In Re Grand Jury Subpoena

PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 13-1237
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IN RE: GRAND JURY SUBPOENA
______

On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(E.D. Pa. No. 2-10-gj-00127-002)
District Judge: Honorable Gene E. K. Pratter
______

Argued September 25, 2013
Before: AMBRO, FISHER and HARDIMAN, Circuit Judges.

(Filed: February 12, 2014)

Ian M. Comisky (ARGUED)
Matthew D. Lee
Blank Rome
130 North 18th Street
One Logan Square
Philadelphia, PA 19103

Stephen R. LaCheen (ARGUED)
LaCheen Wittels & Greenberg
1429 Walnut Street, Suite 1301
Philadelphia, PA 19102
Counsel for Appellant, John Doe

Michelle Morgan (ARGUED)
Peter F. Schenck
Office of United States Attorney
615 Chestnut Street, Suite 1250
Philadelphia, PA 19106
Counsel for Appellee, United States
 ______

OPINION OF THE COURT
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FISHER, Circuit Judge.

Corporation and Client (together, “Intervenors”) are targets of an ongoing grand

jury investigation into alleged violations of the Foreign Corrupt Practices Act (“FCPA”).

The grand jury served a subpoena on Intervenors‟ former attorney (“Attorney”) and the

Government moved to enforce this subpoena and compel Attorney‟s testimony, based

upon the crime-fraud exception to the attorney-client privilege. Intervenors sought to

quash the subpoena by asserting the attorney-client privilege and work product

protection. After questioning Attorney in camera, the District Court found that the

crime-fraud exception applied and compelled Attorney to testify before the grand jury.

Intervenors appeal, challenging the District Court‟s decision to conduct an in

camera examination, the procedures it fashioned for the examination, and the court‟s

ultimate finding that the crime-fraud exception applies. We hold that the standard

announced in United States v. Zolin, 491 U.S. 554, 572 (1989), applies to determine

whether to conduct an in camera examination of a witness. We also find that the District

Court did not abuse its discretion in applying this standard, in determining procedures for

the examination, or in ultimately finding that the crime-fraud exception applies. We

therefore affirm the District Court‟s order enforcing the grand jury subpoena.

2
 I.

A.

This matter is before us in the context of an ongoing grand jury investigation. To

maintain confidentiality, we will refer only to the facts that have been made public and

will refer to those involved as “Corporation,” “Client,” and “Attorney” in order to

maintain their anonymity. We also note that we and the District Court had access to

information pertaining to the alleged criminal violations via the Government‟s Ex Parte

Affidavit, which set forth the basis for the Government‟s belief that the Intervenors

committed FCPA violations. Intervenors were not apprised of this information.

Additionally, we were informed by Attorney‟s account of the communications at issue,

which were divulged to the District Court during the in camera examination. Neither the

Government nor the Intervenors were privy to this account. As such, we are hampered in

our ability to articulate the background information underlying our conclusions.

Intervenors are the targets of an ongoing grand jury investigation in the Eastern

District of Pennsylvania seeking to determine whether they made corrupt payments to

obtain business in violation of the FCPA. Corporation is a consulting firm headquartered

in Pennsylvania and Client is Corporation‟s President and Managing Director. The grand

jury investigation stems from Intervenors‟ business transactions with a financial

institution (“the Bank”) headquartered in the United Kingdom and owned by a number of

foreign countries. Between 2007 and 2009, Corporation was retained as a financial

advisor by five companies to provide assistance in obtaining financing from the Bank for

3
oil and gas projects. Two of the five projects were approved and financed by the Bank,

resulting in the payment of nearly $8 million in success fees to Corporation. For all five

projects, “Banker,” an official and banker at the Bank, was the operation leader

responsible for overseeing the financing process. In 2008 and 2009, Corporation made

payments totaling more than $3.5 million to Banker‟s sister. The payments occurred

within months of the success-fee payments to Corporation. No evidence showed that

Banker‟s sister worked on or was involved in any of the projects or meaningfully

contributed to any of Corporation‟s other ventures.

