Court Opinion

ID: 1027064
Source: CourtListenerOpinion
Date Created: 2013-07-05 07:16:55.160104+00
Date Added: 2024-06-11T15:27:39.002598
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                               No. 07-5144

UNITED STATES OF AMERICA,

                Plaintiff - Appellee,

           v.

IN THE MATTER OF THE SEARCH OF 235 SOUTH QUEEN STREET,
MARTINSBURG, WV,

                Defendant - Appellant.

Appeal from the United States District Court for the Northern
District of West Virginia, at Martinsburg.         Frederick P.
Stamp, Jr., Senior District Judge. (3:06-mj-00033-FPS-JES-1)

Argued:   September 25, 2008                 Decided:    November 4, 2008

Before MOTZ, KING, and DUNCAN, Circuit Judges.

Dismissed by unpublished per curiam opinion.            Judge King wrote a
separate concurring opinion.

ARGUED: William Benjamin Moffitt, III, MOFFITT & BROADNAX,
Alexandria, Virginia, for Appellant.  Paul Thomas Camilletti,
OFFICE OF THE UNITED STATES ATTORNEY, Martinsburg, West
Virginia; Randolph John Bernard, OFFICE OF THE UNITED STATES
ATTORNEY, Wheeling, West Virginia, for Appellee.   ON BRIEF:
Sharon L. Potter, United States Attorney, Wheeling, West
Virginia, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

     Appellant was indicted on various charges stemming from her

alleged scheme to defraud the government by over-billing for her

legal services to a federally subsidized program.                          The United

States sought access to her closed case files and electronic

records.     Appellant argued in response that the documents were

protected     by   various       privileges,       specifically      the    attorney-

client   privilege,        the   work    product     privilege,      and    the   Fifth

Amendment     privilege.          The    district      court    issued      an    order

rejecting Appellant’s assertions of privilege and this appeal

followed.

     Because       Appellant       retains       possession     of    the    disputed

documents and has not been cited with civil contempt for her

refusal to turn them over, this case presents an interlocutory

appeal     over    which    we    lack      jurisdiction.         Accordingly,      we

dismiss. 1

                                          I.

     Appellant      is     an    attorney       licensed   to   practice     in   West

Virginia.     On December 22, 2005, Appellant incorporated her law

     1
      Appellant also raises the issue of whether the subpoenas,
and subsequent court orders, ordering production of the disputed
documents   are  moot.     Because   we   dismiss for   lack  of
jurisdiction, we do not reach this issue.

                                            2
practice     into      a     Professional            Limited       Liability       Corporation

(“PLLC”).       During the fall of 2006, the United States Attorney’s

Office began an investigation of Appellant’s possible fraudulent

billing    of    the       West    Virginia      Public        Defender     Services.         On

November 17, 2006, a search team executed a search warrant at

Appellant’s law office.               The search team failed to find all of

Appellant’s      closed        case    files         and    electronic        records.        On

November 16 and 17, 2006, the investigating grand jury issued

two   subpoenas        duces       tecum     ordering         Appellant       to    appear    on

December 5, 2006, bringing all her closed case files, her server

and her backup hard drive.              Appellant failed to appear.

      Appellant subsequently sent a letter to the United States

Attorney’s       Office,          invoking       her       Fifth    Amendment        privilege

against    self-incrimination               as   to     the     act    of     producing      the

subpoenaed      materials.            The    United        States     filed    a    motion    to

compel production of the materials sought, which the district

court granted.         Various motions, including Appellant’s requests

for clarification and the United States’ motion to show cause,

followed.       While these motions were pending, the grand jury that

had issued the subpoenas on November 16 and 17, 2006 indicted

Appellant on mail fraud, wire fraud and conspiracy.                                Thereafter,

                                                 3
the    grand     jury’s    term   expired   and   no     new   grand   jury   was

empaneled. 2

       On July 11, 2007, the magistrate judge to whom the matter

was referred issued an order ruling on the attorney-client and

work product privileges for the various categories of subpoenaed

documents.       The magistrate judge dismissed without prejudice the

government’s claim that the crime-fraud exception vitiated these

privileges.       The magistrate judge found that, on the evidence

presented, the government had not established a prima facie case

of    fraud. 3    The     magistrate   judge   further    held   that,   because

Appellant incorporated her law practice as a PLLC on December

22, 2005, the Fifth Amendment act of production privilege does

not apply to corporate documents created or received after that

       2
      On July 10, 2007, the United States served a trial subpoena
duces tecum pursuant to Federal Rule of Criminal Procedure l7(c)
for the same disputed documents for use in a related criminal
case.   (Apparently there were clerical errors on the subpoena
which made it technically impossible to comply with.)     On July
11, 2007, Appellant filed a motion to quash the subpoena,
claiming that the United States was improperly using its
subpoena power as a discovery device. The issue of whether the
July 10, 2007 trial subpoena should be quashed or modified is
not currently before this court.
       3
      The government later submitted a supplemental memorandum,
together with several exhibits, in support of the application of
crime-fraud exception.   These filings formed the basis of the
district court’s November 19, 2007 ruling on the crime-fraud
exception.

