In re Grand Jury Matter #3, 15-2475

CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)
Writing for the CourtMcKEE, Judge.
Citation841 F.3d 177
Parties IN RE: GRAND JURY MATTER #3 John Doe, Appellant
Docket NumberNo. 15-2475,15-2475
Decision Date28 October 2016

841 F.3d 177


John Doe, Appellant

No. 15-2475

United States Court of Appeals, Third Circuit.

Argued: January 12, 2016
Opinion filed: October 28, 2016

McKEE, Judge.

Company A, John Doe 1, John Doe 1's lawyer, and John Doe 2 are the subjects of an ongoing grand jury investigation into an allegedly fraudulent business scheme.2 John Doe 1 brought this appeal after the government obtained access to an email he claimed was privileged. Before presenting the email in question to the grand jury, the government asked the district court for permission to do so. The district court granted permission, finding that although the email was protected by the work product privilege, the crime-fraud exception to that doctrine applied. John Doe 1 then filed an interlocutory appeal, requesting that our Court reverse the district court's order.

On January 12, 2016, when we heard oral argument in this case, the grand jury had not yet issued any indictments. However, while this appeal was still pending, the district court permitted the grand jury to view the email in question. On March 31, 2016, the grand jury returned a seventeen-count indictment, charging John Doe

841 F.3d 180

1, John Doe 1's lawyer, and John Doe 2 with conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act, conspiracy, mail fraud, wire fraud, and money laundering. For the reasons that follow, we hold that we do not have jurisdiction to hear the present appeal.


A. John Doe 1, John Doe 2, and Company A

Company A, John Doe 1, and John Doe 2 were subjects of an ongoing grand jury investigation that sought to determine whether they and others undertook fraudulent business transactions in order to launder money and settle lawsuits under false pretenses. Company A was incorporated in Florida in 2008. John Doe 1 was the president and the "sole proprietor" of that company.3 Nonetheless, a November 2008 document purports to memorialize John Doe 1's sale of one hundred percent of the shares of Company A to a corporation we will call Company B for $10,000. John Doe 2 is the sole owner of Company B. Following this purchase agreement, John Doe 1 claims that John Doe 2 engaged John Doe 1 and his associates to be responsible for Company A's day-to-day operations. However, numerous filings and tax documents suggested that John Doe 1 maintained control and ownership of Company A even after Company A was purportedly transferred.

Since at least 2000, multiple individuals have sued John Doe 1 and his businesses in state courts around the country based on John Doe 1's business practices. One such lawsuit was a class action filed against Company A in Indiana state court. In this class action, the plaintiffs alleged that Company A's business practices violated various Indiana state laws. They sought to hold John Doe 1 accountable for these violations. However, during this litigation, John Doe 1 averred in a deposition that he had transferred ownership of Company A to Company B. John Doe 2 then represented that Company A was no longer in business and had limited assets. Shortly after John Doe 1's deposition, the Indiana plaintiffs settled their lawsuit for approximately $260,000, about ten percent of the value that attorneys for the plaintiffs had put on the lawsuit.

B. District Court Grand Jury Proceedings & Interlocutory Appeal

Thereafter, the government empaneled a grand jury to investigate John Does 1 and 2. In the course of this investigation, a grand jury subpoena was sent to John Doe 1's accountant requesting that he provide the government with John Doe 1's personal and corporate tax returns. Among other things, these tax documents revealed that John Doe 1 had claimed one hundred percent ownership of Company A every tax year from 2008 through 2012. The accountant also told an IRS agent that, at some point in 2013, John Doe 1's lawyer informed him that John Doe 1 had sold Company A to John Doe 2 in 2008. He also informed investigators that he might have taken notes on this conversation. The government requested those notes, and the accountant's attorney sent the government three documents.

One of these documents was an email John Doe 1 had sent to the accountant on July 16, 2013, forwarding an email that John Doe 1's lawyer had sent to John Doe 1 four days earlier. The contents of this email could be read to incriminate John Doe 1, John Doe 1's lawyer, and John Doe 2. The email instructs John Doe 1 of the steps he should take to correct his records

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so that they reflect that John Doe 2, not John Doe 1, owned Company A since 2008. When John Doe 1 forwarded this email to his accountant, he simply wrote: "Please see the seventh paragraph down re; my tax returns. Then we can discuss this." Thus, the email can be interpreted as evidence of John Does 1 and 2's fraudulent scheme.

