The Internal Revenue Service (IRS), as part of its investigation
of the tax returns of L. Ron Hubbard, founder of the Church of
Scientology (the Church), filed in the Federal District Court a
petition to enforce a summons it had served upon the Clerk of the
Los Angeles County Superior Court demanding that he produce
documents, including two tapes, in his possession in conjunction
with a pending suit. The Church and Mary Sue Hubbard, intervenors
in the state court action and respondents here, intervened to
oppose production of the materials. They claimed,
inter
alia, that the IRS was not seeking the materials in good
faith, and that the attorney-client privilege barred the tapes'
disclosure. The IRS argued, among other things, that the tapes fell
within the exception to the attorney-client privilege for
communications in furtherance of future illegal conduct -- the
so-called "crime-fraud" exception -- and urged the District Court
to listen to the tapes in making its privilege determination. In
addition, the IRS submitted a declaration by a special agent which
had included partial tape transcripts the IRS lawfully had
obtained. The court rejected respondents' bad-faith claim and
ordered production of five of the requested documents, but it
conditioned its enforcement order by placing restrictions upon IRS
dissemination of the documents. The court also ruled that the tapes
need not be produced, since they contained privileged
attorney-client communications to which, the quoted excerpts
revealed, the crime-fraud exception did not apply. The court
rejected the request that it listen to the tapes, on the ground
that that request had been abandoned in favor of using the agent's
declaration as the basis for determining the privilege question.
The Court of Appeals affirmed the conditional enforcement order. As
to the privilege issue, it agreed with respondents that the
District Court would have been without power to grant the IRS'
demand for
in camera review of the tapes because the
Government's evidence of crime or fraud must come from sources
independent of the attorney-client communications on the tapes.
Reviewing the independent evidence (a review that excluded the
partial transcripts), the court affirmed the District Court's
determination as to the inapplicability of the crime-fraud
exception.
Page 491 U. S. 555
Held:
1. Insofar as it upheld the District Court's conditional
enforcement order, the Court of Appeals' judgment is affirmed by an
equally divided Court. P.
491 U. S.
561.
2. In appropriate circumstances,
in camera review of
allegedly privileged attorney-client communications may be used to
determine whether the communications fall within the crime-fraud
exception. Pp.
491 U. S.
562-575.
(a) Federal Rule of Evidence 104(a), which provides that a court
is bound by the rules of evidence with respect to privileges when
determining the existence of a privilege, does not prohibit the use
of
in camera review. Pp.
491 U. S.
565-570.
(b) However, before a district court may engage in
in
camera review at the request of the party opposing the
privilege, that party must present evidence sufficient to support a
reasonable belief that such review may reveal evidence that
establishes the exception's applicability. Once this threshold
showing is made, the decision whether to engage in
in
camera review rests in the sound discretion of the court. Pp.
491 U. S.
570-572.
(c) The party opposing the privilege may use any relevant
nonprivileged evidence, lawfully obtained, to meet the threshold
showing, even if its evidence is not "independent" of the contested
communications as the Court of Appeals uses that term. Pp.
491 U. S.
573-574.
(d) On remand, the Court of Appeals should consider whether the
District Court's refusal to listen to the tapes
in toto
was justified by the manner in which the IRS presented and
preserved its
in camera review request. If its demand was
properly preserved, that court, or the District Court on remand,
should determine whether the IRS has presented a sufficient
evidentiary basis for
in camera review and whether it is
appropriate for the District Court, in its discretion, to grant the
request. Pp.
491 U. S.
574-575.
809 F.2d 1411, 842 F.2d 1135, and 850 F.2d 610, affirmed in
part, vacated in part, and remanded.
BLACKMUN, J., delivered the opinion of the Court, in which all
other Members joined, except BRENNAN, J., who took no part in the
consideration or decision of the case.
Page 491 U. S. 556
JUSTICE BLACKMUN delivered the opinion of the Court.
This case arises out of the efforts of the Criminal
Investigation Division of the Internal Revenue Service (IRS) to
investigate the tax returns of L. Ron Hubbard, founder of the
Church of Scientology (the Church), for the calendar years 1979
through 1983. We granted certiorari, 488 U.S. 907 (1988), to
consider two issues that have divided the Courts of Appeals. The
first is whether, when a district court enforces an IRS summons,
see 26 U.S.C. § 7604, the court may condition its
enforcement order by placing restrictions on the disclosure of the
summoned information. [
Footnote
1] The Court of Appeals in this case upheld the restrictions.
We affirm its judgment on that issue by an equally divided
Court.
