Opinion ID: 6500514
Heading Depth: 2
Heading Rank: 2

Heading: Filter Teams26

Text: Because federal agents intercepted and seized materials covered by attorney-client privilege, the government established filter teams to keep that information out of procure a warrant and when “the affidavit’s remaining content is insufficient to establish probable cause, the search warrant must be voided and the fruits of the search excluded”). 26 We exercise de novo review over specific legal issues underlying the claim of attorney-client privilege and review factual determinations for clear error. In re Impounded, 241 F.3d 308, 312 (3d Cir. 2001). We review for abuse of discretion a district court’s judgment that the crime-fraud exception applies. Id. at 318. We review pre-indictment procedures used by the District Court for abuse of discretion. See In re Grand Jury Subpoena, 223 F.3d 213, 219 (3d Cir. 2000) (finding no abuse of discretion in district court “denying Appellant and/or his attorney access to this information to protect grand jury secrecy”). Preserved Fifth Amendment claims are typically reviewed for harmless error, United States v. Toliver, 330 F.3d 607, 613 (3d Cir. 2003), while infringements on the Sixth Amendment right to counsel are generally structural errors that require automatic reversal, United States v. Gonzalez-Lopez, 548 U.S. 140, 150 (2006). With regard to Pelullo’s challenges to ex parte proceedings, however, we need not grapple with the varying standards of review because those claims fail under any standard, as he identifies no error. We analyze his separation-of-powers claim under the harmless-error standard, as discussed in greater detail herein. 37 prosecutors’ hands. Pelullo challenges the procedures employed by the filter teams and the District Court’s attorneyclient privilege rulings as deprivations of his Fifth Amendment right to due process and his Sixth Amendment right to counsel, and as violative of the separation of powers.27 As a remedy for those alleged errors, he claims he is entitled to a new trial. His arguments fail.
In August 2007, approximately four years before Pelullo was indicted, the District Court entered an order permitting the government to intercept his cellphone communications, having found probable cause that he and others were committing criminal offenses and using communications with counsel to further those offenses. While wiretapping Pelullo’s phone, federal agents intercepted calls between Pelullo and his attorneys. Knowing that some of those communications could be privileged, the government deployed a “Wiretap Filter Team” between federal investigators and the prosecution team, to examine the communications and sort them into three categories before turning them over to the prosecutors: (1) communications protected by the attorney-client privilege; (2) communications that would be privileged but for the crimefraud exception, which excludes from the scope of the 27 John and William Maxwell say they adopt Pelullo’s arguments on these issues. That adoption, however, is ineffective, because Pelullo’s briefing focuses specifically on alleged intrusions into his own attorney-client privilege, an issue that has no relevance to the Maxwells. 38 attorney-client privilege any communications made “in furtherance of a future crime or fraud”; and (3) unprivileged communications. United States v. Zolin, 491 U.S. 554, 563 (1989). Once the Wiretap Filter Team sorted the information, it sought court approval to share with the prosecution team unprivileged communications and communications falling under the crime-fraud exception. The Wiretap Filter Team was headed by Assistant U.S. Attorney (“AUSA”) Melissa Jampol. She and her team reviewed wire and text communications between Pelullo and his attorneys, including, among others, David Adler, Gary McCarthy, and Donald Manno. Federal agent Kevin Moyer, who engaged as well in the surveillance of Scarfo and others for a brief period, was also assigned to the Wiretap Filter Team. In connection with his surveillance responsibilities, Moyer interacted with members of the prosecution team. During the duration of the wiretap, which was from August 2007 through January 2008, Jampol submitted five sealed ex parte motions to the District Court seeking to disclose communications to the prosecution team. The District Court granted each of those motions, authorizing disclosure of selected intercepted communications to the prosecution team. The Wiretap Filter Team’s memoranda of law, including supporting affidavits and related papers, remained under seal until after Pelullo’s indictment was unsealed. Following the indictment’s unsealing, all the intercepted communications, including those not yet disclosed to the prosecution team, were provided to Pelullo’s counsel, giving him an opportunity to challenge any of the communications as privileged, prior to their potential use at trial. Pelullo’s counsel