In re A Witness before the Special Grand Jury 2000-2

In the

United States Court of Appeals

For the Seventh Circuit

No. 01-3386

IN RE: A WITNESS BEFORE THE SPECIAL

GRAND J URY 2000-2.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 98 GJ 596—Marvin E. Aspen, Chief Judge.

ARGUED OCTOBER 29, 2001 — DECIDED APRIL 23, 2002*

Before FLAUM, Chief Judge, and POSNER and DIANE P.

WOOD, Circuit Judges.

DIANE P. WOOD, Circuit Judge. The central question on

this appeal is whether a state government lawyer may

refuse, on the basis of the attorney-client privilege, to

disclose communications with a state officeholder when

faced with a grand jury subpoena. The district court found

that in the context of a federal criminal investigation, no

such government attorney-client privilege existed. We

agree with this determination, and therefore affirm.

I

Roger Bickel was employed by the state of Illinois as

Chief Legal Counsel to the Secretary of State’s office

*

This opinion is being initially released in

typescript. The printed version will follow.

2 No. 01-3386

during the first four years of former Secretary (now

Governor) George Ryan’s administration. Bickel provided

legal counsel and advice to Ryan and other Secretary of

State officials as they carried out their public duties.

Bickel has also served as a personal lawyer to Ryan, his

wife, and Ryan’s campaign committee, Citizens for Ryan,

since at least 1989.

For the past three years, federal prosecutors have been

investigating a “licenses for bribes” scandal in the Illinois

Secretary of State’s office, dubbed “Operation Safe Road.”

The alleged (and in some instances admitted) corruption

extends to the improper issuance of commercial drivers’

licenses, specialty license plates, leases, and other

contracts; the improper use of campaign funds for the

personal benefit of Secretary of State employees; and

obstruction of justice in connection with internal office

investigations. Because of his role in advising then-

Secretary Ryan, federal prosecutors soug ht to discuss

these matters with Bickel. Initially, they tried scheduling

a voluntary interview with him for this purpose, but Ryan

objected to the meeting and advised both Bickel and the

federal prosecutors that he had not waived and would not

waive the attorney-client privilege with respect to any of

his prior conversations with Bickel.

After several avenues for resolving the problem proved

unsuccessful, the federal prosecutors served a subpoena

from the grand jury that commanded Bickel to appear and

testify before that body about all conversations he had

with Ryan in his official capacity as General Counsel.

They also obtained a motion to compel Bickel to testify

about those matters. Finally, the United States secured a

letter from Illinois’ current Secretary of State, Jesse

White, in which the latter purported to waive the Office’s

attorney-client privilege as to all of Bickel’s official

conversations with “all personnel and officials of the

Secretary of State, regardless of their particular position

or office.” Ryan continued to oppose all efforts to obtain

allegedly privileged information from Bickel.

No. 01-3386 3

On September 7, 2001, the district court granted the

United States’ motion to compel, finding that no attorney-

client privilege attached to the communications at issue,

and, alternatively, that if a privilege did attach, White had

effectively waived it. While the motion to compel does not

create a final judgment, we permit clients to immediately

appeal a court order that their attorney testify before a

grand jury under the exception recognized in Perlman v.

United States, 247 U.S. 7 (1918). See United States v.

Evans, 113 F.3d 1457, 1458 (7th Cir. 1997); In re Grand

Jury Proceeding, 68 F.3d 193, 195 (7th Cir. 1995); United

States v. Davis, 1 F.3d 606, 607 (7th Cir. 1993). We

therefore have jurisdiction over this appeal.

II

We review de novo the question whether Ryan may

invoke the attorney-client privilege to shield Bickel’s

testimony before the federal grand jury. See Upjohn Co. v.

United States, 449 U.S. 383 (1981). The federal courts have

authority to recognize privilege claims under the federal

common law. Fed. R. Evid. 501. While Rule 501 manifests

a congressional desire to grant courts the flexibility to

determine privileges on a case-by-case basis, Trammel v.

United States, 445 U.S. 40, 47 (1980), “these exceptions to

the demand for every man’s evidence are not lightly

created nor expansively construed, for they are in

derogation of the search for truth.” United States v. Nixon,

418 U.S. 683, 710 (1974); In re Grand Jury Proceedings, 220

F.3d 568, 571 (7th Cir. 2000).

One of the oldest and most widely recognized privileges

is the attorney-client privilege, which protects

confidential communications made between clients and

their attorneys for the purpose of securing legal advice.

Swidler & Berlin v. United States, 524 U.S. 399, 403 (1998).

