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In re 2015-2016 Jefferson County Grand Jury

Supreme Court of Colorado, En Banc

February 5, 2018

In Re 2015-2016 Jefferson County Grand Jury, and concerning grand jury witness Amy Brimah.

         Original Proceeding Pursuant to C.A.R. 21 Jefferson County District Court Case No. 15CR2 Honorable Dennis Hall, Judge

          Attorneys for Petitioner Amy Brimah: Richilano Shea LLC John M. Richilano Keyonyu X. O'Connell Denver, Colorado.

          Attorneys for Petitioner M.W.: McDermott Stuart & Ward LLP Sean McDermott Denver, Colorado.

          Attorneys for Respondent The People of the State of Colorado: Peter A. Weir, District Attorney, First Judicial District Donna Skinner Reed, Chief Appellate Deputy District Attorney Lisa Scanga, Deputy District Attorney Golden, Colorado

          Attorneys for Amicus Curiae Colorado Bar Association: Mountain Law Group, LLC John W. Dunn Vail, Colorado Holland & Hart, LLP Marcy G. Glenn Denver, Colorado

          Attorneys for Amicus Curiae Colorado Defense Lawyers Association: Gordon & Rees LLP John M. Palmeri John R. Mann Heather K. Kelly Megan M. Rose Denver, Colorado

          Attorneys for Amicus Curiae Colorado District Attorneys' Council: Thomas R. Raynes, Executive Director Timothy Lane, Staff Attorney Denver, Colorado

          Attorneys for Amicus Curiae Colorado Trial Lawyers Association: Haddon, Morgan and Foreman, P.C. Norman R. Mueller Rachel A. Bellis Denver, Colorado.

          OPINION

          HOOD JUSTICE

         ¶1 This original proceeding arises from a grand jury investigation of petitioner M.W. and his company, I.I. The People suspected that I.I. was manufacturing and distributing a cigarette product illegally sprayed with synthetic cannabinoids. As part of the grand jury investigation, the People issued a subpoena duces tecum to I.I's attorney Amy Brimah, ordering her to produce all materials related to any representation by her of I.I. and M.W. The People also requested a hearing, outside the presence of the grand jury and before a judge.

         ¶2 Brimah and M.W. moved to quash the subpoena, arguing that the materials were protected by the attorney-client privilege. The People asserted that the crime-fraud exception to the attorney-client privilege applies. Brimah and M.W. disagreed and countered that the district court judge would at least need to review each document to determine whether to strip any document of its privileged status.

         ¶3 The district court denied Brimah's and M.W.'s motions. It declined to review the documents individually and ordered Brimah to produce the requested materials. Brimah and M.W. petitioned this court for a rule to show cause. We issued the rule.

         ¶4 We hold that a two-step process applies when a party seeks disclosure of attorney-client-privileged documents under the crime-fraud exception. First, before a court may review the privileged documents in camera, it must "require a showing of a factual basis adequate to support a good faith belief by a reasonable person that wrongful conduct sufficient to invoke the crime or fraud exception to the attorney-client privilege has occurred." Caldwell v. Dist. Court, 644 P.2d 26, 33 (Colo. 1982). Second, the court may strip a communication of privilege only upon a showing of probable cause to believe that (1) the client was committing, or attempting to commit, a crime or fraud and (2) the communication was made in furtherance of the putative crime or fraud. Because the People failed to make such a showing here, the district court abused its discretion in stripping the documents of privilege.

         ¶5 Brimah and M.W. also argue that the district court should have required the People to disclose the applications and authorizations for the intercepts on which it premised its subpoena under Colorado's wiretap statute, specifically section 16-15-102(9), C.R.S. (2017). On the facts present here, we agree. Therefore, we reverse the district court on this point as well.

         ¶6 Accordingly, we make the rule to show cause absolute, and we remand this case to the district court for further proceedings consistent with this opinion.

