## Facts

- A federal grand jury investigated a business “target” and related entities and issued subpoenas for extensive business records.
- The target’s attorney handled subpoena responses and produced some documents while repeatedly representing that many requested record categories did not exist.
- After continued incomplete production, federal agents executed search warrants at the target’s home and businesses and found materials that matched categories the attorney had said did not exist.
- The government subpoenaed the attorney to testify before the grand jury about the nonexistence representations and the failure to produce records later recovered by search.
- The attorney refused to answer questions, asserting attorney-client privilege on behalf of anonymous clients associated with the target.
- The government sought to compel testimony, arguing the crime-fraud exception applied because the client used the attorney’s services to obstruct the grand jury investigation.

## Issues

1. Whether the crime-fraud exception permitted compelling the attorney’s grand jury testimony about communications concerning the existence and production of subpoenaed documents.
2. Whether the district court applied the wrong legal standard by quashing or declining to enforce the subpoena based on “fundamental unfairness” rather than the crime-fraud framework.

## Decision

- The Third Circuit vacated the district court’s order declining to enforce the subpoena and remanded.
- The court held the district court erred by relying on generalized fairness concerns instead of evaluating the government’s proffer under the crime-fraud exception.
- The court concluded the government’s evidence could support a prima facie obstruction-of-justice theory based on false or misleading document-production representations that impeded a pending grand jury proceeding.
- The district court was required to assess, under the proper standard, whether the attorney-client privilege was defeated by crime-fraud and, if so, to determine the permissible scope of compelled testimony.

## Legal Principles

- Attorney-client privilege protects confidential client communications made for the purpose of seeking legal advice, subject to recognized exceptions.
- The crime-fraud exception removes protection for communications made to further a continuing or future crime or fraud; the government must make a prima facie showing that the client used the attorney’s services in furtherance of that misconduct.
- Obstruction of justice in the grand jury context may be shown by evidence of a pending proceeding, knowledge of it, corrupt intent to obstruct, and conduct with the natural and probable effect of interfering with the proceeding.
- Review standards: quashing a grand jury subpoena is reviewed for abuse of discretion; legal questions regarding application of crime-fraud are reviewed de novo; related factual determinations are reviewed for clear error.
- Courts must apply the governing privilege and crime-fraud doctrine; equitable concerns about “unfairness” cannot substitute for the required legal analysis.

## Conclusion

The Third Circuit required the district court to apply the crime-fraud exception framework to determine whether the attorney-client privilege could be pierced to compel an attorney’s grand jury testimony about disputed document-production representations, and it vacated the subpoena-quashing order for failure to use that standard.


In re Impounded, 241 F.3d 308 (3d Cir. 2001)