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In re Thirty-Third Statewide Investigating Grand Jury

Supreme Court of Pennsylvania

February 19, 2014


ARGUED: March 5, 2013

Appeal from the Order of the Dauphin County Court of Common Pleas at No. 1325 MD 2010 (Notice No. 21) dated April 24, 2012




Appellant, the Pennsylvania Turnpike Commission (the "Commission"), filed a petition for review of an order of the supervising judge of the Thirty-Third Statewide Investigating Grand Jury, sitting in the Dauphin County Court of Common Pleas, which denied the Commission's motion for a protective order seeking to prohibit the Office of Attorney General (the "OAG") from reviewing allegedly privileged or protected communications between the Commission and its counsel. Final orders in matters involving investigating grand juries are within the exclusive appellate jurisdiction of this Court. 42 Pa.C.S. § 722(5). This case does not involve a final order, but the Court accepted the Commission's petition for review and directed briefing and oral argument to consider the important question of privilege in the context of Commonwealth agencies subject to grand jury investigation. We now affirm.

I. Background[1]

Since 2009, the OAG has been conducting a statewide grand jury investigation into whether criminal statutes have been violated by the Commission, its employees and others, in connection with, inter alia, the Commission's employment and procurement practices. Throughout the investigation, the OAG has issued subpoenas to the Commission and third parties. According to the Commission, it has produced more than 140, 000 pages of material to the OAG in response to subpoena, but with regard to certain requested material, the Commission invoked the protections of the attorney-client privilege and the attorney work product doctrine. The Commission sought to negotiate with the OAG a plan for production of the material through the use of a "privilege log." The Commission proposed the following review process: 1) the OAG would identify in general terms (either by custodian, name of outside law firm, or some other specific identifying information) documents and communications of a potentially privileged nature that the OAG wished to review; 2) the Commission's counsel would then review the material, produce documents that were not protected, and provide the OAG with a privilege log of any material that the Commission withheld on the basis of the attorney-client privilege or work product doctrine; 3) following receipt of the privilege log, if the OAG either disagreed with the stated basis for withholding an item, or otherwise believed that an exception existed that would override the asserted protection, then the OAG would identify those items to the Commission's counsel; and 4) if no agreement could be reached about those items, then counsel would promptly provide any material in question to a court for in camera review and disposition. See Pa. R. Crim. P. 573(F) (on motion, court may permit showing of disputed discovery material to be made in form of written statement to be inspected by court in camera). Commission's Brief at 5-6. The OAG rejected the Commission's proposal.

Subsequently, the Commission filed a motion for protective order with the supervising judge of the grand jury, the Honorable Barry F. Feudale, seeking to prevent disclosure of the allegedly protected materials, and to allow instead the production of material through the proposed privilege log which would identify items withheld on the basis of the attorney-client privilege or work product doctrine.[2] The Commission maintained that it could invoke these privileges because the statutory codifications are unequivocal in their application to all attorneys and all of their clients, and that nothing in the Commonwealth Attorneys Act (the "CAA"), not even the broad "books and papers" provision, 71 P.S. § 732-208, [3] eliminates, modifies or otherwise qualifies privileges for Commonwealth agencies. In response, the OAG insisted that it should have "unfettered access" to all requested items, and that the attorney-client and work product privileges do not protect the documents and records of a Commonwealth agency from a grand jury subpoena.

On April 24, 2012, Judge Feudale denied the motion for protective order and filed a Memorandum Opinion under seal. Judge Feudale concluded, in relevant part, that the OAG has the right to access all of the requested material pursuant to the books and papers provision of the CAA, and that the attorney-client and work product privileges do not preclude the OAG's access to these materials.

The Commission filed a petition for review in this Court pursuant to Pa. R. A. P. 3331(a)(3) and Chapter 15 of the appellate rules, asserting that the supervising judge's interlocutory order was immediately appealable as a collateral order. We granted review, ordered briefing, and directed that the matter be listed for oral argument. In re Thirty-Third Statewide Investigating Grand Jury, 48 A.3d 1217 (Pa. 2012) (per curiam). Mr. Justice Saylor filed a Dissenting Statement noting, inter alia, that the Commission argued that its right to review arose under the collateral order doctrine; that the Court's prior decisions had declined to review privilege assertions in the grand jury setting under the collateral order doctrine, for reasons relating to the interests and complexities particular to the investigative grand jury process; and that interlocutory review in the grand jury setting, in the few instances deemed appropriate, generally proceeded under the Court's powers of extraordinary jurisdiction. Justice Saylor noted that he was uncomfortable with a movement away from that constancy of approach in the grand jury setting; and thus, he would have denied collateral order review. Id. at 1217-18 (Saylor, J, dissenting).

