Richard Roe, Inc., In re, Docket No. 95-6142

• Decision Date: 03 February 1999
• Docket Number: Docket No. 95-6142
• Citation: 168 F.3d 69
• Parties: In re RICHARD ROE, INC., and John Doe, Inc. United States of America, Petitioner-Appellee, v. Richard Roe, Inc.; Richard Roe; John Doe, Inc.; and John Doe, Respondents-Appellants.
• Court: U.S. Court of Appeals — Second Circuit

Page 69

168 F.3d 69

43 Fed.R.Serv.3d 585

In re RICHARD ROE, INC., and John Doe, Inc.

United States of America, Petitioner-Appellee, v. Richard Roe, Inc.; Richard Roe; John Doe, Inc.; and John

Doe, Respondents-Appellants.

Docket No. 95-6142

United States Court of Appeals, Second Circuit.

Submitted Dec. 12, 1997.

Decided Feb. 3, 1999.

Alan B. Vickery, Assistant United States Attorney for the Eastern District of New York, Brooklyn, New York (Zachary W. Carter, United States Attorney; Peter A. Norling and Lee G. Dunst, Assistant United States Attorneys, of counsel), for Petitioner-Appellee.

Laura A. Brevetti, New York, New York (Robert A. Culp, of counsel), for Respondents-Appellants Richard Roe, Inc. and Richard Roe.

Andrew L. Frey, Mayer, Brown & Platt, New York, New York (Charles Rothfeld, of counsel; David M. Zornow and Lawrence S. Spiegel, Skadden, Arps, Slate, Meagher & Flom, of counsel), for Respondents-Appellants John Doe, Inc. and John Doe.

Before: WINTER, Chief Judge, JACOBS, and CABRANES, Circuit Judges. ^*

WINTER, Chief Judge:

This appeal from a civil contempt order concerns whether certain documents relating to a major piece of civil litigation fall within the "crime-fraud" exception to attorney-client privilege and attorney work product immunity. This case is before us for a second time, following Chief Judge Sifton's order that 175 otherwise privileged documents be produced by appellants and by ruling that one document was not privileged. He also held that the government could compel the authors and recipients of these documents to testify as witnesses before the grand jury. Because the documents in question were not "in furtherance of a crime or fraud," we reverse.

The pre-1995 facts concerning this appeal are recounted in our earlier decision, see In re Richard Roe, Inc., 68 F.3d 38, 39 (2d Cir.1995) ("Roe I "), familiarity with which is assumed. In Roe I, we reversed Judge Platt's production order, holding that he applied the incorrect legal test determining whether the crime-fraud exception applied to the documents at issue. Roe I held that "a party seeking to invoke the crime-fraud exception must at least demonstrate that there is probable cause to believe that a crime or fraud has been attempted or committed and that the communications were in furtherance thereof." Id. at 40 (citing In re John Doe, Inc., 13 F.3d 633, 637 (2d Cir.1994)); see also United States v. Jacobs, 117 F.3d 82, 87 (2d Cir.1997). We remanded the case with instructions to

determine which, if any, of the documents or communications were in furtherance of a crime or fraud.... If production is ordered, the court shall specify the factual basis for the crime or fraud that the documents or communications are deemed to have furthered, which of the parties asserting claims of privilege possessed a criminal or fraudulent purpose with respect to those documents or communications, and, if appropriate, whether the crime-fraud exception applies to an innocent joint privilege-holder.

Roe I, 68 F.3d at 41.

Following the remand, Judge Platt recused himself, and the case was reassigned to Chief Judge Sifton. After performing an in camera review of grand jury testimony, the documents, and other material, the court, in an opinion filed under seal, held that 175 of the documents were subject to discovery based upon the crime-fraud exception. The district court found probable cause to believe that violations of the federal mail fraud statute, 18 U.S.C. § 1341, and the federal perjury statute 18 U.S.C. § 1621, had occurred and that the communications in those documents furthered or concealed the fraud. It also found that Document 195 was not privileged. Finally, it rejected the argument that because Richard Roe, Inc. is an innocent joint privilege-holder, the crime-fraud exception does not apply.

Appellants and the government have filed their briefs on this appeal ex parte. Appellants have provided the documents to us for in camera inspection. As a result, the government does not know the contents of the documents, and appellants must speculate as to the nature of the government's legal theories regarding the crimes being considered by the grand jury. As a further result, there are three versions of this opinion: the published version available to all; a sealed version available only to the government; and another sealed version available only to the appellants. The various versions indicate where materials included in sealed versions have been redacted.

Appellants contend that the district court erred in its finding that either prong of the crime-fraud exception was satisfied and in holding that the crime-fraud exception can apply to an innocent joint privilege-holder. Because we hold that the district court's conclusion that the documents were in furtherance of a crime or fraud is erroneous, we therefore need not and do not address the other issues raised.

In Roe I, we rejected a test for the crime-fraud exception that examined only whether the material sought might provide evidence of a crime or fraud, i.e., a "relevant evidence" test. See Roe I, 68 F.3d at 40-41. Instead, we required that there be (i) a determination that "the client communication or attorney work product in question was itself in furtherance of the crime or fraud" and (ii) "probable cause to believe that the particular communication with counsel or attorney work product was intended in some way to facilitate or to conceal the criminal activity." Id. at 40 (emphasis added); see also Jacobs, 117 F.3d at 88 (" 'To subject the attorney-client communications to disclosure, they must actually have been made with an intent to further an unlawful act.' " (quoting United States v. White, 887 F.2d 267, 271 (D.C.Cir.1989) (Ruth Bader Ginsburg, J.))).

In that opinion, we also stated that the precise factual basis of the alleged fraud in the instant matter was "unclear." Roe I, 68 F.3d at 41. The government has now elucidated its theory for us. Without commenting on its validity, we can say that, insofar as is pertinent to the present proceeding, that theory views the act of defending the lawsuit in question as itself being in furtherance of a fraud.

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The government's theory would collapse the two-part test for the crime-fraud exception established in Roe I. See id. at 40. If (as the government argues) there is probable cause that a fraud has been committed that consists, at least partially, of engaging in litigation, then probable cause would arguably exist to find that every document prepared in connection with the defense of that litigation was in furtherance of the fraud and thus not privileged.

Given that the attorney-client privilege and work product immunity play a critical role in our judicial system, see United States v. Zolin, 491 U.S. 554, 562, 109 S.Ct. 2619, 105 L.Ed.2d 469 (1989); Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981); Hickman v. Taylor, 329 U.S. 495, 510-11, 67 S.Ct. 385, 91 L.Ed. 451 (1947); In re John Doe Corp., 675 F.2d 482, 492 (2d Cir.1982), the limited exceptions to them, see, e.g., Jaco...