decided: July 23, 1979.
IN THE MATTER OF: GRAND JURY EMPANELLED FEBRUARY 14, 1978; NATHAN MARKOWITZ, APPELLANT
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY; D.C. Misc. No. 78-28
Before Hunter, Weis and Garth, Circuit Judges.
Opinion OF THE COURT
This appeal is taken from the May 22, 1979 Order of the District Court for the District of New Jersey which directed that Nathan Markowitz, Esq. be confined pursuant to 28 U.S.C. § 1826 for refusing to disclose the identity of his client and for refusing to produce documents called for by a grand jury subpoena which had been served on him. Markowitz claimed both his and his client's fifth amendment privilege against self-incrimination and the attorney-client privilege when he refused to name his client. He also claimed these privileges when he refused to turn over the documents requested by the grand jury subpoena.
The district court held that Markowitz could not avail himself of the privilege against self-incrimination and could not assert his client's privilege; it also concluded that no attorney-client privilege had been established. Accordingly the court ordered his confinement.*fn1 We disagree with the district court's refusal to grant Markowitz's fifth amendment privilege to refuse to identify his client. On all other points of the district court's holding we agree. Thus, the order of confinement, absent the requirement that Markowitz identify his client, will be affirmed.
On March 17, 1979, the motor vessel OLAUG, allegedly the property of the Killington Investment Corporation, was seized off the New Jersey coastline by federal officials. It was found to be carrying approximately 42,000 pounds of hashish. The grand jury before which Markowitz was directed to appear is investigating the circumstances surrounding the presence of the hashish aboard the OLAUG. Markowitz was summoned to appear*fn2 because the government apparently believes that he has participated in transactions relating to the ownership of the OLAUG. See Transcript of In Re Grand Jury at 25; Appellant's Appendix at 45a. On May 22, 1979 Markowitz appeared before the grand jury. He refused to produce any documents or answer any questions, except for preliminary questions about his name and occupation. As a basis for this refusal, he asserted his fifth amendment privilege, his client's fifth amendment privilege, and the attorney-client privilege.
The government immediately sought a ruling from the district court as to whether Markowitz was justified in asserting these privileges. The court ruled that it would be necessary to examine the documents In camera in order to determine if the privileges applied to those documents. Before examining the file, the court directed Markowitz to take the stand and be sworn. After identifying the documents in the files as the ones subpoenaed and providing some information on his professional background, Markowitz refused to identify his client. The court ruled that Markowitz could not justify this refusal on the basis of any of the privileges claimed and ordered him to answer. When Markowitz again refused, the court instructed him that he could be confined pursuant to either 28 U.S.C. § 1826 or Federal Rule of Criminal Procedure 42. The court allowed a recess for Markowitz to consider his position. At the resumption of proceedings, the court questioned Markowitz about several items in the document file. He refused to answer on the basis of the three grounds asserted previously. The court ruled that this refusal also was not justified. When Markowitz respectfully continued to refuse to answer, the court ordered that he be committed pursuant to 28 U.S.C. § 1826.
First, we consider Markowitz's refusal to identify his client. On appeal Markowitz asserts only the attorney-client privilege and his own fifth amendment privilege.*fn3
In the circumstances of this case we conclude that Markowitz could not refuse to name his client in reliance on the attorney-client privilege, even assuming that all of the necessary elements of an attorney-client relationship had been established. In Gannet v. First National State Bank of New Jersey, 546 F.2d 1072, 1073 n. 4 (3d Cir. 1976), Cert. denied, 431 U.S. 954, 97 S. Ct. 2674, 53 L. Ed. 2d 270 (1977), we wrote:
This court has stated in at least two opinions that absent unusual circumstances the identity of the client does not come within the attorney-client privilege. See In re Semel, 411 F.2d 195, 197 (3d Cir. 1969); Mauch v. Commissioner of Internal Revenue, 113 F.2d 555, 556-57 (3d Cir. 1940).
