NACDL Amicus Brief

No.14-389 WILSON-EPES PRINTING CO., INC. – (202) 789-0096 – WASHINGTON, D. C. 20002 IN THE Supreme Court of the United States ———— CORPORATION AND CLIENT, Petitioner, v. UNITED STATES OF AMERICA, Respondent. ———— On Petition for a Writ of Certiorari to the United States Court of Appeals for the Third Circuit ———— BRIEF OF THE NATIONAL ASSOCIATION OF CRIMINAL DEFENSE LAWYERS AS AMICUS CURIAE IN SUPPORT OF PETITION FOR A WRIT OF CERTIORARI ———— MARA V. J. SENN Counsel of Record ARNOLD & PORTER LLP 555 12th Street, NW Washington, DC 20004 (202) 942-5000 [email protected] Counsel for NACDL Amicus Curiae [Additional Counsel Listed On Signature Page] (i) TABLE OF CONTENTS Page TABLE OF AUTHORITIES ................................ iii INTEREST OF AMICUS CURIAE ..................... 1 SUMMARY OF ARGUMENT ............................. 1 ARGUMENT ........................................................ 6 I. THE CIRCUIT SPLIT ON QUANTUM OF PROOF CREATES DISPARATE EVIDENTIARY STANDARDS FOR DEFENDANTS FACING GRAND JURY PROCEEDINGS ....................................... 6 A. The Probable Cause Standard Used in the Second, Sixth, Eighth and DC Circuits Is the Minimum Quantum of Proof 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 Little Protection, Are too Amorphous, and Lack Consistent Application. ............... 9 1. The reasonable cause and reasonable basis to suspect standards applied by the First, Third, and Ninth Circuits encompass too broad a range of evidentiary thresholds to ensure consistent application. ................... 9 ii TABLE OF CONTENTS—Continued Page 2. The burden-shifting approach in the Fourth, Fifth and Seventh Circuits is too amorphous and inappropriate for the grand jury setting. ............................................ 11 3. The “some foundation in fact” standard used in the Tenth and Eleventh Circuits fails to provide any guidance to District Courts and subjects defendants to inconsistent standards. .................. 14 II. THE PETITION PRESENTS A QUESTION OF NATIONAL IMPOR- TANCE ON THE SCOPE OF THE CRIME-FRAUD EXCEPTION, THE PRIMARY EXCEPTION TO THE ATTORNEY-CLIENT PRIVILEGE. ......... 15 A. Issuing Subpoenas against Lawyers Providing Clients Advice Undermines the Attorney-Client Relationship ....... 16 B. The Use of the Crime-Fraud Excep- tion To Challenge the Attorney-Client Privilege Is a Growing Problem .......... 17 III. THE DECISION BELOW WAS WRONG AND SETS A DANGEROUS PRECEDENT ............................................ 18 CONCLUSION .................................................... 22 iii TABLE OF AUTHORITIES CASES 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 Empanelled January 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 Matter of Fine, 641 F.2d 199 (5th Cir. 1981) ..................... 12 iv TABLE OF AUTHORITIES—Continued Page(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 Tecum Dated 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 v TABLE OF AUTHORITIES—Continued Page(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.), aff’d 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, 8 United States v. 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 vi TABLE OF AUTHORITIES—Continued OTHER AUTHORITIES Page(s) American Bar Association Standing Committee on Ethics and Professional Responsibility and Section of Criminal Justice, Report to the House of Delegates, 1990 ........................................................... 15 Black’s Law Dictionary (4th ed. 1968) ......... 12 Fed. R. Evid. 104(a) ...................................... 7 Gardner, The Crime or Fraud Exception to the Attorney-Client Privilege, 47 A.B.A.J. 708 (1961) .................................................. 5 Genego, Risky Business: The Hazards of Being a Criminal Defense Lawyer, 2 Crim. Just. 40 (1986) ................................ 17 Paul R. Rice, Attorney-Client Privilege in the United States, §8.6, at 44 (2d ed. 1999) ......................................................... 4 Rudolf & Mayer, Grand Jury Practice, 5 Crim. Just. 22 (1990) ................................ 