in re grand jury cert petition

8/10/2019 In Re Grand Jury Cert Petition

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No. _________================================================================

In The

Supreme ourt of the United States--------------------------------- ---------------------------------

IN RE: GRAND JURY SUBPOENACORPORATION, CLIENT,

Petitioners.

--------------------------------- ---------------------------------

On Petition For A Writ Of CertiorariTo The United States Court Of Appeals

For The Third Circuit

--------------------------------- ---------------------------------PETITION FOR A WRIT OF CERTIORARI

--------------------------------- ---------------------------------

I AN M. C OMISKY *M ATTHEW D. L EE BRIDGET E. M AYER BLANK R OME LLPOne Logan SquarePhiladelphia, PA 19103(215) [email protected]@blankrome.com

STEPHEN R OBERT L A CHEEN L A CHEEN , W ITTELS &

GREENBERG , LLP1429 Walnut Street, 13th FloorPhiladelphia, PA 19102(215) [email protected]

Attorneys for Petitioners

*Counsel of Record

================================================================COCKLE LEGAL BRIEFS (800) 225-6964

WWW.COCKLELEGALBRIEFS.COM


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QUESTIONS PRESENTED FOR REVIEW

The crime-fraud exception to the attorney-clientprivilege has not been examined by this Court sinceits decision in United States v. Zolin, 491 U.S. 554

(1989), over 25 years ago. It is generally agreed thatthere are two elements to the crime-fraud exception:(1) the client intended to engage in a crime or fraudwhen consulting the attorney; and (2) the attorney-client communication was used in furtherance of thecrime or fraud. All of the courts of appeals haveexamined these requirements, but have reachedwidely differing results. This case thus presents theissue of the proper elements to the crime-fraudexception.

The present case also presents the issue of thequantum of proof necessary to satisfy the crime-fraudexception, an issue left unresolved in Zolin , and theproper standard to be met prior to an in camera interview of an attorney-witness for the purpose ofdetermining the applicability of the exception. Thiscase further presents the question of whether grand

jury secrecy is violated when a district court conductsan in camera examination of an attorney-witnesswithout the presence of counsel for the target.

The questions presented are:

1. Whether the crime-fraud exception to theattorney-client privilege, last discussedin Zolin , applies solely because the clientis later accused of committing a crime or


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QUESTIONS PRESENTEDFOR REVIEW Continued

fraud, even though the attorney who wasconsulted was unable to provide defini-tive advice and the client believed thathe was acting within the scope of thelaw.

2. Whether the government must make athreshold showing higher than that re-quired by Zolin , for the in camera exam-ination of documents, in order for adistrict court to conduct an in camera examination of an attorney-witness forthe purpose of making a crime-fraudfinding.

3. Whether grand jury secrecy requires adistrict court to exclude counsel forgrand jury targets from an in camera

judicial examination of an attorney-witness and permits the district court torefuse to furnish either a transcript ora summary of the testimony providedbefore ruling on the applicability of thecrime-fraud exception.


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LIST OF PARTIES ANDCORPORATE DISCLOSURE STATEMENT

Per the Courts direction, these sections areomitted from this bound submission. Because thisappeal arises from a grand jury proceeding, Petition-ers are identified by the pseudonyms used by theCourt of Appeals. A List of All Parties and a Corpo-rate Disclosure Statement describing Petitioners byname is being provided to the Court under seal.


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TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW ........ i

LIST OF PARTIES AND CORPORATE DIS-

CLOSURE STATEMENT ................................. iiiTABLE OF CONTENTS ...................................... iv

TABLE OF AUTHORITIES ................................. vii

OPINION BELOW ............................................... 1

JURISDICTION ................................................... 1

CONSTITUTIONAL PROVISION INVOLVED .... 2

INTRODUCTION ................................................ 2

STATEMENT OF THE CASE .............................. 5

A. The Government Serves A Grand JurySubpoena On Corporation And ClientsFormer Counsel And Moves To CompelCompliance ................................................ 6

B. The District Courts Order ........................ 6

C. The In Camera Examination Of Attorney ... 7

D. The District Courts Opinion And Order ..... 7

E. Petitioners Appeal ..................................... 9

REASONS FOR GRANTING THE WRIT ........... 10

I. THE THIRD CIRCUITS DECISIONDEEPENS A CIRCUIT SPLIT WITHRESPECT TO THE INTENT AND INFURTHERANCE REQUIREMENTS OFTHE CRIME-FRAUD EXCEPTION .......... 11


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TABLE OF CONTENTS Continued

Page

A. The Third Circuits Ruling ResultsIn Application Of The Crime-FraudException So Long As An AttorneyWas Consulted And The Client Is Later

Accused Of Committing A Crime OrFraud .................................................... 13

B. The Third Circuits In FurtheranceRuling Is Contrary To Holdings OfOther Circuits ...................................... 16

C. The Court Should Decide The Unre-solved Issue In Zolin Involving TheRequisite Standard Of Proof For Ap-plication Of The Crime-Fraud Excep-tion ....................................................... 19

II. THE COURT SHOULD DETERMINETHE APPROPRIATE THRESHOLDSTANDARD TO BE APPLIED PRIOR TOTHE IN CAMERA EXAMINATION OF AWITNESS FOR THE PURPOSE OFMAKING A CRIME-FRAUD DETERMI-NATION ..................................................... 25

A. Zolin Does Not Apply With RespectTo In Camera Reviews Of UnrecordedCommunications .................................. 25

B. The Circuit Courts Are Not In Agree-ment As To The Procedures ApplicableTo In Camera Attorney-Witness Inter-views .................................................... 29


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TABLE OF CONTENTS Continued

Page

III. THE COURT SHOULD DECIDE THEPROCESS THAT IS DUE IN CASESWHERE AN IN CAMERA EXAMINATIONOF AN ATTORNEY IS PERMITTED ......... 31

CONCLUSION ..................................................... 39

APPENDIX

Opinion of the United States Court of Appealsfor the Third Circuit, dated February 12,2014 .................................................................. App. 1

Governments Opposition to Petition for Writ ofCertiorari in John Doe 1 v. United States of

America , No. 12-1239 ..................................... App. 26

SEALED SUPPLEMENTAL APPENDIX

Third Circuit Order Staying Mandate ...... Supp. App. 1

Third Circuit Order Denying Rehearing andRehearing En Banc ................................ Supp. App. 2

Third Circuit Oral Argument Transcript ... Supp. App. 3

District Courts January 18, 2013 Memoran-dum ....................................................... Supp. App. 74

Letter to District Court Enclosing Questionsfor Attorney .......................................... Supp. App. 82

District Courts November 13, 2012 Memoran-dum ....................................................... Supp. App. 90


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TABLE OF AUTHORITIES

Page

C ASES

Alabama v. White , 496 U.S. 325 (1990) ..................... 23

Anaya v. United States , 815 F.2d 1373 (10thCir. 1987) ........................................................... 34, 38

Appeal of Catania , 682 F.2d 61 (3d Cir. 1982) ........... 32

Appeal of Hughes , 633 F.2d 282 (3d Cir. 1980) .......... 34

Blalock v. United States , 844 F.2d 1546 (11thCir. 1988) ........................................................... 34, 35

Bourjaily v. United States, 483 U.S. 171 (1987) ........ 23

Clark v. United States , 289 U.S. 1 (1933) .......... passim

Cox v. Admr U.S. Steele & Carnegie , 17 F.3d1386 (11th Cir. 1994) ............................................... 12

Davies v. Commr , 68 F.3d 1129 (9th Cir. 1995) ........ 34

Hickman v. Taylor , 329 U.S. 495 (1947) .................... 29

In re Antitrust Grand Jury , 805 F.2d 155 (6thCir. 1986) ........................................................... 13, 17

In re BankAmerica Corp. Secs. Litig. , 270 F.3d639 (8th Cir. 2001) ............................................ 12, 13

In re Grand Jury , 705 F.3d 133 (3d Cir.

