In re: Sealed Case, No. 99-3125

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Writing for the CourtWilliams; Appellant RNC first argues that the case is moot. The theory is that this court lacks, and the district court before it lacked
Citation223 F.3d 775,2000 WL 831827
Parties(D.C. Cir. 2000) In re: Sealed Case
Decision Date14 July 2000
Docket NumberNo. 99-3125

Page 775

223 F.3d 775 (D.C. Cir. 2000)
In re: Sealed Case
No. 99-3125
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 25, 2000
Decided July 14, 2000

Page 776

Appeal from the United States District Court for the District of Columbia(No. 98ms00003)

Before: Williams, Ginsburg and Rogers, Circuit Judges.

Opinion for the Court filed by Circuit Judge Williams.

Williams, Circuit Judge:

A lawyer resisted compliance with a federal grand jury subpoena on grounds of privilege, and the government filed a motion to compel compliance. Finding the documents privileged, the district court reviewed them in camera and found them subject to the crime-fraud exception. Accordingly it ordered them produced. We reverse: the understanding of the federal elections laws supporting application of the crime-fraud exception is erroneous.

* * *

Because this case is under seal we endeavor to provide no more information than is necessary to our disposition. Principles governing the relationships of courts and agencies, however, compel us to address--and, indeed, ultimately defer to--a civil enforcement recommendation issued by the Federal Elections Commission ("FEC") when the matter was before it. See In re RNC, Alec Pointevint, and Haley Barbour, Matter Under Review ("MUR") 4250. We thus divulge facts of the case to the extent they appear in the Statement of Reasons associated with the MUR, Statement of Reasons of Commissioners Wold, Elliott and Mason, MUR

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4250 (Feb. 11, 2000), a document that 11 CFR S 4.4(a)(3) requires be made public. Of course, the subject of this case might theoretically be different from that of the Commission proceeding, but the factual similarity is so obvious that it would be pointless to suppress the actual names.

In May 1993 three officials of the Republican National Committee ("RNC"), including the Chairman Haley Barbour, founded the National Policy Forum ("NPF"), a separately incorporated, not-for-profit think tank. Through September 1994 NPF received loans totaling $2,345,000 from the Republican National State Elections Committee ("RNSEC").RNSEC is a "nonfederal" account of RNC and thus is not a "political committee" for purposes of certain disclosure requirements and contribution rules of the Federal Election Campaign Act of 1971 ("FECA"), 2 U.S.C. § 431 et seq. See, e.g., id. § 433 (registration requirements of political committees), § 434(a)-(b) (reporting requirements of political committees), § 441a(1)-(2) (limitations on contributions to and by political committees).

In September 1994, when NPF still owed RNSEC $2,145,000, Barbour and other NPF and RNC officials arrived at an agreement with Ambrous Young, a foreign national. Young's corporation, Young Brothers Development, Ltd. Hong Kong ("YBD-Hong Kong"), would provide $2,100,000 in collateral through its U.S. subsidiary to secure a loan of that amount from Signet Bank to NPF. On October 17, 1994 Signet disbursed the loan to NPF, and on October 20 NPF used $1,600,000 of the proceeds to repay a portion of the original loan from RNSEC.

The FEC's General Counsel recommended that the Commission find probable cause to believe that RNC and its officials had violated 2 U.S.C. § 441e(a)--a prohibition on receipt of contributions from foreign nationals. The Commission split 3-3, and because a majority of commissioners is required to find probable cause, 2 U.S.C. § 437g(a)(4)(A)(i), the vote precluded Commission enforcement action. In re RNC, Alec Pointevint, and Haley Barbour, MUR 4250. The three commissioners who voted for no-action provided a Statement of Reasons, details of which will follow.

NPF's loan repayment also drew the attention of the Department of Justice, which here rests its crime-fraud exception claim on the theory that the repayment transaction amounted to solicitation and receipt of foreign contributions by the RNC in violation of § 441e(a), and conspiracy by various RNC officials to defraud the United States for failing to disclose the transaction, 18 U.S.C. §§ 371, 1001.

