Court Opinion

ID: 3161320
Source: CourtListenerOpinion
Date Created: 2015-12-09 21:00:20.4605+00
Date Added: 2024-06-11T11:56:31.212345
License: Public Domain

United States Court of Appeals
                      For the First Circuit

Nos. 14-1963
     14-1964
     14-2074

                     UNITED STATES OF AMERICA,

                    Appellee, Cross-Appellant,

                                v.

                         DAVID E. GORSKI,

               Defendant, Appellant, Cross-Appellee,

                     LEGION CONSTUCTION, INC.,

          Interested Party, Appellant, Cross-Appellee.

          APPEALS FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF MASSACHUSETTS

        [Hon. F. Dennis Saylor, IV, U.S. District Judge]

                              Before

                    Lynch, Selya, and Kayatta,
                          Circuit Judges.

     Tracy A. Miner, with whom Megan A. Siddall and Demeo LLP were
on brief, for Gorski.
     Martin G. Weinberg, with whom Kimberly Homan was on brief,
for Legion Construction, Inc.
     Jennifer Hay Zacks, Assistant United States Attorney, with
whom Carmen M. Ortiz, United States Attorney, was on brief, for
the United States.
December 9, 2015
              LYNCH, Circuit Judge.        These   interlocutory       appeals

are from a district court order that, among other things, compels

the law firm of Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C.

(Mintz Levin) to produce certain documents pertaining to a fraud

allegedly committed by David Gorski in his operation of Legion

Construction, Inc. (Legion). Gorski and Legion appeal the district

court's   order       that   attorney-client   privileged      documents    be

produced under the crime-fraud exception.             The prosecution cross-

appeals the district court's decision to exclude communications

between Gorski and his personal attorney, Elizabeth Schwartz, from

the production order.        We conclude that we have jurisdiction over

Legion's appeal and the prosecution's cross-appeal, but not over

Gorski's appeal.       We dismiss Gorski's appeal for want of appellate

jurisdiction.        We affirm the production order as to Mintz Levin.

We   vacate    the    district   court's   decision    to   exclude   Gorski's

communications with Schwartz from the production order and remand

that portion of its order.

                                      I.

              The prosecution alleges that from about late 2005 to

about November 2010, Gorski fraudulently represented to federal

government agencies that Legion was a Service-Disabled Veteran

Owned Small Business Entity (SDVOSB) in order to qualify for and

obtain government contracts.

                                     - 3 -
             By statute, at least three percent of all government

contracts must go to SDVOSBs.             15 U.S.C. § 644(g)(1)(A)(ii).                 To

qualify as an SDVOSB, an entity must be at least fifty-one percent

owned by one or more service-disabled veterans. 13 C.F.R. § 125.9;

38 C.F.R. § 74.3.         The entity must also be controlled by one or

more   service-disabled        veterans,     meaning         that    both    long-term

decision-making         and   day-to-day     management        are     conducted        by

service-disabled veterans.              13 C.F.R. § 125.10(a); 38 C.F.R.

§ 74.4(a), (c)(1).        Before February 8, 2010, the service-disabled

veteran owners were not required to work full time but had to "show

sustained and significant time invested in the business."                               38

C.F.R. § 74.4(c)(1) (2008).               Effective February 8, 2010, the

regulations      were    amended   to     require     that     a    service-disabled

veteran    owner      "work   full-time    in   the      business."         38    C.F.R.

§   74.4(c)(1)     (2010).      The     February    8,    2010,      amendment      also

eliminated      the   self-certification        procedure      that    had       been   in

effect    for   SDVOSBs,      replacing    it   with     a    formal    verification

process.     38 C.F.R. § 74.2.            The essence of the criminal case

against Gorski is that Gorski, a non-veteran, made false statements

about the ownership, operation, and control of Legion to appear to

be in compliance with the SDVOSB eligibility requirements while

retaining effective ownership and control of the company for

himself.