It is well established that a client may be either an

individual or a corporation. See, e.g., Upjohn, 449 U.S. at

390 (1981). But here, we have a special case: the client is

neither a private individual nor a private corporation. It

4 No. 01-3386

is instead the State of Illinois itself, represented through

one of its agencies. There is surprisingly little case law on

whether a government agency may also be a client for

purposes of this privilege, but both parties here concede

that, at least in the civil and regulatory context, the

government is entitled to the same attorney-client

privilege as any other client. See Green v. IRS, 556 F.

Supp. 79, 85 (N.D. Ind. 1982) (privilege “unquestionably”

applies to conversations between government lawyers and

administrative personnel), aff’d, 734 F.2d 18 (7th Cir.

1984); Restatement (Third) of Law Governing Lawyers § 74

(2000) (“[T]he attorney-client privilege extends to a

communication of a governmental organization.”). We

therefore proceed on that basis.

In the case of private parties, the privilege functions

identically in both civil and criminal proceedings.

Swidler, 524 U.S. at 408-09 (finding “no case authority for

the proposition that the privilege applies differently in

criminal and civil cases”). The United States, however,

contends that the privilege between a government

attorney and her official client does not extend to criminal

proceedings, such as a grand jury investigation. It is

supported in that position by decisions of two courts of

appeals (both with thoughtful dissents) arising from

Independent Counsel investigations of President Clinton.

See In re Lindsey, 158 F.3d 1263 (D.C. Cir. 1998); In re

Grand Jury Subpoena Duces Tecum, 112 F.3d 910 (8th Cir.

1997). Ryan argues that those cases were wrongly decided,

at least insofar as they might apply here to support a

distinction between governmental clients and private

clients.

The first question we face is whether recognizing a

privilege in this case would be an expansion of the current

scope of the attorney-client privilege, or if a refusal to

recognize the privilege would amount to a contraction of

an existing privilege. Although this may seem like two

sides of the same coin, it is not: the Supreme Court has

instructed us, in developing a federal common law of

No. 01-3386 5

privileges, to avoid either derogating existing privileges

or extending privileges to new, uncharted waters absent

compelling considerations. Jaffee v. Redmond, 518 U.S. 1,

9 (1996). Unfortunately, there is no clear-cut answer to

this question because, outside of former Secretary Ryan

and the Clinton administration, only one government

body, the Detroit City Council, has ever attempted to

claim such a privilege in the criminal context. In re Grand

Jury Subpoena, 886 F.2d 135 (6th Cir. 1989). Thus, one

could argue either that, since historically the privilege has

never been claimed, recognizing it would be an extension,

or that, since no court has ever recognized a civil-criminal

distinction to the privilege, creating one here would

constitute an exception.

While Swidler rejected a civil-criminal distinction for

the privilege as to individuals, other courts have

recognized that the governmental context is different,

even after that decision, and have limited the privilege for

governmental agencies in the criminal context. See

Lindsey, 158 F.3d at 1272. This position is supported by

the leading treatise. 24 Charles Alan Wright & Kenneth

W. Graham, Jr., Federal Practice and Procedure § 5475, at

125-27. Furthermore, the pedigree of the privilege

recognized in Swidler was far more impressive than the

governmental privilege for which Ryan argues here.

Swidler focused on whether the privilege survived the

death of the individual client, a proposition that the

common law had assumed for over a century. Swidler, 524

U.S. at 404, citin g Russell v. Jackson, 68 Eng. Rep. 558

(V.C. 1851). The government attorney-client privilege has

no such deep historical roots. We therefore reject Ryan’s

contention that Swidler compels us to find an absolute

privilege in the criminal context just because we

acknowledge a government attorney-client privilege in the

civil context. Even the dissenting judges in the Clinton

cases were unwilling to go so far as this. Lindsey, 158 F.3d

at 1283 (Tatel, J., dissenting) (“[G]overnment lawyers

working in executive departments and agencies enjoy a

6 No. 01-3386

reduced privilege in the face of grand jury subpoenas”);

Duces Tecum, 112 F.3d at 935-38 (Kopf, J., dissenting)

(finding that in criminal context government could

overcome privilege through procedural protections and

specific showing of need). Compare Branzburg v. Hayes,

408 U.S. 665 (1972) (no First Amendment-based reporter’s

privilege to refuse to testify before grand jury). Our

decision here instead must rest on whether the policy

reasons for recognizing an attorney-client privilege in

other contexts apply equally when the United States seeks

information from a government lawyer.

