United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 13, 2006 Decided February 9, 2007
No. 05-3126
IN RE: GRAND JURY
Appeal from the United States District Court
for the District of Columbia
(No. 05mc00197)
Richard W. Beckler argued the cause for appellants. With
him on the briefs was John F. Stanton.
Nicholas A. Marsh, Attorney, U.S. Department of Justice,
argued the cause for appellee the United States. With him on
the brief was Matthew C. Solomon, Attorney.
Stuart M. Gerson argued the cause and filed the brief for
appellee.
Before: SENTELLE, Circuit Judge, and EDWARDS and
WILLIAMS, Senior Circuit Judges.
Opinion for the Court filed by Circuit Judge SENTELLE.
SENTELLE, Circuit Judge: The appellants, a corporate
executive and his personal attorney, seek to have quashed a
grand jury subpoena issued to the corporation’s corporate
counsel for testimony concerning communications made
between the corporate counsel, and the client and his personal
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attorney. In the proceeding below the district court issued an
order denying the motion to quash. Because we agree that the
communications at issue are not protected by the attorney-client
privilege, we affirm the district court’s order. As this case
involves an ongoing grand jury investigation the parties shall
remain anonymous, and the factual details limited.
I. Background
A corporation held a Board of Directors meeting on
February 7, 2003. At that meeting, appellant John Doe, the
corporation’s Senior Vice President for Business Development,
recommended that the corporation participate in certain planned
political activities. The Board expressly adopted a political
action plan providing that corporate money would be
contributed in specific amounts to named federal political
candidates. Subsequently, in the summer of 2003, the
corporation conducted an internal investigation of whether its
past actions had violated federal campaign finance laws. This
internal investigation was undertaken by the corporation’s law
firm (hereinafter the “law firm”), and in particular one of the law
firm’s partners (hereinafter “corporate counsel”). In September
2003 a report resulting from that internal investigation, alleging
possible federal election law violations, was submitted by the
corporation to the Department of Justice (hereinafter “DOJ” or
“government”).
After receiving the report the DOJ commenced an
investigation into allegations of election fraud at the corporation
and on the part of several of the corporation’s employees.
Pursuant to its investigation, the DOJ issued a subpoena to the
corporation requesting documents related to, among other
things, political contributions made by the corporation or any of
its officers, directors, or employees. The corporation continued
to be represented by the law firm. Appellant Doe in his capacity
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as an executive of the corporation was also represented by the
law firm but in addition retained his own personal attorney.
After the DOJ issued its subpoena, the corporation and its
corporate counsel entered into a Joint Defense Agreement
(“JDA”) with Doe and his personal attorney (hereinafter
collectively “appellants”). The JDA provided for the exchange
of communications and documents between the parties to the
JDA and that such communications and documents would
remain protected by the attorney-client privilege. Corporate
counsel also served as the corporation’s custodian of record and
the principal point of contact with the government.
In response to the DOJ’s subpoena, the corporation
produced, inter alia, an unsigned copy of the minutes of the
February 7, 2003, Board of Directors meeting. These minutes
appeared to show that the political activities plan Doe put forth
at the meeting included illegal corporate contributions to federal
political candidates. The DOJ then requested additional
information from the corporation regarding the Board of
Directors meeting. In response to this request, corporate counsel
sent a letter on December 1, 2004, to Doe’s personal attorney
with a copy of the February 7th unsigned Board Minutes
attached, asking that Doe provide “[a]ny recollections or
information” that he may have in order to address the DOJ’s
concerns. In reply Doe’s personal attorney sent corporate
counsel a fax which stated that enclosed was “a signed copy of
the [February 7, 2003] minutes with [Doe’s] recommendations
attached.” These “recommendations” were typed on a one-page
document which read at the top “Board Meeting,” “February 7,
2003,” and “Assignment Recommendation.” This “Assignment
Recommendation” seemingly indicated that, contrary to the
Board minutes, there were no approved recommendations.