                                        - 4 -
             The prosecution alleges the following facts.              Around

late   2005,     Gorski   approached   Veteran   A,    a    service-disabled

veteran,    to   start    a   construction   business      targeting   SDVOSB

contracts.       Gorski told Veteran A that he wanted Veteran A's

involvement for his "veteran status."        Gorski filed a certificate

of incorporation for Legion in January 2006, with Veteran A listed

as president and himself as vice president.

             From January 2006 to August 2007, Veteran A was nominally

the fifty-five percent owner of Legion.          In August 2007, Gorski

caused Legion to undergo a corporate restructuring in which Gorski

became a nominal forty-nine percent owner, Veteran A became a

nominal eleven percent owner, and Veteran B -- also a service-

disabled veteran -- became nominal owner of the remaining forty

percent. However, Veteran A received no compensation for the stock

that   he   relinquished.       Meanwhile,   Gorski     retained   effective

control of Legion by having the veterans execute demand notes

payable to Gorski and secured by their shares of Legion stock, as

well as by having them sign employment agreements that allowed

Gorski to terminate their employment with Legion for cause. Gorski

also placed his wife on Legion's payroll even though she had full-

time employment elsewhere, as a disguised method to pay himself

more money than he was paying the veterans.           Throughout this time,

Legion was awarded government contracts based on representations

that it qualified as an SDVOSB.

                                    - 5 -
           In    late    2009,    Legion      retained    Mintz     Levin    in

anticipation of the February 8, 2010, amendment in regulatory

criteria   for   SDVOSBs.         Mintz     Levin   effected    a   corporate

restructuring    under    which    Veteran     B    purchased   Veteran     A's

remaining stock, resulting in Veteran B nominally owning fifty-

one percent of Legion's shares and Gorski nominally owning forty-

nine percent.    Although the purchase did not occur until March 23,

2010, the documents were dated "as of" February 1, 2010 -- before

the date of the regulatory amendments.

           At some point, Gorski also engaged Elizabeth Schwartz,

an attorney unaffiliated with Mintz Levin, for legal advice related

to the 2010 restructuring.

           On March 8, 2010, one of Legion's competitors filed a

bid protest with the U.S. Small Business Administration (SBA)

challenging Legion's SDVOSB status.          The protest related to a bid

submitted by Legion on January 11, 2010. On April 5, 2010, Legion,

with the assistance of Mintz Levin, filed a response to the SBA.

The response included new corporate documents prepared by Mintz

Levin purporting to show that Legion restructured on February 1,

2010.   The record supports the district court's finding that the

new corporate documents were crafted so as to make it appear that

they were signed before the date of the SBA regulatory amendments,

when they were not, and that an affidavit that flatly swore under

penalty of perjury that Veteran B purchased the stock on February

                                    - 6 -
1, 2010, was false.        Further, it is plain that Gorski likely knew

that his lawyers' handiwork could lead SBA to believe that which

was false.

             Between July 29, 2010, and November 19, 2010, Gorski had

discussions       with   Legion's    accountant      about    circumventing      the

SDVOSB regulations that require the service-disabled veteran owner

to be the company's highest paid officer.                    Gorski and Legion's

accountant discussed a plan under which Gorski would receive

additional, hidden compensation in a special bank account.

             On October 23, 2012, Gorski was indicted for one count

of conspiracy to defraud the United States and four counts of wire

fraud, in violation of 18 U.S.C. §§ 371 and 1343.

             On July 21, 2014, the prosecution issued subpoenas to

Legion and Mintz Levin under Federal Rule of Criminal Procedure

17(c).   The subpoenas required the production of documents from

November 2009 to December 2010 concerning Legion's ownership and

SDVOSB eligibility; negotiations and transfers of Legion stock

involving Gorski, Veteran A, and Veteran B; and the March 2010 bid

protest filed against Legion.               Mintz Levin and Legion withheld

production of certain documents on the basis of attorney-client

privilege.

