NACDL Amicus Brief

8/10/2019 NACDL Amicus Brief

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No. 14-389

WILSON-EPES PRINTINGCO.,INC. (202)789-0096 WASHINGTON,D.C.20002

IN THE

Supreme ourt of the United States

CORPORATION AND CLIENT,

Petitioner,

v.

UNITED STATES OFAMERICA,

Respondent.

On Petition for a Writ of Certiorari to theUnited States Court of Appeals

for the Third Circuit

BRIEF OF THE NATIONAL ASSOCIATIONOF CRIMINAL DEFENSE LAWYERS

ASAMICUS CURIAEIN SUPPORT OFPETITION FOR A WRIT OF CERTIORARI

MARAV.J.SENNCounsel of Record

ARNOLD &PORTER LLP555 12th Street, NWWashington, DC 20004(202) [email protected]

Counsel for NACDL

Amicus Curiae

[Additional Counsel Listed On Signature Page]


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(i)

TABLE OF CONTENTSPage

TABLE OF AUTHORITIES ................................ iii

INTEREST OFAMICUS CURIAE..................... 1

SUMMARY OF ARGUMENT ............................. 1

ARGUMENT ........................................................ 6

I. THE CIRCUIT SPLIT ON QUANTUMOF PROOF CREATES DISPARATE

EVIDENTIARY STANDARDS FORDEFENDANTS FACING GRAND JURYPROCEEDINGS ....................................... 6

A. The Probable Cause Standard Usedin the Second, Sixth, Eighth and DCCircuits Is the Minimum Quantum ofProof for Application of the Crime-Fraud Exception to the Attorney-Client Privilege. ................................... 6

B. The Various Lower Standards Used in

the Other Circuits for the Crime-Fraud Exception Provide LittleProtection, Are too Amorphous, andLack Consistent Application. ............... 9

1. The reasonable cause andreasonable basis to suspectstandards applied by the First,Third, and Ninth Circuitsencompass too broad a range ofevidentiary thresholds to ensureconsistent application. ................... 9


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TABLE OF CONTENTSContinuedPage

2. The burden-shifting approach inthe Fourth, Fifth and SeventhCircuits is too amorphous andinappropriate for the grand jurysetting. ............................................ 11

3. The some foundation in factstandard used in the Tenth andEleventh Circuits fails to provideany guidance to District Courtsand subjects defendants toinconsistent standards. .................. 14

II. THE PETITION PRESENTS AQUESTION OF NATIONAL IMPOR-TANCE ON THE SCOPE OF THECRIME-FRAUD EXCEPTION, THEPRIMARY EXCEPTION TO THE

ATTORNEY-CLIENT PRIVILEGE. ......... 15

A. Issuing Subpoenas against LawyersProviding Clients Advice Underminesthe Attorney-Client Relationship ....... 16

B. The Use of the Crime-Fraud Excep-tion To Challenge the Attorney-ClientPrivilege Is a Growing Problem .......... 17

III. THE DECISION BELOW WAS WRONGAND SETS A DANGEROUSPRECEDENT ............................................ 18

CONCLUSION .................................................... 22


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iii

TABLE OF AUTHORITIESCASES Page(s)

Bourjaily v. United States,483 U.S. 171 (1987) ................................... 7

Clark v. United States,289 U.S. 1 (1993) ....................................... 3

In re Grand Jury,705 F.3d 133 (3d Cir. 2012) ...................... 3, 10

In re Grand Jury Investigation,

842 F.2d 1223 (11th Cir. 1987) ................. 4, 14

In re Grand Jury Investigation,445 F.3d 266 (3d Cir. 2006) ...................... 3-4

In re Grand Jury Matters,751 F.2d 1223 (1st Cir. 1984) ................... 16

In re Grand Jury Proceedings,674 F.2d 309 (4th Cir. 1982) ..................... 12

In re Grand Jury Proceedings,87 F.3d 377 (9th Cir. 1996) ....................... 10

In re Grand Jury Proceedings #5 EmpanelledJanuary 28, 2004,401 F.3d 247 (4th Cir. 2005) ..................... 4, 11

In re Grand Jury Proceedings,417 F.3d 18 (1st Cir. 2005) ..................... 4, 8, 10

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

In re Grand Jury Proceedings in Matterof Fine,

641 F.2d 199 (5th Cir. 1981) ..................... 12


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TABLE OF AUTHORITIESContinuedPage(s)

In re Grand Jury Subpoena,419 F.3d 329 (5th Cir. 2005) ................. 4, 11, 12

In re Grand Jury Subpoena,No. 10-127-02, 2013 WL 228115 (E.D.Pa. Jan 18, 2013) ...................................... 4

In re Grand Jury Subpoena,745 F.3d 681 (3d Cir. 2014) ...................... 10

In re Grand Jury Subpoenas,144 F.3d 653 (10th Cir. 1998) ................... 4, 14

In re Grand Jury Subpoena Duces TecumDated Sept. 15, 1983,731 F.2d 1032 (2d Cir. 1984) ................... 7