17 Stuart Gerson and Jennifer E. Gladieux, Advice of Counsel: Eroding Confidentiality in 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 INTEREST OF AMICUS CURIAE 1 The National Association of Criminal Defense Lawyers (NACDL) is a non-profit corporation with more than 11,500 affiliate members in 50 states, including private criminal defense attorneys, public defenders, and law professors. NACDL was founded in 1958 to promote criminal law research, to advance and disseminate knowledge in the area of criminal practice, 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 of lawyers representing parties in administrative, regulatory, and criminal investigations. In further- ance of this and its other objectives, NACDL has appeared hundreds of times as amicus curiae before this Court, the federal courts of appeals, and the highest courts of numerous states. NACDL has a particular interest in this case because the decision of the Court below could interfere with the ability of NACDL’s members to represent their clients, subject NACDL members and their clients to punishment for zealous advocacy, and undermine the adversarial process essential to fairness in the criminal justice system. SUMMARY OF THE ARGUMENT The decision below, which applies a “reasonable basis to suspect” standard, deepens the existing circuit 1 Letters of consent have been filed with the Clerk. Pursuant to Rule 37.6, amicus states that no counsel for a party authored any part of the brief, and no person or entity other than amicus and its counsel made a monetary contribution to the preparation or submission of this brief. 2 split regarding the quantum of proof necessary to establish the applicability of the crime-fraud exception to the attorney-client privilege. The crime-fraud exception prevents clients from asserting the attorney- client privilege when the client’s intent at the time they seek an attorney’s advice is to initiate, continue or further fraudulent or criminal activity. The attorney-client privilege is “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 “rests on the need for the advocate and counselor to know all that relates to the client’s reasons for seeking representation if the professional mission is to be carried out.” Trammel v. United States, 445 U.S. 40, 51 (1980). While exceptions to this privilege exist— the most common of which is the crime-fraud exception—piercing this seal of secrecy may critically harm the privilege’s purpose of encouraging “full and frank communication between attorneys and their clients,” which promotes “broader public interests in the observance of law and administration of justice.” United States v. Zolin, 491 U.S. 554, 562 (1989). Attorneys have an obligation under this privilege not to reveal client confidences and to assert this privilege on behalf of a client. United States v. Edgar, 82 F.3d 499, 508 (1st Cir. 1996) (citations omitted). In Zolin, this Court defined the “threshold evidentiary showing” required to hold in camera review of allegedly privileged communications. 491 U.S. at 563-64. This Court, however, explicitly stated that 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 a result of the gap left by Zolin, federal circuits have 3 been forced to rely on minimal guidance: a prima facie showing is required to vitiate the attorney-client privilege. Clark v. United States, 289 U.S. 1, 14-15 (1933) (referring alternately to “a showing of a prima facie case sufficient to satisfy the judge” or “prima facie evidence that [the charge] has some foundation in fact”). However, the prima facie standard “is among the most rubbery of all legal phrases” and “usually means little more than a showing of whatever is required to permit some inferential leap sufficient to reach 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 “rubbery” prima facie standard. What has emerged from the question left open in Zolin are widely differing formulations for the quantum of proof required for the applicability of the crime-fraud exception to the attorney-client privilege. The Second, Sixth, Eighth, and D.C. Circuits require probable cause. See United States v. Jacobs, 117 F.3d 82, 87 (2d Cir. 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., 609 F.3d 909, 913 (8th Cir. 2010); In re Sealed Case, 107 F.3d 46, 50 (D.C. Cir. 1997). 2 The First, Third, and Ninth Circuits require reasonable cause or reasonable basis to suspect, which appears to be a lower standard than probable cause. See In re Grand Jury 2 The D.C. Circuit requires “evidence that if believed by the trier of fact, would establish the elements of an ongoing or imminent crime or fraud,” but the D.C. Circuit has stated that there is “little practical difference” between this standard and that of the Second Circuit’s requirement of “probable cause.” In re Sealed Case, 107 F.3d at 50. 4 Investigation, 445 F.3d 266, 275 (3d Cir. 2006); In re Grand Jury Proceedings, 417 F.3d 18, 23 (1st Cir. 2005); United States v. Chen, 99 F.3d 1495, 1503 (9th Cir. 1996). 