             On   August     7,   2014,   the   district      court    granted   the

prosecution's       motion    that    the    court    conduct     an    in   camera

examination to determine whether the crime-fraud exception to the

                                      - 7 -
attorney-client      privilege   applied.        Mintz   Levin   and   Legion

submitted thousands of pages of documents for the district court's

review.    On September 4, 2014, the district court held an ex parte

hearing with defense counsel and, upon concluding that the crime-

fraud exception to the attorney-client privilege applied, ordered

that all of the contested documents be produced.

            On September 8, 2014, Gorski filed an ex parte motion

for reconsideration of the September 4 order as overbroad with

respect to seven categories of documents.            Also on September 8,

2014, Legion, which is not a party to the criminal case, filed a

motion to intervene and to stay the September 4 order, along with

a motion to conduct a de novo hearing on the crime-fraud exception.

The district court granted Legion's motion and, on September 11,

2014, held an ex parte hearing with counsel for Legion and Gorski.

            On September 12, 2014, the district court issued an order

granting    in     part   and    denying    in    part   the     motion   for

reconsideration.      As an initial matter, the district court found

that all of the documents at issue were relevant and facially

privileged.      The only issue was whether the crime-fraud exception

applied.   The district court began its analysis by stating that it

considered the grand jury indictment of Gorski to be "conclusive

evidence" of probable cause to believe that Gorski committed a

crime or fraud.      The district court then reasoned that "there is

a reasonable basis to believe that Gorski intended to, and did,

                                   - 8 -
use the services of the lawyers" in furtherance of that crime or

fraud.   The district court found that it was reasonable to believe

that Gorski intended to use Mintz Levin's services to "perpetuate

[an] ongoing scheme" in which he "maintain[ed] effective ownership

and control of Legion, while maintaining its apparent status as

a[n] SDVOSB."

           However,       the    district    court       granted    the    motion     to

reconsider as to category three of the documents, which consisted

of   communications       between   Gorski        and    his    personal    attorney,

Schwartz, in relation to the 2010 restructuring.                       The district

court    found     that     although     "[t]he         basic    intent     of     those

communications is arguably the same as his communications with

Mintz Levin, . . . Ms. Schwartz apparently had no role in the

submission to the SBA."          The district court concluded that under

the circumstances, it would "not make the necessary finding" as to

the applicability of the crime-fraud exception. The district court

also determined, without explaining its reasoning on the record,

that the crime-fraud exception did not apply to documents in

categories       one,     two,   five,      and    six     of    the      motion    for

reconsideration. The district court ordered Legion and Mintz Levin

to produce all of the contested documents not encompassed by those

categories.

           Legion and Gorski filed separate notices of appeal.

Legion limited its appeal to the portion of the district court

                                       - 9 -
order requiring production of documents by Mintz Levin.           The

district court has stayed its production order as to Mintz Levin

pending appeal. The district court has stayed and held in abeyance

its independent production order as to Legion, pending resolution

of this appeal as to the Mintz Levin order.

                                   II.

              "Ordinarily, litigants may not seek immediate appeal of

discovery orders because they are not final decisions and orders

of the district court."        Gill v. Gulfstream Park Racing Ass'n,

Inc., 399 F.3d 391, 397 (1st Cir. 2005); see also FDIC v. Ogden

Corp., 202 F.3d 454, 458 (1st Cir. 2000).     A target of a discovery

order can gain an immediate right of appeal by refusing to comply

with a discovery order, being held in contempt by the district

court, and then appealing the contempt order.       Gill, 399 F.3d at

397.       However, none of the parties to this appeal have been held

in contempt.        Examining the alternative bases upon which the

parties claim appellate jurisdiction to challenge the discovery

order, we conclude that we do not have jurisdiction over Gorski's

appeal but that we do have jurisdiction over Legion's appeal and

the prosecution's cross-appeal.