         I. Facts and Procedural History

         ¶7 In 2014, the People began investigating M.W. and his company, I.I., based on their suspicion that I.I. was manufacturing and distributing a cigarette product, NBT Herbal Cigarettes, illegally laced with synthetic cannabinoids. I.I.'s cigarette-distribution activities waned or even stopped in late 2015 as a result of police intervention, though the timing of this wind-down isn't clear. It is undisputed that, at least by December 2, 2015, when the police executed a search warrant and seized items, I.I.'s distribution of cigarettes had been "substantially curtailed" (as conceded by counsel for the People at a hearing on August 11, 2016).

         ¶8 On June 25, 2016, the People served Amy Brimah, counsel for I.I., with a subpoena duces tecum, ordering her to appear in court three days later and to produce "[a] copy of any file, whether physical or electronic, that pertains to the representation of [M.W.], [I.I.], and NBT Herbal Cigarettes from February 19, 2013 to the present." The subpoena said, "There will be a hearing on whether these documents are privileged."

         ¶9 Along with the subpoena, the People served a notice of hearing[1] for the district court to determine whether the crime-fraud exception to the attorney-client privilege applied to communications between M.W. and Brimah. The People identified three categories of privileged materials at issue: (1) emails between M.W. and Brimah, dated between February 19, 2013, and November 4, 2015, that were in the People's possession though unread; (2) intercepted phone communications between M.W. and Brimah that were in the People's possession though unheard; and (3) Brimah's files pertaining to M.W. and I.I., as requested in the subpoena. As "an offer of proof that the crime-fraud exception applies, " the People provided summaries of some of M.W.'s phone calls with business associates (not with Brimah) that police had intercepted. The summarized calls had been made on July 14, September 22, and October 1 of 2015.[2]

         ¶10 Brimah and M.W. filed motions to quash the subpoena, on which the district court held a hearing. According to Brimah and M.W., it was not until that hearing that they learned the subpoena was issued as part of a grand jury proceeding. The court set a second hearing, in order to give Brimah and M.W. additional time to formulate their arguments in opposition.

         ¶11 The People then issued a new subpoena duces tecum, this time clearly identified as a grand jury subpoena. The language of the subpoena changed as well. It required Brimah to appear in court on July 18, 2016, and to produce "any and all documents, books and records and/or files, whether physical, electronic, or other format, that pertains [sic] to the representation of [M.W.], [I.I.], and/or NBT Herbal Cigarettes, including but not limited to contracts, account statements, notices, communications, or other material in your possession."

         ¶12 Brimah and M.W. again responded with motions to quash. They renewed their objection based on privilege and also asserted that the subpoena was founded on intercepted communications authorized by wiretap orders that the People had failed to disclose to them, in violation of section 16-15-102(9). (Section 16-15-102(9) requires that, before the contents of any intercepted wire, oral, or electronic communication may be admitted in any trial, hearing, or other proceeding in a state court, each party must be furnished with a copy of the application and court order authorizing the interception.)

         ¶13 The district court denied the motions to quash. Because there was "abundant evidence" Brimah was engaged in routine legal work furthering I.I.'s business and the only business of I.I. was illegal, the court reasoned that the materials sought by the People's subpoena must have been made for the purpose of aiding in the commission of a continuing crime, and therefore were not protected by the attorney-client privilege. Under these circumstances, the court considered an in camera review[3] of the subpoenaed materials unnecessary.[4]

         ¶14 A problem with service of the subpoena prompted repetition of this series of events. In her new motion to quash, Brimah added the argument that the crime-fraud exception could not apply to any attorney-client communications after I.I.'s cigarette distribution had been curtailed in late 2015. She pointed out that the crime-fraud exception applies only to communications in furtherance of a continuing or future crime. Because I.I.'s only activity alleged to be criminal had ceased as a result of government intervention in late 2015, Brimah argued, any communications afterwards could not have been in furtherance of a continuing or future crime.

