Commonwealth v. Spanier
2016 Pa. Super. 14, 132 A.3d 481, 2016 Pa. Super. LEXIS 33 (2016)
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Rule of Law:
When corporate counsel represents a corporate employee during a grand jury investigation, an individual attorney-client relationship is formed, and its communications are privileged, unless counsel explicitly clarifies the limited scope of the representation and obtains the employee's informed consent.
Facts:
- In 1998, Penn State University Police investigated former assistant football coach Jerry Sandusky for inappropriate conduct with a minor in a campus shower; no charges were filed, but University President Graham Spanier was copied on related emails.
- In February 2001, assistant coach Michael McQueary witnessed Sandusky sexually assaulting a boy in a Penn State locker room shower.
- McQueary reported the 2001 incident to head coach Joe Paterno, who then reported it to Athletic Director Tim Curley.
- Curley and Vice President Gary Schultz met with McQueary and subsequently informed President Spanier that Sandusky had been involved in 'horseplay' with a child in the shower.
- Spanier instructed Curley and Schultz to tell Sandusky not to bring children into university facilities and to contact the chair of Sandusky's charity, The Second Mile.
- In late 2010, the Pennsylvania Office of Attorney General (OAG) began a grand jury investigation into Sandusky and subpoenaed Curley, Schultz, Paterno, and the University.
- Penn State's general counsel, Cynthia Baldwin, informed Spanier of the subpoenas and agreed to represent him, Curley, and Schultz in their grand jury appearances.
- Baldwin met with Spanier to prepare for his testimony, attended his pre-testimony interview with the OAG, and sat with him as his counsel during his grand jury testimony on April 13, 2011.
Procedural Posture:
- The Commonwealth filed a criminal complaint against Graham Spanier in the Court of Common Pleas, based on a grand jury presentment that relied on Cynthia Baldwin's testimony.
- Following a preliminary hearing, a magisterial district court found a prima facie case existed and held the charges for trial.
- In the Court of Common Pleas, Spanier filed pre-trial motions to preclude Baldwin's testimony and quash the resulting charges, arguing a violation of his attorney-client privilege.
- The trial court denied Spanier's motions, holding that Baldwin represented Spanier only as an agent of Penn State and that no individual attorney-client privilege had been formed.
- Spanier filed an interlocutory appeal of the trial court's order to the Superior Court of Pennsylvania.
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Issue:
Does an attorney-client relationship, protected by privilege, form between a corporate employee and corporate counsel during a grand jury investigation when the counsel fails to clarify that they represent only the corporation and not the employee in their individual capacity?
Opinions:
Majority - Bowes, J.
Yes. An attorney-client relationship protected by privilege is formed between a corporate employee and corporate counsel when counsel fails to adequately explain that their representation is limited to the employee's role as a corporate agent and does not extend to their personal capacity. The right to counsel before a grand jury is a personal right intended to protect the witness from self-incrimination. When corporate counsel appears with an employee in such a proceeding without providing clear warnings to the contrary (i.e., 'Upjohn warnings'), the employee may reasonably believe the attorney represents their personal interests. Here, Cynthia Baldwin did not adequately explain to Graham Spanier that she represented him solely as an agent of Penn State and not in his individual capacity. Circumstances, including Baldwin's presence during testimony and consultation, supported Spanier's reasonable belief that she was his personal attorney. Therefore, their communications were privileged, and Baldwin's subsequent testimony against Spanier before the grand jury was a breach of that privilege, rendering her an incompetent witness as to those communications.
Analysis:
This decision significantly clarifies the obligations of corporate counsel in Pennsylvania when representing employees in criminal investigations, emphasizing the need for explicit 'Upjohn warnings.' It establishes that the default presumption in a grand jury context is that counsel is present to protect the individual's personal rights, thus creating a personal attorney-client privilege unless expressly disclaimed. This ruling places a substantial burden on corporate attorneys to unambiguously define the nature of their representation to employees. It protects employees from unknowingly waiving their rights by confiding in a lawyer they believe is their advocate but who is solely loyal to the corporation.
