In the Courts

On Feb. 12, 2014, the U.S. Court of Appeals for the Third Circuit upheld a district court's order compelling an attorney to testify during a grand jury investigation of alleged violations of the Foreign Corrupt Practices Act (FCPA). In re Grand Jury Subpoena, —F.3d—, 2014 WL 541216 (3rd Cir. 2014). Describing the matter as a “close case,” the appellate court agreed with the district court's holding that the crime-fraud exception applied to defeat the attorney-client privilege. Id. at *7, *9.

As the court noted, the attorney-client privilege is the “oldest of the privileges for confidential communications known to the common law.” Id. at *4 (citing Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981). However, its protection “ceases to operate ' where the desired advice refers not to prior wrongdoing, but to future wrongdoing.'” Id. (citing United States v. Zolin, 491 U.S. 554, 562-63, 109 S.Ct. 2619, 105 L.Ed.2d 469 (1989) (internal citations omitted)). Under well-established precedent, the attorney-client privilege may be defeated on the basis of the crime-fraud exception where “the party seeking to overcome the privilege … make[s] a prima facie showing that (1) the client was committing or intending to commit a fraud or crime, and (2) the attorney-client communications were in furtherance of that alleged crime or fraud.” Id. (internal citations omitted).