Attorney worked out of Corporation‟s office but practiced law independently. In

exchange for permitting Attorney to work out of the office rent-free, Client would

periodically consult Attorney on ordinary legal matters. Attorney had several brief

interactions with Client regarding one of the successful financing projects. In April 2008,

Client approached Attorney to discuss issues he was having with the project. Client

explained that he planned on paying Banker in order to ensure that the project progressed

swiftly, as Banker was threatening to slow down the approval process. Attorney did

some preliminary research, found the FCPA, and asked Client whether the Bank was a

government entity and whether Banker was a government official. Although Attorney

could not ascertain given his limited research whether the planned action was legal or

illegal, he advised Client not to make the payment. Despite this advice, Client insisted

that his proposed payment did not violate the FCPA, and informed Attorney that he

4
would go ahead with the payment. Attorney gave Client a copy of the FCPA. After this

communication, Attorney and Client ended their relationship.1

In February of 2010, the Bank began an internal investigation into the transactions

between Intervenors and Banker‟s sister. The Overseas Anti-Corruption Unit (“the

Unit”) in the United Kingdom was informed of the situation, and the Unit informed the

Federal Bureau of Investigation (“FBI”). The Unit arrested Banker and Banker‟s sister in

the United Kingdom; their prosecution is ongoing. The FBI began its investigation into

Intervenors in February 2010. Due to the parallel prosecution of Banker and Banker‟s

sister in the United Kingdom, Intervenors have 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 enforce the subpoena, seeking an order directing Attorney to

appear and testify before the grand jury. On September 4, 2012, Corporation and Client

moved to intervene, and the District Court granted this request. After briefing, the

District Court determined that it would conduct an in camera examination of Attorney

outside the presence of Intervenors and the Government to determine the applicability of

the crime-fraud exception to the communications between Attorney and Client. The

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

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District Court invited Intervenors and the Government to submit questions for the District

Court to ask Attorney, which both did.

On January 8, 2013, the District Court questioned Attorney in camera, with only

Attorney‟s own counsel present. After this examination, Intervenors requested that the

District Court release a transcript of Attorney‟s testimony so that they could argue that

the communications were not subject to the crime-fraud exception. On January 18, 2012,

the District Court issued a memorandum and order granting the Government‟s motion to

enforce the subpoena and directing Attorney to testify before the grand jury. Based upon

its review of the Government‟s Ex Parte Affidavit and Attorney‟s in camera testimony,

the District Court found a reasonable basis to suspect that Intervenors intended to commit

a crime when Client consulted Attorney and could have used the information gleaned

from the consultation in furtherance of the crime. The District Court also declined to

release a transcript of the testimony. Intervenors timely appealed and the District Court

granted a stay of its order compelling Attorney‟s grand jury testimony pending resolution

of this appeal.

II.

The District Court had jurisdiction under 18 U.S.C. § 3231. Ordinarily, this Court

has jurisdiction only over final decisions of district courts. 28 U.S.C. § 1291. When a

district court orders a witness to testify or produce documents, the order is generally not

immediately appealable; rather, the witness who wishes to object “must refuse

compliance, be held in contempt, and then appeal the contempt order.” In re Grand Jury,

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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), a privilege holder may

immediately appeal an adverse disclosure order when the privileged information is

controlled by a “disinterested third party who is likely to disclose that information rather

than be held in contempt for the sake of an immediate appeal.” In re Grand Jury, 705

F.3d at 138. Attorney is a disinterested third party controlling allegedly privileged

information. As such, this Court has jurisdiction to hear the appeal brought by

Intervenors, the privilege holders.

“We exercise de novo review over the legal issues underlying the application of

the crime-fraud exception to the attorney-client privilege.” In re Impounded, 241 F.3d

308, 312 (3d Cir. 2001). “Once the court determines there is sufficient evidence of a

crime or fraud to waive the attorney-client privilege, we review its judgment for abuse of

discretion.” Id. at 318. We review procedures used by the district court for abuse of

discretion. See In re Grand Jury Subpoena, 223 F.3d 213, 219 (3d Cir. 2000) (“We

conclude that the District Court did not abuse its discretion in denying Appellant and/or

his attorney access to this information to protect grand jury secrecy.”).

III.

Central to the issues in this case is the attorney-client privilege, the “oldest of the

privileges for confidential communications known to the common law.” Upjohn Co. v.

United States, 449 U.S. 383, 389 (1981). The “privilege protects from disclosure

confidential communications made between attorneys and clients for the purpose of

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obtaining or providing legal assistance to the client.” In re Grand Jury, 705 F.3d at 151.