2012) ...................................................... 20, 21, 22, 24 In re Grand Jury Investigation , 352 F. Appx

805 (4th Cir. 2009) .................................................. 12

In re Grand Jury Investigation , 445 F.3d 266(3d Cir. 2006) ..................................................... 12, 30


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TABLE OF AUTHORITIES Continued

Page

In re Grand Jury Investigation , 610 F.2d 202(5th Cir. 1980) ................................................... 33, 35

In re Grand Jury Matter , 697 F.2d 511 (3d Cir.1982) ........................................................................ 32

In re Grand Jury Proceeding , 68 F.3d 193 (7thCir. 1995) ................................................................. 34

In re Grand Jury Proceedings # 5 , 401 F.3d 247(4th Cir. 2005) ....................................... 13, 17, 21, 22

In re Grand Jury Proceedings , 417 F.3d 18 (1stCir. 2005) ......................................... 12, 13, 15, 21, 22

In re Grand Jury Proceedings , 486 F.2d 85 (3dCir. 1973) ................................................................. 27

In re Grand Jury Proceedings , 609 F.3d 909(8th Cir. 2010) ......................................................... 21

In re Grand Jury Proceedings , 851 F.2d 860(6th Cir. 1988) ......................................................... 38

In re Grand Jury Subpoena, 223 F.3d 213 (3dCir. 2000) ................................................................. 22

In re Grand Jury Subpoena , 419 F.3d 329 (5thCir. 2005) ............................................... 17, 21, 22, 31

In re Grand Jury Subpoena , 920 F.2d 235 (4thCir. 1990) ................................................................. 32

In re Grand Jury Subpoena as to C97-216 , 187F.3d 996 (8th Cir. 1999) .......................................... 31

In re Grand Jury Subpoenas , 144 F.3d 653(10th Cir. 1998) ........................................... 17, 22, 34


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Page

In re Grand Jury Subpoenas Duces Tecum , 798F.2d 32 (2d Cir. 1986) .............................................. 17

In re John Doe, Inc. , 13 F.3d 633 (2d Cir.1994) .................................................................. 29, 30

In re Napster, Inc. Copyright Litig. , 479 F.3d1078 (9th Cir. 2007) .............................. 12, 17, 19, 22

In re Richard Roe, Inc. , 68 F.3d 38 (2d Cir.1995) ........................................................................ 12

In re Sealed Case , 107 F.3d 46 (D.C. Cir.1997) ............................................................ 14, 18, 22

In re Sealed Case , 676 F.2d 793 (D.C. Cir. 1982) ....... 16

In re Sealed Case , 754 F.2d 395 (D.C. Cir.1985) .................................................................. 12, 17

In re Six Grand Jury Witnesses , 979 F.2d 939(2d Cir. 1992) ........................................................... 34

In re Special March 1981 Grand Jury , 753 F.2d575 (7th Cir. 1985) .................................................. 33

Loughrin v. United States , ___ S.Ct. ___, 2014WL 2807180 (2014) ................................................. 22

Mohawk Indus., Inc. v. Carpenter , 558 U.S. 100

(2009) ................................................................. 11, 12 Nara v. Frank, 494 F.3d 1132 (3d Cir. 2007) ............. 10

Perlman v. United States , 247 U.S. 7 (1918) ............... 9

Pritchard-Keang Nam Corp. v. Jaworski , 751F.2d 277 (8th Cir. 1984) .......................................... 15


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Senate of Puerto Rico ex rel. Judiciary Comm.v. United States DOJ , 823 F.2d 574 (D.C. Cir.1987) ........................................................................ 33

United States v. Bauer , 132 F.3d 504 (9th Cir.1997) ........................................................................ 17

United States v. Boender , 649 F.3d 650 (7th Cir.2011) ............................................................ 21, 22, 30

United States v. Cleckler , 265 F. Appx 850(11th Cir. 2008) ........................................................ 22

United States v. Clem, 210 F.3d 373, 2000 WL353508 (6th Cir. Mar. 31, 2000) .............................. 21

United States v. Collis , 128 F.3d 313 (6th Cir.1997) .................................................................. 12, 21

United States v. Dynavac, Inc. , 6 F.3d 1407 (9thCir. 1993) ........................................................... 33, 38

United States v. Eastern Air Lines, Inc. , 923F.2d 241 (2d Cir. 1991) ............................................ 32

United States v. Jacobs , 117 F.3d 82 (2d Cir.1997) ............................................................ 17, 21, 22

United States v. John Doe, Inc. I , 481 U.S. 102(1987) ....................................................................... 37

United States v. Phillips , 843 F.2d 438 (11thCir. 1988) ................................................................. 35

United States v. Williams , 504 U.S. 36 (1992) ........... 27

United States v. Zolin , 491 U.S. 469 (1989) ....... passim


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Page

CONSTITUTION

U.S. Const. amend. V ......................................... passim

S TATUTES

28 U.S.C. 1254(1) ....................................................... 1

Foreign Corrupt Practices Act (FCPA), 15U.S.C. 78dd-1 et.seq. .................................... 5, 9, 16

OTHER A UTHORITIES

Cary Bricker, Revisiting the Crime-Fraud Exception to the Attorney-Client Privilege: A

Proposal to Remedy the Disparity in Protec-tions for Civil and Criminal Privilege Hold- ers ............................................................................ 20

Crime-Fraud Ruling Forces Lawyer to Testify inGrand Jury Investigation of Former Clients ,BNA Snapshot, February 18, 2014 ......................... 27

Edna Selan Epstein, The Attorney-Client Privilege and the Work Production Doctrine , Volume I at 690 (5th ed. 2007) ............................... 15

Fed. R. Crim. P. 6(e) ............................................ passim

James M. Fischer, The Crime-Fraud Exceptionto Privilege ............................................................... 20

The New Wigmore: Evidentiary Privileges 6.13.2d .................................................................. 24

Winter 2012 American Bar Association ..................... 20


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Petitioners Corporation and Client respectfullyrequest that a writ of certiorari issue to review theopinion of the court of appeals. 1

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OPINION BELOW

The pertinent appellate decision is reported at745 F.3d 681 and reprinted at App. 1-25. The twomemorandum decisions of the district court were filedunder seal and have not been published. The memo-randum decisions have been submitted to the Courtin a sealed Supplemental Appendix. The appellatecourt mandate was stayed on April 23, 2014. Supp.

App. 1.

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JURISDICTION

The Judgment sought to be reviewed was enteredon February 12, 2014. Petitioners petition for hearing

en banc was denied on April 11, 2014. Supp. App. 2.Jurisdiction lies under 28 U.S.C. 1254(1), and thispetition is timely filed on or before July 10, 2014.

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1 Because this appeal arises from a grand jury proceeding,Petitioners are identified by the pseudonyms used by the courtof appeals.


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CONSTITUTIONAL PROVISION INVOLVED

U.S. Const. amend V.

No person shall be held to answer for a capi-tal, or otherwise infamous crime, unless on apresentment or indictment of a Grand Jury,except in cases arising in the land or navalforces, or in the Militia, when in actual ser-vice in time of War or public danger; nor shallany person be subject for the same offence tobe twice put in jeopardy of life or limb; norshall be compelled in any criminal case to bea witness against himself, nor be deprived oflife, liberty, or property, without due processof law; nor shall private property be taken forpublic use, without just compensation.

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INTRODUCTION

1. The attorney-client privilege is designed toencourage full and frank communication betweenattorneys and their clients. United States v. Zolin ,491 U.S. 469, 562 (1989). While the crime-fraudexception is traceable to Clark v. United States , 289U.S. 1 (1933), the Court has never established a clearstandard that federal courts should employ to setaside the privilege. The circuit courts, while in disa-greement as to the standard to be applied, haverecognized that the crime-fraud exception requires anevidentiary showing of both intent to misuse theattorneys advice and the clients use of that advice infurtherance of a crime or fraud.


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The Third Circuits decision permits a districtcourt to make a finding of pre-existing wrongfulintent whenever a client consults an attorney as tothe scope of the law and is later accused of commit-ting a crime or fraud. Because attorneys routinely

discuss the law with their clients, the effect of theThird Circuits presumption is that the intent ele-ment will be found, and the privilege breached, invirtually every case. A circuit conflict exists as to theintent requirement.

With respect to the in furtherance element ofthe crime-fraud exception, this Court long ago indi-cated that an evidentiary showing that attorneyadvice was used to facilitate a crime or fraud is

required. While the circuit courts are in disagreementas to the in furtherance element as well, severalcircuit courts have recognized that the in further-ance element is not met when a client ignores, oracts contrary to, attorney advice. The Third Circuitsdecision permits the application of the crime-fraudexception whenever an attorney is consulted and theclient is subsequently accused of committing a crimeor fraud, regardless of whether the client is providedcorrect or incorrect advice, or even in a case like this

one where no definitive advice was given. The ThirdCircuits holding boils down to a logical fallacy: posthoc, ergo proper hoc .

Beyond the elements that must be shown inorder to vitiate the privilege, the quantum of proofthat must be presented has been left unansweredsince Zolin . This issue has been explored by the


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The Third Circuits decision invites the district courtto assume the role of the prosecutor in the case.

3. The district courts refusal to permit Peti-tioners to attend the in camera examination of theattorney-witness, or to review a transcript thereof,was based upon an improper expansion of the scope ofgrand jury secrecy, resulting in a denial of due pro-cess. Circuit courts have generally agreed that Fed.R. Crim. P. 6(e) protects only what is said or takesplace in the grand jury room, and not informationthat exists separate and apart from those proceed-ings. With this decision, the Third Circuit now holdsthat information not yet before the grand jury can beprotected based on the possibility that such infor-mation may reflect evidence to be submitted to thegrand jury. This ruling extends grand jury secrecybeyond any other circuit courts decisions and isinconsistent with this Courts precedents.

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STATEMENT OF THE CASE

Petitioners Corporation and Client, a consultingand risk management firm and Corporations Presi-dent and Managing Director, respectively, are targets

of a grand jury investigation into an alleged schemeto make corrupt payments in violation of the ForeignCorrupt Practices Act (FCPA), 15 U.S.C. 78dd-1

et seq.


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A. The Government Serves A Grand JurySubpoena On Corporation And ClientsFormer Counsel And Moves To CompelCompliance

On May 25, 2012, the government served a grand

jury subpoena on Corporation and Clients formercounsel (Attorney), who rented office space atCorporations offices and who provided legal advice toPetitioners. Petitioners moved to quash the subpoena.

