United States v. Doe & Corp.
810 F.3d 1110, 2016 WL 380889, 2016 U.S. App. LEXIS 619 (2016)
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Rule of Law:
After a prima facie showing of the crime-fraud exception has been made using non-privileged evidence, a district court must conduct an in camera review of the privileged documents to determine which specific communications were made 'in furtherance of' the crime or fraud before compelling their production.
Facts:
- An entity, referred to as 'Appellant Corporation', was a call center that marketed a surgical device.
- The director of Los Angeles County Public Health sent a letter to the Food and Drug Administration (FDA) expressing concern that the Corporation's advertisements inadequately informed consumers of potential risks.
- After receiving a copy of this letter, the Corporation, through its counsel, sent its own letter to the FDA disputing the assertions.
- The FDA initiated an investigation and sent warning letters to the Corporation, stating its advertising likely violated the Food, Drug, and Cosmetic Act (FDCA).
- New counsel for the Corporation, as well as a third attorney for associated medical centers, responded to the FDA's warning letters.
- The government later alleged that these response letters sent by the attorneys to the FDA contained false statements designed to obstruct the agency's investigation.
Procedural Posture:
- The government issued grand jury subpoenas to three lawyers representing the Corporation and associated medical centers, seeking documents and communications related to their correspondence with the FDA.
- The lawyers partially complied but withheld certain documents, asserting attorney-client privilege.
- The government filed a motion to compel full compliance in the U.S. District Court.
- The district court, without conducting an in camera review of the documents, 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, compelling production of all materials identified in the subpoenas.
- The Corporation (appellant) appealed the district court's order to the U.S. Court of Appeals for the Ninth Circuit.
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Issue:
After a party has made a prima facie showing of the crime-fraud exception using non-privileged evidence, must a district court conduct an in camera review of the privileged documents to determine which specific communications were 'in furtherance of' the crime or fraud before compelling their production?
Opinions:
Majority - Gould, Circuit Judge
Yes. After a prima facie case for the crime-fraud exception is established, a district court must conduct an in camera review of the subpoenaed documents before ordering their production. The court explained that invoking the crime-fraud exception is a two-step process. First, the party seeking the documents must show the client was engaged in or planning a crime when it sought counsel's advice to further the scheme. This step can be satisfied with independent, non-privileged evidence, as the district court correctly found here. The second step, however, requires demonstrating that the specific attorney-client communications sought were made 'in furtherance of' the illegality. To determine this, and to properly scope the production order, the district court must examine the individual documents themselves. The lower court erred by ordering a blanket production of all subpoenaed materials without first conducting this mandatory in camera review to see which specific communications furthered the alleged crime-fraud.
Analysis:
This decision clarifies the procedural requirements for applying the crime-fraud exception in the Ninth Circuit, establishing a mandatory procedural safeguard. By requiring an in camera review after a prima facie showing, the court protects the core of the attorney-client privilege from overly broad discovery. This ruling prevents a situation where an initial showing of potential fraud could grant an opposing party access to all communications on a topic, including those that constitute legitimate legal advice. This aligns the Ninth Circuit with other circuits and reinforces the principle that the crime-fraud exception is narrow and applies only to specific communications that actually further the illegal conduct, not the entire attorney-client relationship.
