OPERATION CLAMBAKE: SCIENTOLOGY COURT FILES

Part of a public library containing court papers related to lawsuits involving Scientology in some way. Collected to help lawyers and critics of Scientology in future lawsuits from or against this cult. Please report back if this has been of help, or send new contributions to the collection. Thanks. Andreas Heldal-Lund (heldal@online.no)




         UNITED STATES of America, Petitioner/Appellee/Cross-Appellant,
                                       v.
                      Frank S. ZOLIN, Respondent/Appellee,
                                       and
            Church of Scientology of California and Mary Sue Hubbard,
                     Intervenors/Appellants/Cross-Appellees.
                             Nos. 85-6065, 85-6105.
                         United States Court of Appeals,
                                 Ninth Circuit.
                                 March 28, 1988.
  In connection with tax investigation, the United States brought action to
 compel state court clerk to produce sealed documents.  Church and taxpayer's
 wife intervened.  The United States District Court for the Central District of
 California, Harry L. Hupp, J., ordered production of some, but not all,
 documents.  Intervenors appealed, and United States cross-appealed.  The Court
 of Appeals, 809 F.2d 1411, affirmed.  En banc review was initially granted.
 Subsequently, the Court of Appeals held that there was no conflict in circuit
 concerning fact that Government must first establish prima facie case of fraud,
 independent of attorney-client communications, before privileged status of
 communications would be lifted.
  Order vacated.
  Beezer, Circuit Judge, dissented and filed an opinion in which J.
 Blaine Anderson and David R. Thompson, Circuit Judges, joined.

 WITNESSES
 Government must make prima facie showing that attorney-client communications
 were in furtherance of an intended or present illegality, independent of
 attorney-client communications, before privileged status of those
 communications can be lifted.

  *1136 Before BROWNING, Chief Judge, ANDERSON, TANG, PREGERSON, ALARCON,
 NORRIS, REINHARDT, BEEZER, BRUNETTI, THOMPSON and LEAVY, Circuit Judges.
                                      ORDER
  En banc review was ordered in this matter under the mistaken assumption
 that United States v. Shewfelt, 455 F.2d 836 (9th Cir.1972) and United
 States v. Friedman, 445 F.2d 1076 (9th Cir.1971) were in conflict on the
 question whether "the government must first establish a prima facie case of
 fraud independently of the said [attorney-client] communications," Shewfelt,
 455 F.2d at 840, before "the privileged status of these communications can be
 lifted."  Id.  There is no conflict.  In United States v. Friedman, we
 did not discuss the showing that the government must make before the trial
 court can examine attorney-client communications to determine whether "the
 thrust of these ... conversations was to effectuate a plan of fraud."
 Shewfelt, 455 F.2d at 840.  In Shewfelt we did, and concluded that the
 government must make a prima facie showing, independent of the communications
 involved, that the attorney-client communications were in furtherance of an
 intended or present illegality.  Id.  Shewfelt is the law of the circuit.
  The dictum in United States v. King, 536 F.Supp. 253 (C.D.Cal.1982)
 suggesting that Shewfelt "does not now appear to be the law in the Ninth
 Circuit," id. at 262, is disapproved.  That portion of the three-judge panel
 opinion in United States v. Zolin, 809 F.2d 1411 (9th Cir.1987), beginning
 with the first full paragraph on page 1418 to and including the last full
 paragraph in the second column on the same page, is ordered withdrawn.  The
 opinion of the three-judge panel will stand in all other respects.
  The order dated November 6, 1987, that this matter be reheard en banc, is
 vacated as improvidently granted.

  BEEZER, Circuit Judge, with whom ANDERSON and THOMPSON, Circuit Judges, join,
 dissenting:
  The order that this matter be reheard en banc was not improvidently granted.
 I dissent.
  According to Ninth Circuit Rule 35-1, our order to rehear the matter en
 banc was entirely appropriate. [FN1]  The independent evidence requirement is a
 procedure for invoking the crime-fraud exception to the attorney-client
 privilege.  We adopted this procedure, in a conclusory way, in United States
 v. Shewfelt, 455 F.2d 836, 840 (9th Cir.1972).  This procedure has not been
 endorsed by any other circuit court of appeals.  The order filed today thus
 perpetuates a maverick version of the attorney-client privilege--a rule of
 national application.  In addition, the attorney-client privilege, as a rule of
 evidence for the federal courts, has an overriding need for national
 uniformity.  Considering that this circuit's position clashes with that of a
 majority of other circuits, our order that we rehear this matter en banc was
 most providently granted.

      FN1. Ninth Circuit Rule 35-1 states, "When the opinion of a panel
     directly conflicts with an existing opinion by another court of appeals and
     substantially affects a rule of national application in which there is an
     overriding need for national uniformity, the existence of such conflict is
     an appropriate ground for suggesting a rehearing en banc."