On June 18, 2012, the government filed a motionto enforce the subpoena seeking an order directing

Attorney to provide testimony before the grand jurybased upon the crime-fraud exception. The govern-ment filed an ex parte submission summarizing

information allegedly obtained by an FBI agent in theinvestigation of Petitioners. Petitioners intervened tooppose the motion.

B. The District Courts Order

On November 13, 2012, the district court ruledthat it would conduct an in camera examination of

Attorney, outside the presence of the government andPetitioners, to determine whether the crime-fraud

exception applied. Supp. App. 100-101; App. 6. Thedistrict court concluded that the standard set out in Zolin for in camera review of documents for thepurpose of making a crime-fraud determination alsoapplied to the taking of testimony as to privilegedcommunications. Supp. App. 97-101. The districtcourt held that the government had met its burden


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for in camera review under Zolin , because the gov-ernment had provided enough information in its ex

parte declaration to support a good faith belief thatexamining [Attorney] in camera may reveal evidencethat the crime-fraud exception applies. Supp. App. 97.

Petitioners thereafter requested that the districtcourt release the transcript of Attorneys testimony,or a redacted version, or a summary thereof, to ena-ble Petitioners to respond to the governments crime-fraud assertion. On December 14, 2012, the districtcourt ordered Attorney to appear for an in camera

judicial interview. Attorney was permitted to berepresented by his own counsel, but Petitioners andthe government were excluded. Petitioners and the

government were permitted to submit proposed ques-tions; the district court observed that the questionssubmitted were substantially similar. Supp. App.78; App. 6.

C. The In Camera Examination of Attorney

On January 8, 2013, the district court conductedan in camera examination of Attorney. On January15, 2013, Petitioners renewed their request that thedistrict court release to Petitioners the transcript of

Attorneys testimony, or at least a summary thereof.

D. The District Courts Opinion and Order

On January 18, 2013, the district court grantedthe governments motion to enforce, and directed

Attorney to testify before the grand jury. The district


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court refused to release any of Attorneys testimony,stating that the transcript almost certainly reflects apreview of [Attorney]s eventual grand jury testimony,i.e. , for the same reasons that the district courtexcluded [Petitioners] from the in camera interview of

[Attorney], secrecy concerns outweigh any need for[Petitioners] to review the transcript of [Attorney]sin camera interview. Supp. App. 78. 2

The district court did not hold that Petitionersused the advice of the Attorney to commit a crime orfraud, but found that Petitioners could have done so ,stating that [Client] and [Corporation] intended tocommit a crime when [Attorney] was consulted forlegal advice regarding the [ ] transaction and could

have easily used it to shape the contours of conductintended to escape the reaches of the law. Supp. App.81. The district court concluded that Attorneystestimony and the governments ex parte submissionprovided a reasonable basis to conclude that [Attor-ney]s advice was used by Client and Corporation tofashion conduct in furtherance of that crime. Id.

2 Because Petitioners have no copy of the transcript of Attorneys in camera interview, it has not been included in theappendices. Petitioners believe the circuit court has the tran-script based upon facts outlined in the panel opinion.


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E. Petitioners Appeal

Petitioners timely appealed, and the districtcourt granted a stay of its order. 3 On February 12,2014, the Third Circuit affirmed the district courtsopinion in its entirety. The panels opinion set forthcertain facts, not contained in the record below, basedupon statements apparently made by Attorney incamera to the district court:

In April 2008, Client approached Attorneyto discuss issues he was having with theproject. Client explained that he plannedon paying Banker in order to ensure thatthe project progressed swiftly, as Bankerwas threatening to slow down the approvalprocess. Attorney did some preliminary re-search, found the FCPA, and asked Clientwhether the Bank was a government entityand whether Banker was a government offi-cial. Although Attorney could not ascertaingiven his limited research whether the plannedaction was legal or illegal, he advised Clientnot to make the payment. Despite this advice,Client insisted that his proposed paymentdid not violate the FCPA, and informed

Attorney that he would go ahead with thepayment. Attorney gave Client a copy of theFCPA.

3 The Third Circuit had jurisdiction pursuant to Perlman v.United States , 247 U.S. 7 (1918), which authorizes an immediateappeal from a discovery order directed at a disinterested third-party regarding privileged testimony.


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App. 5. 4 Petitioners petition for rehearing and rehear-ing en banc was denied on April 11, 2014. Significantly,the Third Circuit stayed its mandate pending thedisposition of this petition. Supp. App. 1. 5

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REASONS FOR GRANTING THE WRIT

This is an extraordinary case involving the appli-cation of the crime-fraud exception to the attorney-client privilege. The district court found that thegovernment established a reasonable basis to suspectthat Corporation and Client intended to commit acrime when Attorney was consulted, and that Attor-neys advice could have been used to shape criminal

conduct. Supp. App. 81. The circuit court affirmeddespite acknowledging that this was a close case,and despite the fact that Client thought his conductwas proper and Attorney did not provide definitiveadvice. App. 5, 19.

This case involves well-developed circuit courtconflicts with respect to the application of the crime-fraud exception. This case also involves a significantissue of first impression regarding the showing to be

4 The project referenced involved oil and gas deals wherePetitioners were retained to provide financing assistance. App.4-5.

5 The Third Circuit thus found that there was a reasonableprobability that this Court would grant certiorari and that atleast five Justices would vote to reverse. See Nara v. Frank , 494F.3d 1132, 1133 (3d Cir. 2007).


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made prior to a district courts in camera examinationof a live attorney-witness for purposes of determiningthe applicability of the crime-fraud exception; coupledwith a circuit split regarding the permissible scope ofgrand jury secrecy. The Court should grant certiorari

because the circuit courts resolution of these issuesserves to all but destroy the privilege in the grand

jury setting.

I. THE THIRD CIRCUITS DECISION DEEP-ENS A CIRCUIT SPLIT WITH RESPECTTO THE INTENT AND IN FURTHERANCEREQUIREMENTS OF THE CRIME-FRAUDEXCEPTION

This Court has long recognized the paramountimportance of the attorney-client privilege. See , e.g. , Mohawk Indus., Inc. v. Carpenter , 558 U.S. 100, 108(2009) (We readily acknowledge the importance ofthe attorney-client privilege.) (internal quotationomitted). The privilege is primarily concerned withencourag[ing] full and frank communication betweenattorneys and their clients and thereby promot[ing]broader public interests in the observance of law andadministration of justice. Zolin , 491 U.S. at 562

(quoting Upjohn v. United States , 449 U.S. 383, 389(1981)).

This Court first mentioned the crime-fraudexception that [a] client who consults an attorneyfor advice that will serve him in the commission of afraud will have no help from the law almost a


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century ago in Clark , 289 U.S. at 15. In Zolin , theCourt stated that the crime-fraud exception applieswhen attorney-client communications were made infurtherance of a future crime or fraud. 491 U.S. at563.

The courts of appeals generally agree that thereare two elements that the government must establishin order invoke the crime-fraud exception: (1) theclient was committing or intended to commit a fraudor crime (the intent element), and (2) the client usedthe attorney-client communication in furtherance ofthe alleged crime or fraud (the in furtherance ele-ment). See , e.g. , In re Grand Jury Proceedings , 417F.3d 18, 22 (1st Cir. 2005); In re Richard Roe, Inc. , 68

F.3d 38, 40 (2d Cir. 1995); In re Grand Jury Investiga-tion , 445 F.3d 266, 274 (3d Cir. 2006); In re Grand Jury Investigation , 352 F. Appx 805, 808 (4th Cir.2009); United States v. Collis , 128 F.3d 313, 321 (6thCir. 1997); In re BankAmerica Corp. Secs. Litig. , 270F.3d 639, 642 (8th Cir. 2001); In re Napster, Inc. Copyright Litig. , 479 F.3d 1078, 1090 (9th Cir. 2007),abrogated on other grounds by Mohawk , 558 U.S. at106 n.1; Cox v. Admr U.S. Steele & Carnegie , 17 F.3d1386, 1416 (11th Cir. 1994); In re Sealed Case , 754

F.2d 395, 399 (D.C. Cir. 1985). The Third Circuitsdecision in this case deepens the circuit split withrespect to both the intent and in furtherance ele-ments of this test.


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A. The Third Circuits Ruling Results In Application Of The Crime-Fraud Ex-ception So Long As An Attorney WasConsulted And The Client Is Later

Accused Of Committing A Crime Or

Fraud Prior to the Third Circuits decision, circuit courts

and commentators recognized that the crime-fraudexception required evidence of specific client intent toutilize attorney advice in furtherance of a crime orfraud. See , e.g. , In re Grand Jury Proceedings , 417F.3d at 23 (The crime-fraud exception requires theclients engagement in criminal or fraudulent activityand the clients intent with respect to attorney-clientcommunications.); In re Grand Jury Proceedings # 5 ,401 F.3d 247, 251 (4th Cir. 2005) ([W]e have heldthat it is the clients knowledge and intentions thatare of paramount concern. . . .); In re BankAmericaCorp. Secs. Litig. , 270 F.3d at 642 ([I]t is the clientsintent to further a crime or fraud that must beshown.); In re Antitrust Grand Jury , 805 F.2d 155,168 (6th Cir. 1986) ([M]erely because some commu-nications may be related to the crime is not enough. . . ; the communication must have been made withan intent to further the crime.).

