On October 30, 2017, Chief Judge Beryl A. Howell of the United States District Court for the District of Columbia unsealed an order granting the Office of the Special Counsel’s (“SCO”) motion to compel the former counsel (“Counsel”) of Paul J. Manafort, Jr. (President Trump’s former campaign manager) and Richard W. Gates (a former campaign adviser to President Trump) to testify before a grand jury regarding certain aspects of her prior representations of these clients. In re Grand Jury Investigation, No. 17-ms-2336 (D.D.C. 2017). The Court rejected Counsel’s assertions of attorney-client privilege and attorney work product protection, finding that the information sought by the SCO fell within the “crime-fraud” exception to the attorney-client privilege and that any applicable privilege had been waived.
By way of background, as part of the SCO’s investigation into possible collusion between the Russian government and United States citizens regarding the 2016 presidential campaign, the SCO issued a grand jury subpoena (the “Grand Jury Subpoena”) on August 18, 2017 to Counsel. The Grand Jury Subpoena sought information relating to two letters that were submitted by Counsel to the DOJ’s National Security Division, pursuant to the Foreign Agent Registration Act (“FARA”). The letters provided a summary of Manafort’s and Gates’ lobbying efforts on behalf of foreign governments. The SCO has maintained that these letters contain false and misleading information (including material omissions), and that the Grand Jury Subpoena is necessary to identify the sources of those letters–i.e. whether Manafort and Gates provided the information, or whether Counsel relied upon third-party information.
Counsel refused to comply with the Grand Jury Subpoena, arguing that the information sought by the Subpoena was protected by the attorney-client privilege and the attorney work product doctrine, and that various Rules of Professional Ethics prevented her from testifying regarding these topics. On September 26, 2017, the SCO proposed to limit the scope of the Grand Jury Subpoena to eight narrow topics, including: (1) the sources upon which Counsel relied for the two FARA submissions; (2) whether those sources approved the FARA submissions, or raised questions or corrections; (3) any communications Counsel had with those sources regarding the FARA submissions; and (4) whether Counsel memorialized any such communications.
The District held three days of hearings on this matter and received ex parte submissions from the SCO regarding the Grand Jury investigation and the basis for its invocation of the “crime-fraud” exception.
The District Court first held that the SCO established a prima facie case that the requested information—though potentially covered by the attorney-client privileged—fell within the “crime-fraud” exception to the privilege. This exception provides that communications “made in furtherance of a crime, fraud, or other misconduct” are not protected by the privilege. In re Grand Jury, 475 F.3d 1299, 1305 (D.C. Cir. 2007). Here, the District Court concluded that the SCO’s submissions made a sufficient showing that Manafort and Gates were “engaged in or planning a criminal or fraudulent scheme when [they] sought the advice of counsel to further the scheme.” In re Grand Jury Investigation, No. 17-ms-2336 (D.D.C. 2017), at 24 (internal quotation omitted). The Court stated that the SCO’s evidence establishes that Manafort and Gates likely violated federal law by making, or conspiring to make, materially false statements in the FARA submissions. The Court concluded that this conduct could potentially constitute a federal crime, including violations of Title 22, United States Code, Section 618(a)(2) (criminalizing willfully false statements in registration statements filed under FARA), Title 18 United States Code, Section 1001(a) (making false statements in a matter within the jurisdiction of the executive branch of the United States), and Title 18 United States Code, Section 371 (conspiring to commit an offense against, or to defraud, the United States). In so holding, the District Court emphasized that the SCO’s intended area of inquiry would focus on five distinct aspects of the FARA submissions, and that the SCO’s questions would principally target Counsel’s sources for those relevant excerpts—all of which have “at the very least, some relationship with the prima facie violation of law.”
The District Court further held that—irrespective of the “crime-fraud” exception—Counsel’s clients had implicitly waived the attorney-client privilege over the information sought by the SCO. Specifically, the District Court held that the privilege had been waived as to the information in the FARA submissions, which themselves contained factual statements that clearly came from Manafort and Gates, and in large part were expressly attributed to the recollections of one or both individuals. Thus, implicit waiver allowed the SCO to pose questions about the identity of Counsel’s sources of information and those sources’ statements to Counsel, since those questions concerned the same subject matter as to which the privilege was waived.
The District Court went on to consider the applicability of the work product privilege. Even if the attorney-client privilege was implicitly waived, work product protection—which extends to material prepared by counsel with an eye toward litigation—could nevertheless still apply. The District Court concluded that the information sought by the SCO was not protected by the work product doctrine. The court specified that “opinion” work product—which includes an attorney’s mental impressions, conclusions, opinions, or legal theories—is granted significant protection and is rarely discoverable. “Fact” work product, by contrast—which does not contain attorney mental impressions—can be discovered upon a showing of substantial need and undue burden associated with obtaining the factual information elsewhere.
The District Court found that all but one of the SCO’s questions sought “fact” work product and that such questions could be posed to Counsel. In so holding, the District Court ruled that the SCO could ask Counsel about communications she had with her sources (most likely Manafort and Gates) for certain aspects of the FARA letters. The District Court reasoned that such questions would not cause Counsel to reveal enough of her mental impressions and conclusions to be considered a request for opinion work product. The District Court, however, did not permit the SCO to ask questions regarding whether Counsel memorialized conversations with her sources, finding that questions concerning such notes and memoranda would be a “window into [her] thought process” and would show how she “focused or weeded” the factual material.
The District Court’s opinion is noteworthy on a number of fronts, including its detailed analysis of the crime-fraud exception to the attorney client privilege as well as the scope of implied waiver. Most relevant is the context in which this case arose—the Government issued a Grand Jury subpoena to Counsel, seeking to question Counsel regarding the sources for an attorney-authored submission that the Government deemed to be false and in furtherance of a crime. The Government was careful and “surgical” in the proffered questions it intended to ask, which clearly sought to identify whether Manafort and Gates provided the information concerning the scope of their lobbying efforts on behalf of foreign clients.
The opinion serves as a reminder of the potential scope of the “crime-fraud” exception—attorney-authored submissions will not automatically shield counsel from having to report their sources of information for aspects of submissions that appear to be intentionally and criminally false. The opinion also serves as a reminder that the “implied waiver” doctrine may extend to the subject matter of attorney submissions that are clearly based on the recollections of, or communications with, clients. While the facts of the Manafort-Gates case are unique, this opinion could serve as a strong precedent for aggressive prosecutors to seek to compel counsel to confirm that their clients provided information in attorney-authored submissions that prosecutors believe were materially false, and submitted in furtherance of an alleged crime.
Click here to view In re Grand Jury Investigation, No. 17-ms-2336 (D.D.C. 2017)
Click here to view In re Grand Jury, 475 F.3d 1299 (D.C. Cir. 2007)