3 The Fourth, Fifth, and Seventh Circuits employ a method akin to a burden-shifting test. See In re Grand Jury Proceedings #5 Empanelled January 28, 2004, 401 F.3d 247, 251 (4th Cir. 2005); In re Grand 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 have not articulated a standard, but merely require there be “some foundation in fact,” arguably an even lower standard than reasonable basis to suspect. See In re Grand 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 the circuits. See, e.g., In re Grand Jury Subpoenas, 144 F.3d at 660 (listing the differing standards among the circuits); Paul R. Rice, Attorney-Client Privilege in the United States, §8.6, at 44 (2d ed. 1999) (“The prima facie standard has always been poorly defined, incon- sistently interpreted and generally misunderstood”). 3 The Ninth Circuit, although claiming that reasonable cause is analogous to probable cause, has admitted that “these standards, and the differences between them, are not entirely free from confusion.” In re Napster, Inc. Copyright Litigation, 479 F.3d 1078, 1094 (9th Cir. 2007), abrogated on other grounds by Mohawk Industries, Inc. v. Carpenter, 558 U.S. 100 (2009). Also, at least one district court has observed that the reasonable basis standard is “relatively low.” See, e.g., In re Grand Jury Subpoena, No. 10–127–02, 2013 WL 228115, at *4 (E.D. Pa. Jan. 18, 2013). 5 In Zolin, this Court acknowledged that its use of the phrase “prima facie case” in Clark “to describe the showing needed to defeat the privilege has caused some confusion” and “[t]he quantum of proof needed to establish admissibility was then, and remains, subject to question.” 491 U.S. 563, n7. More than a quarter of a century later, the question remains open as the “circuit courts have not addressed in meaningful detail the actual burden that the movant carries in seeking to pierce the privilege on the basis of the crime-fraud exception.” 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 exception is steadily becoming the norm. This has led to an erosion of the privilege due to the increased tendency by courts to find that the crime-fraud exception applies. In the past three decades, prosecutors have increasingly subpoenaed attorneys to testify in front of grand juries in criminal cases, with little to no resistance from courts. In far too many instances, the Government’s weapon to overcome the attorney-client privilege is the crime-fraud exception. “Legal rights must depend upon valid principles of evidence.” Gardner, The Crime or Fraud Exception to the Attorney–Client Privilege, 47 A.B.A.J. 708, 710 (1961). Unfortunately, the circuit split regarding the quantum of proof for the applicability of the crime-fraud exception to attorney-client privilege breeds wild inconsistency. Moreover, district courts are left to decide crime-fraud exception cases with little guidance from circuit courts in applying the gov- erning standard. Given the Government’s increased attempts to pierce the attorney-client privilege, the lack of uniformity in the circuits creates an 6 unacceptable risk to lawyers and defendants. This case presents a clean vehicle to resolve the existing circuit split. ARGUMENT I. THE CIRCUIT SPLIT ON QUANTUM OF PROOF CREATES DISPARATE EVIDEN- TIARY STANDARDS FOR DEFENDANTS FACING 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 to obtain an in camera review based on unsubstantiated information that they may have collected through an unlawful intrusion into the privilege, without giving defendants an opportunity to challenge the reliability or validity of that evidence. Adding further confusion and uncertainty to a tool that is already plagued with ambiguity and fraught with prosecutorial abuse will only harm the criminal justice system. The issuance of subpoenas in grand jury and other criminal proceedings to attorneys should be limited to those situations in which there is a genuine need to intrude into the attorney-client relationship, and the prosecutor has already pursued alternative avenues to get the information, rather than going on a fishing expedition with legal counsel. A. The Probable Cause Standard Used in the Second, Sixth, Eighth and DC Circuits Is the Minimum Quantum of Proof 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 7 articulated by the Second, Sixth, Eighth, and D.C. Circuits should be the minimum standard. This standard strikes an appropriate balance between the competing interests of the Government and defendants. 