                                        4
date.        Appellant     filed        several        objections      to    the    magistrate

judge’s order.

        On November 19, 2007, the district court entered an order

holding,      in    part,        that      the       crime-fraud      exception       vitiated

Appellant’s        attorney-client             and     work    product      privileges         with

respect      to    the   disputed          documents     and    that     Appellant        had    no

Fifth    Amendment       privilege          with      regard    to   corporate       documents

created      or    received      on     or     after     December      22,    2005,       as    the

privilege does not apply to corporations.                            The appeal before us

was taken from this order.

        As   of    the    date        of      oral     argument,      however,       Appellant

retained      possession         of     the    disputed        documents      and    no    civil

contempt order had been filed against her.                            As discussed below,

under controlling precedent such an appeal is interlocutory and

must be dismissed for lack of jurisdiction.

                                                 II.

        With certain narrow exceptions, the appellate jurisdiction

of this court extends only to appeals from final orders of a

district      court.        28    U.S.C.A        §     1291    (2006)    (“The      courts       of

appeals . . . shall have jurisdiction of appeals from all final

decisions of the district courts of the United States . . .”);

see Cobbledick v. United States, 309 U.S. 323, 324-25 (1940); In

re Carefirst of Md., Inc., 305 F.3d 253, 255 (4th Cir. 2002).

                                                 5
Generally, for purposes of section 1291, a district court order

is “final” if it “ends the litigation on the merits and leaves

nothing for the court to do but execute the judgment.”                             Catlin

v. United States, 324 U.S. 229, 233 (1945) (citation omitted).

So long as the matter remains unfinished, open, or inconclusive,

there may not be any intrusion by appeal.                         Cohen v. Beneficial

Indus. Loan Corp., 337 U.S. 541, 546 (1949).                            The purpose of

this       final    judgment     rule    is     to     combine    in    one   review    all

reviewable         stages   of   the    proceeding       in     order   to    enhance   the

effective administration of justice, preventing the harassment

and cost of interlocutory appeals from enfeebling the justice

system. 4      See Cohen, 337 U.S. at 546; Cobbledick, 309 U.S. at

325.

       Under        the     “collateral              order      doctrine”,       however,

interlocutory appeals are allowed in a small class of decisions

that       “finally   determine        claims     of    right    separable     from,    and

       4
      The Second Circuit has further expounded on the reasons for
the statutory requirement of finality for appealability:     “the
elimination of unnecessary appeals, since the complaining party
may win the case or settle it; the absence of irreparable harm
from the vast majority of orders requiring production of
documents; the potential for harassment of litigants by nuisance
appeals, and the fact that any appeal tends to delay or deter
trial or settlement of a lawsuit; the burden on the reviewing
court’s docket from appeals of housekeeping matters in the
district courts; and the slim chance for reversal of all but the
most unusual discovery orders.” Am. Express Warehousing, Ltd. v
Transamerica Ins. Co., 380 F.2d 277, 280 (2d Cir. 1967).

                                              6
collateral to, rights asserted in the action, too important to

be denied review and too independent of the cause itself to

require that appellate consideration be deferred until the whole

case is adjudicated.”             Cohen, 337 U.S. at 546.                For a collateral

order to be immediately reviewable, it must meet three stringent

conditions:         the    order     must      “[1]      conclusively         determine     the

disputed       question,     [2]     resolve       an    important      issue       completely

separate from the merits of the action, and [3] be effectively

unreviewable on appeal from a final judgment.”                           Will v. Hancock,

546     U.S.     345,     349    (2006)        (quotation        marks      and     citations

omitted).         An    order      that    fails        to    meet    any     one    of   these

requirements is not immediately appealable.                           See Carefirst, 305

F.3d at 258.        An order is “effectively unreviewable” only if the

order     at    issue     involves        an   asserted        right     “the       legal   and

practical       value   of      which     would    be    destroyed       if    it    were   not

vindicated before trial.”                 Lauro Lines S.R.L. v. Chasser, 490

U.S. 495, 498-99 (1989) (quotation marks and citations omitted).