In re Napster, Inc. Copyright Litigation,479 F. 3d 1078 (9th Cir. 2007) .................. 4

In re Omnicom Grp., Inc. Sec. Litig.,233 F.R.D. 400 (S.D.N.Y. 2006) ................ 5, 8

In re Sealed Case,754 F.2d 395 (D.C. Cir. 1985) ................... 9, 19

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

Mohawk Industries, Inc. v. Carpenter,558 U.S. 100 (2009) ................................... 14

Trammel v. United States,445 U.S. 40 (1980) ..................................... 2

United States v. Boender,

649 F.3d 650 (7th Cir. 2011) ................. 4, 11, 13


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TABLE OF AUTHORITIESContinuedPage(s)

United States v. Chen,99 F.3d 1495 (9th Cir. 1996) ..................... 4, 10

United States v. Clem,No. 97-5507, 2000 WL 353508(6th Cir. 2000) ........................................... 3

United States v. Edgar,82 F.3d 499 (1st Cir. 1996) ................... 2, 16, 21

United States v. Graf,610 F.3d 1148 (9th Cir. 2010) ................... 13

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

United States v. Klubock,832 F.2d 649 (1st Cir.), affd en banc,832 F.2d 664 (1st Cir. 1987) ..................... 17

United States v. McDonald,No. 01-CR-1168JSWDW, 2002

WL 31956106 (E.D.N.Y. May 9, 2002) ..... 7, 8United Statesv. Zolin,

491 U.S. 554 (1989) ............................. 2, 5, 9, 13

Upjohn Co. v. United States,449 U.S. 383 (1981) ................................... 2, 21

Whitehouse v. U.S. District Court for Dist.of Rhode Island,53 F.3d 1349 (1st Cir. 1995) ..................... 18


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TABLE OF AUTHORITIESContinuedOTHER AUTHORITIES Page(s)

American Bar Association StandingCommittee on Ethics and ProfessionalResponsibility and Section of CriminalJustice, Report to the House of Delegates,1990 ........................................................... 15

Blacks Law Dictionary (4th ed. 1968) ......... 12

Fed. R. Evid. 104(a) ...................................... 7

Gardner, The Crime or Fraud Exception tothe Attorney-Client Privilege, 47 A.B.A.J.708 (1961) .................................................. 5

Genego, Risky Business: The Hazards ofBeing a Criminal Defense Lawyer, 2Crim. Just. 40 (1986) ................................ 17

Paul R. Rice, Attorney-Client Privilege inthe United States, 8.6, at 44 (2d ed.1999) ......................................................... 4

Rudolf & Mayer, Grand Jury Practice, 5Crim. Just. 22 (1990) ................................ 17

Stuart Gerson and Jennifer E. Gladieux,Advice of Counsel: Eroding Confidentialityin Federal Health Care Law, 51 Ala. L.163 (1999) .................................................. 18

Stern & Hoffman, Privileged Informers:The Attorney Subpoena Problem and

Proposal for Reform, 136 U. Pa. L. Rev.1783 (1988) ................................................ 17


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INTEREST OFAMICUS CURIAE1

The National Association of Criminal Defense

Lawyers (NACDL) is a non-profit corporation withmore than 11,500 affiliate members in 50 states,including private criminal defense attorneys, publicdefenders, and law professors. NACDL was foundedin 1958 to promote criminal law research, to advanceand disseminate knowledge in the area of criminalpractice, and to encourage integrity, independence,and expertise among criminal defense counsel.NACDL is particularly dedicated to advancing the

proper, efficient, and just administration of justice,including issues involving the role and duties oflawyers representing parties in administrative,regulatory, and criminal investigations. In further-ance of this and its other objectives, NACDL hasappeared hundreds of times as amicus curiae beforethis Court, the federal courts of appeals, and thehighest courts of numerous states.

NACDL has a particular interest in this casebecause the decision of the Court below could interfere

with the ability of NACDLs members to representtheir clients, subject NACDL members and theirclients to punishment for zealous advocacy, andundermine the adversarial process essential tofairness in the criminal justice system.

SUMMARY OF THE ARGUMENT

The decision below, which applies a reasonablebasis to suspect standard, deepens the existing circuit

1Letters of consent have been filed with the Clerk. Pursuant

to Rule 37.6, amicus states that no counsel for a party authoredany part of the brief, and no person or entity other than amicus

and its counsel made a monetary contribution to the preparationor submission of this brief.


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split regarding the quantum of proof necessary toestablish the applicability of the crime-fraud exceptionto the attorney-client privilege. The crime-fraudexception prevents clients from asserting the attorney-client privilege when the clients intent at the timethey seek an attorneys advice is to initiate, continueor further fraudulent or criminal activity.

The attorney-client privilege is the oldest of theprivileges for confidential communications known tothe common law. Upjohn Co. v. United States, 449U.S. 383, 389 (1981). The privilege rests on the

need for the advocate and counselor to know allthat relates to the clients reasons for seekingrepresentation if the professional mission is to becarried out. Trammel v. United States,445 U.S. 40,51 (1980). While exceptions to this privilege existthe most common of which is the crime-fraudexceptionpiercing this seal of secrecy may criticallyharm the privileges purpose of encouraging full andfrank communication between attorneys and theirclients, which promotes broader public interests inthe observance of law and administration of justice.