moved to exclude the intercepted communications en masse, without identifying 39 any particular communication claimed to be privileged. The District Court denied that motion. Roughly nine months after the entry of the order, law enforcement officials executed search warrants at the offices of both Manno’s solo law practice and McCarthy’s law firm. Two more filter teams were established to review and sort out privileged materials seized from those offices: the “Manno Filter Team” and the “McCarthy Filter Team.” AUSA Matthew Smith and federal agent Michael O’Brien formed the Manno Filter Team. O’Brien performed an initial review of materials seized from Manno’s law office, trying to make sure those items fell within the scope of the search warrant, and Smith then made the privilege determinations. Manno v. Christie, 2008 WL 4058016, at  (D.N.J. Aug. 22, 2008). If Smith determined that items were not privileged, he turned them over to the prosecution team, without going through the District Court first. Id. In contrast, if he thought that certain items might be privileged, he then determined whether an exception to the privilege, such as the crime-fraud exception, applied. Id. When such an exception did apply, Smith would “‘meet and confer’ with Manno or any … individual who may have a claim of privilege in an attempt to work out a resolution.” Id. Then, if that was unsuccessful in resolving any concerns, Smith applied to the District Court for a privilege determination before disclosing anything to the prosecution team. Id. The McCarthy Filter Team, led by Department of Justice attorney Cynthia Torg, followed similar procedures. It cataloged the materials seized from McCarthy’s law office and substantively evaluated them. Because the materials included 40 multiple parties and transactions, the team worked with McCarthy’s counsel to identify items covered by the attorneyclient privilege and the names of any of McCarthy’s clients who may have held the corresponding privilege as to those items. Any items identified as “potentially privileged” were segregated, and in February 2013, nearly one and a half years after Pelullo’s indictment, his counsel in this case was provided copies of those items to confirm if either Pelullo or Seven Hills claimed that privilege. The McCarthy Filter Team then sought to work with Pelullo’s counsel to resolve privilege disputes and reduce the volume of contested documents that the District Court needed to review.
Pelullo first challenges the propriety of the procedures employed by the Wiretap Filter Team and Manno Filter Team, saying they violated his Fifth and Sixth Amendment rights. He asserts it was improper for Agent Moyer to be on both the Wiretap Filter Team and an investigative team that had regular contact with the prosecution. He claims that error necessarily led to privileged information making its way from the Wiretap Filter Team to the prosecution. Additionally, Pelullo contends the Manno Filter Team’s attorney-client privilege determinations were improperly made by Agent O’Brien, a non-attorney. While rare, governmental intrusion into an attorneyclient relationship has occasionally risen to the level of “outrageous government conduct” violative of the Fifth 41 Amendment’s Due Process Clause.28 United States v. Voigt, 89 F.3d 1050, 1066 (3d Cir. 1996). We have exercised “scrupulous restraint” before declaring government action so “outrageous” as to “shock[] … the universal sense of justice[.]” Id. at 1065 (citation omitted). We thus require defendants to show the government knew of and deliberately intruded into the attorney-client relationship, resulting in “actual and substantial prejudice.” Id. at 1066-67. But nowhere does Pelullo claim the government’s conduct “amount[ed] to an abuse of official power that ‘shocks the conscience’” or otherwise explain how his due process rights were violated. Fagan v. City of Vineland, 22 F.3d 1296, 1303 (3d Cir. 1994) (citing Collins v. City of Harker Heights, 503 U.S. 115, 126 (1992)). He directs us to “no document, no telephone call, nothing that was turned over to the prosecution team that in any way has been used against [him] improperly[.]” (JAB at 2225.) Although Agent Moyer’s presence on both a surveillance team 28 Common-law attorney-client privilege, which Pelullo asserts, has been described as overlapping with the Fifth Amendment protection against self-incrimination. See Fisher v. United States, 425 U.S. 391, 405 (1976) (noting the overlap between the right against self-incrimination and the attorney client privilege); In re Foster, 188 F.3d 1259, 1271 (10th Cir. 1999) (“Under Fisher, [the attorney-client] privilege effectively incorporates a client’s Fifth Amendment right; it prevents the court from forcing [the attorney] to produce documents given it by [the client] in seeking legal advice if the Amendment would bar the court from forcing [the client] himself to produce those documents.”). Pelullo, however, only argues a Fifth Amendment due process violation, and he does not invoke his right against self-incrimination. 