The parties have briefed the following merits issues: 1) whether the attorney-client privilege and the work product doctrine apply to records and communications of Commonwealth agencies in the context of a criminal investigation by the OAG; 2) whether the books and papers provision of the CAA, 71 P.S. § 732-208, waives and eliminates the attorney-client privilege and work product doctrine for Commonwealth agencies in a criminal investigation by the OAG; and 3) whether a Commonwealth agency and the OAG are the same "client" for purposes of invoking the attorney-client privilege and work product doctrine in a criminal investigation by the OAG.[4]

II. Appellate Jurisdiction

The question of whether the order below is appealable implicates this Court's jurisdiction. Commonwealth v. Kennedy, 876 A.2d 939, 943 (Pa. 2005). Our per curiam order accepting the petition for review for briefing and argument did not address the basis for our exercise of jurisdiction, and the parties have not made arguments on this point in their briefs. The Commission states simply that the appeal involves a collateral order issued by the supervising judge of a statewide investigating grand jury, and thus, in its view, the order is immediately appealable pursuant to Pennsylvania Rules of Appellate Procedure 313, 702(c) and 3331. Given the salient points raised in Justice Saylor's dissent to our per curiam order, some discussion of the basis for our jurisdiction over the instant interlocutory order is appropriate.

Appellate Rule 313 provides that an "appeal may be taken as of right from a collateral order of an administrative agency or lower court." Pa.R.A.P. 313(a). The Rule defines a collateral order as one that is "separable from and collateral to the main cause of action where the right involved is too important to be denied review and the question presented is such that if review is postponed until final judgment in the case, the claim will be irreparably lost." Pa.R.A.P. 313(b). See Commonwealth v. Wright, 78 A.3d 1070, 1077-79 (Pa. 2013) (discussing collateral order doctrine and allowing immediate Commonwealth appeal from interlocutory order regarding criminal defendant's competency to waive rights on post-conviction review). Appellate Rule 702(c) provides that all petitions for review related to special prosecutions or investigations shall be filed in the Supreme Court, and Appellate Rule 3331(a)(3) further provides that an "order entered in connection with the supervision, administration or operation of an investigating grand jury or otherwise directly affecting an investigating grand jury or any investigation conducted by it" shall be subject to review pursuant to Chapter 15 of our appellate rules related to judicial review of governmental determinations. See also 42 Pa.C.S. § 722(5) (Supreme Court has exclusive jurisdiction of appeals from final orders of courts of common pleas in cases involving convening, supervision, administration, operation or discharge of an investigating grand jury or otherwise directly affecting such grand jury or any investigation conducted by it). But see Pa.R.A.P. 3331(d) (interlocutory or final nature of order shall not be affected by this rule and unless independent grounds appear for review of an interlocutory order, interlocutory nature of order will be sufficient reason for denying petition for review); Note to Pa.R.A.P. 3331 (rule "is intended to provide a simple and expeditious method for Supreme Court supervision of special prosecutions and investigations, e.g., orders of the supervising judge of an investigating grand jury, " but is not applicable to review of investigating grand jury issues that collaterally arise in plenary criminal prosecution initiated by complaint, information or indictment).

Outside the grand jury context, this Court has applied the collateral order doctrine to allow immediate review of interlocutory orders involving privilege matters, most often and recently in cases arising under the Post Conviction Relief Act ("PCRA"), 42 Pa.C.S. §§ 9541-9546. In the PCRA context, both defense and Commonwealth appeals involving interlocutory orders affecting privilege have been deemed to be reviewable collateral orders. See, e.g., Wright, supra; Commonwealth v. Harris, 32 A.3d 243, 251 (Pa. 2011) (defense PCRA appeal; holding that "orders overruling claims of privilege and requiring disclosure are immediately appealable" as collateral orders); Commonwealth v. Williams, supra (Commonwealth appeal from PCRA discovery order involving trial prosecutor's notes, where order alleged to violate work product doctrine, deemed reviewable collateral order). In the wake of cases such as Harris, our approach in this area may properly be described as uniform and categorical. See Thirty-Third Statewide Investigating Grand Jury, 48 A.3d at 1217-18 (Saylor, J., dissenting).