United States v. Zolin, 491 U.S. 554, 562 (1989).Attorneys have an obligation under this privilege notto reveal client confidences and to assert this privilegeon behalf of a client. United States v. Edgar, 82 F.3d499, 508 (1st Cir. 1996) (citations omitted).

In Zolin, this Court defined the thresholdevidentiary showing required to hold in camerareview of allegedly privileged communications. 491U.S. at 563-64. This Court, however, explicitly statedthat it need not decide the quantum of proof necessary

ultimately to establish the applicability of the crime-fraud exception. Id.at 564 (emphasis added). As aresult of the gap left by Zolin, federal circuits have


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been forced to rely on minimal guidance: aprima facieshowing is required to vitiate the attorney-clientprivilege. Clark v. United States, 289 U.S. 1, 14-15(1933) (referring alternately to a showing of a primafacie case sufficient to satisfy the judge or primafacie evidence that [the charge] has some foundationin fact). However, theprima faciestandard is amongthe most rubbery of all legal phrases and usuallymeans little more than a showing of whatever isrequired to permit some inferential leap sufficient toreach a particular outcome. In re Grand Jury, 705

F.3d 133, 152 (3d Cir. 2012) (emphasis added).Unsurprisingly, federal courts have struggled to

apply consistently the rubberyprima faciestandard.What has emerged from the question left open inZolinare widely differing formulations for the quantum ofproof required for the applicability of the crime-fraudexception to the attorney-client privilege. The Second,Sixth, Eighth, and D.C. Circuits require probablecause. SeeUnited States v. Jacobs, 117 F.3d 82, 87 (2dCir. 1997), abrogated on other grounds by Loughrin v.United States, 134 S. Ct. 2384 (2014); United States v.

Clem, No. 97-5507, 2000 WL 353508, at *3 (6th Cir.2000); In re Grand Jury Proceedings, G.S., F.S., 609F.3d 909, 913 (8th Cir. 2010); In re Sealed Case, 107F.3d 46, 50 (D.C. Cir. 1997).2 The First, Third, andNinth Circuits require reasonable cause or reasonablebasis to suspect, which appears to be a lower standardthan probable cause. See In re Grand Jury

2 The D.C. Circuit requires evidence that if believed by thetrier of fact, would establish the elements of an ongoing or

imminent crime or fraud, but the D.C. Circuit has statedthat there is little practical difference between this standard

and that of the Second Circuits requirement of probable cause.In re Sealed Case, 107 F.3d at 50.


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Investigation, 445 F.3d 266, 275 (3d Cir. 2006); In reGrand Jury Proceedings, 417 F.3d 18, 23 (1st Cir.2005); United States v. Chen, 99 F.3d 1495, 1503 (9thCir. 1996).3 The Fourth, Fifth, and Seventh Circuitsemploy a method akin to a burden-shifting test. See

In re Grand Jury Proceedings #5 Empanelled January28, 2004, 401 F.3d 247, 251 (4th Cir. 2005); In reGrand Jury Subpoena, 419 F.3d 329, 336 (5th Cir.2005); United States v. Boender, 649 F.3d 650, 655-56(7th Cir. 2011). The Tenth and Eleventh Circuits havenot articulated a standard, but merely require there

be some foundation in fact, arguably an even lowerstandard than reasonable basis to suspect. See In reGrand Jury Subpoenas, 144 F.3d 653, 660 (10th Cir.1998);In re Grand Jury Investigation, 842 F.2d 1223,1226, 1228 (11th Cir. 1987).

For years, courts and commentators have acknowl-edged the existence of the disparate evidentiary stand-ards and the confusion it has produced among thecircuits. See, e.g., In re Grand Jury Subpoenas, 144F.3d at 660 (listing the differing standards among thecircuits); Paul R. Rice,Attorney-Client Privilege in the

United States, 8.6, at 44 (2d ed. 1999) (The primafacie standard has always been poorly defined, incon-sistently interpreted and generally misunderstood).

3The Ninth Circuit, although claiming that reasonable cause

is analogous to probable cause, has admitted that thesestandards, and the differences between them, are not entirelyfree from confusion. In re Napster, Inc. Copyright Litigation,

479 F.3d 1078, 1094 (9th Cir. 2007),abrogated on other groundsby Mohawk Industries, Inc. v. Carpenter, 558 U.S. 100 (2009).

Also, at least one district court has observed that the reasonablebasis standard is relatively low. See, e.g., In re Grand JurySubpoena,No. 1012702, 2013 WL 228115, at *4 (E.D. Pa. Jan.18, 2013).