The second issue concerns the testimonial privilege for
attorney-client communications and, more particularly, the
generally recognized exception to that privilege for communications
in furtherance of future illegal conduct -- the so-called
"crime-fraud" exception. The specific question presented is whether
the applicability of the crime-fraud exception must be established
by "independent evidence" (
i.e., without reference to the
content of the contested communications themselves) or,
alternatively, whether the applicability of that exception can be
resolved by an
in camera inspection of the allegedly
privileged material. [
Footnote
2] We reject the "independent evidence" approach and hold that
the district court, under
Page 491 U. S. 557
circumstances we explore below, and at the behest of the party
opposing the claim of privilege, may conduct an
in camera
review of the materials in question. Because the Court of Appeals
considered only "independent evidence," we vacate its judgment on
this issue and remand the case for further proceedings. [
Footnote 3]
I
In the course of its investigation, the IRS sought access to 51
documents that had been filed with the Clerk of the Los Angeles
County Superior Court in connection with a case entitled
Church
of Scientology of California v. Armstrong, No. C420 153. The
Armstrong litigation involved, among other things, a
charge by the Church that one of its former members, Gerald
Armstrong, had obtained by unlawful means documentary materials
relating to Church activities, including two tapes. Some of the
documents sought by the IRS had been filed under seal.
The IRS, by its Special Agent Steven Petersell, served a summons
upon the Clerk on October 24, 1984, pursuant to 26 U.S.C. § 7603,
demanding that he produce the 51 documents. [
Footnote 4] The tapes were among those listed.
App. 33-38. On November 21, IRS agents were permitted to inspect
and copy some of the summoned materials, including the tapes.
On November 27, the Church and Mary Sue Hubbard, who had
intervened in
Armstrong, secured a temporary
restraining
Page 491 U. S. 558
order from the United States District Court for the Central
District of California. The order required the IRS to file with the
District Court all materials acquired on November 21 and all
reproductions and notes related thereto, pending disposition of the
intervenors' motion for a preliminary injunction to bar IRS use of
these materials. Exh. 2 to Petition to Enforce Internal Revenue
Summons. By order dated December 10, the District Court returned to
the IRS all materials except the tapes and the IRS' notes
reflecting their contents.
See App. 30.
On January 18, 1985, the IRS filed in the District Court a
petition to enforce its summons. In addition to the tapes, the IRS
sought 12 sealed documents the Clerk had refused to produce in
response to the IRS summons. The Church and Mary Sue Hubbard
intervened to oppose production of the tapes and the sealed
documents. Respondents claimed that IRS was not seeking the
documents in good faith, and objected on grounds of lack of
relevance and attorney-client privilege.
Respondents asserted the privilege as a bar to disclosure of the
tapes. The IRS argued, among other things, however, that the tapes
fell within the crime-fraud exception to the attorney-client
privilege, and urged the District Court to listen to the tapes in
the course of making its privilege determination. In addition, the
IRS submitted to the court two declarations by Agent Petersell. In
the first, Petersell stated his grounds for believing that the
tapes were relevant to the investigation.
See Declaration
in No. CV850440-HLH, � 3 (March 8, 1985). In the second, Petersell
offered a description of the tapes' contents, based on information
he received during several interviews. Appended to this declaration
-- over respondents' objection -- were partial transcripts of the
tapes, which the IRS lawfully had obtained from a confidential
source.
See March 15, 1985, declaration
Page 491 U. S. 559
(filed under seal). [
Footnote
5] In subsequent briefing, the IRS reiterated its request that
the District Court listen to the tapes
in camera before
making its privilege ruling.
After oral argument and an evidentiary hearing, the District
Court rejected respondents' claim of bad faith. App. to Pet. for
Cert. 27a. The court ordered production of 5 of the 12 documents,
id. at 28a, and specified:
"The documents delivered hereunder shall not be delivered to any
other government agency by the IRS unless criminal tax prosecution
is sought or an Order of Court is obtained."
Id. at 28a.
Turning to the tapes, the District Court ruled that respondents
had demonstrated that they contain confidential attorney-client
communications, that the privilege had not been waived, and
that
"[t]he 'fraud-crime' exception to the attorney-client privilege
does not apply. The quoted excerpts tend to show or admit past
fraud, but there is no clear indication that future fraud or crime
is being planned."
Id. at 28a. On this basis, the court held that the
Clerk "need not produce its copy of the tapes pursuant to the
summons."
Id. at 28a. The District Court denied the IRS'
motion for reconsideration, rejecting the IRS' renewed request that
the court listen to the tapes
in toto.
"While this was at one time discussed with counsel, thereafter
Mr. Petersell's declaration was submitted, and no one suggested
that this
Page 491 U. S. 560
was an inadequate basis on which to determine the
attorney-client privilege question."
Id. at 25a-26a.
Respondents appealed to the Court of Appeals for the Ninth
Circuit, and the IRS cross-appealed on two relevant grounds. First,
the IRS claimed that the District Court abused its discretion by
placing conditions on the IRS' future use of the subpoenaed
information. The Court of Appeals disagreed, holding:
"A district court may, when appropriate, condition enforcement
of a summons on the IRS' agreeing to abide by disclosure
restrictions."
