Court Opinion

ID: 9718131
Source: CourtListenerOpinion
Date Created: 2023-08-26 07:17:30.908383+00
Date Added: 2024-06-11T18:23:57.499133
License: Public Domain

ROBERT M. BELL, Judge,
dissenting.
I agree with the majority that “Rule 1.6 [of the Model Rules of Professional Conduct] applies to confidential communications between a client and an attorney in all situations except where the ‘evidence is sought from the lawyer through compulsion of law.’ ” (emphasis in original). The information, sought in this case, which has been subpoenaed, duces tecum, from the respondent, by the Office of the Attorney General involves attorney’s fees a former client paid respondent for representation in connection with a narcotics prosecution, a matter unrelated to the present tax investigation. Thus, it is the “attorney-client privilege rather than the Rules of Professional Conduct” on which we must focus. The circuit court erred when it applied Rule 1.6, perhaps as an adjunct to the attorney-client privilege, to quash the subpoena.
*14The “overwhelming weight of authority,” in this country, at least in the federal circuits, is, indeed, that records pertaining to a specific client’s payment of attorney’s fees and expenses are not privileged, i.e., they do not fall within the contours of the attorney-client privilege. In re: Grand Jury Proceedings, 88-9 (MIA), 899 F.2d 1039, 1042 (11th Cir.1990); See In re: Osterhoudt, 722 F.2d 591, 593 (9th Cir.1983); United States v. Hodge & Zweig, 548 F.2d 1347, 1353 (9th Cir.1977); In re: Michaelson, 511 F.2d 882, 889 (9th Cir.1975); In re: Grand Jury Proceedings (Pavlick), 680 F.2d 1026, 1027 (5th Cir.1982); In re: Grand Jury Proceedings (United States v. Jones), 517 F.2d 666, 670 n. 2 (5th Cir.1975); In re: Grand Jury Matter, 926 F.2d 348, 351 (4th Cir.1991); United States v. (Under Seal), 774 F.2d 624, 628 (4th Cir.1985), cert, denied, 475 U.S. 1108,106 S.Ct. 1514, 89 L.Ed.2d 913 (1986); In re Special Grand Jury No. 81-1, 676 F.2d 1005,1009 (4th Cir.1982); In re Shargel, 742 F.2d 61, 62 (2nd Cir.1984); Daniel J. Capra, Deterring the Formation of the Attorney-Client Relationship: Disclosure of Client Identity Payment of Fees, and Communications by Fiduciaries, 4 Geo. J. Legal Ethics, 235, 237 (1990); Steven Goode, Identity, Fees, and the Attorney-Client Privilege, 59 Geo.Wash.L.Rev. 307, 320-35 (1991).
The majority is correct that the facts of this case do not bring the requested fee information within any recognized exception to the general rule. Because former, rather than present clients, are involved in this case,1 the charges in connection with which respondent represented them have been resolved, and the subpoena relates to a tax investigation being conducted into their finances, which disclosure, *15by the respondent of the fee information would not implicate these clients in the matter for which they sought his legal advice. Nor is the information the last link the State needs to determine the clients’ identity and, thus, connect them with illegal activity, see In re: Grand Jury Proceedings (Pavlick), 680 F.2d at 1027; the subpoena having referred to the clients by name, identity simply is not an issue.2 Finally, since, as already noted, the clients did not consult the respondent about a tax investigation or tax matters, the “communication” exception does not apply.3
The combination of the lack of authority and, in the context of this case, the failure of the fee information to come within one of the exceptions, leaves the majority comfortable with its conclusion that fee information not only should, but must, be disclosed. Like other cases which have stated it, however, the majority opinion, too, fails to provide a reasoned basis upon which to justify that proposition as a matter either of reason or definition. See Steven Goode, Identity, Fees and the Attorney-Client Privilege, 59 Geo.Wash.L.Rev. at 321-22, in which the author, whose bottom line on the issue is the same as the majority’s, bemoans the cases’ lack of principled analysis. He points out that
[t]he starting point in Baird \v. Koerner, 279 F.2d 623 (9th Cir.1960)] as it has been in numerous cases that followed, was the oft-stated hornbook rule that the identity of a client is ordinarily not privileged. Although the justification for this rule is far from self-evident, it boasts a venerable heritage and was not challenged by the court. *16Instead, the court sought to show why this was not the ordinary case.” (footnotes omitted).
Id. The “venerable heritage,” to which Professor Goode refers really does relate to client identity, not, as is the issue in the instant case, the fees paid by the client. See Chirac v. Reinicker, 24 U.S. (11 Wheat) 280, 294, 6 L.Ed. 474 (1826) (footnotes omitted).
The rationales offered for holding that fee information is not confidential are not persuasive. See Goode, 59 Geo. Wash.L.Rev. at 348. One rationale for excluding fee information from the attorney-client privilege was stated in In re: Osterhoudt, 722 F.2d at 593: “Fee arrangements usually fall outside the scope of the privilege simply because such information ordinarily reveals no confidential professional communication between attorney and client, and not because such information may not be incriminating.” Another was stated in In re Shargel:
It seems evident to us that a broad privilege against the disclosure of the identity of clients and of fee information might easily become an immunity for corrupt or criminal acts. See McCormick, Evidence § 90 at 187 (2d ed. 1972) (“One who reviews the cases in this area will be struck with the prevailing flavor of chicanery and sharp practice pervading most of the attempts to suppress the proof of professional employment.”) Such a shield would create unnecessary but considerable temptations to use lawyers as conduits of information or of commodities necessary to criminal schemes or as launderers of money. The bar and the system of justice will suffer little if all involved are aware that assured safety from disclosure does not exist.
742 F.2d at 64. Still another policy reason was offered by the 9th Circuit:
The courts have inherent power to regulate the bar. The courts have the right to inquire into fee arrangements both to protect the client from excessive fees and to assist an attorney in collection of his fee, but more importantly, the court may inquire into fee arrangements *17to protect against suspected conflicts of interest. When an attorney is paid by someone other than his client to represent that client there is a real and present danger that the attorney may in actuality be representing not the interests of his client, but those of his compensator. Not only does the client have a right to know who is paying his attorney, but the court retains the right to satisfy itself that no conflict exists and that the attorney is fulfilling his duty of loyalty to his client.
511 F.2d at 888-89.
An important purpose of the attorney-client privilege is “to increase communication between clients and lawyers.” Goode, 59 Geo.Wash.L.Rev. at 314. In Maryland, we have said that the privilege is undergirded by the public policy that “ ‘an individual in a free society should be encouraged to consult with his attorney whose function is to counsel and advise him and he should be free from apprehension of compelled disclosures by his legal advisor’.” State v. Pratt, 284 Md. 516, 520, 398 A.2d 421, 423 (1979), quoting Harrison v. State, 276 Md. 122, 135, 345 A.2d 830, 838 (quoting Morris v. State, 4 Md.App. 252, 254, 242 A.2d 559, 561 (1968)). As Professor Goode points out, however, that purpose cannot be viewed in a vacuum:
Until a potential client actually becomes a client, no lawyer-client communication can occur. In analyzing attorney-client privilege issues, therefore, courts must be sensitive not only to the effect of their decisions on the willingness of existing clients to confide in their lawyers but also on the willingness of potential clients to become clients, (footnote omitted).
59 Geo.Wash.L.Rev. at 314. Neither can the reach of the privilege. See Pratt, 284 Md. at 520, 398 A.2d at 423 (“While never given an explicit constitutional underpinning, the privilege is, nevertheless, closely tied to the federal, as well as this State’s, constitutional guarantees of effective assistance of counsel and could, if limited too severely, make these basic guarantees virtually meaningless.”) Dan*18iel J. Capra, writing in 4 Geo. J. Legal Ethics at 238, puts it thusly:
The privilege is only one aspect of the trust and confidence that is necessary for an effective attorney-client relationship. The attorney’s ethical obligation to protect against disclosure of adverse client information extends beyond the evidentiary privilege. This obligation is based on the proposition that the trust and confidence which is the foundation of the attorney-client relationship do not rest solely on the privilege, but also on the expectation that the attorney has a duty of loyalty and will represent the client’s interests in every appropriate way. It is hardly conducive to trust and confidence if the attorney is forced to give damaging information about his client to the government. Moreover, forcing the attorney to become a witness against the client may require the attorney to disqualify himself with an obvious deleterious effect on the attorney-client relationship. Finally, a prosecutor’s subpoena of defense counsel can have a significant chilling effect on the lawyer and the bar as a whole.[4] (footnotes omitted).
See also Estate of Kofsky, 487 Pa. 473, 409 A.2d 1358, 1362 (1980).
It is safe to assume that most clients do not consider the matter at all, but it is also safe to assume that, were they to have thought about it, not one of them would expect that his or her fee arrangements would easily be revealed, even to the government. Indeed, I suspect that most would anticipate that fee information, like other communications or information shared with his or her lawyer, is,, and will remain, confidential. Requiring disclosure of fee information, even after the attorney-client relationship has ceased, I *19believe, is very likely to have an effect on a potential client’s willingness to consult an attorney.
Payment of attorney’s fees is necessary, not merely incidental, to the establishment of the attorney-client relationship.5 Ordinarily, payment is required before the relationship is formed and certainly before representation is provided. Unless the fees are paid, in most instances, there will be no attorney-client relationship. The fee is so intimately related to the attorney-client relationship, therefore, as to be inseparable from it. In short, payment of the attorney’s fees charged is at the very core of the relationship. The size of the fee may also suggest a great deal about the client’s case and representation, for example, just how critical the client’s situation is perceived to be, both by the client and by the lawyer, which, in turn, bears on how much the client is able to pay.
When the State subpoenas, as part of a tax investigation, an attorney’s fee information relating to a former client, it is hoping to uncover incriminating evidence, which the attorney served with the subpoena provides when the information sought is turned over. A dedicated and tenacious advocate who is required to furnish fee information on a former client may be transformed, in a matter of a few days, from that tenacious advocate on behalf of that client into a State’s witness against that client. And, despite the State’s and the majority’s refusal to acknowledge it, the matter about which that attorney will be a witness is intimately related to, if not inseparable from, the case in which he represented the client. Under these circumstances, as instances of fee information being subpoenaed become more and more frequent, counsel will find it necessary to advise potential clients that, at some time in the future, after the matter for which he or she was consulted *20has concluded, his or her records regarding the fee charged may be subpoenaed and, if that occurs, he or she will be obliged to respond by providing the State with the information it seeks, the fees paid. Stress and strain on the attorney-client relationship undoubtedly will result. To be sure, some potential clients will not be deterred from seeking the advice of counsel. Many, however, will be.