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InZolin, this Court acknowledged that its use of thephrase prima facie case in Clark to describe theshowing needed to defeat the privilege has causedsome confusion and [t]he quantum of proof needed toestablish admissibility was then, and remains, subjectto question. 491 U.S. 563, n7. More than a quarterof a century later, the question remains open as thecircuit courts have not addressed in meaningful detailthe actual burden that the movant carries in seekingto pierce the privilege on the basis of the crime-fraudexception. In re Omnicom Grp., Inc. Sec. Litig., 233

F.R.D. 400, 406 (S.D.N.Y. 2006).And this uncertainty has had a growing practical

impact. Once used rarely, the crime-fraud exceptionis steadily becoming the norm. This has led to anerosion of the privilege due to the increased tendencyby courts to find that the crime-fraud exceptionapplies. In the past three decades, prosecutors haveincreasingly subpoenaed attorneys to testify in frontof grand juries in criminal cases, with little to noresistance from courts. In far too many instances, theGovernments weapon to overcome the attorney-client

privilege is the crime-fraud exception.

Legal rights must depend upon valid principles ofevidence. Gardner, The Crime or Fraud Exception tothe AttorneyClient Privilege, 47 A.B.A.J. 708, 710(1961). Unfortunately, the circuit split regardingthe quantum of proof for the applicability of thecrime-fraud exception to attorney-client privilegebreeds wild inconsistency. Moreover, district courtsare left to decide crime-fraud exception cases withlittle guidance from circuit courts in applying the gov-

erning standard. Given the Governments increasedattempts to pierce the attorney-client privilege, thelack of uniformity in the circuits creates an


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unacceptable risk to lawyers and defendants. Thiscase presents a clean vehicle to resolve the existingcircuit split.

ARGUMENT

I. THE CIRCUIT SPLIT ON QUANTUM OFPROOF CREATES DISPARATE EVIDEN-TIARY STANDARDS FOR DEFENDANTSFACING GRAND JURY PROCEEDINGS

Many courts have long struggled with the eviden-tiary standards required under the crime-fraud excep-

tion. In general, current rules allow prosecutors toobtain an in camerareview based on unsubstantiatedinformation that they may have collected through anunlawful intrusion into the privilege, without givingdefendants an opportunity to challenge the reliabilityor validity of that evidence. Adding further confusionand uncertainty to a tool that is already plagued withambiguity and fraught with prosecutorial abuse willonly harm the criminal justice system. The issuanceof subpoenas in grand jury and other criminalproceedings to attorneys should be limited to those

situations in which there is a genuine need tointrude into the attorney-client relationship, and theprosecutor has already pursued alternative avenues toget the information, rather than going on a fishingexpedition with legal counsel.

A. The Probable Cause Standard Usedin the Second, Sixth, Eighth and DCCircuits Is the Minimum Quantum ofProof for Application of the Crime-Fraud Exception to the Attorney-Client

Privilege.The probable cause standard to defeat the attorney-

client privilege with the crime-fraud exception


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articulated by the Second, Sixth, Eighth, and D.C.Circuits should be the minimum standard. Thisstandard strikes an appropriate balance betweenthe competing interests of the Government anddefendants.4 While not too demanding, the probablecause standard prevents the Government from relyingon mere allegations or speculative evidence to piercethe attorney-client privilege. It is also a well-definedstandard that is relatively easy to administer.

Anything less than the probable cause standard wouldresult in the crime-fraud exception swallowing the

general rule of the attorney-client privilege.A finding of probable cause requires that the

perpetration of a crime or fraud is more probablethan not. United States v. McDonald, No. 01-CR-1168JSWDW, 2002 WL 31956106, at *5 (E.D.N.Y.May 9, 2002) (internal citations and quotationsomitted).5 In other words, the party invoking the

4 This is not to suggest that a higher burden should not be

considered by the Court. There is support in this Courtsjurisprudence that the applicability of the crime-fraud exception

should be subject to the standard of preponderance of theevidence, as required by Fed. R. Evid. 104(a). See Bourjaily v.United States, 483 U.S. 171, 175-76 (1987) (requiring the use of a

preponderance of proof standard when resolving preliminaryfactual issues as a predicate to admitting evidence); see also

Zolin,491 U.S. at 568 (acknowledging that preliminary questionsconcerning privileges must be addressed under Rule 104(a).)

5The Second Circuit contends that there is little difference

between the probable cause standard and the reasonable basisstandard employed by some other circuits. In re Grand Jury

Subpoena Duces Tecum Dated Sept. 15, 1983, 731 F.2d 1032, 1039

(2d Cir. 1984). However, its articulation of the quantum of proof

required to apply the crime-fraud exception is distinct. Compare,e.g., McDonald, 2002 WL 31956106, at *5 (With a strongemphasis on intent, the crime-fraud exception applies only when

there is probable cause to believe that the communications with


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crime-fraud exception must establish that it is morelikely than not that defendants engaged in a schemeto defraud and that the communications were infurtherance of the fraud. Id. Moreover, under thisstandard, the Government need not prove the actualexistence of crime or fraud and [a] finding of probablecause is not negated by an innocent explanation whichmay be consistent with the facts alleged. Id. (internalcitations and quotations omitted).