809 F.2d 1411, 1417 (1987).
Second, the IRS contended that the District Court erred in
rejecting the application of the crime-fraud exception to the
tapes. In particular, the IRS argued that the District Court
incorrectly held that the IRS had abandoned its request for
in
camera review of the tapes, and that the court should have
listened to the tapes before ruling that the crime-fraud exception
was inapplicable. Answering Brief for United States as Appellee in
No. 85-6065, and Opening Brief for United States as Cross-Appellant
in No. 85-6105 (CA9), pp. 48-49 (filed under seal). Respondents
contended, in contrast, that the District Court erred in the
opposite direction: they argued that it was error for the court to
rely on the partial transcripts, because,
"[i]n this Circuit, a party cannot rely on the communications
themselves -- whether by listening to the tapes
or reviewing
excerpts or transcripts of them -- to bear its burden to
invoke the exception, but must bear the burden by independent
evidence. This is the clear and unambiguous holding of
United
States v. Shewfelt, 455 F.2d 836 (9th Cir.),
cert.
denied, 406 U.S. 944 (1972)."
(Emphasis added.) Answering Brief for Church of Scientology of
California and Mary Sue Hubbard as Cross-Appellees in No. 85-6065,
and Reply Brief as Appellants in No. 85-6105 (CA9), p. 24 (filed
under seal).
The panel of the Court of Appeals agreed with respondents that,
under
Shewfelt,
"the Government's evidence of crime or
Page 491 U. S. 561
fraud must come from sources independent of the attorney-client
communications recorded on the tapes,"
809 F.2d at 1418, thereby implicitly holding that, even if the
IRS had properly preserved its demand for
in camera
review, the District Court would have been without power to grant
it. The Court of Appeals then reviewed "the Government's
independent evidence."
Id. at 1418-1419. That review
appears to have excluded the partial transcripts, and thus the
Court of Appeals implicitly agreed with respondents that it was
improper for the District Court to have considered even the partial
transcripts.
See Brief for United States 7. On the basis
of its review of the "independent evidence," the Court of Appeals
affirmed the District Court's determination that the IRS had failed
to establish the applicability of the crime-fraud exception. 809
F.2d at 1419.
The full Court of Appeals vacated the panel opinion and ordered
en banc review on the basis of a perceived conflict between
Shewfelt and
United States v. Friedman, 445 F.2d
1076 (CA9),
cert. denied sub nom. Jacobs v. United States,
404 U.S. 958 (1971). 832 F.2d 127 (1987). Upon consideration, a
majority of the limited en banc court,
see Ninth Circuit
Rule 35-3, determined that the intracircuit conflict was illusory;
it agreed with respondents that
Friedman did not address
the independent evidence rule. 832 F.2d 1135, 1136 (1988),
amended by 850 F.2d 610 (1988). The limited en banc court
vacated the order for rehearing en banc as improvidently granted,
and reinstated the panel opinion in relevant part.
Ibid.
II
This Court is evenly divided with respect to the issue of the
power of a district court to place restrictions upon the
dissemination by the IRS of information obtained through a § 7604
subpoena enforcement action. We therefore affirm the judgment of
the Court of Appeals insofar as it upheld the District Court's
conditional enforcement order.
Page 491 U. S. 562
III
Questions of privilege that arise in the course of the
adjudication of federal rights are "governed by the principles of
the common law as they may be interpreted by the courts of the
United States in the light of reason and experience." Fed.Rule
Evid. 501. We have recognized the attorney-client privilege under
federal law, as "the oldest of the privileges for confidential
communications known to the common law."
Upjohn Co. v. United
States, 449 U. S. 383,
449 U. S. 389
(1981). Although the underlying rationale for the privilege has
changed over time,
see 8 J. Wigmore, Evidence § 2290
(McNaughton rev. 1961), [
Footnote
6] courts long have viewed its central concern as one
"to encourage full and frank communication between attorneys and
their clients, and thereby promote broader public interests in the
observance of law and administration of justice."
Upjohn, 449 U.S. at
449 U. S. 389.
That purpose, of course, requires that clients be free to "make
full disclosure to their attorneys" of past wrongdoings,
Fisher
v. United States, 425 U. S. 391,
425 U. S. 403
(1976), in order that the client may obtain "the aid of persons
having knowledge of the law and skilled in its practice,"
Hunt
v. Blackburn, 128 U. S. 464,
128 U. S. 470
(1888).
The attorney-client privilege is not without its costs.
Cf.
Trammel v. United States, 445 U. S. 40,
445 U. S. 50
(1980).
"[S]ince the privilege has the effect of withholding relevant
information from the factfinder, it applies only where necessary to
achieve its purpose."
Fisher, 425 U.S. at
425 U. S. 403.
The attorney-client privilege must necessarily protect the
confidences of wrongdoers, but the reason for that protection --
the centrality of open client and attorney communication to the
proper functioning of our adversary system of justice -- "ceas[es]
to operate at a certain point, namely, where the desired advice
refers
not to prior wrongdoing, but
Page 491 U. S. 563
to
future wrongdoing." 8 Wigmore, § 2298, p. 573
(emphasis in original);
see also Clark v. United States,
289 U. S. 1,
289 U. S. 15
(1933). It is the purpose of the crime-fraud exception to the
attorney-client privilege to assure that the "seal of secrecy,"
ibid., between lawyer and client does not extend to
communications "made for the purpose of getting advice for the
commission of a fraud" or crime.
O'Rourke v. Darbishire,
[1920] A. C. 581, 604 (P.C.).