Although the communications are often relevant and highly probative of the truth, they

are protected in order “to encourage full and frank communication between attorneys and

their clients and thereby promote broader public interests in the observance of law and

administration of justice.” Upjohn Co., 449 U.S. at 389.

Despite their importance, the protections afforded by the privilege are not

absolute. “[T]he reason for that protection . . . ceases to operate at a certain point,

namely, where the desired advice refers not to prior wrongdoing, but to future

wrongdoing.” Zolin, 491 U.S. at 562-63 (internal quotation marks, alterations, and

citations omitted). “To circumvent [the attorney-client] privilege[] under the crime-fraud

exception, the party seeking to overcome the privilege . . . must make a prima facie

showing that (1) the client was committing or intending to commit a fraud or crime, and

(2) the attorney-client communications were in furtherance of that alleged crime or

fraud.” In re Grand Jury, 705 F.3d at 151 (quoting In re Grand Jury Subpoena, 223 F.3d

at 217) (internal quotation marks omitted). Because it is often difficult or impossible to

prove that the exception applies without delving into the communications themselves, the

Supreme Court has held that courts may use in camera review to establish the

applicability of the exception. Zolin, 491 U.S. at 568-69. We explore the contours of in

camera review and the ultimate crime-fraud finding in this appeal.

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 A.

Intervenors raise issues with: the standard that the District Court applied to

determine whether to conduct an in camera examination, its decision to hold an

examination in this case, and the procedures that it used in that examination.2 We hold

that the District Court applied the proper standard and did not abuse its discretion in

finding that the standard applied or in fashioning procedures for the examination.

1.

In Zolin, the Supreme Court announced the inquiry that should precede an in

camera review of documents to determine the applicability of the crime-fraud exception.

491 U.S. at 572. The Court stated that a district court “should require a showing of a

factual basis adequate to support a good faith belief by a reasonable person that in

camera review of the materials may reveal evidence to establish the claim that the crime-

fraud exception applies.” Id. (internal quotation marks and citation omitted). In Zolin,

the government sought to compel the production of tapes of communications and

documents covered by the attorney-client privilege under the exception. Id. at 557.

2
Intervenors also argue that the District Court‟s examination of the Attorney
violated the separation of powers doctrine. This claim plainly misunderstands the roles
of the grand jury in investigating independently from any branch of government and of
the district court in ensuring that the grand jury does not infringe upon common law
privileges. The grand jury belongs to no branch of the government, instead “serving as a
kind of buffer 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). The District Court was fulfilling its obligation to check the
grand jury‟s investigative power by reviewing the grand jury subpoena in order to protect
the attorney-client privilege. See id. at 313.

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Intervenors assert that due to key differences between documented materials and the oral

examination of an attorney, the latter should be subject to a more stringent standard than

that announced for the former in Zolin.

In determining the standard that should apply to in camera examination of a

witness about oral communications, we first note that the Supreme Court did not exclude

oral communications from the ambit of its holding. Id. at 574. Nevertheless, in camera

examination of a witness implicates different concerns than examination of documents or

recordings, so we must determine whether we should adopt the Zolin standard where

unmemorialized oral communications are at issue.

In determining whether there ought to be a threshold showing for in camera

review, the Supreme Court articulated three concerns with the use of in camera

examinations: erosion of the privilege that is aimed at fostering disclosure between

attorney and client, due process implications, and additional burdens on the district

courts. Id. at 571. Intervenors present an additional concern – the malleability of witness

recollections. We will weigh these concerns against the need to prove the applicability of

the crime-fraud exception.

While the “policy of protecting open and legitimate disclosure between attorneys

and clients” is of the utmost importance, id. at 571, a district court‟s examination of a

witness does no more to erode the protection than examination of written or recorded

communications. Applying the same standard in both situations allows for equal

accountability when the communications, whether at the behest of the client or not, were

10
never chronicled. If we were to apply a heightened standard to oral communications,

would-be criminals could use the differing standards to avoid the proper application of

the crime-fraud exception. A client could seek to take advantage of the higher showing

necessary to delve into oral communications by instructing the attorney not to record the

communications in any way. We do not want to incentivize circumventing the proper

application of the crime-fraud exception. As for the due process implications, we believe

that a district court can properly be entrusted to consider the due process interests and

circumstances in each case, and use its discretion to fashion a proper procedure for the in

camera examination. With respect to the third concern, an in camera examination of a

witness is more burdensome on the district court than examination of documents. The

district court must fashion procedures for the examination, bring the witness into court,

and conduct the hearing. However, the concern that the examination may be more

burdensome does not indicate to us that such an examination should only be undertaken

on a higher showing. This would serve to insulate some oral communications from the

crime-fraud exception – an “intolerably high” cost. Id. at 569.