         ¶15 Ultimately, the court reiterated its previous order: Because there was no suggestion in the evidence that I.I. engaged in any lawful activity, all of Brimah's materials pertaining to I.I. fell within the crime-fraud exception. The court once again declined to conduct an in camera review of the subpoenaed materials, because it concluded the materials "ipso facto" fell within the exception. The court also concluded that section 16-15-102(9) does not pertain to grand jury proceedings.

         ¶16 Brimah and M.W. jointly petitioned this court to exercise its original jurisdiction and issue a rule to show cause why their confidential attorney-client communications and files should be disclosed under the crime-fraud exception, and why they are not entitled to disclosure of the wire intercept authorization materials under section 16-15-102(9). We issued the requested rule.

         II. Original Jurisdiction

         ¶17 We may choose to exercise our original jurisdiction when an ordinary appellate remedy would be inadequate. C.A.R. 21(a)(1). We have done so when a party "is wrongfully required to disclose confidential records, [such that] the damage will occur upon disclosure, regardless of any ruling on appeal." People v. Sisneros, 55 P.3d 797, 799 (Colo. 2002).

         ¶18 An ordinary appellate remedy would be inadequate here: Once provided to the

         People and the grand jury, the confidential materials sought by the subpoena cannot be retracted. Accordingly, we choose to exercise our original jurisdiction in this instance.

         III. Analysis

         ¶19 This case requires us to address two issues: first, the quantum of proof of wrongdoing required to strip documents of the attorney-client privilege under the crime-fraud exception, and second, the applicability of section 16-15-102(9) on these facts. We address each issue in turn below.

         A. The District Court Abused Its Discretion in Declaring All Subpoenaed Documents to Be Subject to the Crime-Fraud Exception Without Conducting In Camera Review

         ¶20 To address this first issue, we begin by explaining the attorney-client privilege and the crime-fraud exception to the privilege. We then review our precedent concerning the privilege and the exception. We conclude that only a minimal showing of wrongful conduct sufficient to invoke the crime-fraud exception is required before a trial court may order a party to produce ostensibly privileged documents for in camera review, but the party seeking to overcome privilege must meet a more demanding standard before the trial court may strip the documents of privilege. This second standard requires probable cause to believe that (1) the client was committing, or attempting to commit, a crime or fraud and (2) the communication was made in furtherance of the putative crime or fraud. Because the district court stripped the documents of privilege without applying this standard to each communication, it abused its discretion.

         1. Standard of Review

         ¶21 We review the district court's ruling here for an abuse of discretion. See People v. Brothers, 2013 CO 31, ¶ 7, 308 P.3d 1213, 1215. Under this standard, we will reverse the district court only if its decision was manifestly arbitrary, unreasonable, or unfair. People v. Hoskins, 2014 CO 70, ¶ 17, 333 P.3d 828, 834.

         ¶22 A trial court has discretion to order compliance with a grand jury subpoena duces tecum, despite a motion to quash, but in ruling on such a motion the court must ensure that the subpoena does not invade those constitutional rights or testimonial privileges invoked. See Losavio v. Robb, 579 P.2d 1152, 1155 (Colo. 1978). The court may also decline to require compliance if it concludes the subpoena is unreasonable or oppressive (or for other reasons irrelevant here). § 16-5-204(4)(i), C.R.S. (2017) (listing reasons).

         2. The Attorney-Client Privilege and the Crime-Fraud Exception

         ¶23 "The attorney-client privilege is the oldest of the privileges for confidential communications known to the common law." Upjohn Co. v. United States, 449 U.S. 383, 389 (1981). The privilege applies to "confidential matters communicated by or to the client in the course of obtaining counsel, advice, or direction with respect to the client's rights or obligations." People v. Madera, 112 P.3d 688, 690 (Colo. 2005) (quoting People v. Lesslie, 24 P.3d 22, 26 (Colo.App. 2000)). In ...


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