The District Court and the Court of Appeals found that the tapes
at issue in this case recorded attorney-client communications, and
that the privilege had not been waived when the tapes were
inadvertently given to Armstrong. 809 F.2d at 1417 (noting that
Armstrong had acquired the tapes from L. Ron Hubbard's personal
secretary, who was under the mistaken impression that the tapes
were blank). These findings are not at issue here. Thus, the
remaining obstacle to respondents' successful assertion of the
privilege is the Government's contention that the recorded
attorney-client communications were made in furtherance of a future
crime or fraud.
A variety of questions may arise when a party raises the
crime-fraud exception. The parties to this case have not been in
complete agreement as to which of these questions are presented
here. In an effort to clarify the matter, we observe, first, that
we need not decide the quantum of proof necessary ultimately to
establish the applicability of the crime-fraud exception.
Cf.
Clark, 289 U.S. at
289 U. S. 15,
quoting O'Rourke; S. Stone & R. Liebman, Testimonial Privileges
§ 1.65, p. 107 (1983). [
Footnote
7] Rather, we are concerned here with
Page 491 U. S. 564
the
type of evidence that may be used to make that
ultimate showing. Within that general area of inquiry, the initial
question in this case is whether a district court, at the request
of the party opposing the privilege, may review the allegedly
privileged communications
in camera to determine whether
the crime-fraud exception applies. [
Footnote 8] If such
in camera review is
permitted, the second question we must consider is whether some
threshold evidentiary showing is needed before the district court
may undertake the requested
Page 491 U. S. 565
review. Finally, if a threshold showing is required, we must
consider the type of evidence the opposing party may use to meet
it:
i.e., in this case, whether the partial transcripts
the IRS possessed may be used for that purpose.
A
We consider first the question whether a district court may ever
honor the request of the party opposing the privilege to conduct an
in camera review of allegedly privileged communications to
determine whether those communications fall within the crime-fraud
exception. We conclude that no express provision of the Federal
Rules of Evidence bars such use of
in camera review, and
that it would be unwise to prohibit it in all instances as a matter
of federal common law. [
Footnote
9]
(1)
At first blush, two provisions of the Federal Rules of Evidence
would appear to be relevant. Rule 104(a) provides:
"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. . . .
In making its determination it is not bound by the rules of
evidence
except those with respect to privileges."
(Emphasis added.) Rule 1101(c) provides: "The rule with respect
to
Page 491 U. S. 566
privileges applies at all stages of all actions, cases, and
proceedings." Taken together, these Rules might be read to
establish that, in a summons-enforcement proceeding,
attorney-client communications cannot be considered by the district
court in making its crime-fraud ruling: to do otherwise, under this
view, would be to make the crime-fraud determination without due
regard to the existence of the privilege.
Even those scholars who support this reading of Rule 104(a)
acknowledge that it leads to an absurd result.
"Because the judge must honor claims of privilege made during
his preliminary fact determinations, many exceptions to the rules
of privilege will become 'dead letters,' since the preliminary
facts that give rise to these exceptions can never be proved. For
example, an exception to the attorney-client privilege provides
that there is no privilege if the communication was made to enable
anyone to commit a crime or fraud. There is virtually no way in
which the exception can ever be proved, save by compelling
disclosure of the contents of the communication; Rule 104(a)
provides that this cannot be done."
21 C. Wright & K. Graham, Federal Practice & Procedure:
Evidence § 5055, p. 276 (1977) (footnote omitted).
We find this Draconian interpretation of Rule 104(a)
inconsistent with the Rule's plain language. The Rule does not
provide by its terms that all materials as to which a "clai[m] of
privilege" is made must be excluded from consideration. In that
critical respect, the language of Rule 104(a) is markedly different
from the comparable California evidence rule, which provides
that
"the presiding officer may not require disclosure of information
claimed to be privileged under this division in order to
rule on the claim of privilege."
Cal.Evid.Code Ann. § 915(a) (West Supp. 1989) (emphasis
Page 491 U. S. 567
added). [
Footnote 10]
There is no reason to read Rule 104(a) as if its text were
identical to that of the California rule.
Nor does it make sense to us to assume, as respondents have
throughout this litigation, that, once the attorney-client nature
of the contested communications is established, those
communications must be treated as
presumptively privileged
for evidentiary purposes until the privilege is "defeated" or
"stripped away" by proof that the communications took place in the
course of planning future crime or fraud.
See Brief for
Respondents 15 (asserting that respondents had "established their
entitlement to the privilege," and that the communications had been
"determined to be privileged," before the crime-fraud question was
resolved). Although some language in
Clark might be read
as supporting this view,
see 289 U.S. at
289 U. S. 15,
respondents acknowledged at oral argument that no prior holding of
this Court requires the imposition of a strict progression of proof
in crime-fraud cases.
See Tr. of Oral Arg. 33-35.
Page 491 U. S. 568
We see no basis for holding that the tapes in this case must be
deemed privileged under Rule 104(a) while the question of crime or
fraud remains open. Indeed, respondents concede that "if the
proponent of the privilege is able to sustain its burden
only by submitting the communications to the court" for
in
camera review, Brief for Respondents 14-15 (emphasis in
original), the court is not required to avert its eyes (or close
its ears) once it concludes that the communication would be
privileged, if the court found the crime-fraud exception
inapplicable. Rather, respondents acknowledge that the court
may
"then consider the same communications to determine if the
opponent of the privilege has established that the crime-fraud
exception applies."
