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Quashing Grand Jury Contempt Orders the Right Way

The Ninth Circuit Court of Appeals issued a decision yesterday that warms the hearts of attorneys and clients across our Circuit.

Clients hire attorneys and expect the attorney-client privilege to remain intact. And, it usually does. But it's the attorney work-product privilege that was recently under attack.

In performing legal work for clients, attorneys will frequently hire consultants or investigators to assist them in preparing for litigation. In this case, that happened when Ponderosa Paint hired Attorney McCreedy. He was responding to threatened criminal litigation by the USEPA over the sale of old paint to employees, which the USEPA interpreted as the unauthorized disposal of hazardous waste.

Without debating the merits of this interpretation, suffice it to say that it is a position that the USEPA consistently takes - so beware. But, let's return to the real problem.

Attorney McCreedy hired Torf Environmental as a consultant to help him respond to the USEPA's demands for information. At all points, McCreedy asserted that the work-product privilege was not waived. Things were eventually resolved with the USEPA, and all seemed in order.

That is until a US Attorney got ahold of things. He called a grand jury to investigate and indict Ponderosa Paint on criminal charges. (I know that's redundant, but it sounds better).

The Grand Jury then wanted to see the documents that Torf prepared for McCreedy and issued a subpoena to Torf. McCreedy refused, rightfully invoked the attorney work-product privilege, and instructed Torf not to produce the documents. The Grand Jury charged Torf with contempt, and the Magistrate quashed the subpoena, but was reversed by the District Court, who held Torf in contempt.

As a good American, Torf appealed.

The Ninth Circuit said that since McCreedy invoked the privilege at every step, and the documents were prepared "because of" the impending criminal litigation, the privilege remained intact.

The Government claimed that the documents had to be created to respond to the USEPA's charges anyway, so they should be produced. The Circuit Court ruled that even though the documents have a dual purpose, the expected protection between an attorney and his environmental consultant remained paramount.

The Court disagreed, and Torf's subpoena was quashed, and the contempt charge reversed.

Chalk one up for the good guys.

And, whenever you hire an environmental consultant to help you respond to the government, hire an attorney, too. Otherwise, you may have to give up some things you may not want to.

Posted by J. Craig Williams on Thursday, December 11, 2003

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