Within the context of a grand jury proceeding, we have recognized that an otherwise interlocutory order may be reviewable if it satisfies the requirements of the collateral order doctrine, but that the doctrine should be "stringently applied." See In re Dauphin County Fourth Investigating Grand Jury, 943 A.2d 929, 935 (Pa. 2007). However, as Justice Saylor accurately noted in his dissent to our exercise of jurisdiction here, in cases where the interlocutory grand jury appeal derives from a privilege-based challenge to a subpoena, our approach has been to disallow review unless the appeal arises in the context of a contempt proceeding and actual sanction for failing to comply with the subpoena. Thus, we have held that "[o]ne seeking to challenge the propriety of a grand jury subpoena must generally choose between complying with the subpoena and litigating the validity through contempt proceedings, " noting that this "approach facilitates the development of an adequate factual record in support of the reasons supporting resistance to the subpoena." In re Twenty-Fourth Statewide Investigating Grand Jury, 907 A.2d 505, 510 (Pa. 2006). In other words, instead of allowing immediate appeal of an order denying a challenge to a grand jury subpoena via the collateral order doctrine, we have ordinarily required that the challenger of the subpoena refuse compliance and be held in contempt before we will exercise jurisdiction to review the merits of the interlocutory matter. Id. at 511; Dauphin County Fourth Investigating Grand Jury, 943 A.2d at 935 (denying review of interlocutory orders entered by supervising judge of grand jury quashing in part and allowing in part certain grand jury subpoenas; petitioners had not yet exposed themselves to contempt and also did not argue that orders met requirements of collateral order doctrine, but "it is clear that the [collateral order] doctrine does not apply"). This general practice supports the important "policy against unnecessarily impeding a grand jury investigation" and avoids the danger of a reviewing court placing itself "at the very heart of a grand jury's investigation" as it attempts to determine whether or not the contested order is indeed collateral. Twenty-Fourth Statewide Investigating Grand Jury, 907 A.2d at 510-11 (quoting from In re Grand Jury Subpoena, 190 F.3d 375, 384 (5th Cir. 1999)). Accord Thirty-Third Statewide Investigating Grand Jury, 48 A.3d at 1217-18 (Saylor, J., dissenting).

Obviously, this appeal arises before the Commission – or more accurately stated, the Commission's employees or individual commissioners – have been held in contempt for failure to comply with the subpoenas at issue. Nevertheless, aware of our prior cases and the countervailing concerns well-articulated in Justice Saylor's dissent, the Court has exercised its power of review here, knowing that it did not fit neatly into the paradigm described above. We do so for the following reasons. But for the concerns and complexities specific to the grand jury context, an order such as the one sub judice – implicating claims of privilege – would qualify as a reviewable collateral order under our emerging categorical approach. At least in the context of government agency employees facing the requirement of a contempt citation and sanction in order to vindicate claims of privilege in the grand jury context, we believe an exception to our general approach is in order, so as to resolve this particular question once and for all. See Pennsylvania Gaming Control Bd. v. Office of Attorney General, 44 A.3d 1134, 1137-38 (Pa. 2011) (Castille, C.J., dissenting) (arguing that rationale for not allowing immediate collateral appeal from contempt order should not apply "where the subjects of subpoena, who have been threatened with incarceration, are public employees of a public agency arguably just trying to do their jobs").

We recognize that there is an aspect of our exercise of jurisdiction here which implicates review for reasons that have led us to invoke extraordinary review in other grand jury matters: i.e., to answer an important and potentially recurring issue, in an area subject to our review if the orders were final. Our addressing the important and potentially recurring issue of privilege in the government agency context should not be read as a categorical approval of interlocutory appeals of this sort in grand jury matters, under the traditional collateral order doctrine. The general requirement of exposure to the contempt process remains intact.

We therefore proceed to consider the merits of the appeal.

III. Arguments

The Commission argues that it is entitled to invoke the attorney-client privilege and work product doctrine to protect communications with its in-house and outside counsel.[5] According to the Commission, the statutory evidentiary privileges codified in the Judicial Code are applicable in both criminal cases, 42 Pa.C.S. § 5916, and civil cases, id. § 5928, and the statutes' headings make no distinction between government or private client communications or between government or private attorneys, and thus the provisions unequivocally apply to all attorneys and all clients. The Commission argues that the supervising judge's construction of the attorney-client privilege "suborns the plain language of the statutes to the OAG's overzealous pursuit of 'unfettered access, ' and improperly reads in a statutory carve-out for counsel advising government agencies." Commission's Brief at 11-12 (citing Commonwealth, Dep't of Transp. v. Taylor, 841 A.2d 108 (Pa. 2004) (rejecting argument that privilege statutes may be rewritten to accomplish a perceived purpose that is at odds with plain language)). The Commission argues that had the General Assembly actually sought to make an exception to the privilege for government attorneys, it could have done so expressly in these statutes.