Id. at 15. Were the tapes truly deemed privileged under
Rule 104(a) at the moment the trial court concludes they contain
potentially privileged attorney-client communications, district
courts would be required to draw precisely the counterintuitive
distinction that respondents wisely reject. We thus shall not adopt
a reading of Rule 104(a) that would treat the contested
communications as "privileged" for purposes of the Rule, and we
shall not interpret Rule 104(a) as categorically prohibiting the
party opposing the privilege on crime-fraud grounds from relying on
the results of an
in camera review of the
communications.
(2)
Having determined that Rule 104(a) does not prohibit the
in
camera review sought by the IRS, we must address the question
as a matter of the federal common law of privileges.
See
Rule 501. We conclude that a complete prohibition against
opponents' use of
in camera review to establish the
applicability of the crime-fraud exception is inconsistent with the
policies underlying the privilege.
We begin our analysis by recognizing that disclosure of
allegedly privileged materials to the district court for purposes
of determining the merits of a claim of privilege does not have the
legal effect of terminating the privilege. Indeed, this
Page 491 U. S. 569
Court has approved the practice of requiring parties who seek to
avoid disclosure of documents to make the documents available for
in camera inspection,
see Kerr v. United States
District Court for Northern District of Cal., 426 U.
S. 394,
426 U. S.
404-405 (1976), and the practice is well established in
the federal courts.
See, e.g., In re Antitrust Grand Jury,
805 F.2d 155, 168 (CA6 1986);
In re Vargas, 723 F.2d 1461,
1467 (CA10 1983);
United States v. Lawless, 709 F.2d 485,
486, 488 (CA7 1983);
In re Grand Jury Witness, 695 F.2d
359, 362 (CA9 1982). Respondents do not dispute this point; they
acknowledge that they would have been free to request
in
camera review to establish the fact that the tapes involved
attorney-client communications, had they been unable to muster
independent evidence to serve that purpose. Brief for Respondents
14-15.
Once it is clear that
in camera review does not destroy
the privileged nature of the contested communications, the question
of the propriety of that review turns on whether the policies
underlying the privilege and its exceptions are better fostered by
permitting such review or by prohibiting it. In our view, the costs
of imposing an absolute bar to consideration of the communications
in camera for purpose of establishing the crime-fraud
exception are intolerably high.
"No matter how light the burden of proof which confronts the
party claiming the exception, there are many blatant abuses of
privilege which cannot be substantiated by extrinsic evidence. This
is particularly true . . . of . . . situations in which an alleged
illegal proposal is made in the context of a relationship which has
an apparent legitimate end."
Note, The Future Crime or Tort Exception to Communications
Privileges, 77 Harv.L.Rev. 730, 737 (1964). A
per se rule
that the communications in question may never be considered
creates, we feel, too great an impediment to the proper functioning
of the adversary process.
See generally 2 D. Louisell
& C. Mueller, Federal Evidence § 213, pp. 828-829 (1985); 2 J.
Weinstein & M. Berger, Weinstein's Evidence
Page 491 U. S. 570
� 11503(d)(1)[01], p. 503-71 (1988). This view is consistent
with current trends in the law.
Compare National
Conference of Commissioners on Uniform State Laws, Uniform Rules of
Evidence, Rule 26(2)(a) (1953 ed.) ("Such privileges shall not
extend . . . to a communication if the judge finds that sufficient
evidence,
aside from the communication, has been
introduced to warrant a finding that the legal service was sought
or obtained in order to enable or aid the client to commit or plan
to commit a crime or a tort" (emphasis added)), reprinted in 1 J.
Bailey & 0. Trelles, The Federal Rules of Evidence: Legislative
Histories and Related Documents (1980),
with Uniform Rule
of Evidence 502 (adopted 1974), 13A U.L.A. 256 (1986) (omitting
explicit independent evidence requirement).
B
We turn to the question whether
in camera review at the
behest of the party asserting the crime-fraud exception is
always permissible, or, in contrast, whether the party
seeking
in camera review must make some threshold showing
that such review is appropriate. In addressing this question, we
attend to the detrimental effect, if any, of
in camera
review on the policies underlying the privilege and on the orderly
administration of justice in our courts. We conclude that some such
showing must be made.
Our endorsement of the practice of testing proponents' privilege
claims through
in camera review of the allegedly
privileged documents has not been without reservation. This Court
noted in
United States v. Reynolds, 345 U. S.
1 (1953), a case which presented a delicate question
concerning the disclosure of military secrets, that "examination of
the evidence, even by the judge alone, in chambers" might in some
cases "jeopardize the security which the privilege is meant to
protect."
Id. at
345 U. S. 10.
Analogizing to claims of Fifth Amendment privilege, it observed
more generally:
"Too much judicial inquiry into the claim of privilege would
force disclosure of the thing the privilege was meant to
protect,
Page 491 U. S. 571
while a complete abandonment of judicial control would lead to
intolerable abuses."
