In re Subpoena

• Decision Date: 01 November 2011
• Docket Number: No. 10–2048.,10–2048.
• Citation: 662 F.3d 65
• Parties: In re GRAND JURY SUBPOENA (MR. S.).
• Court: U.S. Court of Appeals — First Circuit

662 F.3d 65

In re GRAND JURY SUBPOENA (MR. S.).

No. 10–2048.

United States Court of Appeals, First Circuit.

Heard Sept. 13, 2011.Decided Nov. 1, 2011.

Robert C. Andrews, with whom Robert C. Andrews Esquire P.C. was on brief, for appellant.

Renée M. Bunker, Assistant United States Attorney, with whom Thomas E. Delahanty II, United States Attorney, was on brief, for appellee.

Before HOWARD, RIPPLE ^* and SELYA, Circuit Judges.SELYA, Circuit Judge.

This appeal challenges the district court's refusal to quash a grand jury subpoena. It poses questions about the attorney-client and Fifth Amendment privileges. After careful consideration, we affirm.

I. BACKGROUND

We begin with a brief account of the relevant facts. To preserve the confidentiality of grand jury proceedings, see Fed.R.Crim.P. 6(e), we use pseudonyms in place of the real names of the protagonists.

On August 24, 2009, a federal grand jury in the District of Maine directed a subpoena to the custodian of records at the Doe Law Office, commanding production of:

Any and all records relating to the purchase of real property by [Mr. S.] from [Mr. and Mrs. X] on November 20, 2007, that was facilitated by [Attorney Doe's Law Office and Title Company,] including, but not limited to, real estate HUD statements, closing statement, sales contract(s) and record of payment, particularly the source and type of funds used (cash, personal check, bank checks, etc.) to purchase the property by [Mr. S.] and/or any other person.

Attorney Doe contacted Mr. S. to verify that he did not object to production of the subpoenaed documents. Having secured Mr. S.'s verbal consent, Doe complied with the subpoena and produced the documents.¹

Within a matter of days, Mr. S. had second thoughts. He retained separate counsel, who notified the United States Attorney's Office (USAO) that the documents were privileged. By that time, however, the documents had been inspected by a USAO paralegal. To maintain the status quo pending a determination of the claim of privilege, the USAO placed them under seal.

In due course, Mr. S. moved to quash the subpoena. See Fed.R.Crim.P. 17(c)(2). He principally argued that the subpoenaed documents were protected by the attorney-client privilege. In support, he noted that Doe is licensed to practice law and professes to have special expertise in real estate transactions; that he sought Doe's legal services in connection with the real estate transaction identified in the subpoena; and that Doe represented him in that transaction, billed him for services rendered, and “used his client trust account” while performing those services. He added that Doe employed the term “Esquire” when signing “documents and correspondence.”

As a fallback, Mr. S. also argued that if the subpoenaed documents had been in his possession, the act of production would have been testimonial and, thus, protected by a Fifth Amendment privilege. Therefore, he insisted, the government could not compel Doe to produce those documents over his objection.

The government opposed the motion to quash. It asserted that neither the attorney-client privilege nor the Fifth Amendment privilege applied. In addition, it submitted the documents that Doe had delivered for in camera review.

In his reply, Mr. S. took a new slant. He cited Fisher v. United States, 425 U.S. 391, 96 S.Ct. 1569, 48 L.Ed.2d 39 (1976), for the proposition that a combination of the attorney-client and Fifth Amendment privileges blocked any compelled disclosure of the subpoenaed documents.

The district court referred the motion to a magistrate judge. See 28 U.S.C. § 636(b). The magistrate judge examined the documents in camera and determined that no privilege attached. Specifically, the magistrate judge found that nothing in the subpoenaed documents “reflect[ed] the seeking or provision of legal advice” and that those documents “lack a confidential nature.” Accordingly, he denied the motion to quash.²

After some backing and filling not relevant here, Mr. S. lodged objections to the magistrate judge's order. The district court independently examined the documents in camera and reviewed the legal issues posed by Mr. S.'s objections. It then summarily affirmed the magistrate judge's order. This timely appeal followed.

When evaluating a privilege determination, the standard of review varies according to the nature of the precise issue involved. See In re Keeper of the Records (Grand Jury Subpoena Addressed to XYZ Corp.), 348 F.3d 16, 21 (1st Cir.2003). Rulings on questions of law are reviewed de novo, findings of fact are reviewed for clear error, and evidentiary determinations are reviewed for abuse of discretion. Id.