Among the consequences of requiring an attorney to turn over fee information on former clients and, thus, to become the State’s witness, perhaps its chief witness, against those clients is that, rather than consulting, and hiring, private counsel, potential clients, aware of that probability, may seek representation from the public sector, i.e. the public defender. This will increase the already heavy burden borne by that sector in assuring meaningful access to counsel. On the other hand, where public defender representation is not available, potential clients may choose to forego counsel altogether and represent themselves. Under either scenario, it is the legal profession that loses; the attorney-client relationship will be inhibited where it does not exist and undermined, where it does.
Permitting a lawyer to be used as a source of information to be used to prosecute that lawyer’s former clients has another, and perhaps even more significant, consequence: the process may easily be abused.6 If a lawyer’s fee records are to be allowed to be subpoenaed in a tax investigation, tax prosecutions may thereby require minimal investigation and, so, may render tax prosecutions a more viable and, effective, prosecution option than conventional prosecutions.7 Prosecutors may conclude, and act on the prem*21ise, that so long as the predicate for the tax investigation is laid — the defendant is charged with a substantive offense requiring him or her to consult, and pay, counsel — it does not much matter whether the case is lost or aborted prior to trial; a viable back-up prosecution, which can build on the aborted, or lost, one and requiring no more than a subpoena for an attorney’s fee records, is still available. Thus, rather than providing an incentive diligently to build a case on substantive charges, the availability of the lawyer’s records as a source of evidence in a tax prosecution, provides the opposite incentive. Prosecutors may be encouraged to initiate prosecutions quickly and to terminate them as soon as possible; with the predicate in place — the defendant has consulted, and presumably paid, counsel for defending him or her in the aborted prosecution — the State can move quickly to pursue him or her on another front, success in the initial prosecution being secondary to the ultimate goal of nailing the defendant on any charge possible. Building the tax case could become, in reality, the only seriously pursued prosecution.8
While I do not quarrel with the philosophy of vigorously pursuing criminals wherever they may operate and nailing them as often as possible, I do quarrel with the role the attorney is forced to play in the process. In my opinion, there is something unseemly and repugnant, not to mention inappropriate, about permitting the State to maintain a prosecution on this basis and there is also something very *22wrong with implicating counsel in it. It is “well-established that ‘the defendant has a right ... to compel the State to investigate its own case, find its own evidence, and prove its own facts.’ ” Pratt, 284 Md. at 524, 398 A.2d at 426, quoting United States v. Wright, 489 F.2d 1181, 1195 (D.C.Cir.1973).
There may be justification for the subpoena of an attorney’s fee information if the attorney were the only source of evidence of a defendant’s tax evasion. There is no indication in this record that the State seeks the attorney’s records as a last resort, or that the information is not available from another source. I am satisfied that the information the State seeks in this income tax investigation is available from other sources: the former client’s bank records or the records of merchants with whom he or she has dealt, such as car dealers, clothing stores, credit card companies, etc.9
The majority opinion contains another troubling premise: “that the ,‘rule of disclosure seems the approach most consonant with the preservation of the repute of the lawyer’s high calling.’ ” At 11, quoting Charles McCormick, Evidence, § 90 at 216 (E. Cleary 3d ed. 1984).
The lawyer’s high calling is not compromised when a lawyer, true to that calling and consistent with his or her role as advocate, defends a criminal defendant charged with unpopular, even dastardly, charges. Nor is it compromised when that same lawyer, recognizing the potential effects on the attorney-client relationship, resists the State’s efforts to make him its instrument in the prosecution of former clients. There is no suggestion of “chicanery or sharp practice” by counsel in this case. Furthermore, the fact that portions of the client population may be tempted to *23“misuse” lawyers and, indeed, some lawyers may allow themselves to be so used,10 is not a sufficient basis for ordering the disclosure of fees or holding that they are outside the privilege. In my opinion, the vast majority of lawyers take seriously their obligations, both ethical and professional. I would trust them to do the right thing rather than abridging the attorney-client privilege/relationship, on the assumption that they will not.
Like Judge Politz, dissenting in In Re: Grand Jury Proceedings (Pavlick), I believe this decision may be the beginning of the demise of the attorney-client relationship and, hence, privilege in this State. I adopt his lament:
The drug traffic is abhorrent. This cancer on our social fabric must be eradicated. The desire to pursue vigorously all suspected participants is understandable and laudatory. Many things may be sacrificed in this effort, but the attorney-client privilege is not, to me, a forfeitable item. The privilege is of such value to our civilized society and system of criminal justice that I must regretfully dissent from today’s ruling and its natural consequence — defense counsel becoming the government’s unwilling instrument for the investigation and prosecution of clients for past criminal acts. I am convinced that society’s momentary gain from this development will be far outdistanced by its ultimate loss, (emphasis in original)
680 F.2d at 1034. I add that, given the chilling effect of requiring fee information to be disclosed once representation has ceased, soon there may not be an attorney-client *24privilege to protect because there will be no attorney-client relationship.11