The Third Circuits decision departed from thesewell-settled principles. Although the panel initiallyrecognized that the crime-fraud exception does notapply where a client consults an attorney about apossible course of action and later forms the intent tocommit a crime, App. 19, it created a presumption of


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pre-existing wrongful intent whenever a client con-sults an attorney and is later accused of a crime orfraud. App. 21. This holding is extraordinary. Thedistrict court did not find that the advice was em-ployed improperly, but that the advice could have

easily [been] used by the Client in furtherance of acrime. The circuit court stated that the Client in-formed the Attorney of his belief that the proposedpayment was not in violation of the law and the

Attorney did not provide definitive advice, but none-theless held that the exception applied. App. 5.

The Third Circuits decision conflicts with therulings of other circuit courts. In In re Sealed Case ,the D.C. Circuit found that government evidence that

a grand jury target discussed campaign finance lawsat a meeting was insufficient to show the requisiteintent. In re Sealed Case , 107 F.3d 46, 50 (D.C. Cir.1997). The court reasoned that:

One cannot reasonably infer from the meetingthat the Company was consulting its generalcounsel with the intention of committing acrime, or even that the vice president wasthen doing so. . . . There is nothing necessari-ly suspicious about the officers of this corpo-

ration getting such advice. True enough,within weeks of the meeting about campaignfinance law, the vice president violated thatlaw. But the government had to demonstratethat the Company sought the legal advicewith the intent to further its illegal conduct.


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The Eighth Circuit has held an alleged fraud thatoccurs after sharing a report with counsel is insuffi-cient to breach the privilege. Pritchard-Keang NamCorp. v. Jaworski , 751 F.2d 277, 283 n.5 (8th Cir. 1984)(That the fraud merely follows the attorney-client

communication does not alone support discovery.).The First Circuit also has held that consultation withcounsel is insufficient to establish a wrongful intent.

In re Grand Jury Proceedings , 417 F.3d at 24 ([t]hereis scant evidence that these clients purpose in retain-ing Lawyer II was to use his services in furtheranceof a crime or fraud.). It is hornbook law that if thepurpose for which the communications were made andthe advice sought was innocent, it will not be dis-coverable, even if the client subsequently committed

some fraud. Edna Selan Epstein, The Attorney-Client Privilege and the Work Product Doctrine , Volume I at690 (5th ed. 2007).

The Third Circuits decision effectively eliminatesthe intent element of the crime-fraud exceptionbecause the requisite intent will be found in everycase in which a client consults an attorney abouta course of action and is later accused of committinga crime or fraud. 6 Indeed, as recognized at oral

6 One member of the Third Circuit panel recognized thedanger of assuming bad intent by a client whenever a consul-tation is followed by an alleged violation of the law. Supp. App.38. The Third Circuit nevertheless held that the crime-fraudexception applied, failing to explain how its decision did not runafoul of this proposition.


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argument, any time an attorney provides informationto support a legal assessment, an intelligent clientcan figure out a better way to commit a crime wheth-er they had a pre-existing intent to violate the law ornot . Supp. App. 67.

The error in the Third Circuits ruling is particu-larly evident because there appears to have been noevidence of criminal or fraudulent intent on the part ofCorporation or Client at the time Attorney was con-sulted. The only information presented was the gov-ernments ex parte assertion of a later FCPA violation.More must be required if the privilege is to remainviable. See Clark , 289 U.S. at 15 (It is obvious thatit would be absurd to say that the privilege could

be got rid of merely by making a charge of fraud.).The Court should grant the writ to prevent thecontinuing erosion of the privilege.

B. The Third Circuits In FurtheranceRuling Is Contrary To Holdings OfOther Circuits

This Court has stated that an attorneys advicemust be used to facilitate a crime or fraud in someway in order for the in furtherance element to bemet. Clark , 289 U.S. at 15. The circuits have statedthe in furtherance element in different ways. See Inre Sealed Case , 676 F.2d 793, 815 (D.C. Cir. 1982)(recognizing that district courts have disagreed withrespect to the degree of relatedness required tomeet the in furtherance element and citing cases).


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The Fourth Circuit requires a close relationshipbetween the communications and the alleged viola-tion. In re Grand Jury Proceedings # 5 , 401 F.3d at251. The Second Circuit requires a purposeful nex-us. In re Grand Jury Subpoenas Duces Tecum , 798

F.2d 32, 34 (2d Cir. 1986). The Ninth Circuit requiresthat the communications be sufficiently related toand made in furtherance of the intended crime. Inre Napster, Inc. , 479 F.3d at 1090 (emphasis in origi-nal); see also In re Grand Jury Subpoena , 419 F.3d329, 347 (5th Cir. 2005) (requiring that communica-tions be reasonably related to the furtherance ofcrime or fraud); In re Antitrust Grand Jury , 805 F.2dat 168 (communications must be shown to be relatedto crime or fraud); In re Grand Jury Subpoenas , 144

F.3d 653, 660 (10th Cir. 1998) (requiring evidentiaryshowing that assistance was obtained in furtheranceof the conduct or was closely related to it.); In reSealed Case , 754 F.2d at 399 (requiring showing ofsome relationship between the communication andthe prima facie violation). These differing approachesshould be resolved by the Court.

Several circuit courts have held that the crime-fraud exception does not apply if a client simply

ignores attorney advice. See , e.g. , United States v. Bauer , 132 F.3d 504, 509-10 (9th Cir. 1997) (rejectingapplication of crime-fraud exception when clientdid precisely the opposite of what he was told);United States v. Jacobs , 117 F.3d 82, 88 (2d Cir. 1997)(A wrongdoers failure to heed the advice of hisor her lawyer does not remove the privilege. The


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attorney-client privilege is strongest where a clientseeks counsels advice to determine the legality ofconduct before taking action.); In re Sealed Case , 107F.3d at 50 (crime-fraud standard not met when fromthe material before the district court, there was no

way of knowing or even guessing whether the vicepresident was on a frolic of his own, against theadvice of Company counsel, when he reimbursed thedonors with corporate funds.).

The Third Circuits decision to affirm applicationof the crime-fraud exception, as crafted by the districtcourt, deepens the circuit split with respect to the infurtherance element. In its opinion, the Third Circuitnoted that Attorney was unable to determine whether

the proposed action of Client was legal, but that Attorney advised Client not to make the payment. App. 5. The Third Circuit noted that Client stillthought the payment would be legal, and Attorneydid not dispute this belief, but concluded, contrary tothe holdings of other circuit courts, that the crime-fraud exception applied. App. 5, 21. It is far too easyfor a district court to assert, post hoc , that the advicecould possibly have been used to shape the clientsalleged misconduct. Not only has the Third Circuit

departed from the well-reasoned decisions of othercircuits that crime-fraud does not apply if the clientignores the attorneys advice, but it went a stepfurther by holding that even when an attorney fails toprovide definitive advice, the in furtherance elementcan be met so long as some law was discussed withthe client. App. 5, 21.


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Under the Third Circuits view, bad intent can bedivined no matter if the attorney provides correctadvice that is ignored, incorrect advice, or no adviceat all. The Third Circuits conclusion therefore fallsinto the logical fallacy of post hoc, ergo proper hoc ,

and conflicts with the law of other circuits.

C. The Court Should Decide The UnresolvedIssue In Zolin Involving The RequisiteStandard Of Proof For Application OfThe Crime-Fraud Exception

In Clark , this Court discussed the crime-fraudexception in a case arising out of juror misconduct,stating that the party seeking to overcome the

attorney-client privilege must make a prima facieshowing. 289 U.S. at 15 ([t]o drive the privilege away. . . there must be prima facie evidence that it hassome foundation in fact.) (internal citation omitted).Over fifty years later, in Zolin , this Court addressedthe standard for reviewing documents in camera inorder to determine the applicability of the crime-fraud exception, but left unanswered the question ofthe quantum of proof necessary to ultimately satisfythe exception. 491 U.S. at 565 n.7.

In the 25 years since Zolin , the quantum ofproof issue has been examined by numerous districtand circuit courts. Each circuit court has addressedthis issue, but no consensus has been reached.See , e.g. , In re Napster, Inc. , 479 F.3d at 1091, 1093(Despite the fundamental importance and long historyof the attorney-client privilege and the crime-fraud


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exception, the procedures for preserving the privilegeagainst a crime-fraud challenge are surprisinglyunclear. . . . Both before and after Zolin , the lowercourts have struggled with the meaning of primafacie case. . . .). The disagreement amongst the cir-

cuits is well-recognized by courts and commentatorsalike. See , e.g. , In re Grand Jury , 705 F.3d 133, 152(3d Cir. 2012) (courts of appeals are divided as to theappropriate quantum of proof necessary to make aprima facie showing.); James M. Fischer, The Crime-

Fraud Exception to Privilege , 41-WTR BRIEF 30, at*33 (Winter 2012 American Bar Association) (Courtshave identified different thresholds for establishing aprima facie case.); Cary Bricker, Revisiting the Crime-

Fraud Exception to the Attorney-Client Privilege: A

Proposal to Remedy the Disparity in Protections forCivil and Criminal Privilege Holders , 82 Temple L.Rev. 149, 174 (2009) (the current scheme [is one]where uncertainty caused by the [current] lack ofuniform standards and procedures surrounding theapplication of the crime-fraud exception leaves [that]exception vulnerable to abuse) (internal quotationomitted).