4 While not too demanding, the probable cause standard prevents the Government from relying on mere allegations or speculative evidence to pierce the attorney-client privilege. It is also a well-defined standard that is relatively easy to administer. Anything less than the probable cause standard would result 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 probable than not.” United States v. McDonald, No. 01-CR- 1168JSWDW, 2002 WL 31956106, at *5 (E.D.N.Y. May 9, 2002) (internal citations and quotations omitted). 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 Court’s jurisprudence that the applicability of the crime-fraud exception should be subject to the standard of preponderance of the evidence, 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 preliminary factual issues as a predicate to admitting evidence); see also Zolin, 491 U.S. at 568 (acknowledging that preliminary questions concerning privileges must be addressed under Rule 104(a).) 5 The Second Circuit contends that there is “little difference” between the probable cause standard and the reasonable basis standard 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 strong emphasis on intent, the crime-fraud exception applies ‘only when there is probable cause to believe that the communications with 8 crime-fraud exception must “establish that it is more likely than not that defendants engaged in a scheme to defraud and that the communications were in furtherance of the fraud.” Id. Moreover, under this standard, the Government need not prove the actual existence of crime or fraud and “[a] finding of probable cause is not negated by an innocent explanation which may be consistent with the facts alleged.” Id. (internal citations and quotations omitted). The invocation of the probable cause standard, a somewhat stringent test, as explained by a district court in the Second Circuit, serves important policy interests: First, this approach would enhance the relia- bility of the court’s ruling. If it is important to preserve the vitality of the privilege, it is important to make sure that decisions that strip parties of privilege protections that otherwise would attach are reliably made.” Second, this concern is particularly acute “when the fraud allegation is based on technically dense or esoteric evidence (matters well beyond the common experience of generalist 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 client’s objective in carrying out the fraud that is controlling.”) with In re Grand Jury Proceedings, 417 F.3d at 23 (merely stating “it is enough to overcome the privilege that there is a reasonable basis to believe that the lawyer’s services were used by the client to foster a crime or fraud”). 9 In sum, “the Sixth Amendment and the underlying policies of the common law privilege require heightened protection of confidential communications between lawyer and client when the lawyer is defending 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 the crime-fraud exception is based on the recognition that the attorney-client privilege will “protect the confidences 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 and the administration of justice” by encouraging possible wrongdoers to seek legal guidance. Id. Consequently, the “more probable than not” quantum of proof should be the minimum showing to allow piercing the privilege. B. The Various Lower Standards Used in the Other Circuits for the Crime-Fraud Exception Provide Little Protection, Are too Amorphous, and Lack Consistent Application 1. The reasonable cause and reasonable basis to suspect standards applied by the First, Third, and Ninth Circuits encompass too broad a range of evidentiary thresholds to ensure consistent application. The reasonable cause or reasonable basis to suspect tests, 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 “is intended to be reasonably demanding,” stressing that 10 speculative and distant evidence is insufficient. In re Grand Jury, 705 F.3d at 153; In re Grand Jury Proceedings, 417 F.3d at 23. However, these circuits have failed to elucidate with precision what this means, other than that the standard is lower than “beyond a reasonable doubt” but higher than “a sneaking suspicion.” In re Grand Jury Proceedings, 87 F.3d 377, 381 (9th Cir. 1996). The First Circuit, for example, provides little guidance other than “it is enough to overcome the privilege that there is a reasonable basis to believe that the lawyer’s services were used by the client to foster a crime or fraud.” In re Grand Jury Proceedings, 417 F.3d at 23. Likewise, the Ninth Circuit has only explained that “mere allegations or suspicion by the Government are insufficient. But proof beyond a reasonable doubt is not necessary to justify application of the crime-fraud exception.” United States v. Chen, 99 F.3d at 1503. Until recently, the Third Circuit struggled to express with precision the standard to apply. See In re Grand Jury, 705 F.3d at 152 (“Our own statement of the proof necessary to apply the crime-fraud exception is not particularly helpful . . . . This begs the quantum-of- proof question because it does not quantify what evidence is sufficient.”). This uncertainty regarding the standard is especially problematic in a “close case” such as this one. In re Grand Jury Subpoena, 745 F.3d 681, 691 (3d Cir. 2014). The lack of clarity and guidance on this important issue, in addition to the circuit split, is sufficient to warrant review. 