                                          I
  The crime-fraud exception defeats the attorney-client privilege.  To invoke
 the exception, *1137 the government must make a prima facie showing that an
 otherwise privileged communication is in furtherance of fraud or crime.  In
 this circuit the government has had to make the prima facie showing by the use
 of independent evidence--evidence other than the suspect communication itself.
 Elsewhere the government has been able to make the prima facie showing by the
 court's in camera inspection of the suspect communication.  The substantive
 issue in this en banc case is:  should we overrule Shewfelt, eliminate the
 independent evidence requirement, and allow in camera inspection of suspect
 communications?  We should.
                                       II
  Every circuit to face the situation this case presents has allowed in camera
 inspection.  In reverse chronological order, they are the Sixth, Second, D.C.,
 Eighth, Third, and Fourth Circuits. [FN2]  Following is a sample of the cases.

      FN2. The Church of Scientology fails to distinguish these cases in any
     principled way.  The Church does point out, correctly, that one of the D.C.
     cases only represents the views of one member of that court.  See In Re
     Sealed Case, 676 F.2d 793, 815 (D.C.Cir.1982) (J. Skelly Wright).

  Sixth:  In Re Antitrust Grand Jury, 805 F.2d 155, 168-169 (6th
 Cir.1986).
  Second:  In Re Grand Jury Subpoena Duces Tecum, 798 F.2d 32 (2d
 Cir.1986);  In Re John Doe Corp., 675 F.2d 482, 486 and 490 (2d Cir.1982).
  D.C.:  In Re Sealed Case, 754 F.2d 395, 399-401 (D.C.Cir.1985) (IRS case
 closely resembling case now before us);  In Re Sealed Case, 676 F.2d 793,
 815 (D.C.Cir.1982).
  Eighth:  Pritchard-Keang Nam Corp. v. Jaworski, 751 F.2d 277, 280 (8th
 Cir.1984);  In Re Berkley & Co., 629 F.2d 548, 553 (8th Cir.1980);  In Re
 Murphy, 560 F.2d 326, 331 and 338 n. 23 (8th Cir.1977);  Pfizer Inc. v.
 Lord, 456 F.2d 545, 551 (8th Cir.1972) (per curiam).
  Third:  In Re Grand Jury Proceedings (FMC Corp.), 604 F.2d 798, 800 (3d
 Cir.1979).
  Fourth:  Union Camp Corp. v. Lewis, 385 F.2d 143, 144 (4th Cir.1967).
                                       III
  Other circuits have not always addressed the underlying policy question in
 allowing in camera review for purposes of the crime-fraud exception.  As an en
 banc panel establishing the law of this circuit, however, we are obligated to
 address the policy question.
  In particular, we are charged with evaluating the tradeoff between maintaining
 confidentiality and prosecuting crimes.  In addressing this policy question,
 the Second Circuit considered an additional factor, grand jury secrecy.  Grand
 jury secrecy would rest on the scale alongside maintaining confidentiality,
 weighing against in camera inspection;  still the Second Circuit found that the
 balance tipped in favor of in camera inspection.  In Re John Doe Corp., 675
 F.2d at 490.
  The need to prosecute crimes strongly supports in camera inspection.  The
 attorney-client privilege was not designed to protect communications in
 furtherance of fraud or crime.  When a communication, otherwise within the
 privilege, itself furthers fraud or crime, independent evidence of that fact
 rarely will be available.  In such cases the independent evidence requirement
 would simply insulate dishonest parties from prosecution.  See United States
 v. King, 536 F.Supp. 253, 262 (C.D.Cal.1982) (declining to follow Shewfelt '
 s independent evidence requirement).
  Church of Scientology suggests that in camera inspection would undermine
 several important policies.  First, inspection would allow the crime-fraud
 exception to eviscerate the attorney-client privilege.  According to the
 Church, the possibility of inspection could "chill open attorney-client
 discussions."  The fact that the inspections take place in camera, however,
 mitigates any chilling effect.  A judge is not a prosecutor and will not expose
 discussions that are unrelated to the fraud or crime alleged.
  Second, according to the Church, inspection would force courts to review "any
 and *1138 all attorney-client communications upon the mere allegation by a
 party ... that the crime-fraud exception applies."  The fear of disclosure of
 even innocent communications could give prosecutors an unfair litigation
 advantage, and courts would incur the intolerable burden of reviewing file
 after file of communications.
  In fact, the fear of disclosure of innocent communications would be reduced if
 the Ninth Circuit eliminated the independent evidence rule.  In camera
 inspection would allow a district court more precisely to determine which
 communications further crime or fraud and which do not.  Compare In Re
 Antitrust Grand Jury, 805 F.2d 155, 168 (6th Cir.1986).
  In any case, the predicate for the Church's conclusions is incorrect:
 in camera inspection need not force courts to review any and all documents
 alleged to fall within the crime-fraud exception.  I would set out a rule that
 gives district courts discretion.  Besides helping to prevent prosecutorial
 fishing expeditions, a rule affording discretion to district courts would allow
 those courts to regulate their burden of in camera review.
  A district court, faced with an argument that the crime-fraud exception
 applies, would decide for itself whether a given case warrants in camera
 review.  A district court would exercise its discretion to conduct in camera
 review according to the circumstances--including the presence or absence of
 circumstantial and other independent evidence.  In a proper case, a district