The invocation of the probable cause standard, asomewhat stringent test, as explained by a district

court in the Second Circuit, serves important policyinterests:

First, this approach would enhance the relia-bility of the courts ruling. If it is important topreserve the vitality of the privilege, it isimportant to make sure that decisions thatstrip parties of privilege protections thatotherwise would attach are reliably made.Second, this concern is particularly acutewhen the fraud allegation is based on

technically dense or esoteric evidence (matterswell beyond the common experience ofgeneralist judges).

In re Omnicom Grp., Inc. Sec. Litig., 233 F.R.D. at 408(internal citations and quotations omitted).

counsel were intended in some way to facilitate or conceal the

criminal activity and it is the clients objective in carrying out thefraud that is controlling.) withIn re Grand Jury Proceedings,

417 F.3d at 23 (merely stating it is enough to overcome theprivilege that there is a reasonable basis to believe that the

lawyers services were used by the client to foster a crime orfraud).


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In sum, the Sixth Amendment and the underlyingpolicies of the common law privilege requireheightened protection of confidential communicationsbetween lawyer and client when the lawyer isdefending the client against criminal charges. In re

Sealed Case, 754 F.2d 395, 403 (D.C. Cir. 1985, Mikva,J., concurring). It must be remembered that thecrime-fraud exception is based on the recognitionthat the attorney-client privilege will protect theconfidences of wrongdoers. Zolin, 491 U.S. at 562.But this cost is accepted as necessary in promoting the

broader public interests in the observance of law andthe administration of justice by encouraging possiblewrongdoers to seek legal guidance. Id. Consequently,the more probable than not quantum of proof shouldbe the minimum showing to allow piercing theprivilege.

B. The Various Lower Standards Used inthe Other Circuits for the Crime-FraudException Provide Little Protection,

Are too Amorphous, and Lack ConsistentApplication

1. The reasonable cause and reasonablebasis to suspect standards appliedby the First, Third, and NinthCircuits encompass too broad arange of evidentiary thresholds toensure consistent application.

The reasonable cause or reasonable basis to suspecttests, adopted by the First, Third, and Ninth Circuits,to defeat the attorney-client privilege with the crime-fraud exception are too broad to be clear or effective.

These circuits maintain that the standard isintended to be reasonably demanding, stressing that


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speculative and distant evidence is insufficient. In reGrand Jury, 705 F.3d at 153; In re Grand JuryProceedings, 417 F.3d at 23. However, these circuitshave failed to elucidate with precision what thismeans, other than that the standard is lower thanbeyond a reasonable doubt but higher than asneaking suspicion. In re Grand Jury Proceedings,87 F.3d 377, 381 (9th Cir. 1996). The First Circuit, forexample, provides little guidance other than it isenough to overcome the privilege that there is areasonable basis to believe that the lawyers services

were used by the client to foster a crime or fraud. Inre Grand Jury Proceedings, 417 F.3d at 23. Likewise,the Ninth Circuit has only explained that mereallegations or suspicion by the Government areinsufficient. But proof beyond a reasonable doubt isnot necessary to justify application of the crime-fraudexception. United States v. Chen, 99 F.3d at 1503.Until recently, the Third Circuit struggled to expresswith precision the standard to apply. See In re Grand

Jury, 705 F.3d at 152 (Our own statement of the proofnecessary to apply the crime-fraud exception is not

particularly helpful . . . . This begs the quantum-of-proof question because it does not quantify whatevidence is sufficient.).

This uncertainty regarding the standard isespecially problematic in a close case such as thisone. In re Grand Jury Subpoena, 745 F.3d 681, 691(3d Cir. 2014). The lack of clarity and guidance on thisimportant issue, in addition to the circuit split, issufficient to warrant review.


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2. The burden-shifting approach in theFourth, Fifth and Seventh Circuits istoo amorphous and inappropriatefor the grand jury setting.

The crime-fraud standard used by the Fourth andFifth Circuits requires a showing of evidence that,if believed by a trier of fact, would establish theelements of a crime. In re Grand Jury Proceedings #5

Empanelled January 28, 2004, 401 F.3d at 251(requiring a prima facie showing of evidence that, ifbelieved by a trier of fact, would establish the elements

of some violation that was ongoing or about to becommitted and noting that the proof must be such asto subject the opposing party to the risk of non-persuasion if the evidence as to the disputed fact is leftunrebutted) (internal quotation marks omitted);In reGrand Jury Subpoena, 419 F.3d at 336 (To make thenecessary prima facie showing for the application ofthe crime-fraud exception here, the Government mustproduce evidence such as will suffice untilcontradicted and overcome by other evidence [] Acase . . . has proceeded upon sufficient proof to that

stage where it will support a finding if evidence to thecontrary is disregarded) (internal quotation marksand brackets omitted).

Similarly, under the Seventh Circuits approach, aprima facie showing is established by such evidencethat allows the district court to require the defendantto come forward with an explanation for the evidenceoffered against the privilege. United States v.