The Third Circuit recognized that there is at

least a tripartite split with respect to the quantum ofproof required to pierce the privilege:

Courts of appeals have articulated the propermeasure of proof in different ways. Somerequire there to be probable cause or areasonable basis to suspect or believe thatthe client was committing or intending to


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commit a crime or fraud and that theattorney-client communications were used infurtherance of the alleged crime or fraud. See

In re Grand Jury Proceedings , 417 F.3d at 23& n.4; United States v. Jacobs , 117 F.3d 82,87 (2d Cir. 1997); United States v. Collis , 128F.3d 313, 321 (6th Cir. 1997); In re Grand

Jury Proceedings , 87 F.3d 377, 381 (9th Cir.1996). Other courts call for evidence sufficientto compel the party asserting the privilege tocome forward with an explanation for theevidence offered against the privilege. SeeUnited States v. Boender , 649 F.3d 650, 655-56 (7th Cir. 2011); In re Grand Jury Sub-

poena , 419 F.3d 329, 336 (5th Cir. 2005). Stillother courts demand a showing of evidencethat, if believed by a trier of fact, wouldestablish that some violation was ongoing orabout to be committed and that the attorney-client communications were used in further-ance of that scheme. See In re Grand Jury ,475 F.3d 1299, 1305 (D.C.Cir. 2007); In reGrand Jury Proceedings # 5 Empanelled

January 28, 2004 , 401 F.3d 247, 251 (4th Cir.2005); In re Grand Jury Investigation , 842F.2d 1223, 1226-27 (11th Cir. 1987).

In re Grand Jury , 705 F.3d at 152. 7

7 Petitioners believe that the split is even greater. Somecircuits require either probable cause or a reasonable basis tosuspect that the client was committing or intended to commit acrime or fraud and that attorney advice was used in furtherancethereof. See In re Grand Jury Proceedings , 609 F.3d 909, 912(8th Cir. 2010); United States v. Clem , 210 F.3d 373, 2000 WL

(Continued on following page)


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Until recently, the Third Circuit had stated thatthe quantum of proof consists of evidence which, ifbelieved by the fact-finder, would be sufficient to sup-port a finding that the elements of the crime-fraudexception were met. In re Grand Jury Subpoena , 223

F.3d 213, 217 (3d Cir. 2000) (quoting Haines v. LiggettGroup Inc. , 975 F.2d 81, 95-96 (3d Cir. 1992)). How-ever, in 2012, the Third Circuit purported to clarifyits approach, finding that the standard for ultimatevitiation of the privilege is a reasonable basis tosuspect that the privilege holder was committingor intending to commit a crime or fraud and thatattorney-client communications or attorney workproduct were used in furtherance of the alleged crimeor fraud. In re Grand Jury , 705 F.3d at 153. This

standard departs from those of many of the othercircuits, and conflicts with Zolin .

353508, at *3 (6th Cir. Mar. 31, 2000) (table); Jacobs , 117 F.3d at87, abrogated on other grounds by Loughrin v. United States ,___ S.Ct. ___, 2014 WL 2807180 (2014). Other courts require ashowing of reasonable cause or reasonable basis. See In re

Napster, Inc. , 479 F.3d at 1094; In re Grand Jury Proceedings ,

417 F.3d 18, 23 (1st Cir. 2005). Others contemplate burdenshifting. See Boender , 649 F.3d at 655-56; In re Grand JurySubpoena , 419 F.3d 329, 336 (5th Cir. 2005); In re Grand Jury

Proceedings # 5 , 401 F.3d 247, 251 n.2 (4th Cir. 2005). Stillothers require evidence if believed by the trier of fact or afoundation in fact. See In re Sealed Case , 107 F.3d at 50;United States v. Cleckler , 265 F. Appx 850, 853 (11th Cir. 2008);

In re Grand Jury Subpoenas , 144 F.3d 653, 660 (10th Cir. 1998).


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The Third Circuits reasonable basis to suspectstandard is equivalent to the reasonable suspicionstandard applied in stop and frisk cases the loweststandard of proof in federal court matters. This Courthas explained that reasonable suspicion is signifi-

cantly less demanding than probable cause because itcan be established with information that is differentin quantity or content than that required to establishprobable cause and with information that is lessreliable than that required to show probable cause.

Alabama v. White , 496 U.S. 325, 330 (1990). Giventhis parallel, it is apparent that the Third Circuitscrime-fraud standard is significantly less demandingthan those adopted in other circuits. 8 In addition, theThird Circuits standard is functionally indistinguish-

able from this Courts factual basis adequate tosupport a good faith belief by a reasonable personstandard for in camera review of documents . Such astandard is fundamentally at odds with the Courtsholding in Zolin that the ultimate crime-fraud stan-dard must be higher than that for in camera review.

Zolin , 491 U.S. at 572.

With no obvious difference between the ThirdCircuits crime-fraud standard and the in camera

8 Petitioners argued in the circuit court that the In reGrand Jury ruling was not a clarification, but a new standardrequiring en banc review. Petitioners had contended in In reGrand Jury that the standard should be a preponderance of theevidence, relying on this Courts opinion in Bourjaily v. UnitedStates , 483 U.S. 171 (1987).


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standard set out in Zolin ,9 the result is that once thestandard for in camera review is met, the ultimatecrime-fraud standard will also be satisfied. Thediffering standards of the circuit courts with respectto crime-fraud require the Court to definitively set

out the quantum of proof required to vitiate theattorney-client privilege. 10 The differing standardsmean that similarly situated parties will be treateddifferently depending upon where they find them-selves subject to litigation an untenable state ofaffairs until this Court takes action.

9 The government maintains there is a difference. In itsopposition to a petition for writ of certiorari following the ThirdCircuits decision in In re Grand Jury , the government took theposition that the Zolin standard is distinguishable from thereasonable basis to suspect standard for the ultimate vitiationof the privilege, because the Zolin standard merely requires thatin camera review be useful to the determination of the ulti-mate crime-fraud issue. App. 46. Whether in camera reviewwould be useful cannot possibly be the standard, not onlybecause in camera review of the actual communications at issuewill always be useful to determining crime-fraud, but becausethis Court recognized in Zolin that there must be some evidence

of wrongdoing to justify in camera review. Zolin , 491 U.S. at 571.10 The issue of the ultimate crime-fraud standard frequentlyarises before the lower courts and shows no signs of becomingless important. One commentator has explained that the crime-fraud exception has grown in importance because the federalprosecutors appear to be invoking the exception [m]ore andmore often. The New Wigmore: Evidentiary Privileges 6.13.2d(citations omitted).


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II. THE COURT SHOULD DETERMINE THE APPROPRIATE THRESHOLD STANDARDTO BE APPLIED PRIOR TO THE INCAMERA EXAMINATION OF A WITNESSFOR THE PURPOSE OF MAKING A

CRIME-FRAUD DETERMINATION A. Zolin Does Not Apply With Respect To

In Camera Reviews Of UnrecordedCommunications

In its opinion, the Third Circuit held that thestandard for in camera review of materials document-ing attorney-client communications, formulated by thisCourt in Zolin , applied with respect to unrecordedoral attorney-client communications. App. 14. Thisdecision conflicts with the principles set out in Zolin .

In Zolin , this Court determined that a partyinvoking the crime-fraud exception must make athreshold showing before a district court may reviewdocumented attorney-client communications in cam-

era . 491 U.S. at 570-72. In settling upon the requiredshowing, the Court focused on the detrimental effectof in camera review on the policies underlying theprivilege and on the orderly administration of

justice. In particular, the Court was concerned with

(1) the potential erosion of the privilege, (2) dueprocess implications, and (3) additional burdens onthe district courts. Zolin , 491 U.S. at 570-71.

In finding that the Zolin standard for in camera review of documented communications applied to oralcommunications, the panel purported to focus onconcerns with in camera examinations articulated in


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Zolin . App. 11-13. The opinion, however, ignored theprinciples set out, concluding that these concernswere no weightier in cases involving witness exami-nations than they are in cases involving documents.

With respect to the first concern, Zolin empha-sized the significance of the attorney-client privilege,noting that examination of the evidence, even by the

judge alone, in chambers might in some cases jeop-ardize the security which the privilege is meant toprotect[,] and that [t]oo much judicial inquiry intothe claim of privilege would force disclosure of thething the privilege was meant to protect[.] Zolin , 491U.S. at 570. Despite this concern, the panel con-cluded, without analysis, that a district courts

examination of a witness does no more to erode theprotection than examination of written or recordedcommunications. App. 12. The panels conclusionignores the fact that delving into unrecorded oralcommunications is a much more intrusive invasion ofthe privilege than the mere examination of docu-ments. One cannot ask a document or other recordedcommunication for information not contained therein,as such materials have closed content. In interview-ing an attorney, however, one can ask for information

in any number of ways, probing thoughts and impres-sions, and even prompting the attorney to look atcommunications from a different perspective. 11

11 This type of probing may have occurred here. Otherwise,it is difficult to fathom the district courts view that Client

(Continued on following page)


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With respect to the second concern, Zolin heldthat in camera proceedings necessarily implicate dueprocess because such proceedings deprive a party to aproceeding of a full opportunity to be heard on anissue. Zolin , 491 U.S. at 571 (citing In re John Doe

Corp. , 675 F.2d 482, 489-90 (2d Cir. 1982)). The paneldismissed this concern, stating that a district courtcan properly be entrusted to consider due process andfashion a proper procedure for an in camera examina-tion, App. 12, again failing to consider the differencesbetween oral communications and documents.