              Gorski relies solely on the collateral order doctrine as

the basis for appellate jurisdiction.1          The collateral order

       1  The prosecution points out an antecedent issue
explicitly left open by the district court: whether Gorski can

                                  - 10 -
doctrine allows immediate appeal of a "small class" of decisions

that do not end the litigation but are nonetheless considered

"final" and thus immediately reviewable.              Cohen v. Beneficial

Indus. Loan Corp., 337 U.S. 541, 546 (1949).          "That small category

includes    only    decisions   that    are     conclusive,    that    resolve

important   questions     separate     from   the   merits,    and    that   are

effectively unreviewable on appeal from the final judgment in the

underlying action."      Swint v. Chambers Cty. Comm'n, 514 U.S. 35,

42 (1995); see also United States v. Quintana–Aguayo, 235 F.3d

682, 684 (1st Cir. 2000) (per curiam).              Gorski argues that the

collateral order doctrine gives us jurisdiction over his appeal

because the district court's discovery order will be effectively

unreviewable in an end-of-case appeal.

            Gorski's argument is squarely at odds with the Supreme

Court's decision in Mohawk Industries, Inc. v. Carpenter, 558 U.S.

100 (2009).        In Mohawk, the Court held that "collateral order

appeals are not necessary to ensure effective review of orders

adverse to the attorney-client privilege," id. at 108, because

"postjudgment appeals generally suffice to protect the rights of

litigants    and     ensure   the    vitality    of   the     attorney-client

even assert attorney-client privilege over the documents the
prosecution seeks from Mintz Levin, or whether the privilege is
held by Legion alone.   We do not resolve this issue because we
lack jurisdiction over Gorski's appeal even if he is a privilege-
holder.

                                    - 11 -
privilege," id. at 109.            The Court reasoned that when disclosure

orders   are    held   to     be     erroneous       on    postjudgment   appeal,

"[a]ppellate    courts       can    remedy     the    improper    disclosure    of

privileged material in the same way they remedy a host of other

erroneous evidentiary rulings: by vacating an adverse judgment and

remanding for a new trial in which the protected material and its

fruits are excluded from evidence."                  Id.    Moreover, the Court

noted, immediate review of serious errors is available through a

writ of mandamus or by a contemptuous refusal to comply with the

discovery order and an appeal of the subsequent contempt order.

Id. at 111.

           Gorski attempts to distinguish Mohawk by pointing out

that if we do not hear his appeal, our decision on Legion's appeal

will   become   the    law    of     the   case      and   prevent   Gorski    from

relitigating the issue on appeal from final judgment. This, Gorski

claims, makes the discovery order effectively unreviewable on

final judgment in a way that distinguishes Mohawk.                   But even if

Gorski is correct about the applicability of the law of the case

doctrine -- an issue we do not decide -- the Court made it clear

in Mohawk that the availability of collateral order review is

determined by examining "the class of claims, taken as a whole."

Id. at 107.     As such, Mohawk held that parties are categorically

barred from appealing privilege-related disclosure orders under

the collateral order doctrine, notwithstanding the fact "[t]hat a

                                      - 12 -
fraction of orders adverse to the attorney-client privilege may

nevertheless harm individual litigants in ways that are 'only

imperfectly reparable.'"           Id. at 112 (quoting Dig. Equip. Corp. v.

Desktop Direct, Inc., 511 U.S. 863, 872 (1994)).                    We do not have

jurisdiction over Gorski's appeal.

             Legion, a non-party to the indictment, claims appellate

jurisdiction      under    an   exception     to      the   final   order   doctrine

deriving from Perlman v. United States, 247 U.S. 7 (1918).                    Under

Perlman, "a discovery order addressed to a non-party sometimes may

be treated as an immediately appealable final order vis-à-vis a

party who claims to hold an applicable privilege."                    Ogden Corp.,

202 F.3d at 459.       The rationale for Perlman is that when the target

of a discovery order is a non-party, a party claiming the privilege

cannot gain the right of appeal by itself refusing to produce

discovery and being held in contempt.                 See id.   Nor will the target

of the discovery order allow itself to be held in contempt to

obtain appellate review on behalf of the privilege-holder because

the   non-party       "presumably     lacks       a    sufficient   stake    in   the

proceeding to risk contempt by refusing compliance."                   Id. (quoting

Church of Scientology v. United States, 506 U.S. 9, 18 n.11

(1992)).     As such, "[c]ourts frequently have invoked Perlman when

a   client    .   .    .   seeks    to    appeal       an   order   compelling    her

attorney . . . to produce allegedly privileged materials."                    Id.

