Richard Roe, Inc., In re
| Decision Date | 13 October 1995 |
| Docket Number | D,No. 669,669 |
| Parties | 43 Fed. R. Evid. Serv. 175 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. ocket 95-6142. |
| Court | U.S. Court of Appeals — Second Circuit |
David M. Zornow, New York City (Keith D. Krakaur, Lawrence S. Spiegel, Skadden, Arps, Slate, Meagher & Flom, New York City, of counsel) for Respondents-Appellants John Doe, Inc. and John Doe.
Laura A. Brevetti, New York City (Robert A. Culp, of counsel) for Respondents-Appellants Richard Roe, Inc. and Richard Roe.
Sean F. O'Shea, Assistant United States Attorney, Brooklyn, New York (Zachary W. Carter, United States Attorney, Eastern District of New York, David C. James, Lee G. Dunst, Assistant United States Attorneys, of counsel) for Petitioner-Appellee.
Before: WINTER, ALTIMARI, and McLAUGHLIN, Circuit Judges.
This appeal concerns the scope of the so-called "crime-fraud" exception to the attorney-client privilege and attorney work product immunity (collectively "the privileges"). Appellant corporations John Doe, Inc. and Richard Roe, Inc. 1 asserted the privileges with respect to four grand jury subpoenas seeking documents and testimony from the corporations and from attorneys who jointly represented the firms at one time. The government subsequently moved to compel production, arguing that the matters sought fell within the crime-fraud exception to the privileges. Based on an ex parte affidavit submitted by the government, the district court concluded that there was a factual basis to believe that the exception applied and thereafter conducted an in camera inspection of the documents at issue. In a sealed opinion, the court found that
although many [of the documents] may enjoy the privilege claim, [the court was] in no position to say that one or more or all of them may not prove to be relevant evidence of activity in furtherance of contemplated or ongoing criminal or fraudulent conduct in this case. Furthermore, this Court does find that these documents, read collectively, have the real potential of being relevant evidence of activity in furtherance of a crime.
The district court thus held that the documents fell within the crime-fraud exception and issued two orders compelling the production of those documents. The court further ordered that unspecified witnesses, clearly including the corporations' joint attorneys, give virtually unlimited testimony concerning: (i) the documents, (ii) an investigation performed by appellants' counsel, and (iii) opinions rendered by counsel during the time frame of the subpoenaed documents. At a hearing on June 21, 1995, John Doe and Richard Roe, two officers of the corporations, refused to produce the subpoenaed documents and were held in contempt. This expedited appeal followed. Because the district court employed an incorrect test to determine whether the crime-fraud exception applies, we reverse and remand with directions.
The attorney-client privilege is "the oldest of the privileges for confidential communications known to the common law." Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 682, 66 L.Ed.2d 584 (1981). The privilege applies so that
(1) [w]here legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his instance permanently protected (7) from disclosure by himself or the legal adviser, (8) except the protection be waived....
United States v. Kovel, 296 F.2d 918, 921 (2d Cir.1961). The attorney-client privilege is designed to promote unfettered communication between attorneys and their clients so that the attorney may give fully informed legal advice. In re John Doe, Inc., 13 F.3d 633, 635-36 (2d Cir.1994) ("John Doe 1994 "); In re Grand Jury Subpoena Duces Tecum Dated September 15, 1983, 731 F.2d 1032, 1036 (2d Cir.1984) ("Marc Rich "). The protection given to attorney work product serves a similar purpose: "to avoid chilling attorneys in developing materials to aid them in giving legal advice and in preparing a case for trial." In re John Doe Corp., 675 F.2d 482, 492 (2d Cir.1982) ("John Doe 1982 "). See generally Hickman v. Taylor, 329 U.S. 495, 67 S.Ct. 385, 91 L.Ed. 451 (1947).
Nevertheless, "[i]t is well-established that communications that otherwise would be protected by the attorney-client privilege or the attorney work product privilege are not protected if they relate to client communications in furtherance of contemplated or ongoing criminal or fraudulent conduct." Marc Rich, 731 F.2d at 1038 (citations omitted). Although there is a societal interest in enabling clients to get sound legal advice, there is no such interest when the communications or advice are intended to further the commission of a crime or fraud. The crime-fraud exception thus insures that the secrecy protecting the attorney-client relationship does not extend to communications or work product " 'made for the purpose of getting advice for the commission of a fraud' or crime." United States v. Zolin, 491 U.S. 554, 563, 109 S.Ct. 2619, 2626, 105 L.Ed.2d 469 (1989) (quoting O'Rourke v. Darbishire, [1920] A.C. 581, 604 (P.C.)).
We have recently reiterated 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. John Doe 1994, 13 F.3d at 637. In the instant case, the district court, after considering the government's ex parte submission and reviewing the subpoenaed documents in camera, premised its holding that the crime-fraud exception applied on a finding that "these documents, read collectively, have the real potential of being relevant evidence of activity in furtherance of a crime." The government argues that this formulation reflects the proper legal standard. We disagree.
The "relevant evidence" test departs from the correct "in furtherance" test in two respects. First, the crime-fraud exception does not apply simply because privileged communications would provide an adversary with evidence of a crime or fraud. If it did, the privilege would be virtually worthless because a...
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