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In re Osterhoudt

United States Court of Appeals, Ninth Circuit
722 F.2d 591 (1983)
ELI5:

Rule of Law:

Information regarding the amount, form, and date of legal fee payments is generally not protected by the attorney-client privilege, even if it is incriminating. Such information only becomes privileged if its disclosure would, in substance, reveal a confidential professional communication between the attorney and client.


Facts:

  • An individual (appellant) was the target of a federal grand jury investigation into possible income tax and controlled substance violations.
  • The government possessed information indicating the appellant was a "major distributor of several multi-ton loads of marijuana" during 1976, 1980, and 1981.
  • The government believed the appellant had earned "substantial sums of money" from these alleged activities.
  • The appellant hired an attorney to represent him in connection with the grand jury investigation.
  • The government sought information from the attorney regarding the date and amount of legal fees the appellant had paid, believing it was necessary for a complete financial investigation.

Procedural Posture:

  • The government issued a grand jury subpoena to the appellant's attorney, seeking disclosure of legal fee information.
  • The appellant filed a motion to quash the subpoena in the U.S. District Court, claiming the information was protected by the attorney-client privilege.
  • The district court (trial court) denied the appellant's motion to quash.
  • The appellant appealed the district court's denial to the United States Court of Appeals for the Ninth Circuit.

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Issue:

Does the attorney-client privilege protect an attorney from being compelled to disclose the amount, form, and date of legal fee payments when that information might incriminate the client in the very criminal activity for which the client sought legal advice?


Opinions:

Majority - Per Curiam

No. The attorney-client privilege does not protect fee information from disclosure merely because it might incriminate the client in the matter for which legal advice was sought. The privilege exists to protect confidential professional communications, and fee arrangements are ordinarily not part of such communications. The court clarified that previous cases had misstated the exception established in Baird v. Koerner. The true principle of Baird is not that incriminating information is privileged, but that information is privileged when its disclosure would be tantamount to revealing a confidential communication, such as an admission of guilt, made during the professional relationship. Because disclosure of the date, amount, and form of payment in this case would not convey the substance of any confidential communications between the appellant and his attorney, the information is not privileged. The court also found no Fifth or Sixth Amendment violation, as the government established a legitimate purpose for the information and the limited nature of the disclosure did not threaten the attorney-client relationship.



Analysis:

This decision significantly clarifies and narrows the "legal advice" exception to the general rule that client identity and fee information are not privileged. The court corrects what it views as a misinterpretation of its own precedent in Baird v. Koerner, shifting the focus away from whether the information is incriminating and back to the core purpose of the privilege: protecting confidential communications. By doing so, the court strengthens the government's ability to obtain financial information in criminal investigations via attorney subpoenas. This precedent instructs lower courts to deny privilege claims for fee information unless the party asserting the privilege can demonstrate that disclosure would effectively reveal the substance of actual legal advice or another confidential communication.

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