Ryan argues that they do. His main contention is that

the attorney-client privilege has been created “to

encourage full and frank communication between

attorneys and their clients and thereby promote broader

public interests in the observance of law and the

administration of justice.” Upjohn, 449 U.S. at 389. If

government officials know that conversations with

attorneys in their offices are not privileged, they will

avoid the candid discussion of sensitive legal matters.

Lindsey, 158 F.3d at 1286-87 (Tatel, J., dissenting). This

could lead to more legal violations and corruption in

public office. Duces Tecum, 112 F.3d at 930-32 (Kopf, J.,

dissenting). Alternatively, uninformed public officials

afraid to obtain legal advice will be unable effectively to

carry out their policy objectives, hampering the

implementation of government programs. Id. at 932.

Indeed, absent a privilege, citizens might be unwilling to

serve in public office at all.

While we recognize the need for full and frank

communication between government officials, we are more

persuaded by the serious arguments against extending the

attorney-client privilege to protect communications

between government lawyers and the public officials they

serve when criminal proceedings are at issue. First,

government lawyers have responsibilities and obligations

different from those facing members of the private bar.

While the latter are appropriately concerned first and

No. 01-3386 7

foremost with protecting their clients – even those

engaged in wrongdoing – from criminal charges and public

exposure, government lawyers have a higher, competing

duty to act in the public interest. Lindsey, 158 F.3d at

1273; Comment to ABA Model Rule 1.13 (noting that

government lawyers may have higher duty to rectify

wrongful official acts despite general rule of

confidentiality). They take an oath, separate from their

bar oath, to uphold the United States Constitution and the

laws of this nation (and usually the laws of the state they

serve when, as was the case with Bickel, they are state

employees). Their compensation comes not from a client

whose interests they are sworn to protect from the power

of the state, but from the state itself and the public fisc.**

It would be both unseemly and a misuse of public assets to

permit a public official to use a taxpayer-provided

attorney to conceal from the taxpayers themselves

otherwise admissible evidence of financial wrongdoing,

official misconduct, or abuse of power. Compare Nixon, 418

U.S. at 713 (qualified executive privilege applies in the

face of a criminal investigation). Therefore, when another

government lawyer requires information as part of a

criminal investigation, the public lawyer is obligated not

to protect his governmental client but to ensure its

compliance with the law.

This discussion necessarily points out another crucial

difference between a government lawyer’s clients and the

**

Of course, a state may provide an officeholder

with an individual taxpayer-provided attorney to

represent her in, for example, a Bivens action or an

independent counsel investigation and could perhaps even

specify by statute that the first duty of an agency’s general

counsel ran always to the head of the agency as individual

rather than officer. Here, however, there is no indication

that Illinois has abrogated the traditional understanding

that an organizational attorney’s client is the organization.

8 No. 01-3386

clients of other lawyers. Individuals and corporations are

both subject to criminal liability for their transgressions.

Individuals will not talk and corporations will have no

incentive to conduct or cooperate in internal

investigations if they know that any information disclosed

may be turned over to authorities. Swidler, 524 U.S. at

407. A state agency, however, cannot be held criminally

liable by either the state itself or the federal government.

See United States v. Price, 383 U.S. 787, 810 (1967). There

is thus no need to offer the attorney-client privilege as an

incentive to increase compliance with the laws. True,

individual state employees can be held liable, and many

have been found guilty of crimes in this very investigation.

But the privilege with which we are concerned today runs

to the office, not to the employees in that office. See Ill.

Sup. Ct. R. 1.13 (2001) (making clear that an organizational

lawyer’s duty is to the organization, not the organization’s

individual officers). Just as a corporate attorney has no

right or obligation to keep otherwise confidential

information from shareholders, Garner v. Wolfinbarger,

430 F.2d 1093, 1101 (5th Cir. 1970), so a government

attorney should have no privilege to shield relevant

information from the public citizens to whom she owes

ultimate allegiance, as represented by the grand jury.

Branzburg, 408 U.S. at 688 (noting grand jury’s

presumptive “right to every man’s evidence”).

In formulating privileges, this court cannot ignore the

interests and responsibilities of the coordinate entities

within our federal system, all of which are sworn to

uphold the public interest and committed to the “general

duty of public service.” Duces Tecum, 112 F.3d at 920.

Public officials are not the same as private citizens

precisely because they exercise the power of the state.

