Opinion ID: 1309235
Heading Depth: 1
Heading Rank: 4

Heading: establishing the crime-fraud exception

Text: It is often difficult to prove the crime-fraud exception only with evidence independent of the privileged communication itself. The best, and often only, evidence of whether the exception exists is the allegedly privileged communication. In re Marriage of Decker, 153 Ill.2d 298, 180 Ill.Dec. 17, 606 N.E.2d 1094, 1106 (1993). The United States Supreme Court addressed this issue in United States v. Zolin, 491 U.S. 554, 109 S.Ct. 2619, 105 L.Ed.2d 469 (1989). [3] In Zolin, the Supreme Court was asked to decide (1) whether a district court, at the request of the party opposing the attorney-client privilege, may review the allegedly privileged communications in camera to determine whether the crime-fraud exception applies; (2) whether some threshold evidentiary showing is needed before the district court may undertake the requested review; and (3) the type of evidence the opposing party may use to meet the threshold showing. [4] As to the first issue, Zolin held that the party opposing the privilege on crime-fraud grounds [may] rely[] on the results of an in camera review of the communications. Zolin, 491 U.S. at 568, 109 S.Ct. at 2629. As to the second issue, Zolin held that a party must establish through nonprivileged evidence, `a factual basis adequate to support a good faith belief by a reasonable person,' that in camera review of the [privileged] materials may reveal evidence to establish the claim that the crime-fraud exception applies. Zolin, 491 U.S. at 572, 109 S.Ct. at 2631 (quoting Caldwell v. District Court, 644 P.2d 26, 33 (Colo.1982)). In addressing the third issue, Zolin concluded that the party opposing the privilege may use any nonprivileged evidence in support of its request for in camera review[.] Zolin, 491 U.S. at 574, 109 S.Ct. at 2632. There are three points I want to highlight regarding Zolin. First, under the decision in Zolin, a party may actually use a privileged communication to establish the crime-fraud exception. This point is critical because often-times a party will not be able to establish the crime-fraud exception without reliance upon the privileged communication. Second, Zolin permits the use of any nonprivileged evidence to establish a prima facie case of crime-fraud. [5] Under this standard, any type evidence showing misconduct ( e.g., bad faith), so long as it is not privileged, may be used to help support a prima facie case. Third, Zolin's threshold prima facie case, the proof necessary to trigger an in camera hearing, is not a high burden. The decision itself emphasized that [t]he threshold we set ... need not be a stringent one. Zolin, 491 U.S. at 572, 109 S.Ct. at 2631. [6] Thus, Zolin's threshold prima facie case requires only a factual showing sufficient to support a reasonable good-faith belief that review of the privileged documents ` may reveal evidence to establish that the crime fraud exception applies.' In re Grand Jury Investigation, 974 F.2d 1068, 1071 (9th Cir.1992) (quoting Zolin, 491 U.S. at 572, 109 S.Ct. at 2631 (emphasis in original)). [7] The Zolin prima facie showing to trigger an in camera review of the crime-fraud exception was adopted by this Court in State v. Beard, 194 W.Va. 740, 461 S.E.2d 486 (1995). In Beard we interpreted Zolin as requiring a party to establish[] a sufficient showing to invoke the crime-fraud exception. Beard, 194 W.Va. at 754, 461 S.E.2d at 500 (emphasis added). Once a prima facie case of the crime-fraud exception has been sufficiently established, the trial court may then conduct an in camera proceeding. [8] During the in camera review, the party opposing the privilege may prevail only where the evidence establishes that the client intended to perpetrate a [crime or] fraud, Olson v. Accessory Controls & Equip. Corp., 254 Conn. 145, 757 A.2d 14, 31 (2000). [9] In addition, the court must find a valid relationship between the confidential communication that was made and the crime or fraud. 