In cases involving in camera examination ofdocuments, the documents are generally produced by

possessed a bad intent when no definitive advice was givenand Client stated that he did not believe he was violating thelaw. Because of the potential for the district court to act as anadvocate for the government in undertaking an in camera examination of an attorney-witness, see In re Grand Jury

Proceedings , 486 F.2d 85, 90 (3d Cir. 1973) (grand jury subpoe-nas are almost universally instrumentalities of the UnitedStates Attorneys office or of some other investigative or prosecu-torial department of the executive branch.); Crime-Fraud

Ruling Forces Lawyer to Testify in Grand Jury Investigation of Former Clients , BNA Snapshot, February 18, 2014 (recognizingthat the Third Circuits decision could damage the judges role asneutral arbiter), Petitioners argued below that such an exami-

nation would violate the constitutional separation of powers.Both the district court and the Third Circuit rejected even thepossibility of such a problem. Supp. App. 100; App. 10 n.2. Butthis Court has recognized that although district courts overseegrand juries, the relationship between a court and a grand juryis one at arms length with the grand jury conducting itsinvestigations independently of the judiciary. United States v.Williams , 504 U.S. 36, 47 (1992).


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the party asserting the privilege, and that party canmake a complete argument with respect to the ap-plicability of the crime-fraud exception. In the case oforal communications, the due process implications ofin camera examinations are more significant if the

privilege proponent is excluded from the examination(as occurred here) because no party has full infor-mation as to what information is reported. The partyasserting the privilege simply has no way of knowingwhat questions were asked, how they were asked,what information was reported, and how the situa-tion may have colored the witness recollections.Moreover, questioning an attorney about past un-recorded communications is subject to serious risks ofinaccuracy due to the limits of recollection and the

passage of time.

With respect to the third concern, Zolin recog-nized that significant burdens would be placed upondistrict courts in conducting in camera reviews ofdocuments. Zolin , 491 U.S. at 571. The Third Circuitacknowledged that in camera examinations of wit-nesses are more burdensome than examinations ofdocuments, but held that this did not require thatsuch an examination be undertaken only after a

higher showing. App. 12-13. To the contrary, Zolin in-dicated that burden on the district courts is relevantto the standard for a threshold showing prior toin camera review.

The Third Circuits analysis significantlyexpands the scope of the crime-fraud exception. TheThird Circuits speculation that clients would avoid


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committing any attorney-client communications towriting to obtain a higher in camera review standardsimply does not reflect the reality of a legal consulta-tion; lawyers normally document their advice and,indeed this Court has generated numerous cases on

attorney work product based on such writings. See , e.g. , Hickman v. Taylor , 329 U.S. 495, 508-11 (1947)(recognizing work product protection for attorneynotes and memoranda). The reality of attorney-clientcommunications is that counsel will not hesitate tocreate a record of a client consultation based upon aconcern that his or her notes, emails, or other writ-ings would later be subject to grand jury subpoena.The fact that no notes or other documents from the

Attorney were at issue here reflects only the limited

nature of Petitioners consultation. In short, the ThirdCircuit failed to consider the reality of unrecordedoral communications versus documented communica-tions and how this difference impacts the standard tobe applied for in camera review, thereby ignoring theteachings of Zolin .

B. The Circuit Courts Are Not In Agree-ment As To The Procedures Applicable

To In Camera

Attorney-Witness Inter-views

While the issue of in camera examination of liveattorney-witnesses has arisen in a handful of cases,no court has taken into account the vastly differentcircumstances prior to applying the Zolin standardfor documented communications. See In re John Doe,


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Inc. , 13 F.3d 633, 635, 637 (2d Cir. 1994) (approving adistrict courts conduct of an in camera interview ofan attorney-witness after the Zolin standard hadbeen met, but never considering the material differ-ences between documented communications versus

live testimony); Boender , 649 F.3d at 656, 658 (findingthat the district court was justified under the Zolinstandard in holding, post-indictment, an in camera adversarial hearing involving testimony from twoattorneys of the defendant to determine the applica-tion of the crime-fraud exception).

Not only have the circuit courts ignored Zolin onthis issue, but they disagree with respect to whetherthe client of the attorney to be interviewed in camera

may participate in the examination. Only the SecondCircuit (and now the Third Circuit) have affirmativelyapproved of the procedure adopted by the districtcourt here, involving a pre-indictment in camera examination of an attorney excluding the targetscounsel. See In re John Doe, Inc. , 13 F.3d at 634-35,636-37. Other circuit courts have sanctioned theparticipation of counsel for the target in such anexamination. See In re Grand Jury Investigation , 445F.3d at 269 (affirming district courts crime-fraud

finding, which was based in part on an in camera examination of the grand jury targets former counsel,which the targets attorney was permitted to attend);

Boender , 649 F.3d at 653, 656, 658 (approving a post-indictment in camera examination of two attorneys ofthe defendant to determine the applicability of thecrime-fraud exception when both the government and


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the defense were permitted to take part in the exam-ination). 12 The circuit conflict on this issue warrantsreview by this Court.

III. THE COURT SHOULD DECIDE THEPROCESS THAT IS DUE IN CASESWHERE AN IN CAMERA EXAMINATIONOF AN ATTORNEY IS PERMITTED

According to the Third Circuit, [t]he DistrictCourt did not abuse its discretion in excluding [Appel-lants] from the interview [of Attorney] or declining torelease a transcript or summary of the testimonybecause there appears to be a significant amount ofinformation before the grand jury that is not known

to [Appellants], and if Appellants were privy to thein camera examination, they could preview not only[Attorneys] grand jury testimony, but also evidencealready submitted to the grand jury, as reflected inthe Governments questions, and the Governmentseventual trial evidence and strategy, which is en-titled to protection as a grand jury secret. App. 16-17.The Third Circuits holding conflicts with the Courts

12

Other circuit courts have declined to review such proce-dures. See In re Grand Jury Subpoena , 419 F.3d at 335-36 (noreview of in camera examination of an attorney because theprocedure was not challenged); In re Grand Jury Subpoena as toC97-216 , 187 F.3d 996, 997-98 (8th Cir. 1999) (declining to reviewdecision to conduct an in camera examination of the appellantsformer attorney without the grand jury targets counsel presentwhen the appellant had not objected to the procedure) .


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interpretation of grand jury secrecy, and also conflictswith the rulings of other circuit courts.

Federal Rule of Criminal Procedure 6(e) generallyprovides that matters occurring before a grand jurymay not be disclosed, and are protected as secrets.Prior to its ruling in this case, the Third Circuitsdecisions were in line with those of other circuits,holding that Rule 6(e) protects only what is said ortakes place in the grand jury room, but not infor-mation existing separate and apart from those pro-ceedings. See In re Grand Jury Matter , 697 F.2d 511,513 (3d Cir. 1982) (documents do not automaticallybecome matters occurring before a grand jury whenthey are subpoenaed by or transmitted to a grand

jury.); Appeal of Catania , 682 F.2d 61, 64 (3d Cir.1982) (The disclosure of information obtained from asource independent of the grand jury proceeding,such as a prior government investigation, does notviolate Rule 6(e); disclosure of prior investigativematerials and draft indictment not governed by Rule6(e)(2)); see also United States v. Eastern Air Lines,

Inc. , 923 F.2d 241, 244 (2d Cir. 1991) (Rule 6(e) notviolated by disclosure of a search warrant affidavit,even if that information might later be presented to

the grand jury, where it was obtained independentlyfrom the grand jury and did not disclose mattersoccurring before the grand jury); In re Grand JurySubpoena , 920 F.2d 235, 241-42 (4th Cir. 1990)(Rule 6(e)(2) protects from disclosure only theessence of what takes place in the grand jury roomand information produced by criminal investigations


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paralleling grand jury investigations do not consti-tute matters occurring before the grand jury); In reGrand Jury Investigation , 610 F.2d 202, 217 (5th Cir.1980) ([T]he disclosure of information obtained froma source independent of the grand jury proceedings,

such as a prior government investigation, does notviolate Rule 6(e).); In re Special March 1981 Grand

Jury , 753 F.2d 575, 578 (7th Cir. 1985) (The principlehas therefore emerged that matters occurring beforethe grand jury do not include every document ofwhich the grand jury happens to have custody.);United States v. Dynavac, Inc. , 6 F.3d 1407, 1413 (9thCir. 1993) (only information that reveal[s] somesecret aspect of the inner workings of the grand juryis protected; business records previously submitted to

grand jury as part of criminal investigation, butcreated for independent reasons not protected); Sen-ate of Puerto Rico ex rel. Judiciary Comm. v. UnitedStates DOJ , 823 F.2d 574, 584 (D.C. Cir. 1987) (reject-ing the position that material that has been presentedto the grand jury makes it exempt from disclosure tothe target of an investigation).