On September 8, 1997 a grand jury subpoenaed the lawyer who had served as general counsel of RNC in the period surrounding the loan repayment. He declined to produce a number of documents that he claimed were subject to the attorney-client and work-product privileges. The government filed a motion to compel compliance, and the RNC intervened to oppose the motion. Finding that the privileges did not attach, the district court ordered the general counsel to produce some of the withheld documents; on appeal by the RNC, this court reversed. In re Sealed Case, 146 F.3d 881, 888 (D.C. Cir. 1998). On remand the district court ordered the documents produced, holding that those privileges, though applicable in the first instance, were subject on the facts here to the crime-fraud exception. Not discussing the alleged "crimes" in detail, the district court said simply that "the evidence shows that the RNC sought the advice of [the general counsel] in an effort to construct the loan guarantee transaction in a manner designed to conceal from the FEC the source of the funds used to acquire the loan," and "to evade federal election campaign laws." Concluding that the government has failed to allege any conduct that is criminal under FECA, we reverse.

Page 778

* * *

Appellant RNC first argues that the case is moot. The theory is that this court lacks, and the district court before it lacked, authority to enforce the subpoena because the grand jury that issued the subpoena had expired before the district court issued its order on September 24, 1999 granting the motion to compel compliance. The RNC relies primarily on the First Circuit's opinion in In re Grand Jury Proceedings (Caucus Distributors, Inc.), 871 F.2d 156, 161 (1st Cir. 1989), in which the court held that the running of civil contempt fines must stop at the expiration of the grand jury under whose aegis the contempt citation was issued, even though a second grand jury pursuing the same matter had been convened.

But whereas in Caucus Distributors the shift in grand juries occurred during the contempt enforcement process, here it occurred before that even started. The analogic force that the Caucus Distributors court drew from the statutory rule that recalcitrant witnesses may not be confined beyond "the term of the grand jury, including extensions, before which such refusal to comply with the court order occurred," 28 U.S.C. § 1826(a)(2); 871 F.2d at 160-61, is plainly absent. Indeed, the First Circuit was explicit that a "subpoena issued by one grand jury may be used to obtain evidence for a second grand jury." Id. at 160. While the court saw the continuous running of fines after expiration of the contempt grand jury as posing difficult questions as to when "an investigation has ceased," id. at 161, such questions, if pertinent at all in this context, impose no comparable risk of ever accumulating penalties for an offense that may have become moot. Finally, the court relied heavily on language in Shillitani v. United States, 384 U.S. 364 (1966); although there the initial grand jury investigation had evidently ceased altogether, with no successor grand jury, the Court had written broadly, seeming to require termination of contempt remedies after any such expiration, regardless of successorship. See id. at 372, cited at 871 F.2d at 161-62.

Appellant has identified no prejudice arising from enforcement of a subpoena where the originally issuing grand jury has expired and another has indisputably carried the investigation forward. A parallel situation was presented in United States v. Kleen Laundry & Cleaners, Inc., 381 F. Supp. 519, 521 (E.D.N.Y. 1974), where the district court upheld enforcement of a subpoena issued by a federal prosecutor in the name of a grand jury that was not sitting at the time but would be sitting on the return date. The court saw no prejudice to the witness and noted that it is "the prosecutor who has the initiative and power by subpoena to bring proof to the courthouse." See id. at 522; see also In re Immunity Order Dated April 21, 1982, 543 F. Supp. 1075, 1078 (S.D.N.Y. 1982). Thus we reject the claims of a lack of power in the district court to enforce the subpoena.

* * *

On the merits, there are slightly different--and here immaterial--differences in the formulation of the test for the crime-fraud exception as applied to the two privileges in question, attorney-client and work-product. To establish the exception to the attorney-client privilege, the court must consider whether the client "made or received the otherwise privileged communication with the intent to further an unlawful or fraudulent act," and establish that the client actually "carried out the crime or fraud." In re Sealed Case, 107 F.3d 46, 49 (D.C. Cir. 1997). To establish the exception to the work-product privilege, courts ask a slightly different question, focusing on the client's general purpose in consulting the lawyer rather than on his intent regarding the particular communication: "Did the client consult the lawyer or use the material for the purpose of committing a crime or fraud? "Id. at 51. Here the application of the crime-fraud exception turns on a pure question of

Page 779

law, which we resolve de novo. United States v. Kim, 23 F.3d 513, 517 (D.C. Cir. 1994).

This case does not fall within the crime-fraud exception because what RNC and its officials are accused of is not criminal. The government alleges that RNC "conspire[d] either to commit an[ ] offense against the United States or to defraud the United States" in violation of 18 U.S.C. § 371.Contrary to the government's assertion that impossibility as a matter of law is not a defense to conspiracy, it clearly is in this...