                                         - 13 -
          Legion's appeal presents a classic Perlman situation.

The district court has ordered Mintz Levin, a non-party, to produce

documents.   Legion asserts attorney-client privilege over those

documents, but it cannot bring an immediate challenge to that order

by allowing itself to be held in contempt because it is not the

target of the subpoena at issue.2      Nor does it seem that Mintz

Levin has any intention of refusing to comply and therefore risking

contempt. See id. Because Legion is a non-party, it cannot ensure

that there would be any traditional final judgment from which to

appeal, either.   Legion is thus "powerless to avert the mischief

of the order," Perlman, 247 U.S. at 13, unless we apply the Perlman

exception and take appellate jurisdiction.

          We have jurisdiction over the prosecution's cross-appeal

under 18 U.S.C. § 3731, which provides that "[a]n appeal by the

United States shall lie to a court of appeals from a decision or

order of a district court suppressing or excluding evidence."

                               III.

          In privilege cases, we review questions of law de novo,

factual findings for clear error, and discretionary judgments for

     2    Although there is also a subpoena against Legion, the
district court's production order as to Legion has been stayed and
held in abeyance pending our resolution of the appeals of the order
as to Mintz Levin. Therefore, we have before us only the part of
the district court's order compelling production from Mintz Levin.

                              - 14 -
abuse of discretion.      Cavallaro v. United States, 284 F.3d 236,

245 (1st Cir. 2002).

            The   attorney-client   privilege   is    "a    privilege   of    a

client to refuse to testify or to have his counsel testify as to

confidential communications between the two made in connection

with the rendering of legal representation."               In re Grand Jury

Proceedings, 417 F.3d 18, 21 (1st Cir. 2005).               The crime-fraud

exception   "withdraws    protection    where   the    client    sought      or

employed legal representation in order to commit or facilitate a

crime or fraud."     Id. at 22.     The party invoking the crime-fraud

exception "must make a prima facie showing: (1) that the client

was engaged in (or was planning) criminal or fraudulent activity

when the attorney-client communications took place; and (2) that

the communications were intended by the client to facilitate or

conceal the criminal or fraudulent activity."              In re Grand Jury

Proceedings (Gregory P. Violette), 183 F.3d 71, 75 (1st Cir. 1999);

see also United States v. Albertelli, 687 F.3d 439, 450 (1st Cir.

2012).   By prima facie showing, we mean "a reasonable basis to

believe that the lawyer's services were used by the client to

foster a crime or fraud."     In re Grand Jury Proceedings, 417 F.3d

at 23 & n.4.      This standard may be met by "something less than a

mathematical (more likely than not) probability that the client

intended to use the attorney in furtherance of a crime or fraud."

                                  - 15 -
Id. at 23.    However, it requires more than "speculation [or]

evidence that shows only a distant likelihood of corruption."        Id.