Intervenors‟ concern about the pliability of a witness‟s memory is a substantial

one. An attorney‟s memory about the interaction with the client could be influenced by

the mere fact that the crime-fraud exception is implicated, and the circumstances of how

a question is asked can affect how the information is remembered and reported. There

are also “dangers of inaccuracy and untrustworthiness” in probing into the memory of an

attorney regarding past communications that do not occur with documented

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communications. Hickman v. Taylor, 329 U.S. 495, 512-13 (1947) (“Under ordinary

conditions, forcing an attorney to repeat or write out all that witnesses have told him and

to deliver the account to his adversary gives rise to grave dangers of inaccuracy and

untrustworthiness.”). Despite these concerns, we are confident that district courts will be

able to question an attorney-witness in a way that ensures that the attorney accurately

recounts the communications with the client. The risk of inaccuracies is mitigated by the

fact that the attorney will be under oath and face questioning from a judge rather than an

adversary. The concern over the malleability of witness memory does not outweigh the

importance of ensuring that abuses of the privilege are exposed. Some abuses of the

privilege cannot be demonstrated by extrinsic evidence, so forbidding consideration of

the communications would be “too great an impediment to the proper functioning of the

adversary process.” Zolin, 491 U.S. at 569.

For these reasons, we hold that district courts should use the Zolin standard to

determine whether to examine a witness in camera. Before a district court can undertake

an in camera examination of an attorney-witness to determine the applicability of the

crime-fraud exception, the party seeking to overcome the privilege must make a

“showing of a factual basis adequate to support a good faith belief by a reasonable person

that in camera review of the materials may reveal evidence to establish the claim that the

crime-fraud exception applies.” Id. at 572 (internal quotation marks and citation

omitted).

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 This conclusion is not inconsistent with previous decisions of this Court. See In re

Grand Jury Investigation, 445 F.3d 266, 280 (3d Cir. 2006) (affirming the district court‟s

finding that the crime-fraud exception applied where the district court had examined

attorneys in camera); In re Grand Jury Subpoena, 223 F.3d at 216 (observing that use of

in camera proceedings or ex parte affidavits is a procedure consistently endorsed to

preserve grand jury secrecy). Nor is it inconsistent with decisions from other courts of

appeals. See, e.g., In re John Doe, Inc., 13 F.3d 633, 637 (2d Cir. 1994) (finding that a

district court‟s in camera examination of an attorney after the threshold Zolin showing

was made comported with due process).

The District Court properly applied the Zolin standard and the Government‟s Ex

Parte Affidavit sufficiently fulfilled this standard. The Ex Parte Affidavit contained

details from the FBI investigation into the projects involving the Bank for which

Corporation served as an advisor. The Affidavit also contained Attorney‟s statement to

the FBI that Attorney was consulted about a financing project, although Attorney did not

reveal the details of this communication. For these reasons, the District Court did not err

in concluding that there was a factual basis to support a good faith belief that in camera

examination of Attorney might reveal evidence establishing the applicability of the

crime-fraud exception and in conducting an in camera examination of Attorney.

2.

Intervenors contest the District Court‟s decision to exclude them from the in

camera examination of Attorney and its refusal to release a transcript or summary of the

13
examination. In considering Intervenors‟ request to attend the in camera examination,

the District Court concluded that the balance between the need for grand jury secrecy and

protection of the attorney-client privilege could only be met if neither Intervenors nor the

Government were present during the examination of Attorney. The District Court denied

Intervenors‟ request for a transcript, redacted transcript, or summary of the examination

testimony for similar reasons. The District Court explained, “[b]ecause the grand jury

proceeding here is ongoing and because the transcript almost certainly reflects a preview

of [Attorney‟s] eventual grand jury testimony, . . . secrecy concerns outweigh any need

for Intervenors to review the transcript of [Attorney‟s] in camera interview.”