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  • Citizens for Responsibility & Ethics in Wash. v. Fed. Election Comm'n, Civil Action No. 16-259 (BAH)
    • United States
    • United States District Courts. United States District Court (Columbia)
    • August 3, 2018
    ...applies. See FEC v. Nat'l Republican Senatorial Comm. ("NRSC "), 966 F.2d 1471, 1476 (D.C. Cir. 1992) ; see also In re Sealed Case , 223 F.3d 775, 779 (D.C. Cir. 2000). In cases where the Commission has deadlocked, "to make judicial review a 316 F.Supp.3d 367meaningful exercise, the three C......
  • United States v. Fernandez, Nos. 12–1289
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • June 26, 2013
    ...23 Harv. J. on Legis. 377, 390 (1986); see also United States v. Farner, 251 F.3d 510, 513 n. 2 (5th Cir.2001); In re Sealed Case, 223 F.3d 775, 779 (D.C.Cir.2000). “Pure legal impossibility is always a defense. For example, a hunter cannot be convicted of attempting to shoot a deer if the ......
  • Guedes v. Bureau Of Alcohol, Tobacco, Firearms, No. 19-5042
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • April 1, 2019
    ...of the act are entitled to deference." Id. (citing Babbitt , 515 U.S. at 703–705, 115 S.Ct. 2407 ). And in In re Sealed Case , 223 F.3d 775 (D.C. Cir. 2000), we again declined to forgo Chevron in a criminal context, holding that "[d]eference is due as much in a criminal context as in any ot......
  • Sai v. Transp. Sec. Admin., Civil Action No. 14-403 (RDM)
    • United States
    • United States District Courts. United States District Court (Columbia)
    • May 24, 2018
    ..."Did the client consult the lawyer or use the material for the purpose of committing a crime or fraud?" Id. at 51.In re Sealed Case, 223 F.3d 775, 778 (D.C. Cir. 2000). The D.C. Circuit has, likewise, observed that the deliberative process privilege is a qualified privilege, which "disappea......
  • Request a trial to view additional results
40 cases
  • Citizens for Responsibility & Ethics in Wash. v. Fed. Election Comm'n, Civil Action No. 16-259 (BAH)
    • United States
    • United States District Courts. United States District Court (Columbia)
    • August 3, 2018
    ...applies. See FEC v. Nat'l Republican Senatorial Comm. ("NRSC "), 966 F.2d 1471, 1476 (D.C. Cir. 1992) ; see also In re Sealed Case , 223 F.3d 775, 779 (D.C. Cir. 2000). In cases where the Commission has deadlocked, "to make judicial review a 316 F.Supp.3d 367meaningful exercise, the three C......
  • United States v. Fernandez, Nos. 12–1289
    • United States
    • United States Courts of Appeals. United States Court of Appeals (1st Circuit)
    • June 26, 2013
    ...23 Harv. J. on Legis. 377, 390 (1986); see also United States v. Farner, 251 F.3d 510, 513 n. 2 (5th Cir.2001); In re Sealed Case, 223 F.3d 775, 779 (D.C.Cir.2000). “Pure legal impossibility is always a defense. For example, a hunter cannot be convicted of attempting to shoot a deer if the ......
  • Guedes v. Bureau Of Alcohol, Tobacco, Firearms, No. 19-5042
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • April 1, 2019
    ...of the act are entitled to deference." Id. (citing Babbitt , 515 U.S. at 703–705, 115 S.Ct. 2407 ). And in In re Sealed Case , 223 F.3d 775 (D.C. Cir. 2000), we again declined to forgo Chevron in a criminal context, holding that "[d]eference is due as much in a criminal context as in any ot......
  • Sai v. Transp. Sec. Admin., Civil Action No. 14-403 (RDM)
    • United States
    • United States District Courts. United States District Court (Columbia)
    • May 24, 2018
    ..."Did the client consult the lawyer or use the material for the purpose of committing a crime or fraud?" Id. at 51.In re Sealed Case, 223 F.3d 775, 778 (D.C. Cir. 2000). The D.C. Circuit has, likewise, observed that the deliberative process privilege is a qualified privilege, which "disappea......
  • Request a trial to view additional results

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