11 2. The burden-shifting approach in the Fourth, Fifth and Seventh Circuits is too amorphous and inappropriate for the grand jury setting. The crime-fraud standard used by the Fourth and Fifth Circuits requires a showing of evidence that, if believed by a trier of fact, would establish the elements 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, if believed by a trier of fact, would establish the elements of some violation that was ongoing or about to be committed” and noting that “the proof must be such as to subject the opposing party to the risk of non- persuasion if the evidence as to the disputed fact is left unrebutted”) (internal quotation marks omitted); In re Grand Jury Subpoena, 419 F.3d at 336 (“To make the necessary prima facie showing for the application of the crime-fraud exception here, the Government must produce evidence such as will suffice until contradicted and overcome by other evidence […] A case . . . has proceeded upon sufficient proof to that stage where it will support a finding if evidence to the contrary is disregarded”) (internal quotation marks and brackets omitted). Similarly, under the Seventh Circuit’s approach, a prima facie showing is established by such evidence that “allows the district court to require the defendant to come forward with an explanation for the evidence offered against the privilege.” United States v. Boender, 649 F.3d at 655. The problems with these amorphous approaches are significant. In addition to being in conflict with other circuits, none of these three circuits have clearly defined with precision the requisite quantum of proof for the applicability of the 12 crime-fraud exception to the attorney-client privilege. For instance, the Fifth Circuit’s precedent relies on the definition of prima facie from Black’s Law Dictionary (4th ed. 1968): “(s)uch as will suffice until contradicted and overcome by other evidence . . . . (a) case which has proceeded upon sufficient proof to that stage where it will support a finding if evidence to contrary is disregarded.” See In re Grand Jury Subpoena, 419 F.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 re Grand Jury Proceedings in Matter of Fine, 641 F.2d at 203. Moreover, the Fifth Circuit precedent on the requisite quantum of proof, or lack thereof, for the applicability of the crime-fraud exception predates the Court’s decision in Zolin in 1989. See In re Grand Jury Subpoena, 419 F.3d at 336 (relying on Fifth Circuit cases from 1981 and 1982). The Fourth Circuit’s approach also misses the mark on providing any clarity or guidance. See, e.g., In re Grand Jury Proceedings, 674 F.2d 309, 310 (4th Cir. 1982) (stating only that “it is clear that the attorney was hired to further the criminal activity. . . the Government has made out a prima facie case that the crime/fraud exception is applicable”). Further, the prima facie burden-shifting approach is problematic in a grand-jury setting. This approach is often used in civil litigation, particularly discrimi- nation cases, where a party is given an opportunity to refute the claims against it in open court. However, in the context of a grand jury setting, where the Government seeks to apply the crime-fraud exception to the attorney-client privilege, a judge usually examines evidence from the Government during an ex 13 parte hearing and in camera inspection. In essence, this burden-shifting approach is used to dispel the privilege altogether without affording the client an opportunity to rebut the prima facie showing. The problematic nature of the burden-shifting approach is illuminated in the Seventh Circuit’s approach where district courts have the option of holding an “adversarial 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 to what is already a burden-shifting approach with the attorney-client privilege. Initially, “[a] party asserting the attorney-client privilege has the burden of establishing the existence of an