Boender, 649 F.3d at 655. The problems with theseamorphous approaches are significant. In addition to

being in conflict with other circuits, none of these threecircuits have clearly defined with precision therequisite quantum of proof for the applicability of the


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crime-fraud exception to the attorney-client privilege.For instance, the Fifth Circuits precedent relies on thedefinition ofprima faciefrom Blacks Law Dictionary(4th ed. 1968): (s)uch as will suffice until contradictedand overcome by other evidence . . . . (a) case whichhas proceeded upon sufficient proof to that stagewhere it will support a finding if evidence to contraryis disregarded. See In re Grand Jury Subpoena, 419F.3d at 336 (citing In re Grand Jury Proceedings in

Matter of Fine, 641 F.2d 199, 203 (5th Cir. 1981)).Although the Fifth Circuit admitted that the term

[prima facie] could be defined in a variety of ways, it,nonetheless, found this definition adequate. In reGrand Jury Proceedings in Matter of Fine, 641 F.2d at203. Moreover, the Fifth Circuit precedent on therequisite quantum of proof, or lack thereof, for theapplicability of the crime-fraud exception predates theCourts decision inZolinin 1989. See In re Grand Jury

Subpoena, 419 F.3d at 336 (relying on Fifth Circuitcases from 1981 and 1982). The Fourth Circuitsapproach also misses the mark on providing anyclarity or guidance. See, e.g., In re Grand Jury

Proceedings, 674 F.2d 309, 310 (4th Cir. 1982) (statingonly that it is clear that the attorney was hired tofurther the criminal activity. . . the Government hasmade out a prima facie case that the crime/fraudexception is applicable).

Further, the prima facie burden-shifting approachis problematic in a grand-jury setting. This approachis often used in civil litigation, particularly discrimi-nation cases, where a party is given an opportunity torefute the claims against it in open court. However, inthe context of a grand jury setting, where the

Government seeks to apply the crime-fraud exceptionto the attorney-client privilege, a judge usuallyexamines evidence from the Government during anex


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parte hearing and in camera inspection. In essence,this burden-shifting approach is used to dispel theprivilege altogether without affording the client anopportunity to rebut the prima facie showing. Theproblematic nature of the burden-shifting approach isilluminated in the Seventh Circuits approach wheredistrict courts have the option of holding anadversarial proceeding to assess whether the crime-fraud exception applies. See United States v. Boender,649 F.3d at 655-57.

Finally, in adopting a burden-shifting approach,

these circuits have added an additional layer towhat is already a burden-shifting approach withthe attorney-client privilege. Initially, [a] partyasserting the attorney-client privilege has the burdenof establishing the existence of an attorney-client relationship and the privileged nature of thecommunication, United States v. Graf, 610 F.3d 1148,1156 (9th Cir. 2010) (internal quotations and citationsomitted); then the burden shifts to the party opposingthe privilege to invoke the crime-fraud exception, andto make a prima facie showing that the exception

applies. See Zolin, 491 U.S. at 560. Followingthat, the party asserting the privilege would havean opportunity for rebuttal. Such an adversarialprocedure requires district courts to engage in severalsteps beyond what is necessary to hold in cameraproceedings in the first place. Given that in cameraproceedings are already burdensome, see Zolin,491 U.S. at 571, this extra step makes the processunnecessarily arduous for district courts. Oncestripped of the privilege, it is unlikely a defendantwould regain attorney-client privilege on appeal

because district court orders are unlikely to bereversed on appeal, particularly when they rest onfactual determinations, such as the piercing of


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attorney-client privilege, for which appellatedeference is the norm. Carpenter, 558 U.S. at 110. Insum, the burden-shifting approach fails to provide anyadditional protection for attorney-client privilege.

3. The some foundation in factstandard used in the Tenth andEleventh Circuits fails to provideany guidance to District Courts andsubjects defendants to inconsistentstandards.

Unlike the other circuits, the Tenth Circuit hasnot articulated a requisite quantum of proof for aprima facie showing, other than the allegation ofattorney participation in the crime or fraud has somefoundation in fact. In re Grand Jury Subpoenas, 144F.3d at 660 (Although the exact quantum of proofnecessary to meet the prima facie standard has notbeen decided by the Supreme Court . . . . [w]e need notarticulate the exact quantum of proof here becauseunder any of these announced standards, theGovernment has made a prima facie showing).

Likewise, the Eleventh Circuit uses the somefoundation in fact standard, with the only guidancebeing that mere allegations of criminality areinsufficient to warrant application of the exception.

In re Grand Jury Investigation, 842 F.2d at 1226,1228. As a result, the question on the quantum ofproof for the applicability of the crime-fraud exceptionto the attorney-client privilege remains an openquestions in these circuits.

Aside from being in conflict with the other circuits,the some foundation in fact standard leaves district

courts to develop their own standards and exposesdefendants to inconsistent standards for application ofthe crime-fraud exception in the Tenth and Eleventh


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Circuits. District courts should not be subjected to aguessing game when the attorney-client privilege is atstake.

II. THE PETITION PRESENTS A QUESTIONOF NATIONAL IMPORTANCE ON THESCOPE OF THE CRIME-FRAUD EXCEP-TION, THE PRIMARY EXCEPTION TOTHE ATTORNEY-CLIENT PRIVILEGE.