With its decision in this case, the Third Circuithas reversed its position: now holding, in conflict with

other circuit courts, that (1) information obtained incamera from an attorney-witness, with his counselpresent, and not yet before the grand jury, is pro-tected as a preview of grand jury testimony; and(2) questions prepared by the government for purposesof establishing the crime-fraud exception are protectedbecause they may reflect evidence submitted to the


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grand jury, or the governments trial evidence andstrategy.

Three circuits have specifically held that inter-views of witnesses that do not take place before thegrand jury are not protected by Rule 6(e). See , e.g. ,

Davies v. Commr , 68 F.3d 1129, 1130 (9th Cir. 1995)(Rule 6(e) simply does not apply to informationvoluntarily provided by [attorney] because a witnesssknowledge and information is not covered by therule.); Blalock v. United States , 844 F.2d 1546, 1551(11th Cir. 1988) (finding no violation of Rule 6(e)despite agents permitting third-parties to be presentduring the questioning of potential grand jurywitnesses; The Rule does not protect from disclosure

information obtained from a source other than thegrand jury, even if the same information is laterpresented to the grand jury.); Anaya v. United States ,815 F.2d 1373, 1380 (10th Cir. 1987) (There is a cleardistinction between a memorandum of the testimonygiven by a witness before the grand jury and a memo-randum of what that person told an investigatoroutside the grand jury room.). 13

13

Indeed, several circuits have publicly reviewed questionsposed to witnesses before a grand jury to determine whetherthey implicate the privilege without any concern that this mightreveal grand jury secrets. See , e.g. , In re Grand Jury Subpoenas ,144 F.3d 653, 662 (10th Cir. 1998); In re Grand Jury Proceeding ,68 F.3d 193, 196 (7th Cir. 1995); In re Six Grand Jury Witnesses ,979 F.2d 939, 945-46 (2d Cir. 1992); Appeal of Hughes , 633 F.2d282, 291-92 (3d Cir. 1980).


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gleaned from the interview. This presumption wasmade despite the district courts claim that Petition-ers should have been aware of their communicationswith Attorney, Supp. App. 78, and its recognition thatPetitioners counsel and the government submitted

substantially similar questions to be posed to Attor-ney at the in camera interview. Id . Petitioners ques-tions consisted of the what, where, and how ofthe interaction between Attorney and Client. Supp.

App. 87-88. With the governments substantiallysimilar questions, no grand jury information couldpossibly have been disclosed.

It is also important to note that counsel for Attorney was permitted to attend the in camera

proceeding with Attorney. Counsel for Attorney couldnot, of course, be present at the actual grand juryproceeding. The presence of counsel for the Attorney,who is under no grand jury secrecy obligations,further supports the conclusion that there was nogrand jury secrecy issue in this case. 14

The Third Circuits decision thus creates a clearcircuit split with respect to the scope of grand jurysecrecy. The Third Circuits approval of Petitionersexclusion from the in camera interview was alsoinconsistent this Courts rationale for protecting

14 Rule 6(e)s secrecy provisions do not apply to witnesses ortheir counsel. Fed. R. Crim. P. 6(e)(2). It is difficult to fathomhow grand jury secrecy was involved since the alleged reviewhad already been disclosed to a third-party that would not bepermitted to be present during grand jury proceedings.


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grand jury secrecy. The Court has indicated thatgrand jury secrecy must be protected to (1) preventthe escape of those whose indictment may be contem-plated; (2) insure the utmost freedom to the grand

jury in its deliberations; (3) prevent subornation of

perjury or tampering with witnesses who may testifybefore the grand jury and later appear at the trial ofthose indicted by it; (4) encourage free and untram-meled disclosures by persons who have informationwith respect to the commission of crimes; and (5)protect an innocent accused who is exonerated fromdisclosure of the fact that he has been under investi-gation. United States v. John Doe, Inc. I , 481 U.S.102, 110 n.5 (1987). None of these concerns are atissue here.

Petitioners were well aware of the existence andnature of the grand jury investigation prior to the incamera examination of Attorney. Indeed, the govern-ment acknowledged that grand jury secrecy concernswere reduced in this case. See In re Grand JurySubpoena , No. 2010-0127, Docket Entry 19, at 18(E.D. Pa.). The government further acknowledged thelack of secrecy interest here, in that it did not objectto Petitioners attending and participating in the in

camera proceeding prior to the district courts deter-mination that neither party should be present. Id. at17-18.

The disclosure of the district courts examinationof Attorney would not permit Petitioners to access orinfluence in any way, the grand jury. Any concernthat Petitioners would suborn perjury or otherwise


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affect testimony before the grand jury would not beheightened by Petitioners attendance at the examina-tion of Attorney (or by the release of the transcript),as Petitioners have known all along that the govern-ment subpoenaed Attorney and the nature of the

inquiry. There is simply no reason to believe thatPetitioners presence at the in camera examinationwould have affected the contents of Attorneys testi-mony. Finally, protecting Petitioners from disclosureof the fact that they have been under investigationis not at issue when Petitioners themselves seek thedisclosure. Because this case implicates none ofthe rationales for grand jury secrecy, such secrecyprovides no basis for excluding Petitioners from thein camera examination of Attorney.

Given the significant disagreement with respectto the scope of grand jury secrecy, see Anaya , 815 F.2dat 1378 (the use of the term grand jury materials inconnection with Rule 6(e) disclosures has becomemisleading and shibbolithic.), 15 the Court shouldclarify the scope of this secrecy to ensure that grand

jury targets are afforded due process prior to thevitiation of their privilege. Specifically, the Courtshould hold that grand jury secrecy does not protect

15 See also In re Grand Jury Proceedings , 851 F.2d 860, 864-66 (6th Cir. 1988) (noting four different approaches that circuitcourts take to address whether documents subpoenaed by agrand jury are grand jury secrets); Dynavac, Inc. , 6 F.3d at 1412-13 (describing various approaches to the treatment of documentsviewed by the grand jury).


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factual information existing separate and apart fromthe grand jury proceedings that has not yet beenpresented to the grand jury, including examinationsof potential grand jury witnesses.

--------------------------------- ---------------------------------

CONCLUSION

The petition for a writ of certiorari should begranted.

Respectfully submitted,

I AN M. C OMISKY * M ATTHEW D. L EE BRIDGET E. M AYER BLANK R OME LLPOne Logan SquarePhiladelphia, PA 19103(215) 569-5646

S TEPHEN R OBERT L A CHEEN L A CHEEN , W ITTELS &

GREENBERG , LLP1429 Walnut Street, 13th FloorPhiladelphia, PA 19102(215) 735-5900

Attorneys for Petitioners

*Counsel of Record


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PRECEDENTIAL

UNITED STATES COURT OF APPEALSFOR THE THIRD CIRCUIT

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No. 13-1237-----------------------------------------------------------------------

IN RE: GRAND JURY SUBPOENA

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On Appeal from the United States District Courtfor the Eastern District of Pennsylvania

(E.D. Pa. No. 2-10-gj-00127-002)District Judge: Honorable Gene E. K. Pratter

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Argued September 25, 2013Before: AMBRO, FISHER and HARDIMAN,

Circuit Judges.

(Filed: February 12, 2014)

Ian M. Comisky (ARGUED)Matthew D. LeeBlank Rome130 North 18th StreetOne Logan SquarePhiladelphia, PA 19103

Stephen R. LaCheen (ARGUED)LaCheen Wittels & Greenberg1429 Walnut Street, Suite 1301Philadelphia, PA 19102

Counsel for Appellant, John Doe


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Michelle Morgan (ARGUED)Peter F. SchenckOffice of United States Attorney615 Chestnut Street, Suite 1250Philadelphia, PA 19106

Counsel for Appellee, United States

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OPINION OF THE COURT

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FISHER, Circuit Judge.

Corporation and Client (together, Intervenors)are targets of an ongoing grand jury investigationinto alleged violations of the Foreign Corrupt Practic-es Act (FCPA). The grand jury served a subpoena onIntervenors former attorney (Attorney) and theGovernment moved to enforce this subpoena andcompel Attorneys testimony, based upon the crime-fraud exception to the attorney-client privilege.Intervenors sought to quash the subpoena by assert-ing the attorney-client privilege and work productprotection. After questioning Attorney in camera, theDistrict Court found that the crime-fraud exceptionapplied and compelled Attorney to testify before the

grand jury.Intervenors appeal, challenging the District

Courts decision to conduct an in camera examination,the procedures it fashioned for the examination, andthe courts ultimate finding that the crime-fraudexception applies. We hold that the standard an-nounced in United States v. Zolin, 491 U.S. 554, 572


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Intervenors are the targets of an ongoing grand jury investigation in the Eastern District of Pennsyl-vania seeking to determine whether they madecorrupt payments to obtain business in violation ofthe FCPA. Corporation is a consulting firm headquar-

tered in Pennsylvania and Client is CorporationsPresident and Managing Director. The grand juryinvestigation stems from Intervenors business trans-actions with a financial institution (the Bank)headquartered in the United Kingdom and owned bya number of foreign countries. Between 2007 and2009, Corporation was retained as a financial advisorby five companies to provide assistance in obtainingfinancing from the Bank for oil and gas projects. Twoof the five projects were approved and financed by the

Bank, resulting in the payment of nearly $8 millionin success fees to Corporation. For all five projects,Banker, an official and banker at the Bank, was theoperation leader responsible for overseeing the fi-nancing process. In 2008 and 2009, Corporation madepayments totaling more than $3.5 million to Bankerssister. The payments occurred within months of thesuccess-fee payments to Corporation. No evidenceshowed that Bankers sister worked on or was in-volved in any of the projects or meaningfully contrib-uted to any of Corporations other ventures.

