U.S. v. Dyer, 83-3249

• Decision Date: 27 December 1983
• Docket Number: No. 83-3249,83-3249
• Citation: 722 F.2d 174
• Parties: 14 Fed. R. Evid. Serv. 1368 UNITED STATES of America, Plaintiff-Appellee, v. T. Windle DYER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 174

722 F.2d 174

14 Fed. R. Evid. Serv. 1368

UNITED STATES of America, Plaintiff-Appellee, v. T. Windle DYER, Defendant-Appellant.

No. 83-3249.

United States Court of Appeals, Fifth Circuit.

Dec. 27, 1983.

Fawer, Brian, Hardy & Zatzkis, Michael S. Fawer, Cindy M. Harris, New Orleans, La., for defendant-appellant.

Alan Ellis, Philadelphia, Pa., for Amicus-Nat'l. Assoc. Crim. Lawyers.

John P. Volz, U.S. Atty., Marilyn Gainey Barnes, Harry W. McSherry, Robert J. Boitmann, Asst. U.S. Attys., New Orleans, La., for plaintiff-appellee.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before GARZA, WILLIAMS and HIGGINBOTHAM, Circuit Judges.

HIGGINBOTHAM, Circuit Judge:

I

Attorneys Stephen Dwyer and Arthur Lemann, III, were subpoenaed by a New Orleans Grand Jury to testify concerning conversations with their client, T. Windle Dyer. Dyer claims that the subpoenas should be quashed because the conversations are protected under the attorney-client privilege. The district court after an evidentiary hearing rejected Dyer's claim of attorney-client privilege pointing to the crime or fraud "exception" to the privilege. We affirm in part and reverse in part.

In April 1982, the Maison Charles, a housing project chartered by Guy Olano and zoned for condominium use, petitioned the New Orleans Planning Commission for zoning as a time share project. This petition was denied. Soon thereafter Dyer became a member of the Commission. At Dyer's first meeting as a member of the Commission, the Commission voted to reconsider its earlier denial of the Maison Charles' petition.

The Commission recommended that the Maison Charles be rezoned as a time share project and within two months the New Orleans City Council granted zoning approval to the Maison Charles for time sharing subject to Olano's compliance with certain conditions. Before appointment to the Planning Commission, Dyer acquired an interest in a different real estate venture, the Algiers Point Project. Dyer knew Guy Olano, who was also chairman of the board of a local bank. Throughout this period, roughly the summer of 1982, Dyer and Olano discussed Olano's difficulties in securing zoning approval for the Maison Charles. They also discussed the possible financing of Dyer's Algiers Point Project by Olano's bank. At some point in these events, Olano became an FBI informant and began to tape their conversations.

On November 1, 1982 Dyer received a commitment letter from Olano's bank good until November 15, 1982 to finance the Algiers Point Project. On November 9, 1982 Olano paid Dyer twenty-five thousand dollars. On the evening of November 15th, Dyer and his civil attorney Dwyer approached Lemann, an attorney specializing in criminal practice in New Orleans. The following day, November 16, Dwyer delivered to Olano's office a letter which returned twenty-five thousand dollars. The letter did not mention the Maison Charles but explained that the money was being returned because of developments in the Algiers Point Project. On November 17 Dyer had a telephone conversation with Olano, who apparently had not received the letter. In this conversation, which Olano also recorded, Dyer denied that he had corrupted other officials in connection with the Maison Charles' rezoning. Dyer stated that he had been conducting an investigation of people who might be corrupting public officials and had tested Olano to see how hesitant he was to pay Dyer to receive zoning approval. Dyer explained to Olano that he had returned Olano's money because he was satisfied that Olano was not the sought corrupting force.

A federal grand jury in New Orleans returned a one count indictment against Dyer on December 2, 1982, charging a violation of the Hobbs Act, 18 U.S.C. Sec. 1951. The indictment alleged that Dyer used his official position to extort $25,000 and to procure a financing commitment for the Algiers Point Project.