II. ANALYSIS

It is an ancient platitude that a grand jury has a right to every man's evidence. Yet this right is not absolute. For present purposes, three examples have potential pertinence.

First, an individual may invoke the attorney-client privilege to avoid the production of documents that are the fruits of confidential communications between him and his attorney. Miss. Pub. Emps.' Ret. Sys. v. Bos. Scientific Corp., 649 F.3d 5, 30 (1st Cir.2011). Second, an individual may assert the Fifth Amendment to prevent the compelled production of documents in his possession if the act of production is both testimonial and self-incriminating. See Fisher, 425 U.S. at 408, 96 S.Ct. 1569. Third, if an individual possesses documents that are privileged from compelled disclosure under the Fifth Amendment and transfers them to his counsel in order to obtain legal advice, those documents are protected under the attorney-client privilege. Id. at 402–05, 96 S.Ct. 1569 (explaining that in such a situation, “the papers, if unobtainable by summons from the client, are unobtainable by summons directed to the attorney”).

In this venue, Mr. S. argues that the subpoenaed documents are protected from compelled divulgement by the attorney-client and Fifth Amendment privileges, severally and in combination. He also advances a claim of procedural error. We start there.

A. In Camera Review.

Prior to ruling on the motion to quash, the district court reviewed the subpoenaed documents in camera and determined that they were not privileged. While Mr. S. does not directly dispute the findings derived from this review, he asserts that it was error for the court to conduct an in camera review before the government had produced sufficient evidence to support a reasonable belief that the documents were evidence of a crime or fraud. Mr. S.'s assertion is triply flawed.

First, it is not necessary to resort to the crime-fraud exception to the attorney-client privilege, until the privilege itself has been attached. The burden of showing that documents are privileged rests with the party asserting the privilege. See In re Keeper of the Records, 348 F.3d at 22. Mr. S.'s position constitutes a thinly veiled effort to turn this principle inside out and shift that burden to the government.

Second, Mr. S.'s position represents a disingenuous attempt to graft onto this case the facts and holding of United States v. Zolin, 491 U.S. 554, 109 S.Ct. 2619, 105 L.Ed.2d 469 (1989). In Zolin, the Court considered the crime-fraud exception to the attorney-client privilege (the lower courts had found that the privilege was established). Id. at 563–64, 109 S.Ct. 2619. The Court held, among other things, that when a party seeks to invoke the crime-fraud exception, a modest evidentiary threshold must be crossed before a judge may conduct an in camera review. Id. at 570–72, 109 S.Ct. 2619. To be specific, the party must make a factual showing “sufficient to support a reasonable belief that in camera review may yield evidence that establishes the [crime-fraud] exception's applicability.” Id. at 574–75, 109 S.Ct. 2619.

Seizing upon this holding, Mr. S. argues that the district court was not entitled to inspect the documents because there is no evidence indicating that the crime-fraud exception applies. That argument is off-point because the crime-fraud exception is not implicated in this case. Rather, the government asserts that the essential elements of the attorney-client privilege itself are lacking. Zolin is, therefore, inapposite.

Third, and most important, the very purpose of conducting an in camera review is to determine which, if any, of a group of documents are privileged. Given this prudential purpose, in camera reviews should be encouraged, not discouraged. In that spirit, federal courts commonly—and appropriately—conduct such reviews to determine whether particular documents are or are not privileged. See id. at 569, 109 S.Ct. 2619 (noting that the Court “has approved the practice of requiring parties who seek to avoid disclosure of documents to make the documents available for in camera inspection, and th[is] practice is well established in the federal courts” (internal citations omitted)); cf. In re Grand Jury Subpoenas, 123 F.3d 695, 699–700 (1st Cir.1997) (remanding for failure to conduct an in camera review).

When, as in this case, the assertion of privilege is subject to legitimate dispute, the desirability of in camera review is heightened. See United States v. Smith, 123 F.3d 140, 151 (3d Cir.1997). Even if the parties do not explicitly request such a step, a district court may be well advised to conduct an in camera review. The court below acted wisely and within the scope of its discretion in doing so.

B. Attorney–Client Privilege.

Mr. S. next argues that the district court erred in allocating the burden of proof vis-á-vis his claim of attorney-client privilege. He says that the court required him to establish, by a preponderance of the evidence, that the subpoenaed documents fell within the ambit of the privilege and that this was too heavy a burden because he should only have been required to make a prima facie showing.

The proper quantum of proof in a situation of this kind is fairly debatable. In this case, however, the absence of any...