The cases relied upon in Semel describe the situations in which the identity of a client is privileged. In Colton v. United States, 306 F.2d 633 (2d Cir. 1962), Cert. denied, 371 U.S. 951, 83 S. Ct. 505, 9 L. Ed. 2d 499 (1963) the court found the privilege warranted where "the substance of a disclosure has already been revealed but not its source." Id. at 637. Similarly, in United States v. Pape, 144 F.2d 778 (2d Cir.), Cert. denied, 323 U.S. 752, 65 S. Ct. 86, 89 L. Ed. 602 (1944) the court observed that there may be "situations in which so much has already appeared of the actual communications between an attorney and a client, that the disclosure of the client will result in a breach of the privilege." Id. at 783. This case does not present such a fact situation. No confidential communications between Markowitz and his client have been revealed. There are no confidences to which Markowitz's client would be linked were its identity known, and hence no privilege within the contemplation of Gannet.*fn4
As to the fifth amendment claim, however, we find that Markowitz does have the right to refuse to reveal the identity of his client. We conclude, in contrast to the district court, that an answer would be "incriminating" compelled testimony within the meaning of the fifth amendment. In Hoffman v. United States, 341 U.S. 479, 71 S. Ct. 814, 95 L. Ed. 1118 (1951), a witness refused to answer certain questions asked by a federal grand jury. The Supreme Court held that the fifth amendment privilege "not only extends to answers that would in themselves support a conviction under a federal criminal statute but likewise embraces those which would furnish a link in the chain of evidence needed to prosecute the claimant." Id. at 486, 71 S. Ct. at 818. To sustain a conviction for contempt it must be " "Perfectly clear, from a careful consideration of all the circumstances in the case, that the witness (who invokes the privilege) is mistaken, and that the answer(s) cannot Possibly have (a) tendency' to incriminate." Id. at 488, 71 S. Ct. at 819 (citations omitted; emphasis in original). Accord, United States v. Yurasovich, 580 F.2d 1212, 1215-16 (3d Cir. 1978).
Markowitz asserted his claim of privilege in a setting colored by inferences that he participated in a conspiracy to commit the very offense under investigation.*fn5 There is a possibility that if Markowitz reveals his client's identity he might furnish "the link in a chain of evidence" against himself. Accordingly, after considering all the circumstances in the case it is Not "perfectly clear . . . that the witness is mistaken, and that the answers cannot Possibly have (a) tendency to incriminate." Id.
We turn now to Markowitz's refusal to produce the documents requested by the grand jury's subpoena. Markowitz claims that his refusal was justified by the attorney-client privilege; his client's fifth amendment privilege (which would protect the documents under the rule in Fisher v. United States, 425 U.S. 391, 402-05, 96 S. Ct. 1569, 48 L. Ed. 2d 39 (1976)); and his personal fifth amendment privilege.
The elements necessary to establish the attorney-client privilege are settled.
(1) (When) legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his insistence permanently protected (7) from disclosure by himself or by the legal adviser, (8) except the protection be waived. (Emphasis added)
J. Wigmore, Evidence § 2292 at 554 (1961).
To the extent that the record is ambiguous as to the elements which are necessary to establish the claim of privilege, "The burden of proving that the (attorney-client) privilege applies is placed upon the party asserting the privilege." United States v. Landof, 591 F.2d 36, 38 (9th Cir. 1978).*fn6 On appeal, Markowitz has acknowledged that the record in this case does not contain sufficient facts to establish the existence of an attorney-client relationship or to prove that the attorney-client privilege covers the documents subpoenaed. Appellant's Brief at 18-20.
Markowitz argues that he was unable to meet the burden usually imposed upon the proponent of the attorney-client privilege because he found it necessary to assert the privilege against compelled self-incrimination when he was asked questions which would have established the attorney-client relationship. He would have responded, he claims, if the government had granted him use immunity or if the court had compelled the government to do so. Nevertheless, the district court did regard all statements made by the witness during the In camera ex parte proceedings as protected by a judicially-created immunity. The district court stated:
I always make it clear before beginning the inspection In camera that The proceeding in camera is itself privileged. Consequently, any answers given for the purpose of determining the validity of the claim of privilege will not constitute any waiver of any right the witness might otherwise have. (Emphasis added)
Transcript of In re Grand Jury at 34; Appellant's Appendix at 54a. Such immunity has been recognized in analogous circumstances. Cf. Simmons v. United States, 390 U.S. at 377, 389-94, 88 S. Ct. 967, 19 L. Ed. 2d 1247 (1968) (suppression hearing); In re Grand Jury Investigation ("A"), 587 F.2d 589, 597-98 (3d Cir. 1978) (hearing on applicability of speech and debate clause); United States v. Inmon, 568 F.2d 326, 332-33 (3d Cir. 1977) (hearing on pretrial motion to dismiss on double jeopardy grounds); United States v. Herman, 589 F.2d 1191, 1204 (3d Cir. 1978) (possibility of judicially-created immunity for essential defense witness who refuses to testify on fifth amendment grounds). Markowitz has not distinguished between the grant of immunity by the executive branch which he prefers and the judicially-created immunity which he was granted by the court and which he refused.*fn7 Further, we note that during the In camera proceeding Markowitz's attorneys had the opportunity to ask him whatever questions they chose. Transcript of In re Grand Jury at 78; Appellant's Appendix at 95a. Although nothing has changed since Markowitz refused to answer questions about the attorney-client relationship, his counsel now claims that, "hopefully, with careful questioning, (he) may be able to provide the answers to these questions, In camera, without making any statements that would be incriminating to (him) personally." Appellant's Supplemental Brief at 8. Failing to avail himself of a protected opportunity to establish the attorney-client privilege, and admitting that he could possibly have answered the court's questions without incriminating himself, Markowitz may not now claim that the inadequacy of the record on this issue should be excused or that the case should be remanded.