Further, the value of the asserted right must be “of a high

order.”        Will, 546 U.S. at 352-53.                It is not the mere avoidance

of trial through an interlocutory appeal that counts when asking

whether an order is effectively unreviewable if review is left

until later, but rather what counts is the “avoidance of a trial

that     would     imperil       a   substantial             public    interest.”           Id.

(citation omitted) (emphasis added).

                                               7
       The        Supreme           Court     has       on    several     occasions      dealt

specifically with the appealability of discovery orders.                                      In

Alexander v. United States, 201 U.S. 117 (1906), the Court held

that       a   federal        circuit       court’s     order    directing     a    witness   to

answer questions and produce documents before a special examiner

lacked the finality requisite for appeal.                              Id. at 121-22.       Only

if the witness refused to comply and was held in contempt would

the right to appeal arise.                       Id.      Similarly, in Cobbledick, the

Court held that a witness ordered to testify in a grand jury

proceeding has no right of appeal “until the witness chooses to

disobey and is committed for contempt.”                               309 U.S. at 328; see

also United States v. Ryan, 402 U.S. 530, 532-33 (1971) (holding

that       the    respondent         may     refuse     to    comply    with   an   order     for

production         before       a    grand       jury   and    litigate    those     issues   if

contempt or similar proceedings are brought against him; if his

contentions are rejected by the trial court, they will only then

be   ripe        for    appellate       review). 5           Citing    Alexander,    Ryan     and

Cobbledick,            this    court       has    held,      “Orders   enforcing     subpoenas

       5
      In Perlman v. United States, 247 U.S. 7, 12-13 (1918), the
Court allowed immediate review of an order directing a third
party to produce documents that belonged to the appellant,
Perlman.   Id. at 12-13.    Perlman claimed that these documents
were immune from production.    Id.  To have denied review would
have left Perlman without recourse because the third party could
not have been expected to risk a contempt citation in order to
secure for Perlman an opportunity for judicial review. Id.; see
also Ryan, 402 U.S. at 532.

                                                    8
issued in connection with civil and criminal actions, or with

grand jury proceedings, are normally not considered final.               To

obtain immediate review of such a district court enforcement

order, the party to whom it is issued must defy it so that a

contempt order, which is considered final, is entered against

him.”   Reich v. Nat’l Eng’g & Contracting Co., 13 F.3d 93, 95

(4th Cir. 1993) (citations omitted); see also In re Subpoena

Duces Tecum, 228 F.3d 341, 345 (4th Cir. 2000).

    In the instant case, the district court’s order of November

19, 2007, holding that Appellant’s claims to various privileges

were either vitiated or inapplicable and ordering the production

of the disputed documents, was not a final order.               Rather, it

was a single phase in the drawn out criminal investigation into

Appellant’s billing activities.        Therefore, the only way that

the order is immediately appealable is if it fits within the

“collateral order doctrine.”

     Since   Appellant   retains   possession   and   control    over   the

disputed documents (making Perlman inapplicable) and she has not

been held in contempt for refusing to produce the documents,

this court’s precedent controls.        See Reich, 13 F.3d at 95.

There can be no immediate review of the district court’s order

since it is part of an ongoing dispute and Appellant has not

been held in contempt for her failure to comply.

                                   9
                                   III.

       Because Appellant’s appeal is not from a final order and

does not meet the requirements of the collateral order doctrine,

this   court   lacks   appellate   jurisdiction.   Accordingly,   the

appeal is

                                                          DISMISSED.

                                    10
KING, Circuit Judge, concurring:

        I write separately to express my considered view that the

lawyering in this case has resulted in a waste of judicial and

legal resources.

        Put succinctly, at oral argument the government abruptly

abandoned its earlier position on the viability of the subpoenas

and this entire proceeding — conceding that they are moot (and

that this appeal is merely an “academic exercise”) because the

grand    jury    expired      after     the    defendant   was       indicted.      The

government had theretofore — in both the district court and its

appellate       brief    —    consistently       maintained     to    the   contrary.

Thus, if the government’s mootness position had been recognized

and adopted in a timely manner, this proceeding would not have

occurred.       In any event, the prosecution does not bear all the

blame.     If the defense had conducted some elementary research,

it would have recognized the jurisdictional problems underlying

its effort to pursue an interlocutory appeal.

        Finally,   the       failures    of    the    lawyers   to    recognize     the

obstacles attendant to their respective positions were further

emphasized at oral argument.                  When the government’s lawyer was

asked by our presiding judge whether the lawyers had “talk[ed]

to each other,” his response was simply “never.”                      Such a lack of

communication      between      counsel       seems    inexcusable,      and   we   are

entitled to expect more.

                                          11
     That said, I agree that this appeal must be dismissed for

lack of jurisdiction and thus concur.

                               12