Intervenors argue that what transpired in camera is not a grand jury secret,

because Attorney‟s recollections exist separate and apart from the grand jury

investigation. The Government responds that Intervenors are not precluded from

interviewing Attorney about his conversation with Client, if Attorney is willing. In this

way, Attorney‟s recollections are not grand jury secrets.

The Government argues, on the other hand, that the questions posed by the District

Court, some of which were submitted by the Government, do constitute grand jury

secrets. The Government maintains that the Intervenors should be prevented from

uncovering what the Government wished to ask Attorney. Intervenors respond that they

already know what the grand jury is investigating due to the parallel prosecution in the

United Kingdom.

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 The District Court did not abuse its discretion in excluding the Intervenors from

the interview or declining to release a transcript or summary of the testimony. The

District Court noted that even though secrecy concerns are minimized by the parallel case

in the United Kingdom, “there appears to be a significant amount of information before

the grand jury that is not known to the Intervenors.” The District Court did not err in so

concluding. Intervenors are not aware of how much the Government knows. But if they

were privy to the in camera examination, they could preview not only Attorney‟s grand

jury testimony, but also evidence already submitted to the grand jury, as reflected in the

Government‟s questions, and the Government‟s eventual trial evidence and strategy.

Even though some information regarding the investigation is public, the content of this

interview is entitled to protection as a grand jury secret. See In re Grand Jury Subpoena,

233 F.3d at 219 (“Given the acknowledged need for secrecy in grand jury proceedings,

we reject Appellant‟s argument that the „unique facts and circumstances in this case,‟

including . . . the fact that the nature of the investigation has already been made public in

several contexts, required the District Court to order disclosure of the government‟s ex

parte affidavit.”). We therefore conclude that the District Court did not abuse its

discretion in adopting these procedures for the in camera proceeding.

B.

Intervenors challenge the District Court‟s determination that the crime-fraud

exception applies to their communications with Attorney. In this circuit, the crime-fraud

exception to the attorney-client privilege applies “[w]here there is a reasonable basis to

15
suspect that the privilege holder was committing or intending to commit a crime or fraud

and that the attorney-client communications or attorney work product were used in

furtherance of the alleged crime or fraud . . . .” In re Grand Jury, 705 F.3d at 153.3

We review the District Court‟s determination that there is sufficient evidence for

the crime-fraud exception to apply for an abuse of discretion. In re Impounded, 241 F.3d

at 318. We begin by acknowledging that this was a close case. The communication

between Attorney and Client was brief, and consisted mainly of informing Client of the

applicable law and advising that he not make the payment. However, we believe that the

questions posed by Attorney to Client and the information that Client could gain from

3
Intervenors argue on appeal that the District Court erred in applying this standard
for the crime-fraud exception. They maintain that the panel in In re Grand Jury
improperly overruled prior precedent to create this standard. In In re Grand Jury
Subpoena, we held that “to invoke the exception, the government must make a prima
facie showing that (1) the client was committing or intending to commit a fraud or crime,
and (2) the attorney-client communications were in furtherance of that alleged crime or
fraud.” 223 F.3d at 217 (internal citations omitted). We then clarified that “[a] „prima
facie showing‟ requires presentation of „evidence which, if believed by the fact-finder,
would be sufficient to support a finding that the elements of the crime-fraud exception
were met.‟” Id. (quoting Haines v. Liggett Grp., Inc., 975 F.2d 81, 95-96 (3d Cir. 1992)).
The In re Grand Jury panel observed that “sufficient to support” was “not
particularly helpful,” as it “begs the quantum-of-proof question because it does not
quantify what evidence is sufficient.” 705 F.3d at 152. The Court sought to clarify the
standard, and examined Third Circuit precedent to conclude “that our precedent is
properly captured by the reasonable basis standard.” Id. at 153.
The In re Grand Jury panel followed what was “binding,” see IOP 9.1; “sufficient
to support” was not a holding, but part of a standard that we clarified. The panel further
clarified that for a presentation of evidence to be “sufficient,” there must be a “reasonable
basis to suspect” that the elements of the crime-fraud exception are fulfilled. The In re
Grand Jury Court did not improperly overrule the holding from a prior opinion; rather, it
clarified an applicable precedent to delineate a more specific standard. Therefore, we
adhere to the “reasonable basis to suspect” standard.