Markowitz also argues that the documents were protected under the rule articulated in Fisher v. United States, 425 U.S. 391, 402-05, 96 S. Ct. 1569, 48 L. Ed. 2d 39 (1976), that documents which would be protected by a privilege such as the fifth amendment while in a client's possession which are conveyed by the client to his or her attorney for the purpose of obtaining legal advice are protected by the attorney-client privilege while in the attorney's possession. The Fisher rule is not based on an attorney's right to vicariously assert his client's fifth amendment privilege. Quite the contrary, that argument was rejected by the Court. See note 3 Supra. Rather, the Fisher rule is grounded on the attorney-client privilege. It requires both that there be an attorney-client relationship, and that the documents would be privileged in the client's hands. Markowitz did not prove that an attorney-client relationship existed; that the documents were turned over for the purpose of securing legal advice; that his client was an entity which could assert a fifth amendment privilege (i. e., that the client was an individual; that the client, if an individual, had a privilege to assert; or that the documents had a tendency to incriminate his client. Absent a showing of an attorney-client relationship, and a showing that the documents would have been privileged in the client's hands, the Fisher rule does not apply.*fn8
Markowitz was also not justified in refusing to produce the subpoenaed documents on the basis of his own fifth amendment privilege. If we assume that he possessed the documents as a representative of a corporation it is well established that "an individual cannot rely upon (his personal fifth amendment privilege) to avoid producing the records of a collective entity which are in his possession in a representative capacity, even if (these) records might incriminate him personally." Bellis v. United States, 417 U.S. 85, 88, 94 S. Ct. 2179, 2183, 40 L. Ed. 2d 678 (1974). See also United States v. White, 322 U.S. 694, 64 S. Ct. 1248, 88 L. Ed. 1542 (1944); Wilson v. United States, 221 U.S. 361, 31 S. Ct. 538, 55 L. Ed. 771 (1911); In the Matter of: Grand Jury Empanelled February 14, 1978 (Colucci), 597 F.2d 851, 859, 860 (3d Cir. 1979).
Assuming that Markowitz does not hold the documents as the agent of a corporation, Markowitz still has no ground for claiming the fifth amendment privilege, since the production of the subpoenaed papers does not constitute a compelled testimonial communication. In In re: Grand Jury Empanelled February 14, 1978 (Colucci), 597 F.2d 851, 860 (3d Cir. 1979), we held:
(B)efore it may quash a Subpoena duces tecum directing the production of personal records, a court must be satisfied that three requirements have been met: (1) Compulsion of a (2) Testimonial communication that is (3) Incriminating.
(Emphasis in original). A witness "cannot avoid compliance with (a) subpoena merely by asserting that the item of evidence which he is required to produce contains incriminating writing, whether his own or that of someone else." Fisher v. United States, 425 U.S. at 410, 96 S. Ct. at 1581. If the document's preparation was voluntary, the fact that production was compelled by the subpoena does not mean that any pre-existing incriminating contents were "compelled testimonial communications" within the meaning of the privilege.*fn9 A witness who produces preexisting documents pursuant to subpoena does not testify as to all facts which the documents themselves may reveal. Fisher v. United States, 425 U.S. at 408-410, 96 S. Ct. 1569; In the Matter of: Grand Jury Empanelled February 14, 1978 (Colucci), 597 F.2d 851, 859-861 (3d Cir. 1979). Since there has been no compelled testimonial communication, whether the contents of the documents may possibly have a tendency to incriminate is not relevant.
It may be that the very act of producing subpoenaed documents has communicative aspects which rise to the level of a testimonial communication, as where merely acknowledging possession of the documents would be an incriminating admission. Fisher, 425 U.S. at 410, 96 S. Ct. 1569. Nevertheless, Markowitz has made no attempt to demonstrate that such tacit incriminating admissions would arise in this case. While the proponent of a fifth amendment privilege is required "to move forward only to the limited extent requisite" to show that the privilege is properly claimed, he must make some showing. In Re United States v. Hoffman Can Corp., 373 F.2d 622, 628 (3d Cir. 1967). The fact that Markowitz, in his capacity as attorney for certain clients would hold documents of the type involved here is unremarkable. The acknowledgment that such documents exist, are possessed or controlled by Markowitz and are believed by Markowitz to be the documents described by the subpoena, does not rise, under the circumstances shown in this record, to the level of testimony within the protection of the Fifth Amendment. Fisher, 425 U.S. at 410, 96 S. Ct. 1569. See also, United States v. Osborn, 561 F.2d 1334, 1339 (9th Cir. 1977).
For the foregoing reasons we conclude that the district court erred in ruling that Markowitz had no fifth amendment privilege to refuse to identify his client, but correctly ruled that Markowitz was obligated to produce the subpoenaed documents. Accordingly, the court's order of confinement pursuant to 28 U.S.C. § 1826 will be reversed to the extent that it requires Markowitz to identify his client and will be affirmed in all other respects.