Sealed Case, In re

• Decision Date: 08 June 1981
• Docket Number: No. 80-1961,80-1961
• Citation: 655 F.2d 1298
• Parties: , Fed. Sec. L. Rep. P 98,021, 8 Fed. R. Evid. Serv. 1117 In re SEALED CASE.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1298

655 F.2d 1298

211 U.S.App.D.C. 68, Fed. Sec. L. Rep. P 98,021,

8 Fed. R. Evid. Serv. 1117

In re SEALED CASE.

No. 80-1961.

United States Court of Appeals District of Columbia Circuit.

Argued May 5, 1981.

Decided June 8, 1981.

Before WRIGHT, WALD and GINSBURG, Circuit Judges.

Opinion for the Court filed by Circuit Judge GINSBURG.

GINSBURG, Circuit Judge:

A corporation (hereinafter "the company") invites our review of an order denying in part its motion to quash a grand jury subpoena duces tecum served on its outside counsel. ¹ We conclude that the order is not immediately reviewable. Accordingly we dismiss the appeal without reaching the merits of the controversy.

I. FACTS

In 1976 the Internal Revenue Service (IRS) investigated alleged sensitive payments the company had made abroad. The company's in-house general counsel and its outside counsel participated in the inquiry. In-house general counsel generated handwritten notes, file memoranda, and a cassette tape detailing the content of conversations relating to this inquiry.

In 1977 the Securities and Exchange Commission (SEC) asked the company to conduct an internal investigation into the same foreign payments and to report any findings to the SEC. The company retained a law firm (hereinafter "audit counsel") to make the investigation. In-house general counsel served as a liaison between the company's board of directors and audit counsel. During this investigation in-house general counsel created additional notes reflecting conversations with company officials, audit counsel, and government agents. The notes, like the materials generated during the IRS inquiry, allegedly reveal company confidences and proposed responses to the government investigations.

In May 1978 audit counsel submitted a final report to the company's directors. Later the same year, the SEC initiated a formal, nonpublic investigation into the existence of sensitive payments by the company. The company gave SEC investigators access to the final report, to audit counsel's notes of interviews conducted during preparation of the report, and to other documents underlying the report. The company subsequently produced copies of the same documents in response to an SEC subpoena. The subpoena, however, apparently did not request, and the company did not reveal, in-house general counsel's notes, memoranda, or cassette tape.

In October 1978 the Government convened a federal grand jury to investigate the company's foreign payments. The grand jury immediately subpoenaed the final report, notes, and documents that the company had submitted to the SEC. The company supplied these materials without protest. In December 1979 the grand jury subpoenaed in-house general counsel, directing him to appear on January 15, 1980, and to produce records in his possession or subject to his control that related to the agency investigations of the company's foreign payments. In-house general counsel, who had left the company in August 1978, consulted with the company's outside counsel. Relying on outside counsel's advice, the former in-house general counsel appeared before the grand jury and produced some documents, but withheld thirty-eight others. ² Former in-house general counsel announced that outside counsel had taken custody of the withheld documents and was asserting claims of attorney-client privilege and work product protection with respect to those documents.

The grand jury then subpoenaed the disputed materials from outside counsel. The subpoena directed outside counsel to produce:

The originals of any and all documents, records, files, reports, agreements, memoranda, tape recordings, dictaphone or stenographic recordings, transcriptions, notes, correspondence, telexes, or other communications, appointment book, calendar or log entries, diary entries, notes of meetings, conversations or conferences previously subpoenaed from ... previous general counsel for (the company) and retained by you.

Brief of Appellant at A1. Outside counsel failed to appear before the grand jury on the specified date or to produce the requested materials. At about the same time, the company replaced outside counsel with new outside counsel (hereinafter "second outside counsel"). Second outside counsel took custody of the disputed documents and filed, on behalf of the company, a motion to quash the subpoena.

