The opinion of the court was delivered by: CANNELLA
Motion by the Government for a pretrial order limiting the defendant Arnold Aronoff's assertion of his attorney/client privilege is granted to the limited extent indicated herein.
By this motion,
the Government seeks, in effect, a pretrial evidentiary ruling that Erwin Ziegelman, and other members of his firm, are not barred by any claim of privilege from disclosing "the substance of any communications or any files relating to" a certain land transaction which is the basis of the instant indictment against Aronoff. Ziegelman, who was Aronoff's attorney in connection with that transaction, has refused to disclose this information without a court order or formal waiver by Aronoff of his attorney/client privilege. Since the Government has brought the motion without revealing to the Court precisely what questions Ziegelman refuses to answer, it apparently concedes, for now at least, that the matters in question involve communications of the sort that are ordinarily protected by the attorney/client privilege. See generally 8 Wigmore, Evidence §§ 2294-2320 (McNaughton rev. 1961). The Government's sole contention is that certain statements made by another of Aronoff's attorneys, after the attorney/client relationship between Aronoff and Ziegelman had terminated, effected a waiver of Aronoff's privilege concerning his communications to Ziegelman.
On November 21 and 22, 1978, the Court conducted an evidentiary hearing on this motion. It now makes the following findings of fact and conclusions of law. Fed.R.Crim.P. 12(e).
Statements made in 1975 and 1976 in connection with an SEC investigation
In 1973, Aronoff retained Ziegelman as his attorney in connection with a multimillion-dollar transaction involving a tract of land in Putnam County, Florida. One of the participants in that transaction was the Penn Dixie Corporation. During the course of negotiations and through the closing Ziegelman represented not only Aronoff, but also a trust located in the Cayman Islands ("the Cayman Islands Trust"), whose beneficiaries included Aronoff's minor children. In addition, Ziegelman participated in the transaction to some extent as a principal.
In 1975, the Securities and Exchange Commission began an investigation of various dealings of the Penn Dixie Corporation, one of which was the Putnam County land transaction. In November 1975, in connection with that investigation, Ziegelman testified and turned over some of the documents that had been subpoenaed by the SEC staff. He refused, however, to disclose the identity of his clients (Aronoff and the Cayman Islands Trust), and withheld the remainder of the subpoenaed documents, on the ground of attorney/client privilege. Moreover, from the documents he did turn over, he deleted any information that would have identified Aronoff or the trust.
Shortly thereafter, George Michaely, the attorney representing Ziegelman in connection with the SEC investigation, contacted Daniel Levitt, who was then Aronoff's attorney. Michaely informed Levitt about Ziegelman's testimony and document productions and asked whether Aronoff would waive his objections to further disclosures. From certain statements made by Levitt during subsequent discussions, Michaely eventually concluded that Aronoff and the trust had waived their objections, and he advised Ziegelman to turn over to the SEC the previously withheld information.
Subsequently, and throughout the course of the investigation, Levitt urged the SEC staff to discuss the land transaction with Ziegelman, who, according to Levitt, would have corroborated Aronoff's version of the events surrounding the Putnam County land deal. There is no evidence that the SEC staff accepted this invitation.
The Government now contends that Levitt's statements to Michaely and the SEC staff amount to a waiver by Aronoff of his attorney/client privilege regarding his discussions with Ziegelman about the land deal. The defendant disputes this contention, primarily on the ground that regardless of what Aronoff or his attorneys said at the time, Ziegelman never disclosed any privileged communications, and therefore nothing was waived. In substance, the Court agrees with the defendant, and finds that any waiver by Aronoff during the course of the investigation was narrowly limited and would not, by itself, permit the inquiry now sought by the Government.
The extent of a waiver effected by Levitt's statements to Michaely may be determined only by considering what it was that Ziegelman had refused to disclose, as well as Levitt's precise words. When Ziegelman testified in November 1975, he withheld his clients' identities and several documents under a claim of privilege. Transcript of Proceedings at 28-29, 47-48 (testimony of G. Michaely), United States v. Aronoff, No. 78 Cr. 713 (S.D.N.Y. Nov. 21, 1978) (hereinafter cited as "Tr."). On January 20, 1976, immediately after Michaely asked Levitt whether Aronoff would waive his privilege, Levitt sent Michaely a transcript of Aronoff's own testimony before the SEC, along with a letter, reminding Ziegelman of "his professional obligations to Mr. Aronoff in the context of the SEC's request for information and documents." Government's Exhibit 1A. On January 28, Michaely released to the SEC certain previously withheld documents; he continued, however, to protect Aronoff's identity and to withhold other documents. Government's Exhibit 1B.
Around this time, during late January or early February 1976, Aronoff received from Ziegelman's law firm a draft of a statement for him to sign waiving his objections to Ziegelman's testifying and producing additional documents on behalf of the Cayman Islands Trust. Aronoff showed this draft to Levitt, whereupon Levitt advised him that he had no privilege with respect to the trust documents, except perhaps, as father of two of the trust beneficiaries, and that any privilege belonging to the trust could be asserted or waived only by the trustee. Tr. at 78-81 (testimony of D. Levitt). Accordingly, Aronoff sent the trustee a letter, drafted by Levitt, stating that as father of two beneficiaries he had no objections to the trust's waiving its privilege. Government's Exhibits 1D, 1E.
Sometime thereafter, Michaely telephoned Levitt to discuss Aronoff's position with respect to the information still withheld by Ziegelman. Statements made by Levitt during that conversation led Michaely to send additional documents to the SEC, with a cover letter dated March 22, 1976, stating that: "all persons concerned who might have been in a position to assert the privilege have waived the privilege." Government's Exhibit 2.
Levitt's precise words to Michaely during the phone conversation, however, have not been ...