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those questions are sufficient for us to conclude that the District Court did not abuse its

discretion in determining that the advice was used in furtherance of a crime or fraud.

For the crime-fraud exception to apply, the client must be “committing or

intending to commit a crime or fraud” at the time he or she consults the attorney. In re

Grand Jury, 705 F.3d at 153. This requirement is stated in the present tense, and does

not by its terms apply to a situation where a client consults an attorney about a possible

course of action and later forms the intent to undertake that action. We have also

observed that the attorney-client privilege “is not lost if the client innocently proposes an

illegal course of conduct to explore with his counsel what he may or may not do.” United

States v. Doe, 429 F.3d 450, 454 (3d Cir. 2005). The exception does not apply where the

client forms the intent to engage in criminal or fraudulent activity after the consultation.

Other courts of appeals have specifically clarified when the client must have

developed the requisite intent. The Second Circuit explained that because the exception

only applies where the communications “were intended in some way to facilitate or to

conceal the criminal activity,” United States v. Jacobs, 117 F.3d 82, 88 (2d Cir. 1997)

(quoting In re Grand Jury Subpoenas Duces Tecum, 798 F.2d 32, 34 (2d Cir. 1986))

(internal quotation marks omitted), it is required “to show that the wrong-doer had set

upon a criminal course before consulting counsel.” Id. (emphasis in original). See also

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

show that the client was engaged in or was planning the criminal or fraudulent conduct

when it sought the assistance of counsel . . . .”); In re Grand Jury Proceedings, 87 F.3d

17
377, 381 (9th Cir. 1996) (“To trigger the crime-fraud exception, the government must

establish that „the client was engaged in or planning a criminal or fraudulent scheme

when it sought the advice of counsel to further the scheme.‟” (quoting In re Sealed Case,

754 F.2d 395, 399 (D.C. Cir. 1985)).

A hypothetical question posed by Judge Ambro at oral argument highlights the

importance of the timing of intent. A client consults with an attorney, intending at the

time to go as close to the line of illegality as possible but to remain within the realm of

legal conduct. The client tells the attorney of a possible course of conduct and asks for

advice on the applicable law. The attorney gives advice, explaining which actions would

be legal and which actions would be illegal. A year later, the client decides that he or she

will cross the line from legal to illegal. Here, the crime-fraud exception would not apply,

because the client was not committing a crime or fraud or intending to commit a crime or

fraud at the time he or she consulted the attorney. Even if the client clearly used the

advice obtained a year earlier in furtherance of the crime or fraud, the exception would

not apply because the client did not have the requisite intent at the time of the

consultation.

In this case, the District Court did not abuse its discretion in determining that

Client intended to commit a crime at the time he consulted with Attorney in April 2008.

The evidence shows Client‟s intent to make a payment to Banker in order to ensure that

the project was approved in a timely manner. We can infer Client‟s pre-existing intent to

make the payment in part from his statement to Attorney that he was going to make the

18
payment anyway, after Attorney advised him that he should not do so. This suggests that

Client had already considered the advisability of making the payment, and determined

that it was in his best interest to do so. The fact that the payment occurred in the same

month that the Bank approved the project financing also indicates that Client planned on

making the payment when he consulted with Attorney. Given the information available

to the District Court, we cannot say that it abused its discretion in concluding that Client

“set upon an illegal course before seeking [Attorney‟s] advice about the scheme‟s

legality.” Jacobs, 117 F.3d at 89.

In delineating the connection required between the advice sought and the crime or

fraud, we have repeatedly stated that the legal advice must be used “in furtherance” of the

alleged crime or fraud. We have rejected a more relaxed “related to” standard, In re

Grand Jury Investigation, 445 F.3d at 277, and explained that the legal advice must

“„give[] direction for the commission of future fraud or crime,‟” In re Grand Jury

Subpoena, 223 F.3d at 217 (quoting Haines, 975 F.2d at 90). Most recently, in In re

Grand Jury, we observed, “[a]ll that is necessary is that the client misuse or intend to

misuse the attorney‟s advice in furtherance of an improper purpose.” 705 F.3d at 157. It

is therefore clear from prior precedent that for advice to be used “in furtherance” of a

crime or fraud, the advice must advance, or the client must intend the advice to advance,

the client‟s criminal or fraudulent purpose. The advice cannot merely relate to the crime

or fraud.