Moreover, argues the Commission, the Right to Know Law, 65 P.S. §§ 67.101 -67.3104 ("RTKL"), allows a requester to seek public records from Commonwealth agencies, see 65 P.S. § 67.301 (Commonwealth agency shall provide public records), but specifically excludes from production a record "protected by a privilege." 65 P.S. § 67.102. The Commission argues that there is no similar "statutory override" of the codified evidentiary privileges in the grand jury context.

In addition, the Commission argues that Pennsylvania's Civil and Criminal Rules of Procedure unequivocally supply work product protection to the products of every attorney, regardless of the attorney's or the client's "government status." Commission's Brief at 15 (citing Pa. R. C. P. 4003.3 and Pa. R. Crim. P. 573(G)).[6] Again, according to the Commission, the scope of this protection applies to the work product of attorneys of and for government agencies. Commission's Brief at 15 (citing LaValle v. Office of Gen. Counsel, 769 A.2d 449, 458 (Pa. 2001) (report prepared by consultant for Department of Transportation was protected from request under former Right to Know Act as work product)). The Commission further claims that the books and papers provision of the CAA relied upon by the OAG, see 71 P.S. § 732-208, simply states that the OAG "shall have the right to access at all times to the books and papers of any Commonwealth agency necessary to carry out his duties under this act, " but its plain language does not purport to waive or otherwise limit the protections afforded by these privileges. [7]According to the Commission, since the evidentiary privileges set forth in 42 Pa.C.S. §§ 5916 and 5928 (enacted in 1976) preexisted the books and papers provision in the CAA (enacted in 1980), those privileges remain inherent in the later provision, or else the General Assembly would have expressly stated the privileges were waived through its newer enactment. The Commission also argues that the OAG's interpretation of the books and papers provision improperly "reads out" the qualifying phrase "necessary to carry out" the OAG's duties, which actually makes clear that the OAG is not entitled to every book and paper of an agency, but only a certain subset.

The Commission further argues that the supervising judge improperly determined that the reference in Section 732-208 of the CAA to "access at all times" confers on the OAG an unfettered right to possess and review all books and papers of an agency, rather than allowing the use of a privilege log as was proposed here. According to the Commission, the court also erred when it relied on Pennsylvania Rule of Professional Conduct 1.13 in deciding that the Commission and the OAG are one "client" such that the OAG could waive the attorney-client privilege for the Commission.[8] The Commission points out that the commentary to Rule 1.13 makes clear that its scope is limited and that the rule does not precisely define the identity of the client of government lawyers. Specifically, the Commission focuses on part of Comment 6 to Rule 1.13 which provides: "The duty defined in this Rule applies to governmental organizations. Defining precisely the identity of the client and prescribing the resulting obligations of such lawyers may be more difficult in the government context and is a matter beyond the scope of these Rules."[9] The Commission argues that, as an independent agency, it is instead authorized to appoint chief counsel and assistant counsel to provide it with legal assistance if the OAG initiates litigation against it. 71 P.S. §§ 732-401, 732-402(3)(ii). And, the Commission insists, the OAG is not the "client" for purposes of waiving the Commission's privileges.

Moreover, the Commission argues that the supervising judge erred when he relied on certain federal case law interpreting the Federal Rules of Evidence in its decision in favor of the OAG here. Instead, the Commission cites to various Pennsylvania cases which have upheld the attorney-client privilege and "rejected efforts to narrow its scope and application." Commission's Brief at 27 (citing Gillard v. AIG Ins. Co., 15 A.3d 44, 48-56 (Pa. 2011)). The Commission also cites federal case law that supports its position that government officials should be encouraged to seek legal advice and enjoy the confidential communication that accompanies that attorney-client relationship, in their effort to uphold the law; the Commission argues that agency officials "must know the law in order to comply with the law." Commission's Brief at 28-29 (citing In re: Grand Jury Investigation, 399 F.3d 527, 534 (2d Cir. 2005) ("Upholding the privilege furthers a ...

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