In Re: Grand Jury v.
2012 U.S. App. LEXIS 25318
| 3rd Cir. | 2012Background
- ABC Corp., along with John Doe 1 and John Doe 2, faces a grand jury investigation into a purported tax scheme involving acquiring and transferring target companies to two LLCs.
- Government subpoenas sought documents and testimony related to legal advice ABC obtained; outside counsel Blank Rome and LaCheen Wittels were served, asserting privileges.
- District Court issued March and June removal orders—March directed production; June addressed in-house counsel, applying the crime-fraud exception to deny privilege.
- ABC Corp. appeals; jurisdiction is contested, with Perlman and Mohawk-based theories debated, and secrecy requires in-camera review of evidence.
- Panel ultimately affirms the June Order, dismisses March Order appeal for lack of jurisdiction, and declines to expand Perlman review; issues remain about scope of the crime-fraud standard.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction to review March Order | ABC argues Perlman permits immediate review. | Government contends contempt path required for immediate review. | No jurisdiction for March Order; contempt route available. |
| Jurisdiction to review June Order | ABC seeks immediate review of in-house counsel orders. | Mohawk/Mohawk-related limits do not bar Perlman review here. | Jurisdiction exists; merits reviewed. |
| Quantum of proof for crime-fraud exception | Standard should be higher than reasonable basis; potentially preponderance. | Reasonable basis suffices; avoids mini-trials at grand jury stage. | Adopts reasonable-basis standard; no preponderance requirement. |
| Application to work product doctrine | Crime-fraud exception should vitiate work product where client misused advice. | If in-house counsel not implicated, work product should be protected. | Crime-fraud can override, but implications remain undecided for independent attorney work product. |
| Document-specific privilege rulings | Certain letters and emails should be privileged; exceptions apply. | Crime-fraud evidence and non-privileged communications justify disclosure. | Three documents denied privilege; two copies of opinion letter and certain emails analyzed; two in-house documents affirmed non-privileged. |
Key Cases Cited
- Perlman v. United States, 247 U.S. 7 (1918) (performs Perlman exception for third-party custodians)
- Mohawk Industries, Inc. v. Carpenter, 558 U.S. 100 (2009) (collateral order doctrine limits on immediate appeals of privilege rulings)
- United States v. Zolin, 491 U.S. 554 (1989) (crime-fraud exception and in-camera review standards)
- In re Grand Jury Subpoena, 223 F.3d 213 (3d Cir.2000) (ex parte submissions and crime-fraud standard)
- In re Grand Jury Proceedings, 604 F.2d 798 (3d Cir.1979) (early articulation of crime-fraud exception framework)
- Bourjaily v. United States, 483 U.S. 171 (1987) (preponderance considerations for preliminary predicates under Rule 104(a))
- In re Impounded, 241 F.3d 308 (3d Cir.2001) (standard of proof and discretion in crime-fraud context)