In Re: Grand Jury Subpoena v. , 415 F.3d 333 ( 2005 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
In Re: Grand Jury Subpoena: UNDER 
SEAL
UNDER SEAL,
Petitioner-Appellant,  No. 04-4410
v.
UNITED STATES OF AMERICA,
Respondent-Appellee.

In Re: Grand Jury Subpoena: UNDER 
SEAL
UNDER SEAL,
Petitioner-Appellant,  No. 04-4411
v.
UNITED STATES OF AMERICA,
Respondent-Appellee.

In Re: Grand Jury Subpoena 
UNITED STATES OF AMERICA,
Plaintiff-Appellee,  No. 04-4673
v.
KENT WAKEFORD,
Defendant-Appellant.

2 IN RE: GRAND JURY SUBPOENA
Appeals from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Gerald Bruce Lee, District Judge.
(CR-04-178-MG; CR-04-178)
Argued: March 17, 2005
Decided: July 18, 2005
Before WILKINS, Chief Judge, NIEMEYER, Circuit Judge,
and Samuel G. WILSON, United States District Judge
for the Western District of Virginia, sitting by designation.
Affirmed by published opinion. Judge Wilson wrote the opinion, in
which Chief Judge Wilkins and Judge Niemeyer joined.
COUNSEL
ARGUED: Alison Courtney Barnes, ROBBINS, RUSSELL, ENG-
LERT, ORSECK & UNTEREINER, L.L.P., Washington, D.C.; Wil-
liam H. Crispin, CRISPIN & ASSOCIATES, P.L.L.C., Washington,
D.C.; Henry Winchester Asbill, COZEN O’CONNOR, Washington,
D.C., for Appellant. Charles Francis Connolly, Assistant United
States Attorney, OFFICE OF THE UNITED STATES ATTORNEY,
Alexandria, Virginia, for Appellee. ON BRIEF: Lauren A. Green-
berg, CRISPIN & ASSOCIATES, P.L.L.C., Washington, D.C.; Law-
rence S. Robbins, Gary A. Orseck, ROBBINS, RUSSELL,
ENGLERT, ORSECK & UNTEREINER, L.L.P., Washington, D.C.;
William B. Moffitt, L. Barrett Boss, COZEN O’CONNOR, Washing-
ton, D.C.; Paul Hugel, Charles Clayman, CLAYMAN & ROSEN-
BERG, New York, New York, for Appellant. Paul J. McNulty, United
States Attorney, Dana J. Boente, Assistant United States Attorney,
Adam A. Reeves, Trial Attorney, Criminal Division, UNITED
STATES DEPARTMENT OF JUSTICE, Alexandria, Virginia, for
Appellee.
IN RE: GRAND JURY SUBPOENA 3
OPINION
WILSON, District Judge:
This is an appeal by three former employees of AOL Time Warner
("AOL") from the decision of the district court denying their motions
to quash a grand jury subpoena for documents related to an internal
investigation by AOL. Appellants argued in the district court that the
subpoenaed documents were protected by the attorney-client privi-
lege. Because the district court concluded that the privilege was
AOL’s alone and because AOL had expressly waived its privilege,
the court denied the appellants’ motion. We affirm.
I.
In March of 2001, AOL began an internal investigation into its
relationship with PurchasePro, Inc. AOL retained the law firm of Wil-
mer, Cutler & Pickering ("Wilmer Cutler") to assist in the investiga-
tion. Over the next several months, AOL’s general counsel and
counsel from Wilmer Cutler (collectively referred to herein as
"AOL’s attorneys" or the "investigating attorneys") interviewed
appellants, AOL employees Kent Wakeford, John Doe 1, and John
Doe 2.1
The investigating attorneys interviewed Wakeford, a manager in
the company’s Business Affairs division, on six occasions. At their
third interview, and the first one in which Wilmer Cutler attorneys
were present, Randall Boe, AOL’s General Counsel, informed Wake-
ford, "We represent the company. These conversations are privileged,
but the privilege belongs to the company and the company decides
whether to waive it. If there is a conflict, the attorney-client privilege
belongs to the company." Memoranda from that meeting also indicate
that the attorneys explained to Wakeford that they represented AOL
but that they "could" represent him as well, "as long as no conflict
appear[ed]." The attorneys interviewed Wakeford again three days
later and, at the beginning of the interview, reiterated that they repre-
1
Because the grand jury has indicted Wakeford, we refer to him by
name.