Therefore it was exculpatory as to Doe. According to an
affidavit filed by corporate counsel in the district court, after
corporate counsel received the fax he on three occasions had
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conversations with Doe concerning the Assignment
Recommendation. The first conversation occurred after
corporate counsel contacted Doe and stated that the DOJ would
want to know why the signed copy of the Board minutes and the
Assignment Recommendation had not been previously identified
and produced as responsive to the grand jury subpoena. Doe
replied that only recently had he instructed his assistant to look
at his personal copies of corporate minutes, which apparently
had not been searched previously. Corporate counsel
subsequently submitted the signed Board minutes and the
Assignment Recommendation to the DOJ.
The DOJ then arranged to interview Doe. In the interim
corporate counsel had his second conversation with Doe when
he met with Doe and his personal attorney and informed Doe
that during the interview the DOJ was likely to inquire as to why
the Assignment Recommendation was produced so late. In
reply Doe reiterated his prior explanation. Several days later,
the DOJ informed corporate counsel that it believed that the
Assignment Recommendation was not, as it had been
represented to be, a contemporaneous record of the events that
it described, and was therefore fraudulent. Corporate counsel
then had his third conversation with Doe, at which time Doe
stated that he could not remember the exact date of the
document’s preparation. Soon thereafter, Doe’s personal
attorney informed corporate counsel by telephone that the
Assignment Recommendation was not made contemporaneously
with the February 7, 2003 Board meeting but in fact had been
prepared sometime in December 2004, i.e., the same time period
when Doe stated that his assistant had conducted a search of his
personal files.
Corporate counsel subsequently notified the DOJ that the
Assignment Recommendation should not be considered a
contemporaneous record of the February 7, 2003 Board meeting.
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In response, the DOJ sought from corporate counsel the
circumstances under which the document was obtained as well
as all conversations corporate counsel had with the persons who
had provided the document to him. Corporate counsel initially
claimed attorney-client privilege but later relented after the
government stated that under the circumstances it was its
position that the crime-fraud exception to the privilege was
applicable. The DOJ then interviewed Doe, in his personal
attorney’s presence, regarding the Assignment
Recommendation, at which time Doe told the DOJ that the
document had been created in December 2004 to replicate notes
that he had made around the time of the Board meeting. Doe
also acknowledged that he knew that the Assignment
Recommendation would be provided to the grand jury in
connection with its investigation. When confronted by the DOJ
with his conflicting statements concerning the manner in which
the document had been provided and represented to the
government, Doe’s personal attorney raised the attorney-client
privilege, interjecting that any communications between Doe
and corporate counsel were protected by the JDA and privileged.
Soon thereafter the DOJ began an obstruction-of-justice
investigation into the matter and served corporate counsel with
a grand jury subpoena seeking information concerning his
conversations with Doe on the Assignment Recommendation.
Corporate counsel filed a motion in district court seeking an
order to quash the subpoena or in the alternative directing him
to testify. Attached to the motion was corporate counsel’s
affidavit containing the substance of his conversations with Doe
concerning the Assignment Recommendation. The motion
sought a ruling on whether these conversations between
corporate counsel and Doe were attorney-client privileged. Doe
and his personal attorney intervened, filing a memorandum in
support of the motion to quash in which they requested that the
court, on grounds of attorney-client privilege, not only suppress
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the subpoena but also exclude from discovery the Assignment
Recommendation. After review of the parties’ briefs, including
a government ex parte affidavit, the district court held a hearing
on the motion. The attorneys presented arguments but no
testimony was taken. At the conclusion of the hearing the
district court ruled that the Assignment Recommendation was a
corporate document responsive to the grand jury subpoena and
was not protected from disclosure by the attorney-client
privilege. The court ruled further that the conversations between
the appellants and corporate counsel concerning creation of the
Assignment Recommendation were not protected from
disclosure as the crime-fraud exception to the attorney-client
privilege applied. The court also noted that the Joint Defense
Agreement was a “contractual issue” that was not relevant to
whether the crime-fraud exception applied.
II. Analysis
Doe and his personal attorney now appeal the district
court’s decision. As they did in the proceeding below they seek
to have quashed the subpoena issued to corporate counsel for his
personal testimony and to have destroyed or returned to them
any documents relating to “confidential communications”
between them and corporate counsel.