The day after the accountant provided this email to the government, the accountant's attorney sought to recall it on the ground that it was privileged and had been inadvertently included in his client's production. The accountant's counsel, however, also told the government that his client believed the email was asking the accountant to perform an accounting service, not a legal service. The government argued that under such circumstances, John Doe 1 waived any privilege that might have otherwise attached to his lawyer's email. Nonetheless, based on this dispute, the government temporarily refrained from presenting the email to the grand jury. Instead, the government moved for permission to show the email on January 23, 2015. John Doe 1 opposed this motion.

The district court ruled that the government could present the email to the grand jury on June 1, 2015. As the district court explained in its memorandum opinion, John Doe 1 did not forward this email to his accountant to seek legal advice or obtain such advice. Accordingly, his forwarding of the email destroyed the attorney-client privilege attached to this document. Nevertheless, the district court did find that the work-product privilege attached to the email because the accountant could not be considered an adversary. The court then concluded that the crime-fraud exception to the work-product privilege applied. On this basis, the court permitted the government to present the email to the grand jury.

Immediately after the district court handed down its decision, John Doe 1 filed an interlocutory appeal, requesting that we reverse this order. We heard oral argument on January 12, 2016. While the appeal to our Court was pending, however, the grand jury returned a seventeen-count indictment charging John Doe 1, his lawyer, and John Doe 2, with conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act, conspiracy, mail fraud, wire fraud, and money laundering.

After this indictment, we requested supplemental briefing from the parties on whether this appeal was moot in light of the indictment. We also asked the government to inform us whether the grand jury had been discharged.

In response, the government explained that the grand jury had been discharged shortly after it returned the indictment. However, the government also informed us that a new grand jury has been empaneled and is investigating new charges against John Doe 1 and others. The government is also considering a superseding indictment. The government has informed us that if it seeks a superseding indictment from the newly empaneled grand jury, it will present the disputed email to the grand jury in support of charges that would be contained in the superseding indictment. Accordingly, both John Doe 1 and the government agree that the appeal is not moot due to the continuing investigation.

Nonetheless, the government now contends that we lack jurisdiction over this appeal under In re Grand Jury Proceedings, 632 F.2d 1033 (3d Cir. 1980). John Doe disagrees. For the following reasons, we agree with the government and hold that we lack jurisdiction over this appeal.


This appeal presents a complicated and novel procedural fact pattern, which complicates

841 F.3d 182

the issue of our jurisdiction. Nonetheless, as we shall explain, we conclude that we lack jurisdiction over this appeal.4 This conclusion is guided, in part, by the decisions of our sister circuits, which have dealt with cases more analogous to the present appeal.

A. The Finality Rule

"[T]he right to a judgment from more than one court is a matter of grace and not a necessary ingredient of justice."5 Congress has determined that courts of appeals shall only have jurisdiction over "final decisions" of the district courts.6 As our Court has acknowledged, two attributes ordinarily define a final decision. "`First, the decision will fully resolve all claims presented to the district court. Second, after the decision has been issued, there will be nothing further for the district court to do.'"7 Thus, "[w]hen a district court orders a witness — whether a party to an underlying litigation, a subject or target of a grand jury investigation, or a complete stranger to the proceedings — to testify or produce documents, its order generally is not considered an immediately appealable final decision under § 1291."8 Therefore, disclosure orders are generally not final and cannot normally be challenged by an immediate, i.e. interlocutory, appeal.

Three considerations generally justify this finality requirement. First, the finality rule "helps preserve the respect due trial judges."9 "Permitting piecemeal appeals would undermine the independence of the district judge, as well as the special role [they] play[ ] in our judicial system."10 Second, this requirement "minimizes a party's opportunities to defeat the valid claims of his opponents through an endless barrage of appeals."11 As Justice Frankfurter once explained, the finality rule "avoid[s] the obstruction to just claims that would come from permitting the harassment and cost of a succession of separate...

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