           Here,   we   are   satisfied   that   the   reasonable   basis

standard is met as to both parts of the crime-fraud exception

test.3   As to the first part, the district court correctly noted

     3    Two antecedent issues are raised by Gorski's brief but
not by Legion's brief. Though we do not have jurisdiction over
Gorski's appeal and Legion does not expressly adopt the arguments
in Gorski's brief, we understand Gorski to make these arguments in
opposition to the government's appeal, and so we address them.
          The first issue is whether the district court erred in
conducting an in camera review of the privileged documents at all.
The Supreme Court has held that district courts may conduct an in
camera review of privileged materials upon a "good faith belief by
a reasonable person," United States v. Zolin, 491 U.S. 554, 572
(1989) (quoting Caldwell v. Dist. 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,"
id. The standard for in camera review is a "very relaxed test"
that requires a lesser evidentiary showing than what is ultimately
needed to pierce the privilege. In re Grand Jury Proceedings, 417
F.3d at 22. That standard was met by the prosecution's allegation
that Mintz Levin's restructuring of Legion was part of a five-year
ongoing scheme whose essence was that the outward structure of the
company did not match its actual ownership and control. Gorski's
argument that the use of an effective date on corporate documents
was not illegal and so could not have formed the basis for the in
camera review is too narrowly focused, because it is the entire
five-year scheme alleged in the indictment that justifies in camera
review. A jury could view the chronology as an attempt to convince
the SBA that transactions took place before they did, and to dispel
any reason for further SBA inquiry.
          The second issue is whether the district court erred in
not considering a January 2, 2014, decision by a magistrate judge
not to conduct an in camera review under Zolin. It is uncontested
that the prosecution did not file a timely appeal of the magistrate
judge's order and thereby waived its right to review under Federal
Rule of Criminal Procedure 59(a). However, the advisory committee
notes on Rule 59(a) specifically provides that "[d]espite the
waiver provisions, the district judge retains the authority to
review any magistrate judge's decision or recommendation whether

                                 - 16 -
that the indictment provides a reasonable basis to believe that

Gorski   and/or   Legion      was   engaged   in     criminal    or   fraudulent

activity.

             As to the second part, we too have reviewed the numerous

and   varied    documents     and    agree    with    the    district    court's

characterizations.      There are many communications between Gorski

and his attorneys on the "perceived need to revise [Legion's]

corporate structure."       The facts concerning the chronology of the

events and the relevance of the dates to the regulatory structure

are documented.     There is considerable information about the bid

protest, choices as to how to respond, and the preparation of

affidavits for submission to the government.

             The district court correctly concluded that there was a

reasonable      basis    to     believe       that     the      attorney-client

communications "were intended by the client to facilitate or

conceal the criminal or fraudulent activity."                In re Grand Jury

Proceedings, 183 F.3d at 75.           Gorski allegedly orchestrated an

ongoing scheme in which, for five years, he maintained the outward

appearance that Legion was compliant with SDVOSB regulations while

retaining actual control for himself.          Mintz Levin was retained to

or not objections are timely filed." See Fed. R. Crim. P. 59(a)
advisory committee's note to 2005 adoption; see also Thomas v.
Arn, 474 U.S. 140, 154 (1985). It was well within the district
court's discretion to decide the issue on its own, even after the
time had passed for the prosecution to appeal the magistrate
judge's order.

                                     - 17 -
restructure     Legion   to   maintain    that   supposed    compliance      with

changing SDVOSB regulations.           The fact that Gorski intended to

continue   the    fraudulent    scheme    even    after    achieving    outward

compliance with the new SDVOSB regulations in early 2010 may be

inferred from the allegation that, between July and November 2010,

Gorski was in discussions with Legion's accountant to provide him

with   hidden    additional    compensation.        In    short,   there   is   a

reasonable basis to believe that for a five-year period running

both before and after the 2010 restructuring, Gorski exercised

ownership and control over Legion in excess of that which was

reported to the SBA.      There is also a reasonable basis to believe

that, with the intent of continuing this scheme, Gorski and/or

Legion sought out the services of Mintz Levin to restructure Legion

and maintain Legion's outward compliance with SDVOSB regulations.

           Legion    argues    that    Gorski    and/or   Legion    lacked   the

intent to use Mintz Levin's services to further or conceal criminal

activity because they were merely seeking to ensure that Legion

was in compliance with the new SDVOSB regulations.                 They contend

that there is no evidence that Gorski lied to the lawyers or

withheld material information from them.                  It is true that a

reasonable inference may be drawn in favor of Gorski from the fact

that he approached a reputable law firm to assist him in the

restructuring and, as the district court noted, this inference may

carry the day at trial.        However, it is also reasonable to infer

                                      - 18 -
that Mintz Levin was retained with the intent of creating outward

compliance with the amended regulations so that Gorski could

continue his ongoing scheme to retain hidden ownership and control.

