Grand Jury Investigation
FOR PUBLICATION (2016)
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Rule of Law:
While a prima facie case for the crime-fraud exception to attorney-client privilege can be established using independent, non-privileged evidence, a district court must conduct an in camera review of specific documents to determine which communications are "in furtherance of" the alleged crime-fraud before compelling their production.
Facts:
- Appellant Corporation operated a call center that marketed a surgical device for medical facilities.
- In December 2010, the director and health officer for Los Angeles County Public Health sent a letter to the FDA raising concerns that Corporation’s advertisements for the surgical device inadequately informed consumers of potential risks.
- Corporation, through its counsel, sent its own letter to the FDA disputing the health officer's assertions and attempting to dissuade the FDA from investigating.
- Despite the attorney’s letter, the FDA opened an investigation and sent warning letters to Corporation and a few medical centers, stating the advertising violated the Food, Drug, and Cosmetic Act (FDCA) by not providing relevant risk information.
- New counsel for Corporation and a third attorney for the medical centers responded by letter to the FDA warning letters.
- The government later alleged that these responses contained false statements designed to obstruct the FDA investigation.
Procedural Posture:
- The government issued grand jury subpoenas to three attorneys (involved in the FDA correspondence) seeking communications related to their FDA correspondence and retainer/billing records.
- The attorneys partially complied but did not fully produce all subpoenaed documents, invoking attorney-client privilege.
- The government filed an ex parte motion to compel compliance with the subpoenas in the United States District Court for the Central District of California (trial court).
- The district court, without reviewing any documents in camera, found that the government had established a prima facie case for the crime-fraud exception based on independent, non-privileged evidence.
- The district court granted the government's motion to compel production of all matters identified in the subpoenas.
- Doe Appellants and Corporations (Respondents-Appellants) appealed the district court's order to the United States Court of Appeals for the Ninth Circuit (intermediate appellate court).
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Issue:
Does a district court, having found a prima facie case that attorneys' services were obtained in furtherance of a crime-fraud based on independent evidence, need to conduct an in camera review of the subpoenaed documents before compelling their production to determine which specific communications are in furtherance of the crime-fraud?
Opinions:
Majority - Gould, Circuit Judge
Yes, a district court must examine individual documents in camera to determine which specific attorney-client communications are "sufficiently related to" and "in furtherance of" the alleged crime-fraud before compelling their production. The court affirmed that a prima facie case for the crime-fraud exception can be established using independent, non-privileged evidence, satisfying the first step of the two-part test. However, it clarified that while in camera review is not necessary for this first step, it is mandated for the second step: to determine the precise scope of the production order and ensure that only communications made "in furtherance of" the contemplated or ongoing crime-fraud are disclosed. Citing other circuits (Eighth and Sixth), the court distinguished between establishing the prima facie case and determining the specific documents to be produced. The district court erred by ordering broad production without this second-stage in camera review of individual documents. Therefore, the order compelling production was vacated and remanded for the district court to conduct the necessary in camera inspection.
Analysis:
This case clarifies the procedural application of the crime-fraud exception to attorney-client privilege within the Ninth Circuit. It establishes a two-step process, distinguishing between proving a prima facie case for the exception and determining the scope of document production. By requiring in camera review at the second stage, the ruling aims to protect privileged communications while allowing legitimate access to evidence of criminal or fraudulent activity. This decision provides a crucial safeguard against overly broad disclosures of privileged materials, ensuring that only communications directly furthering a crime or fraud are compelled, thereby balancing the integrity of legal privilege with the demands of justice.
