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In re Grand Jury Subpoena Duces Tecum Served Upon Gerald L. Shargel

August 13, 1984


Appeal from an order entered in the United States District Court for the Southern District of New York (Morris E. Lasker, Judge) denying a motion to quash a grand jury subpoena duces tecum requiring Attorney Gerald L. Shargel to reveal fee arrangements and property transfers involving certain named persons. Affirmed.

Author: Winter

BEFORE: OAKES and WINTER, Circuit Judges and MISHLER, District Judge.*fn*

WINTER, Circuit Judge:

John Doe, on behalf of himself and five other clients of Gerald L. Shargel, Esq., appeals from Judge Lasker's order denying a motion to quash a grand jury subpoena duces tecum requiring Mr. Shargel to produce records of all fee arrangements or property transfers from, to, or on behalf of ten named individuals, six of whom invoke the attorney-client privilege.

We affirm.


On March 5, 1984, a federal grand jury sitting in the Southern District of New York issued the subpoena in question requiring, inter alia, that Mr. Shargel produce records of any monies or property transferred to him by or on behalf of ten named individuals, eight of whom have been indicted for violating the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961 et seq. (West Supp. 1984).The government states that the information is sought as evidence of "unexplained wealth," tax law violations, and payments of legal fees by "benefactors." In moving to quash the grand jury subpoena, Mr. Shargel averred that (i) he has provided legal representation to eight of the ten individuals; (ii) he has provided legal representation to six of those eight in connection with one or more of the acts named in the recently filed RICO indictment and that those six consulted him for legal advice about those acts well before any formal proceedings had been instituted; and (iii) as to the remaining two individuals his representation concerned other matters in which they had already been publicly charged.*fn1 Mr. Shargel argued, inter alia, that the requested information fell within the attorney-client privilege because: (i) he is a prominent criminal law specialist, and the disclosure of the identity of an individual consulting him would in effect divulge the communication "I have a criminal problem"; and (ii) the fact that each client consulted him shortly after the alleged events underlying the RICO indictment would support an inference of concerted activity.

On April 26, 1984, Judge Lasker denied the motion to quash. John Doe, one of Mr. Shargel's clients, intervened to appeal from Judge Lasker's order. We granted a stay pursuant to Fed. R. App. P. 8(a) and expedited the appeal.


The underlying theory of the attorney-client privilege is

that encouraging clients to make the fullest disclosure to their attorneys enables the latter to act more effectively, justly, and expeditiously, and that these benefits outweigh the risks posed by barring full revelation in court.

J. Weinstein & M. Berger, Evidence, P503(02) (1982); see Fisher v. United States, 425 U.S. 391, 403, 48 L. Ed. 2d 39, 96 S. Ct. 1569 (1976). Since the privilege prevents disclosure of relevant evidence and thus impedes the quest for truth, a distinguished commentator has said that it must "be strictly confined within the narrowest possible limits consistent with the logic of its principle." 8 J. Wigmore, Evidence § 2291, at 554 (McNaughton rev. ed. 1961).

We have consistently held that client identity and fee information are, absent special circumstances, not privileged. Colton v. United States, 306 F.2d 633, 637-38 (2d Cir. 1962), cert. denied, 371 U.S. 951, 9 L. Ed. 2d 499, 83 S. Ct. 505 (1963), United States v. Pape, 144 F.2d 778, 782 (2d Cir.), cert. denied, 323 U.S. 752, 89 L. Ed. 602, 65 S. Ct. 86 (1944). This result follows from defining the privilege to encompass only those confidential communications necessary to obtain informed legal advice. This definition, which focuses upon facilitating the role of the lawyer as a professional advisor and advocate, is to be distinguished from the so-called "incrimination rationale," which focuses upon whether the materials sought may be used as evidence against the client.*fn2 Compare Matter of Witnesses Before the Special March 1980 Grand Jury, 729 F.2d 489, 492-94 (7th Cir. 1984) with In re Grand Jury Proceedings (Pavlick), 680 F.2d 1026 (5th Cir. 1982). See also J. Weinstein & M. Berger, Evidence, P503(a)(4)[02].

While the attorney-client privlege historically arose at the same time as the privilege against self-incrimination, it was early established that the privileges had distinct policies and that the "point-of-honor" -- the attorney's reluctance to incriminate his client -- was not a valid reason to invoke the attorney-client privilege. 9 W. Holdsworth, A History of English Law, at 201-02 (1926). The goal of enabling attorneys to offer informed professional advice and advocacy cannot be accomplished if courts may compel disclosure of communications between the client and attorney necessary to the provision of such services. Absent the privilege, an attorney could not even appraise the risk to the client of such a communication until it occurs. The attorney must thus decide early in the course of consultation whether to warn the client against communications which, however necessary to the rendering of competent legal advice, might be disclosed to an adversary in litigation. Lawyers would routinely have to choose between forgoing information indispensable to the provision of informed and competent legal representation or hearing the information and exposing the client to risk of subsequent disclosure to an adversary. Inadequate legal counsel would fall upon the innocent as well as upon ...

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