That reasonable inference suffices to meet the "something less

than a mathematical (more likely than not) probability" standard,

In re Grand Jury Proceedings, 417 F.3d at 23, that the prosecution

had to meet to defeat the attorney-client privilege.

          Legion argues that even if the above were true, the

production order was overbroad because the district court did not

conduct a document-by-document review to determine specifically

which communications and documents were in furtherance of the

criminal or fraudulent conduct.    However, the district court made

it clear in a status conference following the order that its

decision was the result of "a document-by-document review."     We

too have reviewed the documents.     The district court could have

done a document-by-document analysis and still readily concluded

that all of the documents from Mintz Levin fell within the crime-

fraud exception based on a reasonable inference that the entire

scope of the representation was intended by Gorski to further the

crime or fraud.   Gorski's ongoing scheme required Legion to be

structured to maintain the appearance of compliance with SDVOSB

regulations, and the entire scope of Mintz Levin's representation

was related to the 2010 restructuring.       As such, there was a

reasonable basis to conclude that there was a complete congruence

                              - 19 -
between everything Mintz Levin did and the fraudulent purpose by

Gorski that triggers the crime-fraud exception.

           Our decision that a prima facie case for the crime-fraud

exception has been made does not reflect a finding on the ultimate

question of whether Gorski acted wrongfully.    See United States v.

Schussel, 291 F. App'x 336, 346 (1st Cir. 2008).   Nor does it bear

on the conduct or intent of the lawyers involved, because the

crime-fraud exception is triggered by the intent of the client.

In re Grand Jury Proceedings, 183 F.3d at 79.

                                IV.

           In its cross-appeal, the prosecution challenges the

district court's quashing of the prosecution's subpoena as to the

"category three" documents, which consisted of communications

between Gorski and his personal attorney, Schwartz, in relation to

the 2010 restructuring.    The district court reasoned that even

though "[t]he basic intent of those communications is arguably the

same as his communications with Mintz Levin," the crime-fraud

exception does not apply to those documents because "Ms. Schwartz

apparently had no role in the submission to the SBA."

           The prosecution argues that the district court erred

because whether or not Schwartz was involved in the submissions to

the SBA relating to the bid protest was legally irrelevant.      We

agree.   As described above, the crime-fraud exception applies upon

two prima facie showings: first, that the client was engaged in

                               - 20 -
criminal or fraudulent activity; and second, that the attorney-

client communications were intended by the client to facilitate or

conceal the criminal or fraudulent activity.              See id. at 75.    The

district court found that the indictment provided a reasonable

basis to believe that Gorski was engaged in criminal activity,

meeting the first requirement.       As for the second requirement, the

district court recognized that Gorski's intent with regard to

Schwartz was arguably the same as his intent with regard to Mintz

Levin:   to    perpetuate   an   ongoing    scheme   to    conceal   the   true

ownership and control of Legion over a five-year time period.               The

fact that Schwartz was not actually involved in the submission of

documents in the bid protest or otherwise has no necessary bearing

on either of those two points.        Further, Schwartz predated Mintz

Levin as counsel advising Gorski on Legion. The government alleges

there was an earlier part of an ongoing fraud.             Gorski did indeed

ask her for ideas on how to "financially benefit from [his]

efforts" despite the nominal restructuring and his concerns about

no longer being the "primary shareholder" despite shouldering the

"balance of responsibilities" after the restructuring.

              Because the district court appears to have employed

incorrect legal reasoning with regard to the "category three"

documents, we vacate and remand that portion of the district court

order for application of the correct legal standard.

                                   - 21 -
                                     V.

           We   dismiss   Gorski's    appeal   for   want   of   appellate

jurisdiction.    We vacate the portion of the district court order

quashing the prosecution's subpoena as to the "category three"

documents, and remand for further proceedings consistent with this

opinion.    Otherwise, we affirm the district court's order of

production as to Mintz Levin.        Costs are taxed against David E.

Gorski and Legion Construction, Inc.

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