4 IN RE: GRAND JURY SUBPOENA
sented AOL, that the privilege belonged to AOL, and that Wakeford
could retain personal counsel at company expense.
The investigating attorneys interviewed John Doe 1 three times.
Before the first interview, Boe told him, "We represent the company.
These conversations are privileged, but the privilege belongs to the
company and the company decides whether to waive it. You are free
to consult with your own lawyer at any time." Memoranda from that
interview indicate that the attorneys also told him, "We can represent
[you] until such time as there appears to be a conflict of interest,[but]
. . . the attorney-client privilege belongs to AOL and AOL can decide
whether to keep it or waive it." At the end of the interview, John Doe
1 asked if he needed personal counsel. A Wilmer Cutler attorney
responded that he did not recommend it, but that he would tell the
company not to be concerned if Doe retained counsel.
AOL’s attorneys interviewed John Doe 2 twice and followed
essentially the same protocol they had followed with the other appel-
lants. They noted, "We represent AOL, and can represent [you] too
if there is not a conflict." In addition, the attorneys told him that, "the
attorney-client privilege is AOL’s and AOL can choose to waive it."
In November, 2001, the Securities and Exchange Commission
("SEC") began to investigate AOL’s relationship with PurchasePro.
In December 2001, AOL and Wakeford, through counsel, entered into
an oral "common interest agreement," which they memorialized in
writing in January 2002. The attorneys acknowledged that, "represen-
tation of [their] respective clients raise[d] issues of common interest
to [their] respective clients and that the sharing of certain documents,
information, . . . and communications with clients" would be mutually
beneficial. As a result, the attorneys agreed to share access to infor-
mation relating to their representation of Wakeford and AOL, noting
that "the oral or written disclosure of Common Interest Materials . . .
[would] not diminish in any way the confidentiality of such Materials
and [would] not constitute a waiver of any applicable privilege."
Wakeford testified before the SEC on February 14, 2002, repre-
sented by his personal counsel. Laura Jehl, AOL’s general counsel,
and F. Whitten Peters of Williams & Connolly, whom AOL had
retained in November 2001 in connection with the PurchasePro inves-
IN RE: GRAND JURY SUBPOENA 5
tigation, were also present, and both stated that they represented
Wakeford "for purposes of [the] deposition." During the deposition,
the SEC investigators questioned Wakeford about his discussions
with AOL’s attorneys. When Wakeford’s attorney asserted the
attorney-client privilege, the SEC investigators followed up with sev-
eral questions to determine whether the privilege was applicable to
the investigating attorneys’ March-June 2001 interviews with Wake-
ford. Wakeford told them he believed, at the time of the interviews,
that the investigating attorneys represented him and the company.
John Doe 1 testified before the SEC on February 27, 2002, repre-
sented by personal counsel. No representatives of AOL were present.
When SEC investigators questioned Doe about the March-June 2001
internal investigation, his counsel asserted that the information was
protected and directed Doe not to answer any questions about the
internal investigation "in respect to the company’s privilege." He
stated that Doe’s response could be considered a waiver of the privi-
lege and that, "if the AOL lawyers were [present], they could make
a judgment, with respect to the company’s privilege, about whether
or not the answer would constitute a waiver."
On February 26, 2004, a grand jury in the Eastern District of Vir-
ginia issued a subpoena commanding AOL to provide "written memo-
randa and other written records reflecting interviews conducted by
attorneys for [AOL]" of the appellants between March 15 and June
30, 2001. While AOL agreed to waive the attorney-client privilege
and produce the subpoenaed documents, counsel for the appellants
moved to quash the subpoena on the grounds that each appellant had
an individual attorney-client relationship with the investigating attor-
neys, that his interviews were individually privileged, and that he had
not waived the privilege. Wakeford also claimed that the information
he disclosed to the investigating attorneys was privileged under the
common interest doctrine.
The district court denied John Doe 1’s and John Doe 2’s motions
because it found they failed to prove they were clients of the investi-
gating attorneys who interviewed them. The court based its conclu-
sion on its findings that: (1) the investigating attorneys told them that
they represented the company; (2) the investigating attorneys told
them, "we can represent you," which is distinct from "we do represent
6 IN RE: GRAND JURY SUBPOENA
you"; (3) they could not show that the investigating attorneys agreed
to represent them; and (4) the investigating attorneys told them that
the attorney-client privilege belonged to the company and the com-
pany could choose to waive it.
