the crime-fraud exception applies." Id. at 572, 109 S.Ct. at 2631 (citing Caldwell v. District Court, 644 P.2d 26, 33 (Colo.1982)). Once this threshold showing is made, the court must make a discretionary decision whether to order in camera review
in light of the facts and circumstances of the particular case, including, among other things, the volume of the materials the district court has been asked to review, the relative importance to the case of the alleged privileged information, and the likelihood that the evidence produced through in camera review, together with other available evidence then before the court, will establish that the crime-fraud exception does apply.
Zolin, 491 U.S. at 572, 109 S.Ct. at 2631 (emphasis added).
The Corporation urges us to find that a district court must consider "other available evidence," in addition to that presented by the party requesting review, at both steps of the Zolin analysis. However, the first step of the analysis should focus only on evidence presented by the party seeking in camera review. Cf. Haines v. Ligget Group, 975 F.2d 81, 96 (3d Cir.1992) ("For in camera inspection, it would be sufficient In the second step of the Zolin analysis, when the district court considers whether to exercise its discretion to conduct in camera review, it may consider "other available evidence then before the court." Zolin, 491 U.S. at 572, 109 S.Ct. at 2631. Although it is clearly proper for a court to entertain such evidence at the second step of the analysis, Zolin does not require that the court undertake such an examination.
for the district court, in its discretion, to consider only the presentation made by the party challenging the privilege."). In In re Grand Jury Investigation, we observed that "an evidentiary threshold must first be met by the party requesting review before the district court may exercise its discretion." 974 F.2d at 1072 (emphasis added). Even so, the burden on the requesting party is "relatively minimal." Id. We require only "[a] showing sufficient to establish a reasonable belief...To continue reading
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