attorney- client relationship and the privileged nature of the communication,” United States v. Graf, 610 F.3d 1148, 1156 (9th Cir. 2010) (internal quotations and citations omitted); then the burden shifts to the party opposing the privilege to invoke the crime-fraud exception, and to make a prima facie showing that the exception applies. See Zolin, 491 U.S. at 560. Following that, the party asserting the privilege would have an opportunity for rebuttal. Such an adversarial procedure requires district courts to engage in several steps beyond what is necessary to hold in camera proceedings in the first place. Given that in camera proceedings are already burdensome, see Zolin, 491 U.S. at 571, this extra step makes the process unnecessarily arduous for district courts. Once stripped of the privilege, it is unlikely a defendant would regain attorney-client privilege on appeal because district court orders “are unlikely to be reversed on appeal, particularly when they rest on factual determinations,” such as the piercing of 14 attorney-client privilege, “for which appellate deference is the norm.” Carpenter, 558 U.S. at 110. In sum, the burden-shifting approach fails to provide any additional protection for attorney-client privilege. 3. The “some foundation in fact” standard used in the Tenth and Eleventh Circuits fails to provide any guidance to District Courts and subjects defendants to inconsistent standards. Unlike the other circuits, the Tenth Circuit has not articulated a requisite quantum of proof for a prima facie showing, other than “the allegation of attorney participation in the crime or fraud has some foundation in fact.” In re Grand Jury Subpoenas, 144 F.3d at 660 (“Although the exact quantum of proof necessary to meet the prima facie standard has not been decided by the Supreme Court . . . . [w]e need not articulate the exact quantum of proof here because under any of these announced standards, the Government has made a prima facie showing”). Likewise, the Eleventh Circuit uses the “some foundation in fact” standard, with the only guidance being that “mere allegations of criminality are insufficient 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 of proof for the applicability of the crime-fraud exception to the attorney-client privilege remains an open questions 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 exposes defendants to inconsistent standards for application of the crime-fraud exception in the Tenth and Eleventh 15 Circuits. District courts should not be subjected to a guessing game when the attorney-client privilege is at stake. II. THE PETITION PRESENTS A QUESTION OF NATIONAL IMPORTANCE ON THE SCOPE OF THE CRIME-FRAUD EXCEP- TION, THE PRIMARY EXCEPTION TO THE ATTORNEY-CLIENT PRIVILEGE. The existing disparate standards have led to different outcomes on crime-fraud issues depending on the happenstance of where the grand jury proceedings are taking place. This should not be the case for a federal privilege standard. The decision below encourages the Government to continue to expand its use of subpoenas against attorneys under the guise of the crime-fraud exception. If left standing, the decision below will have detrimental effects on individuals seeking advice, as well as increased confusion, fear, and harm to criminal defense lawyers and the legal profession. In fact, the potential reach of the decision below likely would result in an unnecessary and overbroad use of subpoenas, which would “threaten both the integrity of the criminal justice system and the ability of large classes of defendants to obtain representation.” American Bar Association Standing Committee on Ethics and Professional Responsibility and Section of Criminal Justice, Report to the House of Delegates, 1990 (citation omitted). 16 A. Issuing Subpoenas against Lawyers Providing Clients Advice Undermines the Attorney-Client Relationship The issuance of subpoenas to attorneys in the context of the crime-fraud exception significantly harms the attorney-client relationship in a number of ways. First, subpoenas issued to attorneys create an immediate conflict of interest between the lawyer and his client because the lawyer’s legal and practical interests as a witness diverge 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 resources in resisting them,” whereas, “the clients’ interest in lessening the likelihood of indictment on additional charges would require the lawyer to do his utmost, including incurring contempt citations, to resist the subpoena.” In Re Grand Jury Matters, 751 F.2d 13, 19 (1st Cir. 1984). This conflict drives a “chilling