Id. at
345 U. S. 8.
The Court in
Reynolds recognized that some compromise
must be reached.
See also United States v. Weisman, 111
F.2d 260, 261-262 (CA2 1940). In
Reynolds, it declined to
"go so far as to say that the court may automatically require a
complete disclosure to the judge before the claim of privilege will
be accepted
in any case." 345 U.S. at
345 U. S. 10
(emphasis added). We think that much the same result is in order
here.
A blanket rule allowing
in camera review as a tool for
determining the applicability of the crime-fraud exception, as
Reynolds suggests, would place the policy of protecting
open and legitimate disclosure between attorneys and clients at
undue risk. There is also reason to be concerned about the possible
due process implications of routine use of
in camera
proceedings.
See, e.g., In re John Doe Corp., 675 F.2d
482, 489-490 (CA2 1982);
In re Special September 1978 Grand
Jury, 640 F.2d 49, 56-58 (CA7 1980). Finally, we cannot ignore
the burdens
in camera review places upon the district
courts, which may well be required to evaluate large evidentiary
records without open adversarial guidance by the parties.
There is no reason to permit opponents of the privilege to
engage in groundless fishing expeditions, with the district courts
as their unwitting (and perhaps unwilling) agents. Courts of
Appeals have suggested that
in camera review is available
to evaluate claims of crime or fraud only "when justified,"
In
re John Doe Corp., 675 F.2d at 490, or "[i]n appropriate
cases,"
In re Sealed Case, 219 U.S.App.D.C. 195, 217, 676
F.2d 793, 815 (1982) (opinion of Wright, J.). Indeed, the
Government conceded at oral argument (albeit reluctantly) that a
district court would be mistaken if it reviewed documents
in
camera solely because "the government beg[ged it]" to do so,
"with no reason to suspect crime or fraud." Tr. of Oral Arg. 26;
see also id. at 60. We agree.
Page 491 U. S. 572
In fashioning a standard for determining when
in camera
review is appropriate, we begin with the observation that "
in
camera inspection . . . is a smaller intrusion upon the
confidentiality of the attorney-client relationship than is public
disclosure." Fried, Too High a Price for Truth: The Exception to
the Attorney-Client Privilege for Contemplated Crimes and Frauds,
64 N. C.L.Rev. 443, 467 (1986). We therefore conclude that a lesser
evidentiary showing is needed to trigger
in camera review
than is required ultimately to overcome the privilege.
Ibid. The threshold we set, in other words, need not be a
stringent one.
We think that the following standard strikes the correct
balance. Before engaging in
in camera review to determine
the applicability of the crime-fraud exception, "the judge should
require a showing of a factual basis adequate to support a good
faith belief by a reasonable person,"
Caldwell v. District
Court, 644 P.2d 26,
33 (Colo. 1982), that
in camera review of the materials
may reveal evidence to establish the claim that the crime-fraud
exception applies.
Once that showing is made, the decision whether to engage in
in camera review rests in the sound discretion of the
district court. The court should make that decision in light of the
facts and circumstances of the particular case, including, among
other things, the volume of materials the district court has been
asked to review, the relevant importance to the case of the alleged
privileged information and the likelihood that the evidence
produced through
in camera review, together with other
available evidence then before the court, will establish that the
crime-fraud exception does apply. The district court is also free
to defer its
in camera review if it concludes that
additional evidence in support of the crime-fraud exception may be
available that is not allegedly privileged, and that production of
the additional evidence will not unduly disrupt or delay the
proceedings.
Page 491 U. S. 573
C
The question remains as to what kind of evidence a district
court may consider in determining whether it has the discretion to
undertake an
in camera review of an allegedly privileged
communication at the behest of the party opposing the privilege.
Here, the issue is whether the partial transcripts may be used by
the IRS in support of its request for
in camera review of
the tapes.
The answer to that question, in the first instance, must be
found in Rule 104(a), which establishes that materials that have
been determined to be privileged may not be considered in making
the preliminary determination of the existence of a privilege.
Neither the District Court nor the Court of Appeals made factual
findings as to the privileged nature of the partial transcripts,
[
Footnote 11] so we cannot
determine on this record whether Rule 104(a) would bar their
consideration.
Assuming for the moment, however, that no rule of privilege bars
the IRS' use of the partial transcripts, we fail to see what
purpose would be served by excluding the transcripts from the
District Court's consideration. There can be little doubt that
partial transcripts, or other evidence directly but incompletely
reflecting the content of the contested communications, generally
will be strong evidence of the subject matter of the communications
themselves. Permitting district courts to consider this type of
evidence would aid them substantially in rapidly and reliably
determining whether
in camera review is appropriate.
Page 491 U. S. 574
Respondents suggest only one serious countervailing
consideration. In their view, a rule that would allow an opponent
of the privilege to rely on such material would encourage litigants
to elicit confidential information from disaffected employees or
others who have access to the information. Tr. of Oral Arg. 40-41.