. I refer only to the situation in which former clients’ fee information is subpoenaed and I read the majority opinion as discouraging, rather than condoning, the subpoena of the fee information concerning present clients. Although it is clear to me that the attorney-client relationship is impacted "more directly when clients, rather than former clients, are involved, in candor, aside from that fact, there seems to be little reason for distinguishing between former and present clients if, in neither case, is the fee information within the privilege.

. It may be asked: should the last link theory automatically apply to an investigation into violations of the prosecution for income tax laws, since the amount paid the attorney necessarily will provide a substantial, if not the final, link, in the chain of evidence necessary for the defendant’s indictment? I would answer "yes.”

. That exception applies when disclosure of the information subpoenaed would necessarily disclose a confidential communication. See e.g. Tornay v. United States, 840 F.2d 1424, 1428 (9th Cir.1988); United States v. Jeffers, 532 F.2d 1101, 1115 (7th Cir.1976), vacated in part on other grounds, 432 U.S. 137, 97 S.Ct. 2207, 53 L.Ed.2d 168 (1977).

. While this passage seems directed at situations in which there are on-going attorney-client relationships, much of what the author says applies equally to former attorney-client relationships, especially when service of a subpoena reasonably can be anticipated. See infra.

. Of course, because attorney’s fees are ordinarily not an issue in the case of the public defender or when services are rendered pro bono, my focus is on the private attorney who hopes his or her business is profitable.

. We do not here deal with Internal Revenue Code § 60501, as to which no contentions are made. That regulation cannot justify an extension of the incursions into the attorney-client relationship/privilege. One ill-advised regulation is not justification for another ill-advised step.

. Maryland Code (1988), §§ 13-1001 and 13-1002 of the Tax General Article reveal that one who violates the State income tax laws is subject to a not insubstantial penalty, although, admittedly, not so *21severe as most mandated by the State narcotics laws. For failure wilfully to file an income tax return, the penalty is “a fine not exceeding $5000 or imprisonment not exceeding 5 years or both.” § 13~1001(c). The penalty for wilfully filing a false return (which is the likely offense for a narcotics dealer) is the penalty for perjury, § 13-1002(b), or 10 years. Maryland Code (1957, 1992 Repl.Vol.) Art. 27, § 439.

. In its initial brief, the State acknowledges that it has initiated a prosecution program of prosecuting known or suspected narcotics traffickers for violation of the State income tax laws. It asserts, as justification for the program, without reference to any source, that "[a]n expense common to these individuals is attorneys fees.”

. The relationship between attorney and client has elements, that none of these other relationships has — trust and confidence. Indeed, it is the relationship, as well as the legal skills the lawyer possesses, that the fees purchase. In my view, the attorney-client relationship can not be equated with these other relationships.

. This case, and the approach which it certifies, is about the drug traffic. The clients were charged with narcotics violation and the State’s brief very candidly describes the purpose of its prosecution program: “the investigation of known and suspected narcotics traffickers for violations of State income tax laws," both of which facts the majority opinion also acknowledges.

. A lawyer engaged with a client in a criminal enterprise is another kettle of fish entirely — the privilege does not apply to that relationship and, in any event, there is no scarcity of resources available to prosecute that lawyer who, by the way, should be prosecuted, and a disciplinary mechanism which can be engaged to remove him or her from the "high calling.” Of course, in that circumstance, as is true whenever a disclosure may tend to be incriminatory, the lawyer may legitimately interpose his or her fifth amendment privilege.