The motion to quash asserted that the work product doctrine shields all of the documents and that the attorney-client privilege shelters most of them. The district judge reviewed the documents in camera and determined that the work product doctrine protects all thirty-eight documents; he did not rule on the attorney-client privilege claim. The district judge also found that the Government had shown no compelling need for the documents sufficient to overcome the work product protection and that the Government had failed to show that the documents were obtainable under the "crime-fraud" exception to the work product doctrine. The district judge, however, found that the company had voluntarily disclosed the substance of some confidential attorney-client communications by complying with the SEC and prior grand jury subpoenas. Therefore, the judge ruled, the company had impliedly waived both the attorney-client privilege and work product protection with respect to any documents detailing attorney-client discussions on the same subjects. Applying this rule, the district judge denied the motion to quash with respect to one entire document and portions of seven others.

The company moved for reconsideration or stay of the district judge's order. The judge denied this motion and ordered second outside counsel to produce the documents designated by his previous order. Second outside counsel did not indicate whether he intended to comply with this order; nor did the district judge hold second outside counsel in contempt. Instead, the company appealed the denial in part of its motion to quash and the district judge stayed his production orders pending disposition of this appeal.

II. ANALYSIS

The company urges that the district judge incorrectly found an implied waiver of the attorney-client privilege and work product doctrine. We pretermit discussion of that issue because we hold that this court lacks authority to review the district court's determination at this time.

Congress has empowered the courts of appeals to review "final decisions" rendered by the district courts. 28 U.S.C. § 1291 (1976). The denial of a motion to quash a subpoena is not such a final decision; the district court decision becomes "final" only when the subpoenaed party refuses to comply with the court order and is cited for contempt. Cobbledick v. United States, 309 U.S. 323, 60 S.Ct. 540, 84 L.Ed. 783 (1940); United States v. Anderson, 464 F.2d 1390 (D.C.Cir.1972). This "insistence on finality and prohibition of piecemeal review discourage undue litigiousness and leaden-footed administration of justice, particularly damaging to the conduct of criminal cases." DiBella v. United States, 369 U.S. 121, 124, 82 S.Ct. 654, 656-57, 7 L.Ed.2d 614 (1962) (citing Cobbledick ).

The company contends that this court may hear its appeal under a well-recognized exception to the Cobbledick rule. In Perlman v. United States, 247 U.S. 7, 38 S.Ct. 417, 62 L.Ed. 950 (1918), a United States Attorney sought access to exhibits that Perlman had deposited in federal district court in connection with a civil suit. A district judge ordered the court clerk to produce the exhibits to the United States Attorney. Perlman, asserting that Government use of the exhibits would violate the Fourth and Fifth Amendments, then attempted to bar the United States Attorney from obtaining the exhibits. The district judge denied Perlman's motion and, although the court clerk still retained the exhibits and had not been held in contempt for failing to produce them, the Supreme Court permitted Perlman to take an immediate appeal. Apparently reasoning that the court clerk would certainly comply with the production order, the Supreme Court ruled that Perlman would be "powerless to avert the mischief of the order" if he were denied an immediate appeal. 247 U.S. at 13, 38 S.Ct. at 419. ³ See United States v Ryan, 402 U.S. 530, 533, 91 S.Ct. 1580, 1582, 29 L.Ed.2d 85 (1971).

The company claims that Perlman establishes a general, third-party exception to the finality rule, permitting "the holder of a privilege (like itself) to appeal an order directing a subpoena recipient such as (second outside counsel) to produce assertedly privileged materials." Reply Brief of Appellant at 3. The Supreme Court, however, has never construed Perlman so broadly. It has recognized the continued vitality of the exception, but has stressed that it is available only "in the limited class of cases where denial of immediate review would render impossible any review whatsoever of an individual's claims." United States v. Ryan, 402 U.S. at 533, 91 S.Ct. at 1582; United States v. Nixon, 418 U.S. 683, 691, 94 S.Ct. 3090, 3099, 41 L.Ed.2d 1039 (1974).

In this case, denial of the company's appeal will not "render impossible" appellate review of its claims. Outside counsel and second outside counsel took custody of the disputed, once in-house documents after the company had decided to resist their production. The company and its successive outside counsels must have been alert to the prospect that the Government might pursue its quest for the documents and seek a contempt citation against the documents' custodian. It is altogether reasonable to assume that the company trusted that outside and second outside counsel would vigorously resist production of the documents, and would risk contempt if the company wished to secure appellate review of an adverse decision in the first instance. The company, therefore, cannot comfortably argue now that circumstances beyond its control disarm it from testing on appeal the...