We think that deterring the aggressive pursuit of relevant
information from third-party sources is not sufficiently central to
the policies of the attorney-client privilege to require us to
adopt the exclusionary rule urged by respondents. We conclude that
the party opposing the privilege may use any nonprivileged evidence
in support of its request for
in camera review even if its
evidence is not "independent" of the contested communications as
the Court of Appeals uses that term. [
Footnote 12]
D
In sum, we conclude that a rigid independent evidence
requirement does not comport with "reason and experience," Fed.Rule
Evid. 501, and we decline to adopt it as part of the developing
federal common law of evidentiary privileges. We hold that
in
camera review may be used to determine whether allegedly
privileged attorney-client communications fall within the
crime-fraud exception. We further hold, however, that before a
district court may engage in
in camera review at the
request of the party opposing the privilege, that party must
present evidence sufficient to support a reasonable belief that
in camera review may yield evidence that establishes the
exception's applicability. Finally, we hold that the threshold
showing to obtain
in camera review may be met by using any
relevant evidence, lawfully obtained, that has not been adjudicated
to be privileged.
Because the Court of Appeals employed a rigid independent
evidence requirement which categorically excluded the partial
transcripts and the tapes themselves from consideration, we vacate
its judgment on this issue and remand the case for further
proceedings consistent with this opinion. On remand, the Court of
Appeals should consider whether the District Court's refusal to
listen to the tapes
in toto was justified by the manner in
which the IRS presented and preserved its request for
in
camera review. [
Footnote
13] In the event the Court of Appeals holds that the IRS'
demand for review was properly preserved, the Court of Appeals
should then determine, or remand the case to the District Court to
determine in the first instance, whether the IRS has presented a
sufficient evidentiary basis for
in camera review, and
whether, if so, it is appropriate for the District Court, in its
discretion, to grant such review.
It is so ordered.
JUSTICE BRENNAN took no part in the consideration or decision of
this case.
[
Footnote 1]
Compare United States v. Author Services, Inc., 804
F.2d 1520, 1525-1526 (CA9 1986),
opinion amended, 811 F.2d
1264 (1987),
with United States v. Barrett, 837 F.2d 1341
(CA5 1988) (en banc),
cert. pending, No. 87-1705.
[
Footnote 2]
Compare United States v. Shewfelt, 455 F.2d 836 (CA9),
cert. denied, 406 U.S. 944 (1972),
with In re Berkley
& Co., 629 F.2d 548 (CA8 1980).
[
Footnote 3]
Respondents suggest that this case is now moot, because L. Ron
Hubbard died January 24, 1986, thus foreclosing any further
criminal investigation of him, and because the IRS civil audit of
Mr. Hubbard for the relevant tax years was terminated as a
"
closed case.'" Brief in Opposition 8-10. The IRS disagrees,
largely because the civil tax audit has not been terminated, and
its result could affect the liability of Mr. Hubbard's estate. We
are satisfied that a live controversy remains.
[
Footnote 4]
The current Clerk of the Superior Court, Frank S. Zolin, is a
named respondent in this case, but did not participate in briefing
or argument before the Court of Appeals or before this Court. We
use the term "respondents" to refer to Mary Sue Hubbard and the
Church, the only active respondents in this Court.
[
Footnote 5]
The IRS denied that the transcripts were made using tapes
obtained from the Superior Court or from any other illicit source.
Agent Petersell declared that
"[t]he partial transcripts were not prepared by the United
States from the tapes in the custody of the Superior Court for Los
Angeles County, California, nor from copies of the tape now in the
custody of the Clerk of this Court. The transcripts were obtained
from a confidential source by another Special Agent prior to the
issuance of this summons. The source was not a party to
Church
of Scientology v. Armstrong, No. 410153, nor an attorney for
any party in that proceeding."
See Declaration of Agent Petersell in No. CV85-0440-HLH
(Tx) (March 21, 1985). As the District Court made no finding of
illegality, we assume for present purposes that the transcripts
were legally obtained.
[
Footnote 6]
See also Hazard, An Historical Perspective on the
Attorney-Client Privilege, 66 Calif.L.Rev. 1061 (1978);
Developments in the Law -- Privileged Communications, 98
Harv.L.Rev. 1450, 1455-1458 (1985).
[
Footnote 7]
We note, however, that this Court's use in
Clark v. United
States, 289 U. S. 1,
289 U. S. 14
(1933), of the phrase "
prima facie case" to describe the
showing needed to defeat the privilege has caused some confusion.
See Gardner, The Crime or Fraud Exception to the
Attorney-Client Privilege, 47 A.B.A.J. 708, 710-711 (1961); Note,
51 Brooklyn L.Rev. 913, 918-919 (1985) ("The
prima facie
standard is commonly used by courts in civil litigation to
shift the burden of proof from one party to the other. In
the context of the fraud exception, however, the standard is used
to dispel the privilege altogether, without affording the client an
opportunity to rebut the
prima facie showing" (emphasis in
original)).
See also In re Grand Jury Subpoena Duces Tecum
Dated September 15, 1985, 731 F.2d 1032, 1039 (CA2 1984). In
using the phrase in
Clark, the Court was aware of
scholarly controversy concerning the role of the judge in the
decision of such preliminary questions of fact.