The existing disparate standards have led todifferent outcomes on crime-fraud issues depending on

the happenstance of where the grand jury proceedingsare taking place. This should not be the case for afederal privilege standard. The decision belowencourages the Government to continue to expand itsuse of subpoenas against attorneys under the guise ofthe crime-fraud exception. If left standing, thedecision below will have detrimental effects onindividuals seeking advice, as well as increasedconfusion, fear, and harm to criminal defense lawyersand the legal profession. In fact, the potential reachof the decision below likely would result in an

unnecessary and overbroad use of subpoenas, whichwould threaten both the integrity of the criminaljustice system and the ability of large classes ofdefendants to obtain representation. AmericanBar Association Standing Committee on Ethics andProfessional Responsibility and Section of CriminalJustice, Report to the House of Delegates, 1990(citation omitted).


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A. Issuing Subpoenas against LawyersProviding Clients Advice Underminesthe Attorney-Client Relationship

The issuance of subpoenas to attorneys in thecontext of the crime-fraud exception significantlyharms the attorney-client relationship in a number ofways. First, subpoenas issued to attorneys create animmediate conflict of interest between the lawyer andhis client because the lawyers legal and practicalinterests as a witnessdiverge from those of his client.The lawyers interest lies in avoiding potential

contempt sanctions by complying with the subpoenas,or at least by expending the fewest possible resourcesin resisting them, whereas, the clients interest inlessening the likelihood of indictment on additionalcharges would require the lawyer to do his utmost,including incurring contempt citations, to resist thesubpoena. In Re Grand Jury Matters, 751 F.2d 13, 19(1st Cir. 1984). This conflict drives a chilling wedgebetween the attorney/witness and his client, andcreates a chilling effect for clients that may cause themnot to seek advice at all, or to withhold information

from an attorney that is necessary for the attorney toprovide advice for fear that the attorney may later becompelled to disclose such information. Edgar, 82F.3d at 507. Thus, expansion of the crime-raud exception will result in less full and frankcommunication between attorneys and their clients,which may actually lead to more criminal activity orlegal or regulatory violations that could have beenprevented if proper advice from counsel had beensought.

Second, subpoenas issued to attorneys make itextremely difficult for a lawyer to dedicate their fulltime and attention to their clients case and issues at


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hand. Once an attorney is subpoenaed, the attorneymust divert valuable time and resources to address thesubpoena, which further creates a conflict of interestthat may not favor the clients best interest.

Third, subpoenas issued to attorneys may convert aclients attorney into an adverse witness against theirclient, with the possibility that the lawyer will berequired to resign as attorney for his client or bedisqualified, which has due process implications underthe Fifth and Sixth Amendments, because prosecutorscan effectively deny criminal defendants their counsel

of choice. United States v. Klubock, 832 F.2d 649, 654(1st Cir.), affd en banc,832 F.2d 664 (1st Cir. 1987).

B. The Use of the Crime-Fraud ExceptionTo Challenge the Attorney-ClientPrivilege Is a Growing Problem

Beginning in the mid-1980s, the Government beganincreasing the issuance of subpoenas to attorneys un-der the crime-fraud exception. For example, anational survey of over 1,500 practicing criminaldefense lawyers found that attorneys were subpoe-

naed infrequently prior to 1980, but documented adramatic increase between 1983 and 1985.

SeeGenego,Risky Business: The Hazards of Being aCriminal Defense Lawyer, 2 Crim. Just. 40 (1986). Inaddition, between 1985 and 1986, the Department ofJustice approved 400 requests to issue grand jurysubpoenas to attorneys. Stern & Hoffman, PrivilegedInformers: The Attorney Subpoena Problem and

Proposal for Reform, 136 U. Pa. L. Rev. 1783, 1787-89(1988) (citing statistics released by the Department ofJustice that indicate an explosion of subpoenas to

lawyers); see also Rudolf & Mayer, Grand JuryPractice, 5 Crim. Just. 22, 24 (1990) (analyzing Justice


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Department attorney subpoena statistics for theperiod from 1985 to 1989).

The 1990s saw a further increase in the assertion ofthe crime-fraud exception. In federal grand jury cases,from 1995 to 1998, the crime-fraud exception wasinvoked in 11.80% of cases, but in 1998, thepercentage rose to 38%. Stuart M. Gerson andJennifer E. Gladieux, Advice of Counsel: ErodingConfidentiality in FederalHealth Care Law, 51 Ala. L.163, 198 (1999). As one court observed, despite theUnited States Department of Justice issuing

guidelines for federal prosecutors seeking to subpoenaan attorney, and the American Bar Associationcreating an ethical prohibition against subpoenaingan attorney, [t]he instances of federal prosecutorssubpoenaing attorneys to compel evidence regardingtheir clients ha[s], nevertheless, continued toincrease. Whitehouse v. U.S. Dist. Court for Dist. of

Rhode Island, 53 F.3d 1349, 1352 (1st Cir. 1995).

III. THE DECISION BELOW WAS WRONGAND SETS A DANGEROUS PRECEDENT

The decision below illustrates the dangers of theapplication of the lower and amorphous reasonablebasis to suspect standard. It underscores both theneed forat a minimumthe higher probable causestandard, and the arbitrariness that can result whendifferent standards are applied in different circuits.

