Third Circuit Widens Use of Exception to Privilege

, The Legal Intelligencer


Jury box..Photo by Jason Doiy.2-9-11.054-2011

The U.S. Court of Appeals for the Third Circuit has given its OK under the crime-fraud exception to attorney-client privilege to a trial court's in camera interview of a lawyer about advice provided to an ex-client as well as its subsequent decision that it meets the exception so that a grand jury could hear the testimony.

In deciding to apply the exception, the appeals court in In re Grand Jury Subpoena extended the standard governing a court's review of documents to interviews of attorneys conducted in chambers.

The U.S. Supreme Court set the standard for review of documents in its 1989 opinion in United States v. Zolin, and it "did not exclude oral communications from the ambit of its holding," Judge D. Michael Fisher wrote on behalf of the three-judge panel. "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."

The court decided that it would.

The unnamed corporation that is at the center of the case is under a grand jury investigation related to alleged violations of the Foreign Corrupt Practices Act. It was identified only as a Pennsylvania-based consulting firm.

The client who consulted the attorney who was interviewed in camera by the trial judge is the corporation's president and managing director.

Both the corporation and the client intervened in the case and sought to keep the lawyer's testimony away from the grand jury, first by challenging the district court's decision to interview the lawyer in camera.

They argued that the court should apply a more stringent standard when faced with the proposition of an in camera interview with a lawyer than it does for an in camera review of documents.

In addition to the three concerns that the Supreme Court noted for considering the standard to apply when considering in camera review—"erosion of the privilege that is aimed at fostering disclosure between attorney and client, due process implications, and additional burdens on the district courts," as summarized by Fisher—the company and its president argued that the court should also consider "the malleability of witness recollections" in the context of conducting in camera interviews with lawyers.

Weighing each concern with respect to the court's interview of a lawyer, the Third Circuit answered the first by saying, "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."

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