U.S. v. Shepard
| Decision Date | 09 April 1982 |
| Docket Number | No. 82-1005,82-1005 |
| Citation | 675 F.2d 977 |
| Parties | UNITED STATES of America, Appellee, v. Donald Joe SHEPARD and Billy Clinton Caldwell, Appellants. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Stephen Stein, Las Vegas, Nev., and Byron Neal Fox, Kansas City, Mo., for appellants.
Robert G. Ulrich, U. S. Atty., W. D. Mo., Edward D. Holmes, Atty., U. S. Dept. of Justice, Kansas City, Mo., for appellee.
Before HEANEY, STEPHENSON * and ARNOLD, Circuit Judges.
This case presents an appeal from the district court's pretrial order disqualifying counsel. Appellants, defendants Shepard and Caldwell, are two of eleven defendants named in a seventeen-count indictment charging, inter alia, conspiracy, interstate travel or transportation in aid of racketeering enterprises and interstate transportation of stolen goods, in violation of 18 U.S.C. §§ 371, 1952 and 2314. The conspiracy count alleges that certain defendants exercised illegal control over the Tropicana Hotel and Country Club of Las Vegas, Nevada (Tropicana) and that defendants Shepard and Caldwell "skimmed" money from the Tropicana for the benefit of other defendants. The grand jury investigation was part of a multi-district investigation into the Tropicana's affairs. 1
The district court 2 disqualified two counsel: Stephen Stein, principal counsel for both defendants Caldwell and Shepard, and Byron Fox, principal counsel for defendants Nick Civella and Carl Civella, and local counsel for defendants Caldwell, Shepard, Agosto and Chiavola. Fox was disqualified only in his capacity as local counsel; he continues to act as principal counsel for defendants Civella. 3 We affirm in part and reverse in part and remand for further proceedings.
Conflicts may arise when an attorney simultaneously represents clients with differing interests (multiple representation), or when an attorney representing a defendant has previously represented codefendants or trial witnesses (successive representation). Both possibilities of conflict are present here. At the time of his disqualification, Stein represented two codefendants. Prior to the indictment, he had represented another codefendant, Joseph Agosto, and he, or a partner in his law firm, had also represented five potential trial witnesses in connection with their appearances before grand juries investigating the Tropicana's business affairs.
The district court concluded that there was a serious possibility that conflicts of interest would arise as a result of Stein's former representation of grand jury witnesses who would probably be called to testify at the trial. 4 It held that, even though the defendants had attempted to waive their right to assistance of counsel unimpeded by these conflicts, the court's responsibility to exercise supervisory authority over members of the bar prevailed over defendants' right to counsel of choice. In disqualifying Stein because of his prior representation of grand jury witnesses, the court did not rule on whether Stein's simultaneous representation of codefendants, or his former representation of a third codefendant, required disqualification.
Stein, or his partner, represented the following individuals: Mitzi Briggs Smith-at one time an eighty percent owner of the Tropicana, Melvin Wolzinger-part owner of the Tropicana, Harold Hug-ex-comptroller of the Tropicana, Jay Brown-Stein's law partner, Nicholas Tanno-general manager of the Tropicana, and Albert Bardier-accountant for a business entity owned by Agosto. Smith, Brown and Hug testified before both the Minnesota and Kansas City federal grand juries. Stein's law partner, Oscar Goodman, represented Smith in connection with her appearance before the Kansas City grand jury. Goodman also represented Melvin Wolzinger, part owner of the Tropicana. The government represented to the district court that all of the grand jury witnesses except Bardier would probably be called as witnesses at trial.
As we noted in United States v. Agosto, et al, supra, at 971, defense counsel's prior representation of grand jury witnesses who are expected to testify at trial raises two major possibilities of conflict: (1) the attorney's pecuniary interest in furthering his business relationship with the former client may affect representation of the present client, and (2) the attorney may misuse confidential information obtained from the former client, or may fail to fully cross-examine for fear of misusing confidential information. See United States v. Jeffers, 520 F.2d 1256, 1264-1265 (7th Cir. 1975), cert. denied, 423 U.S. 1066, 96 S.Ct 423, 46 L.Ed.2d 656 (1976). Certainly, the more serious possibility of conflict arises by reason of Stein's receipt of confidential information. 5 There is a presumption that an attorney receives confidential communications in the course of his representation of a client. See, e.g., United States v. Provenzano, 620 F.2d 985, 1005 (3d Cir.), cert. denied, 449 U.S. 899, 101 S.Ct. 267, 66 L.Ed.2d 129 (1980); Arkansas v. Dean Foods Products Co., Inc., 605 F.2d 380, 384-385 (8th Cir. 1979); United States v. Kitchin, 592 F.2d 900, 905 (5th Cir.) (adopting district court's findings and conclusions), cert. denied, 444 U.S. 843, 100 S.Ct. 86, 62 L.Ed.2d 56 (1979).
However, as we pointed out in United States v. Agosto, et al., supra, at 975, the presumption does not apply as to a client who states that, in fact, no confidential communications were made. A former client may also waive the attorney-client privilege. See generally Developments in the Law-Conflicts of Interest, 94 Harv.L.Rev. 1244, 1333-1334 (1981).
The record does not show whether the grand jury witnesses disclaim having made any confidential communications to Stein or whether they would waive any privilege claim they might have. Stein, in his response to the government's motion seeking disqualification, stated to the court that the representation afforded by him and by his law partner was of a limited nature, and did not...
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