Sealed Case, In re

• Decision Date: 19 June 1998
• Docket Number: No. 98-3032,98-3032
• Parties: , 49 Fed. R. Evid. Serv. 467 In re: SEALED CASE.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 881

146 F.3d 881

330 U.S.App.D.C. 368, 49 Fed. R. Evid. Serv. 467

In re: SEALED CASE.

No. 98-3032.

United States Court of Appeals, District of Columbia Circuit.

Argued May 11, 1998.

Decided June 19, 1998.

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

Before: HENDERSON, ROGERS and TATEL, Circuit Judges.

TATEL, Circuit Judge:

Directed by a grand jury subpoena to produce notes and other written materials prepared in connection with work for a client, a lawyer claimed that the attorney work-product privilege protected the materials from disclosure. The district court, finding that a "specific claim" had not arisen at the time the lawyer prepared the documents, held the privilege inapplicable. Because the workproduct privilege in this case turns not on whether a specific claim existed, but instead on whether, under all the circumstances, the lawyer prepared the materials "in anticipation of litigation," we reverse and remand.

I

Shortly after the Chairman of the Republican National Committee founded a non-profit think tank called the National Policy Forum, the RNC loaned the newly formed organization over $2.5 million. From the beginning, critics closely scrutinized the relationship between the two organizations. A Washington Post editorial argued that the NPF should "be subject to the usual laws on contributions and disclosures." Who Paid for Those Ideas?, WASH. POST , Oct. 1, 1993, at A24. According to the editorial, the watchdog group Common Cause was "looking into" whether the NPF " 'violat[ed] ... the campaign laws and whether it should be challenged.' " " Id. (quoting Common Cause's president).

Acting through the Justice Department's Campaign Financing Task Force, the government alleges that in the summer of 1994, the RNC Chairman arranged to have funds transferred from a Hong Kong company through an American subsidiary to an American bank to serve as collateral for a loan the bank made to the NPF. From the proceeds of the loan, the NPF then paid the RNC $1.6 million. In connection with this transaction, the RNC consulted a lawyer who, according to the lawyer's affidavit, prepared, made notes on, and edited documents "in anticipation of possible litigation."

In August 1995, the Democratic National Committee filed a complaint with the Federal Election Commission alleging that the RNC's relationship with the NPF violated the Federal Election Campaign Act, 2 U.S.C. §§ 431-455 (1994). Although nothing in the record tells us what, if anything, the FEC did with this complaint, two years later a federal grand jury issued a subpoena directing the lawyer to produce memoranda, correspondence, notes, and other written materials relating to the 1994 loan transaction. Producing over 140 documents, some of which were redacted, the lawyer withheld ninety-five pages, claiming they were protected by either the attorney-client or the work-product privilege. After the government moved to compel, the RNC filed a motion to intervene, which the district court granted.

In a Memorandum Opinion and Order issued on March 10, 1998--and sealed to protect the lawyer's identity, see In re Motions of Dow Jones & Co., 142 F.3d 496, 504, 505 (D.C.Cir. 1998) (noting that grand jury secrecy rules protect the identity of grand jury witnesses)--the district court ruled that the work-product privilege protected none of the documents prepared by the lawyer prior to the filing of the DNC's August 1995 complaint. The district court found that neither the lawyer nor the RNC had "articulate[d] any specific claim the RNC could have been facing at the time of the loan transaction" or "explain[ed] with any particularity how the loan transaction could have led to litigation." In re Grand Jury No. 95-3, No. 98-003, at 7 (D.D.C. Mar. 10, 1998). For documents prepared after the filing of the DNC complaint, the court ruled that the privilege applied, but that since the government can obtain access to factual information contained in even protected documents by demonstrating substantial need and an inability to obtain the materials elsewhere, and finding that such a showing had been made here, the court would review the documents in camera to determine whether they contain only factual information, or instead represent opinions, judgments, and thought processes of counsel. Id. at 8.

The RNC appealed, and we granted its motion to stay pending appeal. Although parties ordinarily may not immediately appeal discovery orders, but must instead disobey and then appeal a subsequent contempt order, see In re Kessler, 100 F.3d 1015, 1016 (D.C.Cir.1996), the RNC may proceed under the Perlman doctrine, which authorizes parties immediately to appeal discovery orders addressed to disinterested third parties, see Perlman v. United States, 247 U.S. 7, 13-15, 38 S.Ct. 417, 62 L.Ed. 950 (1918). The Perlman doctrine applies here because the lawyer swore in an affidavit an intention to produce the documents rather than submit to a contempt citation. See In re Sealed Case, 141 F.3d 337, 340 (D.C.Cir. 1998) ("In some cases the attorney will indicate an intention to comply with the subpoena, and on those facts this circuit regards Perlman as controlling."). Because the Perlman doctrine authorizes appeals only by clients, however, we dismissed the lawyer's appeal. See id. ("Of course that makes appeal available for the client, not, as here, the attorney.").