 court might reject the crime-fraud exception without in camera review:  without
 inspecting all documents alleged to evidence crime or fraud, or even without
 inspecting any documents--without hearing all conversations alleged to evidence
 crime or fraud, or even without hearing any conversations.
  For additional protection of privileged documents--to avoid disclosure of
 innocent documents--I would also set out a rule that requires district courts
 to allow the crime-fraud exception only in relation to communications that the
 court individually has inspected in camera.  This approach would be in line
 with the Sixth Circuit's position.  In In Re Antitrust Grand Jury, 805 F.2d
 155, 168 (6th Cir.1986), the Sixth Circuit required the district court to
 review documents in camera before ordering them produced:
   Not only do we believe in camera review is mandated to determine the scope of
 the order, in camera review of the documents could have assisted the court in
 determining whether a prima facie violation had been made.
  Church of Scientology hints that inspection would undermine another policy,
 that of supporting adversarial argument.  In endorsing in camera review, the
 Second Circuit decided that limitations on adversarial argument are outweighed
 by the need to resolve an evidentiary question while preserving
 confidentiality.  675 F.2d at 490.  In any case, the independent evidence
 rule itself does not support adversarial argument insofar as the subject of the
 argument--the communication alleged to be in furtherance of crime or fraud--is
 available to one party and not the other.  At best a distorted form of
 adversarial argument can occur.
  Finally, according to the Church, Federal Rule of Evidence 104(a) and
 Bourjaily v. United States, --- U.S. ----, 107 S.Ct. 2775, 97 L.Ed.2d
 144 (1987), indicate that a court making preliminary inquiries about a
 privilege must abide by preexisting evidence rules such as the independent
 evidence requirement.  Rule 104(a), however, is not on point.  The rule
 deals with questions about the existence of a privilege, not about an exception
 to a privilege:
   Preliminary questions concerning the qualification of a person to be a
 witness, the existence of a privilege, or the admissibility of evidence shall
 be determined by the court, subject to the provisions of subdivision (b).  In
 making its determination it is not bound by the rules of evidence except those
 with respect to privileges.
  Church of Scientology gains no support for the independent evidence
 requirement by analogy to Rule 104(a).  In the Ninth Circuit the rules of
 evidence with respect to *1139 privileges do allow for in camera review:  a
 court undertakes in camera review of documents to decide whether the attorney-
 client privilege even exists with respect to those documents.  In Re Grand
 Jury Witness, 695 F.2d 359, 362 (9th Cir.1982).
  Church of Scientology garners no support from Bourjaily.  In that case the
 Supreme Court held that a showing to admit a co-conspirator's statement under
 Rule 801(d)(2) need not rely on independent evidence, but may rely on the
 statement itself.  If anything Bourjaily suggests that a court may indeed
 examine suspect communications when considering the crime-fraud exception.
 Compare 107 S.Ct. at 2780.
  Accordingly, I would overrule Shewfelt, eliminate the independent evidence
 requirement, and allow in camera inspection of suspect communications.  The way
 I would formulate the rule, however, would dictate that we affirm the district
 court in this case.
                                       IV
  The government argues that the district court abused its discretion by
 rejecting the crime-fraud exception without inspecting all the tape recorded
 communications known to the government.  According to the rule I have
 described, a district court would be within its discretion to reject the
 exception without inspecting all suspect communications or even any
 communications.  In this case the government submitted only a partial
 transcript of material to the district court.  When the government submitted
 that partial transcript, the government was aware of the entire contents of the
 tapes.  See Government's Brief at 12 (discussing Xanthos Declaration submitted
 to district court on motion for reconsideration).  The district court was
 entitled to rely on the government to highlight, to the best of its ability,
 those parts of the tapes that might fall within the crime-fraud exception.
  On appeal the government asks us to order the district court to inspect those
 parts of the tapes that were not within the partial transcript.  In the
 district court, however, the government did not indicate that a partial
 transcript was an inadequate basis for a ruling on the crime-fraud exception.
 See Denial of Motion for Reconsideration, Government's Supplemental Excerpt of
 Record at Tab 80.  The government never explained why it had failed to include
 the other parts of the tapes in the partial transcript in the first place.
 Id.  The district court was well within its discretion to consider only the
 partial transcript, and the district court did not abuse its discretion in
 rejecting the crime-fraud exception.
                                        V
  We should overrule Shewfelt and eliminate the independent evidence
 requirement.  An appropriate rule would make in camera review discretionary for
 the district court to reject the crime-fraud exception, mandatory for the
 district court to allow the exception and order disclosure.  In this case the
 district court did not abuse its discretion by rejecting the exception without
 a complete review.

End of file...