wedge between the attorney/witness and his client,” and creates a chilling effect for clients that may cause them not to seek advice at all, or to withhold information from an attorney that is necessary for the attorney to provide advice for fear that the attorney may later be compelled to disclose such information. Edgar, 82 F.3d at 507. Thus, expansion of the crime- raud exception will result in less “full and frank” communication between attorneys and their clients, which may actually lead to more criminal activity or legal or regulatory violations that could have been prevented if proper advice from counsel had been sought. Second, subpoenas issued to attorneys make it extremely difficult for a lawyer to dedicate their full time and attention to their client’s case and issues at 17 hand. Once an attorney is subpoenaed, the attorney must divert valuable time and resources to address the subpoena, which further creates a conflict of interest that may not favor the client’s best interest. Third, subpoenas issued to attorneys may convert a client’s attorney into an adverse witness against their client, with the possibility that the lawyer will “be required to resign as attorney for his client” or be disqualified, which has due process implications under the Fifth and Sixth Amendments, because prosecutors can effectively deny criminal defendant’s their counsel of choice. United States v. Klubock, 832 F.2d 649, 654 (1st Cir.), aff’d en banc, 832 F.2d 664 (1st Cir. 1987). B. The Use of the Crime-Fraud Exception To Challenge the Attorney-Client Privilege Is a Growing Problem Beginning in the mid-1980s, the Government began increasing the issuance of subpoenas to attorneys un- der the crime-fraud exception. For example, a national survey of over 1,500 practicing criminal defense lawyers found that attorneys were subpoe- naed infrequently prior to 1980, but documented a dramatic increase between 1983 and 1985. See Genego, Risky Business: The Hazards of Being a Criminal Defense Lawyer, 2 Crim. Just. 40 (1986). In addition, between 1985 and 1986, the Department of Justice approved 400 requests to issue grand jury subpoenas to attorneys. Stern & Hoffman, Privileged Informers: The Attorney Subpoena Problem and Proposal for Reform, 136 U. Pa. L. Rev. 1783, 1787-89 (1988) (citing statistics released by the Department of Justice that indicate “an explosion of subpoenas to lawyers”); see also Rudolf & Mayer, Grand Jury Practice, 5 Crim. Just. 22, 24 (1990) (analyzing Justice 18 Department attorney subpoena statistics for the period from 1985 to 1989). The 1990s saw a further increase in the assertion of the crime-fraud exception. In federal grand jury cases, “from 1995 to 1998, the crime-fraud exception was invoked in 11.80% of cases,” but in 1998, the percentage rose to 38%. Stuart M. Gerson and Jennifer E. Gladieux, Advice of Counsel: Eroding Confidentiality in Federal Health Care Law, 51 Ala. L. 163, 198 (1999). As one court observed, despite the United States Department of Justice issuing guidelines for federal prosecutors seeking to subpoena an attorney, and the American Bar Association creating an ethical prohibition against subpoenaing an attorney, “[t]he instances of federal prosecutors subpoenaing attorneys to compel evidence regarding their clients ha[s], nevertheless, continued to increase.” Whitehouse v. U.S. Dist. Court for Dist. of Rhode Island, 53 F.3d 1349, 1352 (1st Cir. 1995). III. THE DECISION BELOW WAS WRONG AND SETS A DANGEROUS PRECEDENT The decision below illustrates the dangers of the application of the lower and amorphous “reasonable basis to suspect” standard. It underscores both the need for—at a minimum—the higher “probable cause” standard, and the arbitrariness that can result when different standards are applied in different circuits. The decision below affirmed the district court’s decision in this “close case.” Had there been a higher standard of proof, the outcome may well have been different. The standard of proof applies to both elements of the crime-fraud exceptions: (1) that the defendant intended to commit the crime before consulting the attorney; and (2) that the legal advice 19 was used in furtherance of the crime. In re Sealed Case, 754 F.2d at 399. The district court inferred that the intent to commit a crime existed before seeking an attorney’s advice because of actions that the defendant took after he had consulted with the attorney. This included making a payment a month after discussing the Foreign Corrupt Practices Act (FCPA) issue with the attorney. Under the Third Circuit’s minimal standard of a reasonable