The government asserts that it may ask for a superseding indictment against Dyer to add a count of obstruction of justice under 18 U.S.C. Sec. 1512, based on Dyer's effort to return the $25,000 accompanied by the November 16 letter. On April 8, 1983 the grand jury issued subpoenas to Lemann and Dwyer to appear before the grand jury and testify as to the circumstances surrounding the preparation and delivery of the November 16th letter from Dyer to Olano. After a hearing at which the tape recorded conversations and letter were received into evidence, Dyer's motion to quash the subpoenas was denied by the district court. The district court found that the crime or fraud exception prevented Dyer from asserting the attorney-client privilege. Dyer appeals.

II

The government argues that the tapes convincingly show that Dyer, after violating the Hobbs Act by exacting twenty-five thousand dollars from Olano to secure approval of the Maison Charles zoning change, began to fear Olano's true motives and decided to cover up his Hobbs Act violation. The argument continues that as part of that retreat and cover up Dyer consulted his attorneys, resulting in the return of the money to Olano with a letter explaining that the money was a return of that received for the project at Algiers Point. Finally the government argues that the cover up included Dyer's telephone call to Olano in which he tried to convince Olano that he had not been serious about taking the money to corrupt officials.

The district court found at the evidentiary hearing that the tapes established at least a prima facie case that Dyer had illegally extorted the $25,000 for his support as a member of the zoning commission in connection with the Maison Charles project and that Dyer had used his attorneys to further his criminal goals by having them write the November 16th letter. The district court rejected any complicity of Dwyer or Lemann.

The findings of fact by the district court may not be set aside unless clearly erroneous. We turn to the review of the facts and whether these facts defeat Dyer's claim of attorney-client privilege.

III

The government argues that Dyer either failed to disclose the true purpose for the money and used his attorneys to obstruct justice or they knowingly participated in an obstruction of justice but that in either event there was no privilege.

The attorney-client privilege is cast in perpetual tension. Its purpose is to "encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of the law and administration of justice." Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 682, 66 L.Ed.2d 584 (1981). At the same time it withdraws what might otherwise be relevant evidence and it acts as an "obstacle to the investigation of the truth." 8 J. Wigmore, Evidence Sec. 2291 (McNaughton rev. 1961). See United States v. Pipkins, 528 F.2d 559, 563 (5th Cir.), cert. denied, 426 U.S. 952, 96 S.Ct. 3177, 49 L.Ed.2d 1191 (1976).

The accommodation of these competing interests drives numerous limits and "exceptions" to the claim of attorney-client privilege. We here examine the "fraud or crime" exception. Where a client seeks to use an attorney to further a continuing or future crime or fraud the broader public interest in the administration of justice is being frustrated, not promoted. Thus, where the government makes a prima facie showing that the attorney-client relationship was intended to further continuing or future criminal or fraudulent activity, the privilege does not exist. In Re Grand Jury Proceedings (Pavlick), 680 F.2d 1026, 1028 (5th Cir.1982) (en banc); In Re Grand Jury Proceedings (Fine), 641 F.2d 199, 203 (5th Cir.1981); Clark v. United States, 289 U.S. 1, 15, 53 S.Ct. 465, 469, 77 L.Ed. 993 (1933) (dicta).

Professor Wigmore aptly stated the rationale and limitations behind the attorney-client privilege:

The confidences of such persons may legitimately be protected, wrongdoers though they have been, because, ... the element of wrong is not always found separated from an element of right; because, even when it is, a legal adviser may properly be employed to obtain the best available or lawful terms of making redress; and because the legal adviser must not habitually be placed in the position of an informer. But these reasons all cease to operate at a certain point, namely, where the desired advice refers not to prior wrongdoing, but to future wrongdoing.

Wigmore at Sec. 2298 (emphasis in original). The tapes support the district court's finding that Dyer consulted with Dwyer for the...