## Facts

- A federal grand jury investigated a marijuana-smuggling operation involving a vessel, the *Nordakrum*, used to bring marijuana into Louisiana.
- The *Nordakrum*’s registered owner was an offshore corporation, Labol Investments, Ltd. (“Labol”).
- Attorney Jeffrey Fine formed Labol on behalf of an unnamed client who later became a target of the grand jury investigation.
- Fine was subpoenaed to appear before the grand jury and was asked to identify the client for whom he formed Labol.
- Fine refused to disclose the client’s identity, asserting attorney-client privilege.
- The government moved in the Eastern District of Louisiana to compel Fine’s testimony and disclosure of the client’s name.
- The district court held an evidentiary hearing at which Fine testified that:
  - He did not know the *Nordakrum* was being used to smuggle marijuana; and
  - He did not know Labol was the registered owner of the *Nordakrum* when he formed the corporation.
- The district court concluded that the attorney-client privilege did not apply and ordered Fine to disclose the client’s name.
- The unnamed client intervened to assert the privilege and appealed the disclosure order.

## Issues

1. Whether the unnamed client could immediately appeal, under the *Perlman* doctrine, an order compelling his attorney (a subpoenaed third party) to disclose privileged information to a grand jury.
2. Whether the attorney-client privilege could protect the client’s identity under the circumstances, or whether the privilege was defeated because the attorney-client relationship was used for ongoing or intended criminal conduct (crime-fraud exception).

## Decision

- The Fifth Circuit held it had appellate jurisdiction under *Perlman v. United States* because the subpoena was directed to the attorney, and the client could not realistically secure review by waiting for the attorney to incur contempt.
- The Fifth Circuit vacated the district court’s order compelling Fine to disclose the client’s identity.
- The court remanded for further proceedings because the record and findings were insufficient to negate the privilege based on crime-fraud; the government was required to make a prima facie showing that the attorney-client relationship was intended to further a criminal enterprise.

## Legal Principles

- Attorney-client privilege ordinarily does not protect a client’s identity, but identity may be protected in limited circumstances when disclosure would effectively reveal a confidential communication or supply a significant evidentiary link against the client.
- Under the *Perlman* doctrine, a privilege holder may immediately appeal an order directing a third party (including a current attorney) to produce allegedly privileged information, because the third party is unlikely to risk contempt to obtain appellate review.
- The crime-fraud exception bars privilege protection where the attorney-client relationship was obtained to further present or intended unlawful activity.
- The government must make a prima facie showing of crime-fraud before the privilege is set aside; a court should not reject the privilege without adequate findings supporting that showing.

## Conclusion

The Fifth Circuit allowed the unnamed client’s immediate appeal, then vacated the order compelling attorney Jeffrey Fine to identify the client and remanded because the district court had not required or developed a sufficient prima facie showing that the representation was used to further criminal activity, a prerequisite to applying the crime-fraud exception and compelling disclosure.


In re Grand Jury Proceedings in Matter of Fine, 641 F.2d 199 (1981)