The government asserts that our review of the district
court’s decision should be for abuse of discretion. See In re
Sealed Case, 950 F.2d 736, 738 (D.C. Cir. 1991); In re Sealed
Case, 754 F.2d 395, 399-400 (D.C. Cir. 1985). Appellants
suggest, however, that we review questions of attorney-client
privilege and/or the applicability of the crime-fraud exception de
novo. See In re Sealed Case, 223 F.3d 778-79 (D.C. Cir. 2000)
(“[Where] the application of the crime fraud exception turns on
a pure question of law” we resolve the question de novo.). We
need not decide between the two, however, as even under the
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stricter standard favored by the appellants we uphold the district
court’s decision.
We observe as a starting point that “the public . . . has a
right to every man’s evidence.” United States v. Nixon, 418
U.S. 683 (1974) (quoting, inter alia, Branzburg v. Hayes, 408
U.S. 665, 688 (1972); United States v. Bryan, 339 U.S. 323, 331
(1941)). In the pursuit of public responsibility, “the law vests
the grand jury with substantial powers.” United States v.
Mandujano, 425 U.S. 564, 571 (1976) (collecting cases)
(“Indispensable to the exercise of its power is the authority to
compel the attendance and the testimony of witnesses . . . and to
require the production of evidence.”) (citations omitted). “When
called by the grand jury, witnesses are thus legally bound to give
testimony.” Id. at 572.
The right of the public to every man’s evidence is, of
course, subject to “except[ion] for those persons protected by a
constitutional, common-law, or statutory privilege.” Nixon, 418
U.S. at 709 (citations omitted). The appellants assert that both
the Assignment Recommendation and any conversations
between corporate counsel and Doe concerning that document
are protected from disclosure by the attorney-client privilege.
According to them the Assignment Recommendation was
provided to corporate counsel by Doe at corporate counsel’s
direction in anticipation of litigation and as such is a privileged
document that was improperly disclosed to the DOJ by
corporate counsel. They further argue that the conversations at
issue were covered by the JDA, which they claim is an extension
of the attorney-client privilege. Asserting that only the client
can waive the attorney-client privilege, they state that neither of
them gave any waiver of any sort to corporate counsel “to
disclose privileged, confidential, or secret materials to the DOJ
at any time.”
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The attorney-client privilege applies only if, inter alia, “the
communication relates to a fact of which the attorney was
informed . . . by his client . . . for the purpose of securing
primarily either (i) an opinion on law or (ii) legal services or (iii)
assistance in some legal proceeding.” In re Sealed Case, 737
F.2d 94, 98-99 (D.C. Cir. 1984) (quoting United States v. United
Shoe Machinery Corp., 89 F. Supp. 357, 358-59 (D. Mass.
1950)). The district court held that the Assignment
Recommendation was not protected by the attorney-client
privilege as it was a corporate document responsive to a
previous subpoena for production. See Braswell v. United
States, 487 U.S. 99, 102 (1988) (“There is no question but that
the contents of subpoenaed business records are not
privileged.”). The document bore the date of February 7, 2003.
It was included in a fax to corporate counsel from Doe’s
personal attorney, at the back of a set of signed minutes of the
Board meeting of the same date. Corporate counsel’s initial fax
to Doe’s personal attorney stated that the Department of Justice,
after reviewing subpoenaed documents, had some concerns
about the Board Meeting, and corporate counsel was therefore
seeking Doe’s “assist[ance] in addressing DOJ’s concerns,” in
particular concerning what Doe had “recommended” at the
meeting. Doe’s personal attorney’s fax in reply to corporate
counsel stated that it was “[i]n response to your request for
additional information about [Doe’s] recommendations at the
February 7, 2003 . . . Board meeting” and that enclosed was “a
signed copy of the minutes with [Doe’s] recommendations
attached . . . [which] should clearly delineate what he
recommended to the Board and what the Board voted to do.”
Under these circumstances it is apparent that Doe and his
personal attorney intended that the Assignment
Recommendation assist corporate counsel in “address[ing]
DOJ’s concerns” by being forwarded to the DOJ along with the
included signed copy of the Board minutes.
