Opinion ID: 479228
Heading Depth: 2
Heading Rank: 1

Heading: Prima Facie Legal Standard

Text: 40 The appellants argue that the district court applied the wrong legal standard in determining that the government made a prima facie showing of a violation. In particular, they argue that the district court's interpretation of a prima facie showing to mean that the government need only meet the evidentiary standards sufficient to defeat an initial directed verdict motion is inappropriate and has no foundation in the law. The appellants press this court to adopt a standard that such evidence needs to be direct evidence or compelling circumstantial evidence. 41 This circuit has yet to formulate an evidentiary standard for determining whether a prima facie violation has been established under the crime-fraud exception. The standard first evolved in Clark v. United States, 289 U.S. at 15, 53 S.Ct. at 469. The Supreme Court described the evidence needed to satisfy the prima facie standard as something to give colour to the charge ... that has some founation in fact. Id. The Second Circuit has defined the Clark standard in terms of the government showing probable cause to believe a crime or fraud was committed. In re Grand Jury Proceedings, 731 F.2d at 1039; In re John Doe Corp., 675 F.2d 482, 491 (2d Cir.1982). The Fifth Circuit has adopted the Black's Law Dictionary definition: [evidence] such as will prevail until contradicted and overcome by other evidence ... [a] case which has proceeded upon sufficient proof to that stage where it will support finding if evidence to contrary is disregarded. Black's Law Dictionary 1071 (4th ed. 1973); In re International Systems and Controls Corp., 693 F.2d at 1242; In re Grand Jury Matter of Fine, 641 F.2d 199, 203 (5th Cir.1981). The District of Columbia Circuit has stated that the government can establish a prima facie showing if it offers evidence that if believed by the trier of fact would establish the elements of an ongoing or imminent crime or fraud. In re Sealed Case, 754 F.2d at 399. 42 None of the standards enunciated above place as high a burden of production on the government as that suggested by the appellants' direct or compelling circumstantial evidence standard. We, therefore, reject it as the standard for this circuit. The evidence produced by the government must raise more than a strong suspicion that a crime was committed to establish a prima facie violation, see In re Grand Jury in the Matter of Fine, 641 F.2d at 204, but it need not be as strong as that needed to effect an arrest or secure an indictment. This matter is also not similar to the trial stage where the government needs to prove the existence of a crime or fraud beyond a reasonable doubt. In re Sealed Case, 754 F.2d at 399. Clark only described the necessary showing as that giving colour to the charge ... that has some foundation in fact. That definition denotes a standard qualitatively different from a direct or compelling circumstantial standard. We do not believe that Clark countenances that such a heavy burden be placed on the government during the grand jury stage. 43 The Second Circuit noted in In re Grand Jury Subpoena Duces Tecum, that there are not practical differences between the probable cause standard and the prima facie standards formulated in the circuits. 731 F.2d at 1039. Both require that a prudent person have a reasonable basis to suspect the perpetration of a crime or fraud. Id. Accord In re Sealed Case, 754 F.2d at 399 n. 3. We are persuaded by the Second Circuit's enunciation and adopt it as our evidentiary standard of a prima facie showing. It is the most objective definition of what we believe the Supreme Court meant when it stated that the government must present evidence to give colour to the charge. 44 The district court's formulation of the standard is problematic. In its opinion, it very methodically analyzes the standard, citing the precise language of the cases referred to above. Notwithstanding this analysis, it went on to create a new evidentiary standard for making a prima facie showing--evidence which would permit a court to deny a directed verdict if such proof were submitted at trial. Under the Fifth Circuit's standard this standard might suffice. Black's Law Dictionary states that a prima facie case consists of sufficient evidence to get plaintiff past a directed verdict. The directed verdict standard is not, however, appropriate in weighing whether the government has established a prima facie case. Minimum proof to get past a directed verdict is generally less than what we believe is needed for the government to meet its burden. Rockwell International Corp. v. Regional Emergency Med. Serv., 688 F.2d 29, 31 (6th Cir.1982) (directed verdict is appropriate if there is complete absence of pleading or proof on issue or issues material to cause of action or where there are no controverted issues of fact upon which reasonable men could differ). 45 Our rejection of the directed verdict standard does not mean, however, that the district court abused its discretion when it determined that the government had established a prima facie case. While the district court's formulation may have been lacking the precise form we prefer, we are not convinced that the district court's underlying considerations of the standard failed to mirror those reflected in our articulation above. We must still consider whether that evidence sufficed under the Second Circuit's standard.