In re Grand Jury Subpoena No. 2013R00691-009

• Decision Date: 16 August 2016
• Docket Number: DOCKET NO. 3:16-mc-00079-FDW-DCK
• Citation: In re Grand Jury Subpoena No. 2013R00691-009, 201 F.Supp.3d 767 (W.D. N.C. 2016)
• Court: U.S. District Court — Western District of North Carolina
• Parties: IN RE: GRAND JURY SUBPOENA NO. 2013R00691-009

201 F.Supp.3d 767

IN RE: GRAND JURY SUBPOENA NO. 2013R00691-009

DOCKET NO. 3:16-mc-00079-FDW-DCK

United States District Court, W.D. North Carolina, Charlotte Division.

Signed August 16, 2016

ORDER

Frank D. Whitney, Chief United States District Judge

THIS MATTER is before the Court on Movant law firm's Motion to Quash Grand Jury Subpoena 2013R00691-009.¹ (Doc. No. 1). The parties submitted written briefs and oral arguments to the Court, and the matter is ripe for disposition. For the reasons that follow, Movant law firm's Motion to Quash (Doc. No. 1) is DENIED.

I. BACKGROUND

On January 28, 2016, the United States served Grand Jury Subpoena No. 2013R00691-009 upon a law firm ("Movant"). Movant maintains offices in North Carolina, South Carolina, and other locations outside the continental United States. (Doc. No. 1, p. 4). The subpoena sought the production of documents maintained by Movant related to real estate closing transactions relevant to an ongoing investigation. (Doc. No. 6, p. 1). Specifically, the subpoena requested production of "[a]ny and all documents, records, or files maintained by [Movant] regarding the closing of real estate transactions involving the purchase, sale, and/or quitclaim of properties" by and between certain companies and/or individuals. (Doc. No. 6, p. 8). Movant provided dual representation—i.e. to both the buyer(s) and seller(s)—in the subject real estate transactions. (Doc. No. 1, p. 3).

The subpoena initially called for production no later than March 15, 2016, but the United States permitted an extension of the production deadline until April 18, 2016. (Doc. No. 6, p. 1). In the time elapsed between service of the challenged subpoena upon Movant and Movant's filing of the pending motion, counsel for the parties engaged in "numerous and lengthy" discussions to alleviate Movant's concerns regarding production of the subpoenaed documents. Id. Movant's last communication with the United States prior to filing the pending motion indicated that Movant had compiled all responsive documents which would be produced after redaction. Id. However, on April 18, 2016—the production deadline—Movant filed the pending Motion to Quash, arguing that the challenged subpoena "seeks the production of privileged documents and is unreasonable and oppressive." Id. at 2.

Specifically, Movant asserts that the subpoena should be quashed on three general grounds: (1) the requested documents are protected by the attorney-client privilege and/or the work product doctrine; (2) compliance would require the prohibited disclosure of non-public private information; and, (3) the subpoena exceeds the scope of the federal grand jury's investigative authority by requesting documents relating to alleged crimes occurring outside the federal district in which the grand jury sits. (Doc. No. 1, pp. 2-4). On April 25, 2016, the Court conducted a hearing on this matter at which it entered an oral ruling denying Movant's motion. Because of the frequent recurrence of objections to grand jury subpoenas encompassed by the instant motion, however, the Court now memorializes its oral ruling with this published opinion.

II. LEGAL STANDARD

The investigative power of the grand jury is necessarily broad if its public responsibility is to be adequately discharged. Branzburg v. Hayes , 408 U.S. 665, 700, 92 S.Ct. 2646, 33 L.Ed.2d 626 (1972) ; Costello v. United States , 350 U.S. 359, 364, 76 S.Ct. 406, 100 L.Ed. 397 (1956). The United States Supreme Court has summarized the role and importance of the grand jury:

[T]he role of the grand jury as an important instrument of effective law enforcement necessarily includes an investigatory function with respect to determining whether a crime has been committed and who committed it.... When the grand jury is performing its investigatory function into a general problem area ... society's interest is best served by a thorough and extensive investigation. A grand jury investigation is not fully carried out until every available clue has been run down and all witnesses examined in every proper way to find if a crime has been committed.

Branzburg , 408 U.S. at 701–702, 92 S.Ct. 2646 (internal citations omitted). A grand jury's ability to procure information is "widely drawn." United States v. Calandra , 414 U.S. 338, 345, 94 S.Ct. 613, 38 L.Ed.2d 561 (1974). Therefore, courts have historically allowed grand juries considerable latitude when conducting criminal inquiries. See id. at 343, 94 S.Ct. 613. However, a grand jury's subpoena power is obviously not unlimited. Id. at 347, 94 S.Ct. 613. One such limit is the prohibition on a grand jury, itself, violating the assertion of a valid privilege. Id. at 346, 94 S.Ct. 613.