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If the document had in fact been the corporate document it
appeared to be, then, as the district court held, there would be no
difficulty in upholding the district court’s ruling. However, this
appeal arises from the fact that the original appearance of the
document may have been the result of a fraud upon the court.
Nonetheless, it is not protected by attorney-client privilege. As
we noted in In re Sealed Case, 877 F.2d 976 (D.C. Cir. 1989),
[a]lthough the attorney-client privilege is of ancient lineage
and continuing importance, the confidentiality of
communications covered by the privilege must be jealously
guarded by the holder of the privilege lest it be waived.
The courts will grant no greater protection to those who
assert the privilege than their own precautions warrant. We
therefore agree with those courts which have held that the
privilege is lost even if the disclosure is inadvertent.
Id. at 980 (internal quotation marks and citations omitted).
Here the disclosure of the document was more than
inadvertent, its disclosure was actually the result of affirmative
acts by the attorney and client now asserting the privilege. We
therefore have no difficulty in holding that the privilege, if
indeed it ever existed, has been waived. We therefore agree
with the district court that the Assignment Recommendation is
not protected by the attorney-client privilege.
The district court also found that Doe is not shielded by the
attorney-client privilege from disclosure of his conversations
with corporate counsel surrounding the creation of the
Assignment Recommendation because of the crime-fraud
exception to the privilege. Attorney-client communications are
not privileged if they “are made in furtherance of a crime, fraud,
or other misconduct.” In re Sealed Case, 754 F.2d at 399. To
overcome a claim of privilege, the government must “make a
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prima facie showing of a violation sufficiently serious to defeat
the privilege”; such a “violation is shown if it is established that
the client was engaged in or planning a criminal or fraudulent
scheme when it sought the advice of counsel to further the
scheme”; and the government’s burden of proof is satisfied “if
it offers evidence that if believed by the trier of fact would
establish the elements of an ongoing or imminent crime or
fraud.” Id. Here, the government has presented evidence,
including the ex parte affidavit, that the Assignment
Recommendation was a back-dated fraudulent document
produced to mislead the government in connection with its
ongoing grand jury investigation. Corporate counsel’s affidavit
submitted with his motion to quash reveals that following
production of that document Doe told corporate counsel on at
least three occasions that his secretary had found the document
and that he did not know when it was created, even though he
later admitted that he created it at the time the signed minutes
were found in his files. We therefore agree that even if the
conversations at issue were subject to the attorney-client
privilege then a prima facie case has been made by the
government that the crime-fraud exception applies to those
conversations.
The appellants claim that both the Assignment
Recommendation and the conversations they had with corporate
counsel concerning that document are protected by the JDA.
According to them the district court erred when it found that the
JDA was not relevant because it was a “contractual issue”
between the parties. They contend, and the government
apparently does not dispute, that joint defense agreements give
rise to an attorney-client privilege. We need not weigh in on the
issue, however. Even if the JDA did give rise to the privilege,
as noted above a prima facie case has been made that the crime-
fraud exception applies to that privilege.
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Appellants argue that even if the materials sought by the
subpoena fall outside the attorney-client privilege because of the
crime-fraud exception, the information sought by the subpoena
is protected under the D.C. Rules of Professional Conduct.
Noting that under those Rules an attorney may not reveal a
client’s “confidence or secret,” see D.C. Rule 1.6(a)-(c),
appellants claim that the information disclosed to the DOJ by
corporate counsel concerning the Assignment Recommendation
and the information sought by the DOJ in the grand jury fall into
the category of either a confidence or a secret barred from
disclosure notwithstanding application of the crime-fraud
exception. Even assuming appellants are correct in arguing that
the D.C. Rules cover this evidence, appellants have offered no
authority for the proposition that an exclusionary remedy would
apply. We doubt that one would. Given that the crime-fraud
exception would expose the controverted evidence even in light
of the common law attorney-client privilege, it would be odd
beyond contemplation that a D.C. local bar rule could thwart the
grand jury’s access to the same evidence.
In short, we agree with the district court that the attorney-
client privilege does not protect those conversations from being
disclosed. Accordingly, the decision of the district court is
Affirmed.