Interesting ruling on scope of attorney-client privilege

Today, the Third Circuit, in In Re: Grand Jury Investigation, ruled on interesting issues regarding attorney-client privilege, the work-product doctrine, and the crime-fraud exception. The case reached the Court after the government subpoenaed certain documents and testimony regarding an attorney’s advice to his client. The district court upheld the subpoena, holding that the crime-fraud exception trumped the attorney-client privilege and work-product doctrine because there was evidence that the attorney had given the client advice in furtherance of her obstruction of justice. After surrender of the documents and the testimony of the attorney before the grand jury, but before an indictment was returned, an object of the investigation, Jane Doe, appealed the district court’s ruling.

The Court first discussed issues of mootness. Because the Court could order relief (i.e., return of the subpoenaed documents, possible injunction of future use of arguably privileged grand jury testimony) to Doe in the event that she prevailed, the Court decided that the appeal was not moot.

Doe argued that the crime-fraud exception should not override the attorney-client privilege where she did not initiate the communication with the attorney, and therefore was not soliciting advice. The Court disagreed and further stated that the government has the burden to show that the client was committing a crime or fraud and the attorney-client communications were in furtherance of such. The Court found some evidence of an ongoing crime: obstruction of justice. Next, the Court assessed whether the attorney-client relations were "in furtherance of" and not merely "related to" the criminal activity. (Interesting note: the district court had relied on a Not Precedential Opinion ("NPO") in determining that the appropriate test for "in furtherance of" was "related to." The opinion makes clear that this was not appropriate.) Nonetheless, because the district court agreed that the attorney-client communications qualified as being "in furtherance of" Doe’s possible obstruction of justice, and thus were subject to the crime-fraud exception, the Court affirmed the district court’s ruling.

Supervised Release Condition Prohibiting Employment with Attorneys Upheld

Today, the Third Circuit, in United States v. Smith, has upheld a condition of supervised release that prohibited the defendant from gaining employment with an attorney or law firm. In Smith, the defendant pleaded guilty to a wire fraud offense, where Smith held himself out as a legal consultant. Smith had some prior convictions that revealed similar activities.

After release from a federal correctional institution, Smith received an offer for employment from local attorneys. Smith’s program review team rejected this opportunity. Smith petitioned the district court to allow the petition. The district court denied it. Smith then filed a motion for reconsideration and the government sought a modification of Smith’s terms of supervised release to include a condition banning Smith from any such employment. The court rejected Smith’s motion and granted the government’s. Smith appealed.

Smith first argued that the district court "lacked the authority to modify the conditions of his release absent changed circumstances." The Third Circuit rejected this contention, noting that the job offer was a change in circumstances warranting the modification.

Smith also argued that the condition did not bear a reasonable relationship to his offense, and was likewise not narrowly tailored. 18 U.S.C. § 3583. The Court disagreed, stating that the condition of supervised release was reasonably related to the goals of sentencing and narrowly tailored to achieve deterrence, public protection, and/or correctional treatment.

The Court also assessed the condition under the reasonableness standard set out by Booker and Cooper, and deemed the condition reasonable under these individualized circumstances. See further coverage of this case on sentencing.typepad.com.

Ineffective assistance and the applicability of AEDPA

In Rolan v. Vaughn, the Third Circuit addressed numerous issues relating to habeas relief. The petitioner in Rolan had petitioned the PA state courts for post-conviction relief, based upon ineffective assistance of counsel, claiming that his attorney had failed to investigate possible defenses. The PA Superior Court ultimately denied such relief, simply ruling that any such deficient performance of counsel could not have prejudiced the defendant. On habeas, the federal district court did not apply the deference to the state court’s factual findings under AEDPA and granted relief, stating that counsel’s failure to investigate was, in fact, ineffective and prejudicial.

On appeal, the Third Circuit first addressed whether AEDPA should have applied. It first stated that AEDPA only applies if the PA Court rejected Rolan’s claim on the merits. The Court determined that the state court did adjudicate the claim on the merits, despite the state court’s decision to dispose of the case for lack of any potential prejudice, rather than on a factual determination as to whether or not Rolan received ineffective assistance of counsel. Thus, AEDPA’s deferential standard of review applied.

Therefore, the district court should have deferred to the state court’s findings of fact, unless a review of the record revealed that the state court’s findings were unreasonable. The Third Circuit then undertook this reasonableness inquiry. The Court determined that the findings of fact (regarding a particular witness’ willingness to testify for the defendant) made by the district court were unreasonable. Accordingly, after reviewing the record, the Court agreed with the district court’s ruling that Rolan had received ineffective assistance of counsel, because Rolan’s attorney failed to properly investigate possible defenses before trial. Because this ineffective assistance did prejudice Rolan’s trial, the Court affirmed the district court’s grant of habeas relief.