We generally review district court decisions enforcing document subpoenas only for arbitrariness or abuse of discretion. See In re Sealed Case, 121 F.3d 729, 740 (D.C.Cir.1997). But because the RNC argues that the district court applied the wrong legal standard, our review here is de novo. See In re Subpoena Served upon the Comptroller of the Currency, 967 F.2d 630, 633 (D.C.Cir.1992) (court gives no deference if the ruling "rests upon a misapprehension of the relevant legal standard or is unsupported by the record").

II

The work-product privilege protects written materials lawyers prepare "in anticipation of litigation." FED.R.CIV.P. 26(b)(3). By ensuring that lawyers can prepare for litigation without fear that opponents may obtain their private notes, memoranda, correspondence, and other written materials, the privilege protects the adversary process. See In re Sealed Case, 107 F.3d 46, 51 (D.C.Cir.1997) ("Like the attorney-client privilege, work product immunity promotes the rendering of effective legal services."). As the Supreme Court said in Hickman v. Taylor, 329 U.S. 495, 67 S.Ct. 385, 91 L.Ed. 451 (1947), the source of the work-product privilege:

[I]t is essential that a lawyer work with a certain degree of privacy, free from unnecessary intrusion by opposing parties and their counsel. Proper preparation of a client's case demands that he assemble information, sift what he considers to be the relevant from the irrelevant facts, prepare his legal theories and plan his strategy without undue and needless interference.

Id. at 510-11, 67 S.Ct. 385; see also 2 CHRISTOPHER B. MUELLER & LAIRD C. KIRKPATRICK, FEDERAL EVIDENCE 410 (2d ed.1994) ("Protection is needed because an attorney preparing for trial must assemble much material that is outside the attorney-client privilege, such as witness statements, investigative reports, drafts of pleadings, and trial memoranda."). The interests articulated in Hickman are present in both criminal and civil cases. See United States v. Nobles, 422 U.S. 225, 238, 95 S.Ct. 2160, 45 L.Ed.2d 141 (1975) ("Although the work-product doctrine most frequently is asserted as a bar to discovery in civil litigation, its role in assuring the proper functioning of the criminal justice system is even more vital. The interests of society and the accused in obtaining a fair and accurate resolution of the question of guilt or innocence demand that adequate safeguards assure the thorough preparation and presentation of each side of the case."). Without a strong work-product privilege, lawyers would keep their thoughts to themselves, avoid communicating with other lawyers, and hesitate to take notes. As Hickman put it:

Were such materials open to opposing counsel on mere demand, much of what is now put down in writing would remain unwritten. An attorney's thoughts, heretofore inviolate, would not be his own. Inefficiency, unfairness and sharp practices would inevitably develop in the giving of legal advice and in the preparation of cases for trial. The effect on the legal profession would be demoralizing. And the interests of the clients and the cause of justice would be poorly served.

329 U.S. at 511, 67 S.Ct. 385; see also RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 136 cmt. b (Proposed Final Draft No. 1, 1996) ("RESTATEMENT") ("The work-product doctrine also protects client interests in obtaining diligent assistance from lawyers. A lawyer whose work product would be open to the other side might forgo useful preparatory procedures, for example, note-taking.").

The "testing question" for the work-product privilege, we have held, is " 'whether, in light of the nature of the document and the factual situation in the particular case, the document can fairly be said to have been prepared or obtained because of the prospect of litigation.' " Senate of Puerto Rico v. U.S. Dep't of Justice, 823 F.2d 574, 586 n. 42 (D.C.Cir.1987) (quoting 8 CHARLES A. WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 2024 at 198 (1970)). For a document to meet this standard, the lawyer must at least have had a subjective belief that litigation was a real possibility, and that belief must have been objectively reasonable. See Martin v. Bally's Park Place Hotel & Casino, 983 F.2d 1252, 1260 (3d Cir.1993) (noting that "anticipation of litigation" inquiry is both subjective and objective); RESTATEMENT § 136, cmt. i ("[T]he immunity covers only material produced with litigation as the primary object of attention and when the apprehension of...