Argued: January 12, 2016
Appeal from the United States District Court for the Eastern
District of Pennsylvania (No. 2:14-gj-631-003) District
Judge: Honorable R. Barclay Surrick
A. Resnik, Esquire (Argued) Michael M. Rosensaft, Esquire
Katten Muchin Rosenman LLP, Karl S. Myers, Esquire Andrew K.
Stutzman, Esquire Stradley Ronon Stevens & Young Counsel
David Memeger, Esquire Robert A. Zauzmer, Esquire Joel M.
Sweet, Esquire Mark B. Dubnoff, Esquire (Argued) Office of
the United States Attorney Counsel for Appellee
Before: McKEE, Chief Judge [*], AMBRO and SCIRICA, Circuit Judges
appeal presents an unusual question of appellate
jurisdiction: May we continue to exercise jurisdiction over
an appeal of an evidentiary ruling in a grand jury proceeding
even after the grand jury has returned both an indictment and
a superseding indictment? We conclude that, so long as the
grand jury investigation continues, we retain jurisdiction
and thus can resolve the controversy.
jurisdiction, we turn to an important question involving the
limits of the exception to the confidentiality normally
afforded to attorney work product. It loses protection from
disclosure when it is used to further a fraud (hence the
carve-out is called the crime-fraud exception). The District
Court stripped an attorney's work product of
confidentiality based on evidence suggesting only that the
client had thought about using that product to facilitate a
fraud, not that the client had actually done so. Because an
actual act to further the fraud is required before attorney
work product loses its confidentiality and we know of none
here, we reverse.
A, John Doe, his lawyer, and Doe's business associate are
the subjects of an ongoing grand jury investigation into an
allegedly fraudulent business scheme.After the Government obtained
access to an email Doe claims was privileged, it asked the
District Court for permission to present it to the grand
jury. The Court granted permission, finding that, although
the email was protected by the work-product privilege, the
crime-fraud exception to that privilege applied. Doe then
filed an interlocutory appeal, requesting that our Court
reverse the District Court's order.
the appeal was pending, the grand jury viewed the email in
question. It then indicted Doe, his lawyer, and Doe's
business associate for conspiracy to violate the Racketeer
Influenced and Corrupt Organizations Act ("RICO"),
conspiracy to commit fraud, mail fraud, wire fraud, and money
laundering. Thereafter the grand jury was discharged and a
new grand jury was empaneled. It too saw the disputed email,
and in December 2016 returned a superseding indictment that
did not contain new charges but revisions to the previous
ones. The grand jury investigation, however, continues still.
What follows fleshes out this factual and procedural
the sole owner of Company A and its president. Nonetheless a
November 2008 document purports to memorialize Doe's sale
of 100% of the shares of Company A to Company B for $10, 000.
Doe's business associate is the sole owner of Company B.
Following this purchase agreement, Doe claims that the
business associate engaged Doe to be responsible for Company
A's day-to-day operations. However, numerous filings and
tax documents suggested that Doe maintained control and
ownership of Company A even after Doe's stock in it was
the last decade and a half multiple individuals have sued Doe
and his businesses in state courts around the country based
on Doe's business practices. One such lawsuit was a class
action filed against Company A in Indiana state court. In it
the plaintiffs alleged that Company A's business
practices violated various Indiana state laws. They sought to
hold Doe accountable for these violations. However, during
this litigation Doe stated in a deposition in 2014 that he
had transferred ownership of Company A to Company B.
Doe's business associate then represented that Company A
was no longer in business and had limited assets. Shortly
after Doe's deposition, the Indiana plaintiffs settled
their claims for approximately $260, 000, about 10% of the
value attorneys for the plaintiffs had put on them.
the Government empaneled a grand jury to investigate Doe and
his business associate. Its theory is that Doe owned Company
A but tricked the plaintiffs into thinking that he had sold
it to his business associate to encourage the plaintiffs to
settle for a lower value. This relies on the premise that Doe
has deep pockets but his business associate does not.
course of its investigation, the grand jury subpoenaed
Doe's accountant requesting that he provide the
Government with Doe's personal and corporate tax returns.
Among other things, these tax documents revealed that Doe had
claimed 100% ownership of Company A every tax year from 2008
through 2012. The accountant also told an IRS agent that, at
some time in 2013, Doe's lawyer informed him that Doe had
sold Company A in 2008. He also informed investigators that
he might have taken notes on this conversation. The
Government requested them, and the accountant's attorney
sent the Government three documents.
the documents was an email Doe had sent to the accountant on
July 16, 2013, forwarding an email that Doe's lawyer had
sent to Doe four days earlier that referenced an ongoing
litigation. The attorney email advises Doe of the steps he
needed to take to correct his records so that they reflect
that the business associate, not Doe, owned Company A since
2008. When Doe forwarded this email to his accountant, he
simply wrote: "Please see the seventh paragraph down re;
my tax returns. Then we can discuss this." There is no
evidence that Doe ever amended his returns or did anything
else, apart from forwarding the email, to follow up on his
attorney's advice. Indeed, the ...