42 and a filter team may have run afoul of Department of Justice procedures, 29 that alone is not enough to establish a constitutional violation. With respect to the Manno Filter Team, Pelullo is not quite accurate when he says that Agent O’Brien, a nonattorney, performed the initial privilege determinations. O’Brien did screen the materials in the first instance to decide what fell within the scope of the warrant. Manno, 2008 WL 4058016, at . The initial privilege review, however, was performed by AUSA Smith. Id. And even if that were not the case, Pelullo does not present an argument that O’Brien being an initial screener would “shock the conscience.” Finally, in a conclusory fashion, Pelullo also asserts that the errors he alleges are also all in violation of the Sixth Amendment. But the Sixth Amendment does not attach before the indictment. See McNeil v. Wisconsin, 501 U.S. 171, 175 (1991); United States v. Kennedy, 225 F.3d 1187, 1194 (10th Cir. 2000) (“Government intrusions into pre-indictment attorney-client relationships do not implicate the Sixth Amendment.”). Pelullo fails to identify any constitutional deficiencies in the procedures of the filter teams, and we discern no error. 29 A Department of Justice manual provides that “‘privilege team[s]’ should … consist[] of agents and lawyers not involved in the underlying investigation.” U.S. Dep’t of Justice, Justice Manual § 9-13.420 (2021). 43
Next, Pelullo challenges the ex parte proceedings held in conjunction with the filter teams, saying they violated his Fifth Amendment due process rights, his Sixth Amendment right to counsel, and separation of powers principles. Again, he comes up short. The use of filter teams is an acceptable method of protecting constitutional privileges. Moreover, Pelullo has not identified any privileged materials that were improperly shared with the prosecution, nor has he otherwise attempted to demonstrate prejudice. The use of filter teams in conjunction with ex parte proceedings is widely accepted. See, e.g., In re Search of Elec. Commc’ns, 802 F.3d 516, 530 (3d Cir. 2015) (“[T]he use of a ‘taint team’ to review for privileged documents [is] a common tool employed by the Government.”); In re Grand Jury Subpoenas, 454 F.3d 511, 522 (6th Cir. 2006) (explaining that when “potentially-privileged documents are already in the government's possession, … the use of the taint team to sift the wheat from the chaff constitutes an action respectful of, rather than injurious to, the protection of privilege”); United States v. Avenatti, 559 F. Supp. 3d 274, 282 (S.D.N.Y. 2021) (“[T]he use of a filter team is a common procedure in this District and has been deemed adequate in numerous cases to protect attorney-client communications.” (citation and internal quotation marks omitted)). Contrary to Pelullo’s suggestion, he had no pre-indictment Sixth Amendment rights, nor did he have a Fifth Amendment due process right to notice of the ex parte proceedings. Indeed, his surveillance was consistent with the Wiretap Act, which requires courts to seal all government applications for wiretaps and any resulting orders. 18 U.S.C. § 2518(8)(a)-(b). That sealing provision was established “to 44 protect the confidentiality of the government’s investigation[,]” United States v. Florea, 541 F.2d 568, 575 (6th Cir. 1976), which the sealing did here until the appropriate time. Although the Act entitles the subject of the wiretap to notice and an inventory of the intercepted communications within a reasonable time, such notice may be postponed pursuant to an ex parte showing of good cause. 18 U.S.C. § 2518(8)(d). Good cause is not a high bar, and an ongoing criminal investigation will typically justify delayed notice of the wiretap. E.g., United States v. John, 508 F.2d 1134, 1139 (8th Cir. 1975); United States v. Manfredi, 488 F.2d 588, 602 (2d Cir. 1973). It did so in this case. The undercover investigation here continued until the intercepted communications gave the government probable cause in May 2008 to search the law offices of Manno and McCarthy. By executing those searches pursuant to warrants, the government’s investigation could no longer continue undercover. Pelullo was thus notified about the existence of the wiretap shortly thereafter. Pelullo next challenges the procedures employed by the Manno and McCarthy Filter Teams, arguing they violated separation-of-powers principles. The Manno and McCarthy Filter Teams, as detailed above, instituted procedures to ensure the protection of privileged materials. In challenging those procedures, Pelullo relies predominantly on a Fourth Circuit case, In re Search Warrant, 942 F.3d 159 (4th Cir. 2019), which held comparable conduct unconstitutional. That case, however, arose in the context of a motion for a temporary