"The attorney-client privilege is the oldest of the privileges for confidential communications known to the common law." Upjohn v. United States , 449 U.S. 383, 389, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981). The Fourth Circuit has adopted the "classic" test for determining the existence of the attorney-client privilege. United States v. Jones , 696 F.2d 1069, 1072 (4th Cir.1982) (per curiam). As employed, application of the privilege requires that:

(1) the asserted holder of the privilege is or sought to become a client; (2) the person to whom the communication was made (a) is a member of the bar of a court, or his subordinate and (b) in connection with this communication is acting as a lawyer; (3) the communication relates to a fact of which the attorney was informed (a) by his client (b) without the presence of strangers (c) for the purpose of securing primarily either (i) an opinion on law or (ii) legal services or (iii) assistance in some legal proceeding, and not (d) for the purpose of committing a crime or tort; and (4) the privilege has been (a) claimed and (b) not waived by the client.

Id. (adopting the test as articulated by United States v. United Shoe Machinery Corp. , 89 F.Supp. 357, 358–59 (Mass.1950) ).

If the privilege applies, confidential communications between lawyer and client are completely protected from disclosure. Hawkins v. Stables , 148 F.3d 379, 383 (4th Cir.1998). However, the attorney-client privilege "is to be narrowly construed" and "recognized ‘only to the very limited extent that ... excluding relevant evidence has a public good transcending the normally predominant principle of utilizing all rational means for ascertaining truth.’ " Id. (quoting Trammel v. United States , 445 U.S. 40, 50, 100 S.Ct. 906, 63 L.Ed.2d 186 (1980) ). This limitation is necessary because of the impediment that the privilege imposes upon the full and free discovery of the truth. See id. As such, when the privilege applies, it does so only to "[c]onfidential disclosures by a client to an attorney made in order to obtain legal assistance." Fisher v. United States , 425 U.S. 391, 403, 96 S.Ct. 1569, 48 L.Ed.2d 39 (1976). "The burden is on the proponent of the attorney-client privilege to demonstrate its applicability." Hawkins , 148 F.3d at 383 (quoting Jones , 696 F.2d at 1072 ).

Distinct from the attorney-client privilege, the work product doctrine belongs to the attorney and confers a qualified privilege on documents prepared by an attorney in anticipation of litigation. Hickman v. Taylor , 329 U.S. 495, 509–14, 67 S.Ct. 385, 91 L.Ed. 451 (1947). Generally, in determining whether a document has been prepared "in anticipation of litigation," most courts look to whether or not the document was prepared because of the prospect of litigation. See Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Murray Sheet Metal Co., Inc. , 967 F.2d 980, 984 (4th Cir.1992). "The prospect of litigation" refers to whether the document's preparer "faces an actual claim or a potential claim." Id. Documents prepared in anticipation of litigation contrast with "materials prepared in the ordinary course of business or pursuant to regulatory requirements or for other non-litigation purposes," the latter of which do not enjoy the protection of work product. Id. As with attorney-client privilege, the party invoking the protection of the work product doctrine bears the burden of demonstrating its applicability. Solis v. Food Employers Labor Ass'n , 644 F.3d 221, 232 (4th Cir.2011).

III. DISCUSSION

Because Movant's second and third arguments, as presented, are most easily dispensed with, the Court will address Movant's objections in reverse order. The Court, therefore, turns first to Movant's "breadth of scope argument."

A. Scope of Grand Jury's Authority

Movant correctly points out that jurisdictional limitations on a grand jury's authority exist. (Doc. No. 1, p. 4). However, Movant then extends this principle to reach the inexplicable and unsupported conclusion that "only those real estate closing files involving conduct occurring within the Western District of North Carolina are properly the subject of any investigation by the grand jury within that District, and therefore subject to subpoena." (Doc. No. 1, p. 4). While Movant appears to have waived or withdrawn this objection at oral argument, the Court will nonetheless address it here.

Grand juries generally enjoy wide latitude in the conduct of their investigations but their jurisdiction is limited to investigate offenses which fall within its venue. See Blair v. United States , 250 U.S. 273, 282-83, 39 S.Ct. 468, 63 L.Ed. 979 (1919); see also Sullivan v. United States , 348 U.S. 170, 184, 75 S.Ct. 182, 99 L.Ed. 210 (1954). However, this jurisdictional limitation does not provide grounds for potential witnesses to challenge their subpoenas because grand juries need not conclusively determine venue as a threshold matter. Blair , 250 U.S. at 282–83, 39 S.Ct. 468. Rather, grand juries "have authority and jurisdiction to investigate the facts in order to determine the question whether the facts show a case within their jurisdiction." Id. at 283, 39 S.Ct. 468. The right of a grand jury to inquire into events occurring in districts outside the one in which it sits is not...