1 Franklin D. Cleckley, Handbook on Evidence § 5-4(E)(6)(a) (1994). [10] Although the United States Supreme Court found in Zolin that the party opposing the privilege on crime-fraud grounds [may] rely[] on the results of an in camera review of the communications, Zolin, 491 U.S. at 568, 109 S.Ct. at 2629, the Supreme Court did not decide the quantum of proof necessary ultimately to establish the applicability of the crime fraud exception. Zolin, 491 U.S. at 563, 109 S.Ct. at 2626. [11] The West Virginia Supreme Court has never directly addressed the issue of the standard of proof for establishing the crime-fraud exception. [12] Courts that have addressed the issue are split. A majority of state courts have held that the crime-fraud exception may be proven by prima facie evidence. [13] See Matter of Mendel, 897 P.2d 68, 74 (Alaska 1995) (prima facie evidence standard); State v. Fodor, 179 Ariz. 442, 880 P.2d 662, 670 (App.1994) (same); State Comp. Ins. Fund v. Superior Court, 91 Cal.App.4th 1080, 111 Cal.Rptr.2d 284, 291 (2001) (same); People v. Board, 656 P.2d 712, 714 (Colo.Ct.App.1982) (same); In re Marriage of Decker, 153 Ill.2d 298, 180 Ill.Dec. 17, 606 N.E.2d 1094, 1105 (1993) (same); Lahr v. State, 731 N.E.2d 479, 483 (Ind.Ct.App.2000) (same); Wallace, Saunders, Austin, Brown & Enochs, Chartered v. Louisburg Grain Co., Inc., 250 Kan. 54, 824 P.2d 933, 939 (1992) (same); State ex rel. Humphrey v. Philip Morris Inc., 606 N.W.2d 676, 691 (Minn.Ct.App.2000) (same); State ex rel. Peabody Coal Co. v. Clark, 863 S.W.2d 604, 608 (Mo.1993) (same); Ocean Spray Cranberries, Inc. v. Holt Cargo Sys., Inc., 345 N.J.Super. 515, 785 A.2d 955, 959 (Law Div.2000) (same); Matter of Grand Jury Subpoena of Stewart, 144 Misc.2d 1012, 545 N.Y.S.2d 974, 980 (1989) (same); In re Investigating Grand Jury of Philadelphia County, 527 Pa. 432, 593 A.2d 402, 407 (1991) (same); Kugle v. DaimlerChrysler Corp., 88 S.W.3d 355, 362 (Tex.App.2002) (same); Lane v. Sharp Packaging Sys., Inc., 251 Wis.2d 68, 640 N.W.2d 788, 807 (2002) (same). One state court uses a probable cause standard. See Olson v. Accessory Controls & Equip. Corp., 254 Conn. 145, 757 A.2d 14, 31 (2000). At least three state courts use a preponderance of the evidence standard. See American Tobacco Co. v. State, 697 So.2d 1249, 1256 (Fla.Dist.Ct.App.1997) (preponderance of the evidence standard); Stidham v. Clark, 74 S.W.3d 719, 727 (Ky.2002); (same) Purcell v. District Attorney, 424 Mass. 109, 676 N.E.2d 436, 439 (1997) (same). Federal courts employ the prima facie evidence standard, but utilize a variety of different terminology to describe that standard of proof. See, e.g., In re Sealed Case, 107 F.3d 46, 50 (D.C.Cir.1997) (evidence that, if believed by the trier of fact, would establish the elements of an ongoing or imminent crime or fraud); In re Grand Jury Proceedings, 87 F.3d 377, 381 (9th Cir.1996) (reasonable cause to believe attorney was used in furtherance of ongoing scheme); United States v. Davis, 1 F.3d 606, 609 (7th Cir.1993) (evidence presented by the party seeking application of the exception sufficient to require the party asserting the privilege to come forward with its own evidence to support the privilege); Haines v. Liggett Group Inc., 975 F.2d 81, 95-96 (3d Cir.1992) (evidence that, if believed by the fact finder, would be sufficient to support a finding that the elements of the crime-fraud exception were met); In re Grand Jury Investigation, 842 F.2d 1223, 1226 (11th Cir.1987) (evidence that, if believed by a trier of fact, would establish the elements of some violation that was ongoing or about to be committed); In re International Sys. & Controls Corp. Sec. Litig., 693 F.2d 1235, 1242 (5th Cir.1982) (evidence such as will suffice until contradicted and overcome by other evidence). Two federal appellate courts utilize a probable cause standard. See In re Richard Roe, Inc., 68 F.3d 38, 40 (2d Cir.1995) (probable cause standard); In re Antitrust Grand Jury, 805 F.2d 155, 166 (6th Cir.1986) (same).