With this responsibility comes also the responsibility to

act in the public interest. It follows that interpersonal

relationships between an attorney for the state and a

government official acting in an official capacity must be

subordinated to the public interest in good and open

No. 01-3386 9

government, leaving the government lawyer duty-bound to

report internal criminal violations, not to shield them

from public exposure. Nixon, 418 U.S. at 712-13

(recognizing executive interest in confidentiality may be

lessened in face of criminal investigation); Lindsey, 158

F.3d at 1273 (noting public interest in “transparent and

accountable government”).

In the final analysis, reason and experience dictate that

the lack of criminal liability for government agencies and

the duty of public lawyers to uphold the law and foster an

open and accountable government outweigh any need for

a privilege in this context. An officeholder wary of

becoming enmeshed in illegal acts may always consult

with a private attorney, and there the privilege

unquestionably would apply. While Ryan fears that our

refusal to recognize a privilege will cause even the most

trivial of matters to be taken to outside counsel, this

strikes us as unduly alarmist. In fact, analogous rules

apply in th e corporate realm, where attorneys are

repeatedly admonished to advise corporate officials that

they are not personal clients of the attorney and may wish

to retain other counsel. These rules do not appear to have

stifled corporate discussion or proved impossible to

administer, and we see no reason why a similar result

cannot be countenanced here.

Ryan makes one final argument in favor of his assertion

of a governmental privilege: in a word, federalism. He

notes that the two leading cases in this area involved the

assertion of a privilege by a lawyer for the federal

government, vis à vis a federal investigation. From this, he

argues that even if federal attorneys lack an attorney-

client privilege in criminal proceedings, state-employed

attorneys should receive one. See Grand Jury Subpoena,

886 F.2d at 138 (implicitly finding that attorney for Detroit

City Council could assert privilege); Duces Tecum, 112

F.3d at 917 (noting in dicta that assertion by a state

attorney “implicates potentially serious federalism

concerns”).

10 No. 01-3386

Although we recognize the importance of federalism in

general, we do not see its relevance to the present

situation. Neither of the cases on which Ryan relies

offered a square holding that an attorney-client privilege

exists between state government lawyers and their state

clients that can override the interests of a federal grand

jury. The Eighth Circuit’s assertion is dicta, and the Sixth

Circuit never analyzed the unique features of a

government-attorney-client privilege, as it was focused

almost entirely on the question whether the attorney’s

advice in that case was even confidential under state law.

Grand Jury Subpoena, 886 F.2d at 138-39. Now that the

question is before us, we can see no reason why state

government lawyers are so different from federal

government lawyers that a different result is justified.

Although the Supreme Court has recognized important

Eleventh Amendment limitations on the ability of private

parties to bring suits against the states, it has made clear

that the United States may still sue a state to enforce the

nation’s laws. Alden v. Maine, 527 U.S. 706, 755 (1999);

Monaco v. Mississippi, 292 U.S. 313, 329 (1934). This

structural fact about our federal system implies that state

officials, including state lawyers, likewise enjoy no

immunity from disclosing relevant information to a federal

grand jury. See In re Special April 1977 Grand Jury, 581

F.2d 589, 592 (7th Cir. 1978).

Finally, we note that the federal courts have never

afforded an evidentiary privilege to the states that is not

also afforded to the federal government. In fact, the most

pertinent case from the Supreme Court cuts the other

way. In United States v. Gillock, 445 U.S. 360, 370-73 (1980),

the Court refused to acknowledge a privilege in a criminal

proceeding for statements made by a state senator, even

though similar statements would have been privileged

under the Speech or Debate Clause, U.S. Const. Art. I, § 6,

cl. 1, if they had been made by a federal legislator. The

Court rejected the idea that either separation of powers or

comity required the judiciary to create a privilege in favor

No. 01-3386 11

of state governments. Instead, “where important federal

interests are at stake, as in the enforcement of federal

criminal statutes, comity yields.” Id. at 373. Thus, a state

privilege should not be recognized if it will impair

legitimate federal interests and provide “only speculative

benefit” to a state official. Id. Having already determined

that the policy reasons behind the attorney-client

privilege do not justify its extension to government

attorneys in the context of criminal investigations, we

decline the invitation to make any distinction between

state and federal attorneys for ill-defined reasons of

federalism.

III

The district court also determined that the current

Secretary of State, Secretary White, was the holder of his

Office’s attorney-client privilege and had the power to

waive that privilege as to conversations occurring before

he took office. In light of our holding that none of the

conversations between Bickel and Ryan made in their

official capacities as General Counsel and Secretary of

State are privileged in the face of a federal grand jury

subpoena, we express no opinion on this determination.

The judgment of the district court is AFFIRMED.