basis to suspect, a client asking his or her attorney about a statute and then later allegedly violating said statute apparently demonstrates the requisite intent element of the crime fraud exception. The Third Circuit’s standard gives too much weight to the post hoc determination that since a client consulted a lawyer on a particular law and the client then allegedly violates the law later, then that must retrospectively mean that the client had the intent before consulting the attorney. This defies logic and common sense. Furthermore, the lawyer in the case gave minimal advice, merely identifying the existence of the FCPA and explaining its elements. In a case like the one before the Court, the ordinary scenario of simply asking a lawyer about the law does not mean that the advice was used in furtherance of a illegal act simply because a crime was allegedly committed at a later date. If the Government need only prove the ambiguous yet low threshold of reasonable basis to suspect a defendant used an attorney’s service to commit a crime to pierce attorney-client privilege, then the protection afforded under the privilege ceases to exist and is rendered meaningless. The attorney-client privilege warrants better treatment than this. This application may create tremendous uncertainty for companies and individuals that do business or conduct other regulated activities 20 throughout the country. For example, clients doing business in the Third Circuit may be reluctant to seek counsel’s advice within the applicable geographic territory for fear that such communications may be revealed through attorney subpoenas. Thus, a business or individual’s activities may comply with applicable laws and regulations in the rest of the country because the business or individual sought advice of counsel, whereas the same activities may violate laws in the Third Circuit because they chose not to seek advice of counsel for fear of their attorney- client privilege being pierced. The result could be inconsistent or conflicting company policies and procedures, inconsistent training of employees, and inconsistent expectations of customers. As importantly, it will incentivize prosecutors to seek to apply the crime-fraud exception in more cases that have borderline facts. Applying at least a “probable cause” standard will shift the outcome towards a stronger protection of the attorney-client privilege, while still not unduly burdening 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, will have a detrimental effect on the criminal justice system and will discourage attorneys from providing representation in controversial criminal cases. This is particularly true if prosecutors in the Third Circuit will have the ability to subpoena attorneys for potentially privileged information based solely on the fact that the attorney’s client eventually committed a crime. The exception is supposed to apply to communications that take place before an intended crime or fraud is committed. While federal prosecutors frequently attempt to apply it to communications after the crime has occurred, 21 appellate courts have reversed and limited the lower courts’ orders to evidence of communications before the crime occurred. See Edgar, 82 F.3d at 508. The Third Circuit’s reliance on the client’s ultimate commission of the crime, therefore, is problematic and in need of correction. The magnitude of piercing the attorney-client privilege is tremendous. It is “the oldest of the privileges for confidential communications known to the common law,” designed 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. Given the disparate standards currently existing among federal courts, the Supreme Court’s review is necessary to finally resolve the confusion and bring uniformity to this crucial question. 22 CONCLUSION For the foregoing reasons, amicus curiae, NACDL, respectfully urges this Court to accept certiorari review of the aforesaid pending matter. This Court’s direction is desperately needed to preserve the integrity of attorney-client privilege and limit the ever-expanding crime-fraud exception. Respectfully submitted, JEFFREY T. GREEN Co-Chair, Amicus Committee NATIONAL ASSOCIATION OF CRIMINAL DEFENSE LAWYERS 1501 K. Street, N.W. Washington, DC 20005 (202) 736-8291 MARA V. J. SENN Counsel of Record ABRAHAM GITTERMAN DOUG QUZACK ARNOLD & PORTER LLP 555 12th Street, NW Washington, DC 20004 (202) 942-5000 [email protected] CSABA M. RUSZNAK ARNOLD & PORTER LLP Three Embarcadero Center 10th Floor San Francisco, CA 94111-4024 (415) 471-3100 Counsel for NACDL Amicus Curiae October 28, 2014