Attorney worked out of Corporations office butpracticed law independently. In exchange for permit-ting Attorney to work out of the office rent-free, Clientwould periodically consult Attorney on ordinary legalmatters. Attorney had several brief interactions with


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Client regarding one of the successful financingprojects. In April 2008, Client approached Attorney todiscuss issues he was having with the project. Clientexplained that he planned on paying Banker in orderto ensure that the project progressed swiftly, as

Banker was threatening to slow down the approvalprocess. Attorney did some preliminary research,found the FCPA, and asked Client whether the Bankwas a government entity and whether Banker was agovernment official. Although Attorney could notascertain given his limited research whether theplanned action was legal or illegal, he advised Clientnot to make the payment. Despite this advice, Clientinsisted that his proposed payment did not violate theFCPA, and informed Attorney that he would go ahead

with the payment. Attorney gave Client a copy of theFCPA. After this communication, Attorney and Clientended their relationship. 1

In February of 2010, the Bank began an internalinvestigation into the transactions between Inter-venors and Bankers sister. The Overseas Anti-Corruption Unit (the Unit) in the United Kingdomwas informed of the situation, and the Unit informedthe Federal Bureau of Investigation (FBI). The Unit

arrested Banker and Bankers sister in the United

1 We recognize that even this vague recitation of thecommunications between Attorney and Client would ordinarilybe covered by the attorney-client privilege. We reveal thisaccount of the communications only because we have found thatthe crime-fraud exception applies.


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Kingdom; their prosecution is ongoing. The FBIbegan its investigation into Intervenors in February2010. Due to the parallel prosecution of Banker andBankers sister in the United Kingdom, Intervenorshave some knowledge of the nature of the grand jury

investigation of which they are subjects.

B.

The grand jury served Attorney with a subpoena.On June 18, 2012, the Government moved to enforcethe subpoena, seeking an order directing Attorney toappear and testify before the grand jury. On Septem-ber 4, 2012, Corporation and Client moved to inter-vene, and the District Court granted this request.

After briefing, the District Court determined that itwould conduct an in camera examination of Attorneyoutside the presence of Intervenors and the Govern-ment to determine the applicability of the crime-fraudexception to the communications between Attorneyand Client. The District Court invited Intervenorsand the Government to submit questions for theDistrict Court to ask Attorney, which both did.

On January 8, 2013, the District Court ques-tioned Attorney in camera, with only Attorneys owncounsel present. After this examination, Intervenorsrequested that the District Court release a transcriptof Attorneys testimony so that they could argue thatthe communications were not subject to the crime-fraud exception. On January 18, 2012, the DistrictCourt issued a memorandum and order granting the


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Governments motion to enforce the subpoena anddirecting Attorney to testify before the grand jury.Based upon its review of the Governments Ex Parte

Affidavit and Attorneys in camera testimony, theDistrict Court found a reasonable basis to suspect

that Intervenors intended to commit a crime whenClient consulted Attorney and could have used theinformation gleaned from the consultation in further-ance of the crime. The District Court also declined torelease a transcript of the testimony. Intervenorstimely appealed and the District Court granted a stayof its order compelling Attorneys grand jury testimo-ny pending resolution of this appeal.

II.

The District Court had jurisdiction under 18U.S.C. 3231. Ordinarily, this Court has jurisdictiononly over final decisions of district courts. 28 U.S.C. 1291. When a district court orders a witness totestify or produce documents, the order is generallynot immediately appealable; rather, the witness whowishes to object must refuse compliance, be held incontempt, and then appeal the contempt order. In reGrand Jury, 705 F.3d 133, 143 (3d Cir. 2012) (internal

quotation marks and citation omitted). However,under Perlman v. United States, 247 U.S. 7 (1918), aprivilege holder may immediately appeal an adversedisclosure order when the privileged information iscontrolled by a disinterested third party who is likelyto disclose that information rather than be held incontempt for the sake of an immediate appeal. In re


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Grand Jury, 705 F.3d at 138. Attorney is a disinter-ested third party controlling allegedly privilegedinformation. As such, this Court has jurisdiction tohear the appeal brought by Intervenors, the privilegeholders.

We exercise de novo review over the legal issuesunderlying the application of the crime-fraud excep-tion to the attorney-client privilege. In re Impound-

ed, 241 F.3d 308, 312 (3d Cir. 2001). Once the courtdetermines there is sufficient evidence of a crime orfraud to waive the attorney-client privilege, we re-view its judgment for abuse of discretion. Id. at 318.We review procedures used by the district court forabuse of discretion. See In re Grand Jury Subpoena,

223 F.3d 213, 219 (3d Cir. 2000) (We conclude thatthe District Court did not abuse its discretion indenying Appellant and/or his attorney access to thisinformation to protect grand jury secrecy.).

III.

Central to the issues in this case is the attorney-client privilege, the oldest of the privileges for confi-dential communications known to the common law.Upjohn Co. v. United States, 449 U.S. 383, 389 (1981).The privilege protects from disclosure confidentialcommunications made between attorneys and clientsfor the purpose of obtaining or providing legal assis-tance to the client. In re Grand Jury, 705 F.3d at151. Although the communications are often relevantand highly probative of the truth, they are protected


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in order to encourage full and frank communicationbetween attorneys and their clients and therebypromote broader public interests in the observance oflaw and administration of justice. Upjohn Co., 449U.S. at 389.

Despite their importance, the protections afford-ed by the privilege are not absolute. [T]he reason forthat protection . . . ceases to operate at a certainpoint, namely, where the desired advice refers not toprior wrongdoing, but to future wrongdoing. Zolin,491 U.S. at 562-63 (internal quotation marks, altera-tions, and citations omitted). To circumvent [theattorney-client] privilege[ ] under the crime-fraudexception, the party seeking to overcome the privilege

. . . must make a prima facie showing that (1) theclient was committing or intending to commit a fraudor crime, and (2) the attorney-client communicationswere in furtherance of that alleged crime or fraud. Inre Grand Jury, 705 F.3d at 151 (quoting In re Grand

Jury Subpoena, 223 F.3d at 217) (internal quotationmarks omitted). Because it is often difficult or impos-sible to prove that the exception applies withoutdelving into the communications themselves, theSupreme Court has held that courts may use in

camera review to establish the applicability of theexception. Zolin, 491 U.S. at 568-69. We explore thecontours of in camera review and the ultimate crime-fraud finding in this appeal.


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A.

Intervenors raise issues with: the standard thatthe District Court applied to determine whether toconduct an in camera examination, its decision tohold an examination in this case, and the proceduresthat it used in that examination. 2 We hold that theDistrict Court applied the proper standard and didnot abuse its discretion in finding that the standardapplied or in fashioning procedures for the examina-tion.

1.

In Zolin, the Supreme Court announced theinquiry that should precede an in camera review ofdocuments to determine the applicability of thecrime-fraud exception. 491 U.S. at 572. The Courtstated that a district court should require a showingof a factual basis adequate to support a good faith

2 Intervenors also argue that the District Courts examina-tion of the Attorney violated the separation of powers doctrine.This claim plainly misunderstands the roles of the grand jury ininvestigating independently from any branch of government andof the district court in ensuring that the grand jury does not

infringe upon common law privileges. The grand jury belongs tono branch of the government, instead serving as a kind ofbuffer or referee between the Government and the people. In re

Impounded, 241 F.3d at 312 (quoting United States v. Williams,504 U.S. 36, 47 (1992)) (internal quotation marks omitted). TheDistrict Court was fulfilling its obligation to check the grand

jurys investigative power by reviewing the grand jury subpoenain order to protect the attorney-client privilege. See id. at 313.


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belief by a reasonable person that in camera review ofthe materials may reveal evidence to establish theclaim that the crime-fraud exception applies. Id.(internal quotation marks and citation omitted). In

Zolin, the government sought to compel the produc-

tion of tapes of communications and documentscovered by the attorney-client privilege under theexception. Id. at 557. Intervenors assert that due tokey differences between documented materials andthe oral examination of an attorney, the latter shouldbe subject to a more stringent standard than thatannounced for the former in Zolin.

In determining the standard that should apply toin camera examination of a witness about oral com-

munications, we first note that the Supreme Courtdid not exclude oral communications from the ambitof its holding. Id. at 574. Nevertheless, in cameraexamination of a witness implicates different con-cerns than examination of documents or recordings,so we must determine whether we should adopt the

Zolin standard where unmemorialized or

in re grand jury cert petition

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