American Tobacco Co. v. State
1997 WL 408527, 697 So. 2d 1249 (1997)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
To overcome the attorney-client privilege under the crime-fraud exception, Florida courts adopt a two-step procedure: the party seeking disclosure must first make a prima facie showing of crime or fraud, after which the party asserting the privilege has the right to an adversarial hearing to present evidence and argument to rebut, with the trial court ultimately weighing all evidence under a preponderance standard.
Facts:
- Various corporations and entities involved in manufacturing, producing, and distributing cigarettes had participated in a joint defense in litigation for over forty years.
- The State of Florida sued several tobacco manufacturers to recover health care costs incurred by the state in treating diseases of Medicaid smokers, alleging fraud in covering up significant health risks.
- The State of Florida sought to discover documents from the tobacco companies, arguing that they fell under the crime-fraud exception to the attorney-client privilege due to the alleged fraud.
- Liggett Group, Inc., a tobacco manufacturer and member of the joint defense, settled with the State of Florida and agreed to produce documents it had previously claimed were privileged, some of which also implicated other tobacco defendants.
- The trial court directed the remaining tobacco company petitioners to submit several boxes of documents to a special master for in-camera review to determine the applicability of the crime-fraud exception.
- The state designated twenty specific documents, and after a two-day hearing, the special master concluded that the state had made a prima facie case that eight of the thirteen disputed documents involved the crime-fraud exception.
- The petitioners contended that the trial court and special master applied an incorrect and overly lenient burden of proof by using a prima facie standard instead of a preponderance of the evidence standard.
Procedural Posture:
- The State of Florida sued various tobacco manufacturers in a state trial court to recover health care costs.
- The trial court appointed a special master to conduct hearings regarding the applicability of the crime-fraud exception to discovery documents sought by the state.
- Following a settlement by co-defendant Liggett Group, Inc., the trial court directed the remaining tobacco company petitioners to submit specific documents to the special master for in-camera review.
- The special master conducted hearings where the state presented evidence of alleged fraud and attorney involvement, and the petitioners presented ex parte rebuttal materials.
- The special master concluded that the state had made a prima facie case that eight of the thirteen disputed documents fell under the crime-fraud exception.
- The petitioners filed exceptions to the special master's report.
- The trial court heard arguments and reviewed materials, ultimately overruling the petitioners' exceptions and ratifying the special master's conclusions.
- Petitioners filed a petition for writ of certiorari with the District Court of Appeal of Florida, Fourth District, challenging the trial court's order compelling the production of these documents.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does the procedure adopted by the trial court, which follows the framework established in Haines v. Liggett Group, Inc., correctly determine the standard of proof necessary to apply the crime-fraud exception to the attorney-client privilege under Florida law?
Opinions:
Majority - WARNER, Judge
Yes, the trial court's procedure, which conforms to the Haines v. Liggett Group, Inc. framework, correctly establishes the standard of proof for the crime-fraud exception. The attorney-client privilege is a fundamental common law protection, intended to encourage candid communication between clients and attorneys to promote the administration of justice. However, this privilege is not absolute and does not extend to communications made for the purpose of committing future crimes or fraud, as codified in Florida Statute § 90.502(4)(a). Furthermore, claims of attorney-client privilege in the corporate context are subject to heightened scrutiny because corporations act through agents and often rely on legal counsel for business advice, potentially creating a broader 'zone of silence' that could thwart discovery and the truth-finding process. Although Florida Statute § 90.105(1) grants trial courts the authority to determine preliminary issues like the existence of a privilege, it does not specify the burden of proof for the crime-fraud exception. While the Florida Supreme Court in Romani v. State suggested a preponderance of the evidence standard for preliminary factual questions generally, the U.S. Supreme Court in United States v. Zolin expressly declined to define the quantum of proof for the crime-fraud exception. Federal courts and four out of five Florida District Courts of Appeal have consistently applied a 'prima facie' standard to this exception. This court concurs with the trial court and adopts the Haines procedure, which it interprets as inherently incorporating a preponderance of the evidence standard through its weighing function. Under Haines, the party seeking disclosure must first present evidence that, if believed, would be sufficient to support a finding that the elements of the crime-fraud exception were met—this is the initial prima facie showing. Crucially, Haines then requires an adversarial proceeding where the party asserting the privilege is given the absolute right to be heard through evidence and argument to rebut the initial showing. When a court 'weighs' evidence in such an adversarial hearing, the appropriate burden of proof is a preponderance of the evidence. Therefore, the Haines procedure ensures that the party seeking disclosure establishes an initial prima facie case, and then the court considers the evidence from both sides, weighing it under a preponderance standard, to determine if the privilege is lost.
Analysis:
This case clarifies the standard of proof for the crime-fraud exception to the attorney-client privilege in Florida, synthesizing the prima facie showing with a preponderance of the evidence standard through a structured adversarial process. By adopting the Haines procedure, the court ensures that while the initial threshold to trigger review is not unduly high, the ultimate determination to pierce the privilege involves a rigorous weighing of evidence from both sides. This framework is particularly significant for corporate defendants, as it reiterates the heightened scrutiny applied to their privilege claims and provides a clear procedural roadmap for challenging such claims, potentially increasing transparency in large-scale litigation involving allegations of corporate misconduct.
