United States Court of Appeals
For the First Circuit
No. 06-2125
IN RE: GRAND JURY PROCEEDINGS.
ON APPEAL FROM ORDERS OF THE
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
Before
Selya and Howard, Circuit Judges,
and Smith,* District Judge.
William W. Fick, Federal Defender Office, with whom Page
Kelley was on brief, for appellant.
B. Stephanie Siegmann, Assistant United States Attorney, with
whom Michael J. Sullivan, United States Attorney, was on brief for
appellee.
November 17, 2006
*Of the District of Rhode Island, sitting by designation.
HOWARD, Circuit Judge. The appellant in this case is the
chief executive officer and president of a corporation. Both
appellant and the corporation are under investigation by a grand
jury. To preserve the secrecy of the investigation, we shall
discuss the relevant facts at a high degree of generality and omit
mention of details, procedural and otherwise, that are not relevant
to our disposition. See Fed. R. Crim. P. 6(e).
Appellant, an individual represented by the Federal
Defender's Office, challenges district court orders (1) compelling
an attorney who represented the corporation (which is no longer in
good standing, but which has not formally been dissolved) to answer
before the grand jury a number of questions about a conversation
between counsel and appellant in his corporate capacity, and (2)
denying his motion to intervene as of right under Fed. R. Civ. P.
24(a) to assert the corporation's attorney-client privilege. The
district court's orders are grounded on a finding that appellant,
in his corporate capacity, waived the corporation's privilege to
bar counsel from answering the questions when he recounted aspects
of the conversation in extrajudicial statements made in the news
media. Although appellant does not know the specific questions
that the district court has ordered counsel to answer, he brings
this appeal to argue that the court erred insofar as it might have
directed counsel to provide details about the conversation beyond
those disclosed in the media interviews. See In re Keeper of the
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Records (XYZ Corp.), 348 F.3d 16, 23-26 (1st Cir. 2003) (discussing
whether and to what extent waivers of the attorney-client privilege
should be inferred from extrajudicial disclosures about privileged
attorney-client communications).
We start with appellant's intervention argument, the
success of which is a prerequisite to our reaching the merits of
the privilege claim. Appellant says that the district court
mistakenly failed to appreciate that, in seeking to assert the
corporation's privilege, he met the requirements of Rule 24(a),
which requires that "the applicant claim[] an interest relating to
the property or transaction which is the subject of the action,"
and that "the applicant [be] so situated that the disposition of
the action may as a practical matter impair or impede [his] ability
to protect that interest, unless [his] interest is adequately
represented by existing parties." The argument has superficial
appeal for, as appellant points out, a corporation's chief
executive officer and president generally is empowered to invoke
the privilege on the corporation's behalf, see Paul R. Rice,
Attorney-Client Privilege in the United States, § 4.20 (2d ed.
1999), and "[c]olorable claims of attorney-client privilege qualify
as sufficient interests to ground intervention as of right," In re
Grand Jury Subpoena (Newparent, Inc.), 274 F.3d 563, 570 (1st Cir.
2001). But there is a fatal problem, overlooked by the parties,
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with the capacity in which appellant has sought to assert the
corporation's privilege.
Appellant has sought to intervene in this action solely
in his individual capacity. As set forth above, appellant is
himself under investigation by the grand jury, and he is
represented in this matter by the Federal Defender's Office, which
must represent appellant's interests, not those of the corporation,
and which, in any event, lacks the authority to represent corporate
defendants because it is a creature of the Criminal Justice Act, 18
U.S.C. § 3006A. See United States v. Hartsell, 127 F.3d 343, 350
(4th Cir. 1997); United States v. Unimex, Inc., 991 F.2d 546, 550
(9th Cir. 1993); United States v. Rivera, 912 F. Supp. 634, 637-38
(D. P.R. 1996). And, quite clearly, appellant, in his personal
capacity, lacks standing to assert the corporation's interest.
See, e.g., In re Grand Jury Subpoenas, 144 F.3d 653, 658 (10th Cir.
1998); United States v. Int'l Bhd. of Teamsters, 119 F.3d 210, 215
(2d Cir. 1997) (collecting cases).
To require appellant to assert the privilege in his
corporate capacity is not to engage in empty formalism, for to
permit an individual corporate officer -- even an individual with
authority to act on behalf of the corporation -- to assert the
corporation's interests in his personal capacity would be to invite
an intolerable conflict of interests. The interests of the
corporation and the interests of the individual corporate officer
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frequently diverge where, as here, both are under investigation.
In such situations, it might well behoove the corporation to waive
the privilege, even though the waiver may damage the individual
officer. See generally In re Grand Jury Subpoena (Newparent,
Inc.), 274 F.3d at 573. Also, under the circumstances of this
case, where appellant's counsel is authorized only to represent
appellant in his personal capacity, permitting appellant to assert
the corporation's privilege in his personal capacity would give
rise to a situation in which the corporation's interests are not
represented by authorized counsel. This is impermissible. Cf.
Rowland v. Cal. Men's Colony, 506 U.S. 194, 201-03 (1993) ("It has
been the law for the better part of two centuries . . . that a
corporation may appear in the federal courts only through licensed
counsel.").
One final point is worth mentioning. If appellant had
made a colorable claim of entitlement to assert privilege because
counsel also represented appellant in his personal capacity in
connection with the conversation in question, the district court
would have been obliged to grant intervention. See In re Grand
Jury Subpoena (Newparent, Inc.), 274 F.3d at 570. But appellant
has made no such claim. Notwithstanding a few bald assertions made
in his filings, below and on appeal, that counsel also represented
appellant in his personal capacity, appellant never developed an
argument before the district court that he should be entitled to
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intervene to assert his own privilege. To the contrary, in the
several hearings at which the district court permitted appellant's
counsel to appear and argue, the intervention issue consistently
was framed in terms of whether appellant could intervene to assert
the corporation's privilege. Moreover, in his appellate brief,
appellant has neither developed any argument that the district
court misapprehended the ground on which he sought intervention nor
argued that he could make the demanding showing required for the
grant of a motion to quash in his personal capacity. See In re
Grand Jury Subpoena (Newparent, Inc.), 274 F.3d at 571-72. We
therefore lack any basis for disturbing the district court's denial
of appellant's motion to intervene. See United States v. Zannino,
895 F.2d 1, 17 (1st Cir. 1990).
Appeal dismissed.
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