restraining order brought by a law firm to enjoin the use, without adequate process, of materials that had been seized as part of a criminal investigation into one of its clients. Id. at 45 164. The Fourth Circuit reversed the district court’s denial of the motion, ordering that the challenged filter team procedures be enjoined. Id. at 170. Pelullo’s argument arises in an entirely different procedural posture: on post-conviction appeal. The full applicability of the Fourth Circuit’s precedent is thus open to question. More importantly, however, Pelullo has not identified any way in which the process used to screen for attorney-client privileged material caused him harm. We do not believe, nor has Pelullo suggested, that the alleged error – allowing an executive branch employee to make an initial privilege determination – is structural. See United States v. Colon-Munoz, 192 F.3d 210, 217 n.9 (1st Cir. 1999) (finding alleged separation-of-powers violation not structural because it “involve[d] the structure of the federal government rather than the structure of the criminal trial process as a reliable means of determining guilt or innocence”); see also Neder v. United States, 527 U.S. 1, 8-9 (1999) (structural error is that which would “deprive defendants of ‘basic protections’ without which ‘a criminal trial cannot reliably serve its function as a vehicle for determination of guilt or innocence ... and no criminal punishment may be regarded as fundamentally fair’” (citation omitted)). Thus, we employ harmless-error review, and the answer to whether there was any error here that caused Pelullo harm is simple. There was not. Despite having had a full and fair opportunity to do so, before both the District Court and us, Pelullo has not pointed to any piece of evidence that was privileged but improperly provided to the prosecution. Without reaching the question of whether a constitutional violation occurred (and without commenting on the 46 advisability of the particular screening methods employed by the government), it is clear that, even if there were error, there was no prejudice as a consequence. See United States v. Schneider, 801 F.3d 186, 200 (3d Cir. 2015) (“An error is harmless when it is highly probable that it did not prejudice the outcome.” (citation and internal quotation marks omitted)). Because Pelullo has not shown that injury resulted from the filter teams’ review, any error was harmless, and his Fifth and Sixth Amendment claims fail.
Pelullo’s final complaint about the handling of his attorney-client privilege assertions in the District Court is that the Court applied the incorrect standard when determining whether the crime-fraud exception applied to certain intercepted communications. But it is Pelullo who misconstrues that exception. The crime-fraud exception to the attorney-client privilege limits “the right of a client to assert the privilege … with respect to pertinent [communications] seized by the government, when the client is charged with continuing or planned criminal activity.” In re Impounded Case, 879 F.2d 1211, 1213 (3d Cir. 1989). To invoke the exception, the party seeking to overcome the privilege must first demonstrate “a factual basis … to support a good faith belief by a reasonable person that the [seized] materials may reveal evidence of a crime or fraud.” Haines v. Liggett Grp. Inc., 975 F.2d 81, 96 (3d Cir. 1992). If that threshold is crossed, the district court will conduct an in camera review to determine whether the party advocating the exception has made “a prima facie showing that (1) the client was committing or intending to 47 commit a fraud or crime, … and (2) the attorney-client communications were in furtherance of that alleged crime or fraud[.]” In re Grand Jury Subpoena, 223 F.3d 213, 217 (3d Cir. 2000) (citations omitted). Contrary to the just-quoted precedent, Pelullo says that the crime-fraud exception requires something beyond a prima facie showing, that some heightened standard governs whether disclosure to the prosecution is permitted. He is wrong. As our precedent makes clear, there is no heightened standard beyond the requisite prima facie showing. Here, the District Court performed the correct analysis when it determined, based on the government’s prima facie showing, that Pelullo was committing crimes and that the communications at issue included discussion furthering those crimes. The Court’s conclusion was supported by the filter teams’ evidence of Pelullo’s criminal activities, the connection between his attorneys and the purported fraud, and analysis of how Pelullo’s conversations with attorneys furthered that fraud. In sum, the showing required to apply the crime-fraud exception was met by the evidence provided by the filter teams, and the District Court relied on the appropriate legal standard in making its determinations. Pelullo has not established any error based on the government’s use of filter teams.