The decision below affirmed the district courtsdecision in this close case. Had there been a higherstandard of proof, the outcome may well have beendifferent. The standard of proof applies to both

elements of the crime-fraud exceptions: (1) that thedefendant intended to commit the crime beforeconsulting the attorney; and (2) that the legal advice


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was used in furtherance of the crime. In re SealedCase, 754 F.2d at 399. The district court inferred thatthe intent to commit a crime existed beforeseeking anattorneys advice because of actions that the defendanttook afterhe had consulted with the attorney. Thisincluded making a payment a month after discussingthe Foreign Corrupt Practices Act (FCPA) issue withthe attorney. Under the Third Circuits minimalstandard of a reasonable basis to suspect, a clientasking his or her attorney about a statute and thenlater allegedly violating said statute apparently

demonstrates the requisite intent element of the crimefraud exception. The Third Circuits standard givestoo much weight to the post hoc determination thatsince a client consulted a lawyer on a particular lawand the client then allegedly violates the law later,then that must retrospectively mean that the clienthad the intent before consulting the attorney. Thisdefies logic and common sense. Furthermore, thelawyer in the case gave minimal advice, merelyidentifying the existence of the FCPA and explainingits elements. In a case like the one before the Court,

the ordinary scenario of simply asking a lawyer aboutthe law does not mean that the advice was used infurtherance of a illegal act simply because a crimewas allegedly committed at a later date. If theGovernment need only prove the ambiguous yet lowthreshold of reasonable basis to suspect a defendantused an attorneys service to commit a crime to pierceattorney-client privilege, then the protection affordedunder the privilege ceases to exist and is renderedmeaningless. The attorney-client privilege warrantsbetter treatment than this.

This application may create tremendousuncertainty for companies and individuals that dobusiness or conduct other regulated activities


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throughout the country. For example, clients doingbusiness in the Third Circuit may be reluctant to seekcounsels advice within the applicable geographicterritory for fear that such communications maybe revealed through attorney subpoenas. Thus, abusiness or individuals activities may comply withapplicable laws and regulations in the rest of thecountry because the business or individual soughtadvice of counsel, whereas the same activities may

violate laws in the Third Circuit because they chosenot to seek advice of counsel for fear of their attorney-

client privilege being pierced. The result couldbe inconsistent or conflicting company policiesand procedures, inconsistent training of employees,and inconsistent expectations of customers. Asimportantly, it will incentivize prosecutors to seek toapply the crime-fraud exception in more cases thathave borderline facts.

Applying at least a probable cause standard willshift the outcome towards a stronger protection ofthe attorney-client privilege, while still not undulyburdening the Government with a high standard of

proof. Expanding the use of the crime-fraud exception,as has been continuing to happen over the years, willhave a detrimental effect on the criminal justicesystem and will discourage attorneys from providingrepresentation in controversial criminal cases. This isparticularly true if prosecutors in the Third Circuitwill have the ability to subpoena attorneys forpotentially privileged information based solely onthe fact that the attorneys client eventuallycommitted a crime. The exception is supposed toapply to communications that take place before an

intended crime or fraud is committed. While federalprosecutors frequently attempt to apply it tocommunications after the crime has occurred,


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appellate courts have reversed and limited the lowercourts orders to evidence of communications beforethe crime occurred. See Edgar, 82 F.3d at 508. TheThird Circuits reliance on the clients ultimatecommission of the crime, therefore, is problematic andin need of correction.

The magnitude of piercing the attorney-clientprivilege is tremendous. It is the oldest of theprivileges for confidential communications known tothe common law, designed to encourage full andfrank communication between attorneys and their

clients and thereby promote broader public interestsin the observance of law and administration of justice.Upjohn Co., 449 U.S. at 389. Given the disparatestandards currently existing among federal courts, theSupreme Courts review is necessary to finally resolvethe confusion and bring uniformity to this crucialquestion.


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CONCLUSIONFor the foregoing reasons, amicus curiae, NACDL,

respectfully urges this Court to accept certiorarireview of the aforesaid pending matter. This Courtsdirection is desperately needed to preserve theintegrity of attorney-client privilege and limit theever-expanding crime-fraud exception.

Respectfully submitted,

JEFFREY T.GREEN

Co-Chair, AmicusCommitteeNATIONALASSOCIATION

OF CRIMINAL DEFENSELAWYERS

1501 K. Street, N.W.Washington, DC 20005(202) 736-8291

MARAV.J.SENN

Counsel of RecordABRAHAM GITTERMANDOUG QUZACKARNOLD &PORTER LLP555 12th Street, NWWashington, DC 20004(202) [email protected]

CSABA M.RUSZNAKARNOLD &PORTER LLPThree Embarcadero Center

10th FloorSan Francisco, CA 94111-4024(415) 471-3100

Counsel for NACDL Amicus Curiae

October 28, 2014

NACDL Amicus Brief

Documents

Transcript of NACDL Amicus Brief