See 289
U.S. at
289 U. S. 14, n.
The quantum of proof needed to establish admissibility was then,
and remains, subject to question.
See, e.g., Maguire &
Epstein, Preliminary Questions of Fact in Determining the
Admissibility of Evidence, 40 Harv.L.Rev. 392, 400 (criticizing
courts insofar as they "have allowed themselves to be led into
holding that only a superficial, one-sided showing is allowable on
any admissibility controversy"), 414-424 (exploring alternative
rules) (1927); 21 C. Wright & K. Graham, Federal Practice and
Procedure: Evidence § 5052, p. 248 (1977) (suggesting, with respect
to the process of proving preliminary questions of fact, that
"[p]erhaps it is a task, like riding a bicycle, that is easier to
do if you do not think too much about what you are doing"). In
light of the narrow question presented here for review, this case
is not the proper occasion to visit these questions.
[
Footnote 8]
In addition, the facts of this case also suggest the question
whether the partial transcripts the IRS possessed may be used by it
in meeting its ultimate burden. It is by no means clear that the
Government has presented that question for this Court's review. The
Government noted in its petition for certiorari that the Court of
Appeals had not considered the partial transcripts in making its
determination that the IRS had failed to establish the
applicability of the crime-fraud exception.
See Pet. for
Cert. 7-8. The question presented for review, however, relates
solely to
in camera review, as does the relevant
discussion in the petition.
See id. at 20-23.
The question whether the partial transcripts may be used in
meeting the IRS' ultimate burden of demonstrating the applicability
of the crime-fraud exception is fairly included within the question
presented, however, and we therefore address it.
See this
Court's Rule 21.1(a). The answer to the question would follow
inexorably from our discussion in any event.
[
Footnote 9]
There is some ambiguity as to whether the Court of Appeals
squarely barred all use of
in camera review for these
purposes, although that is the fairest reading of the court's
opinion. Respondents at times appear to advocate that position,
see Brief in Opposition 19-21, but at times suggest
otherwise,
see Brief for Respondents 13;
see also
Reply Brief for United States 15. The ambiguity in respondents'
position is perhaps due to the fact that they accept the premise
that
in camera review is permitted under Circuit precedent
in different circumstances from those at issue in this case --
i.e., where the proponent of the privilege seeks
in
camera review to demonstrate the applicability of the
privilege in the first instance,
see Brief for Respondents
14, or when the proponent requests
in camera review to
ensure that an order requiring production of some materials held
not to be privileged does not inadvertently yield privileged
information,
see id. at 20-21.
[
Footnote 10]
A good example of the effect of the California rule is provided
by the record in this case. While the disputed matters were being
briefed in Federal District Court, the State Superior Court held a
hearing on a motion by Government attorneys seeking access to
materials in the
Armstrong case for ongoing litigation in
Washington, D.C. The transcript of the hearing was made part of the
record before the District Court in this case. Regarding the tapes,
the Government argued to the Superior Court that the
attorney-client conversations on the tapes reflect the planning or
commission of a crime or fraud. Tr. of Hearing of February 11,
1985, in No. C420 153 (Super.Ct.Cal.), p. 52. That claim was
supported by several declarations and other extrinsic evidence. The
Government noted, however, that "the tape recordings themselves
would . . . be the best evidence of exactly what was going on."
Id. at 53. The intervenors stressed that, as a matter of
California law, "you can't show the tapes are not privileged by the
contents."
Id. at 58;
see also id. at 68. The
Superior Court acknowledged the premise that "you can't look at the
conversation itself to make [the crime-fraud] determination,"
id. at 74, and concluded that the extrinsic evidence was
not sufficient to make out a
prima facie case that the
crime-fraud exception applies,
id. at 76-76.
[
Footnote 11]
There are no findings as to whether respondents themselves would
be privileged to resist a demand that
they produce the
partial transcripts. Nor has there been any legal and factual
exploration of whether respondents may claim privilege as a bar to
the IRS' use of the copy of the transcripts it lawfully obtained
from a third party.
See, e.g., Developments in the Law --
Privileged Communications, 98 Harv.L.Rev. at 1648, 1660-1661
(discussing controversy concerning the legal effect of an
inadvertent disclosure which does not constitute a waiver of the
privilege, and citing cases); 8 Wigmore § 2326.
[
Footnote 12]
In addition, we conclude that evidence that is not "independent"
of the contents of allegedly privileged communications -- like the
partial transcripts in this case -- may be used not only in the
pursuit of
in camera review, but also may provide the
evidentiary basis for the ultimate showing that the crime-fraud
exception applies. We see little to distinguish these two uses: in
both circumstances, if the evidence has not itself been determined
to be privileged, its exclusion does not serve the policies which
underlie the attorney-client privilege.
See generally
Note, The Future Crime or Tort Exception to Communications
Privileges, 77 Harv.L.Rev. 730, 737 (1964).
[
Footnote 13]
The Court of Appeals also will have the opportunity to review
the partial transcripts, and to determine whether, even without
in camera review of the tapes, the IRS presented
sufficient evidence to establish that the tapes are within the
crime-fraud exception.