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 If the attorney merely informs the client of the criminality of a proposed action,

the crime-fraud exception does not apply. For example, consider the situation where a

client, intending to undertake an illegal course of action, consults a first attorney, tells the

attorney the proposed course of action, and the attorney advises that the course of action

is illegal. The client, dissatisfied with the first attorney‟s answer, then consults a second

attorney. The client tells the attorney the same proposed course of action, but this

attorney says yes, that course of action is legal. Both of these consultations would remain

privileged, because the attorneys merely opined on the lawfulness of a particular course

of conduct, and this advice cannot be used “in furtherance” of the crime.

The situation here is different. In addition to the advice Attorney provided to

Client that he should not make a payment, Attorney also provided information about the

types of conduct that violate the law. We cannot say that the District Court abused its

discretion in determining “that there is a reasonable basis to conclude that [Attorney‟s]

advice was used by [Intervenors] to fashion conduct in furtherance of [their] crime.”

Specifically, Attorney‟s questions about whether or not the Bank was a governmental

entity and whether Banker was a government official would have informed Client that the

governmental connection was key to violating the FCPA. This would lead logically to

the idea of routing the payment through Banker‟s sister, who was not connected to the

Bank, in order to avoid the reaches of the FCPA or detection of the violation. Of course,

it is impossible to know what Client thought or how he processed the information gained

from Attorney. But the District Court did not abuse its discretion in determining that

20
Client “could easily have used [the advice] to shape the contours of conduct intended to

escape the reaches of the law.” For these reason, we affirm the District Court‟s finding

that the crime-fraud exception applies and its order compelling Attorney to testify before

the grand jury.

C.

Intervenors assert that Attorney‟s testimony is protected by the work product

doctrine. The District Court did not address this issue; however, it was fully briefed

before the District Court. “The work-product doctrine . . . protects from discovery

materials prepared or collected by an attorney „in the course of preparation for possible

litigation.‟” In re Grand Jury Investigation, 599 F.2d 1224, 1228 (3d Cir. 1979) (quoting

Hickman, 329 U.S. at 505). The burden of proving the applicability of the work product

privilege rests upon the party asserting the privilege. Haines, 975 F.2d at 94. A lawyer

“may assert the work product privilege,” and “[t]o the extent a client‟s interest may be

affected, he, too, may assert the work product privilege.” In re Grand Jury Proceedings,

604 F.2d 798, 801 (3d Cir. 1979). Intervenors have attempted to assert the work product

privilege on their own behalf and on Attorney‟s behalf, arguing that an innocent attorney

can prevent disclosure of work product even if the client used it to further a crime or

fraud. Attorney did not raise the work product issue before the District Court and

Intervenors cannot assert the privilege on his behalf. Therefore, we need not address

whether an innocent attorney may raise the privilege when there is a crime-fraud finding.

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 A crime-fraud finding overcomes the work product privilege. “Where there is a

reasonable basis to suspect that the privilege holder was committing or intending to

commit a crime or fraud and that the . . . attorney work product w[as] used in furtherance

of the alleged crime or fraud, this is enough to break the privilege.” In re Grand Jury,

705 F.3d at 153. Because, as discussed supra, we affirm the District Court‟s crime-fraud

finding, the work product privilege does not apply. Nevertheless, even without the

crime-fraud finding, the communications between Intervenors and Attorney do not

qualify as protected work product because they were not made “in the course of

preparation for possible litigation.” In re Grand Jury Investigation, 599 F.2d at 1228

(quoting Hickman, 329 U.S. at 505). “Work product prepared in the course of business is

not immune from discovery.” Holmes v. Pension Plan of Bethlehem Steel Corp., 213

F.3d 124, 138 (3d Cir. 2000). Although the “legal theories, research, and fact material

gathered” here could be considered intangible work product, In re Grand Jury

Proceedings, 604 F.2d at 801, Attorney‟s recollections and research are not protected

because they were not made in preparation for possible litigation. When Intervenors

consulted Attorney in April 2008, there was no litigation on the horizon. Investigation

into the transactions that led to the grand jury investigation began nearly two years later.

The consultation was made in the ordinary course of a business transaction; therefore,

Attorney‟s recollections are not protected work product.

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 IV.

For the foregoing reasons, we affirm the order of the District Court enforcing the

grand jury subpoena.

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