The court initially granted Wakeford’s motion to quash because it
found that his communications with the investigating attorneys were
privileged under the common interest agreement between counsel for
Wakeford and counsel for AOL. Following a motion for reconsidera-
tion, the court reversed its earlier ruling and held that the subpoenaed
documents relating to Wakeford’s interviews were not privileged
because it found that Wakeford’s common interest agreement with
AOL postdated the March-June 2001 interviews. In addition, the
court held that Wakeford failed to prove that he was a client of the
investigating attorneys at the time the interviews took place. The
court based its conclusion on its findings that: (1) none of the investi-
gating attorneys understood that Wakeford was seeking personal legal
advice; (2) the investigating attorneys did not provide any personal
legal advice to him; and (3) the investigating attorneys believed they
represented AOL and not Wakeford. This appeal followed.
II.
Appellants argue that because they believed that the investigating
attorneys who conducted the interviews were representing them per-
sonally, their communications are privileged. However, we agree with
the district court that essential touchstones for the formation of an
attorney-client relationship between the investigating attorneys and
the appellants were missing at the time of the interviews. There is no
evidence of an objectively reasonable, mutual understanding that the
appellants were seeking legal advice from the investigating attorneys
or that the investigating attorneys were rendering personal legal
advice. Nor, in light of the investigating attorneys’ disclosure that
they represented AOL and that the privilege and the right to waive it
were AOL’s alone, do we find investigating counsel’s hypothetical
pronouncement that they could represent appellants sufficient to
establish the reasonable understanding that they were representing
appellants. Accordingly, we find no fault with the district court’s
IN RE: GRAND JURY SUBPOENA 7
opinion that no individual attorney-client privilege attached to the
appellants’ communications with AOL’s attorneys.2
We apply a two-fold standard of review in this case. We give def-
erence to the district court’s determination of the underlying facts,
and review those findings for clear error. In re. Grand Jury Subpoena
v. Under Seal, 341 F.3d 331, 334 (4th Cir. 2003); see also In re. Allen
et al., 106 F.3d 582, 601 (4th Cir. 1997) (noting the two-fold standard
of review). A finding of fact is clearly erroneous, despite the presence
of evidence to support it, when the reviewing court, after carefully
examining all the evidence, is "left with the definite and firm convic-
tion that a mistake has been committed." Anderson v. City of Besse-
mer City, 470 U.S. 564, 573 (1985). We review the application of
legal principles de novo. In re. Grand Jury Subpoena, 341 F.3d at
334.
"The attorney-client privilege is the oldest of the privileges for con-
fidential communications known to the common law." Upjohn v.
United States, 449 U.S. 383, 389 (1981). "[W]hen the privilege
applies, it affords confidential communications between lawyer and
client complete protection from disclosure." Hawkins v. Stables, 148
F.3d 379, 383 (4th Cir. 1998). Because its application interferes with
"the truthseeking mission of the legal process," United States v. Ted-
der, 801 F.2d 1437, 1441 (4th Cir. 1986), however, we must narrowly
construe the privilege, and recognize it "only to the very limited
extent that . . . excluding relevant evidence has a public good tran-
scending the normally predominant principle of utilizing all rational
means for ascertaining the truth." Trammel v. United States, 445 U.S.
40, 50 (1980). Accordingly, the privilege applies only to
"[c]onfidential disclosures by a client to an attorney made in order to
obtain legal assistance." Fisher v. United States, 425 U.S. 391, 403
2
The grand jury’s return of an indictment against Wakeford does not
moot his appeal because the government continues to seek records from
the March-June 2001 interviews for trial as to Wakeford and through a
second grand jury as to others. Given this high probability of reoccur-
rence, our opinion is in no way advisory. See In re. Grand Jury Proceed-
ings, 33 F.3d 342, 347 (4th Cir. 1994) (applying the "capable of
repetition, yet evading review" exception to the mootness doctrine in the
context of expired grand jury).
8 IN RE: GRAND JURY SUBPOENA
3
(1976). "The burden is on the proponent of the attorney-client privi-
lege to demonstrate its applicability." Jones, 696 F.2d at 1072.
The person seeking to invoke the attorney-client privilege must
prove that he is a client or that he affirmatively sought to become a
client. "The professional relationship . . . hinges upon the client’s
belief that he is consulting a lawyer in that capacity and his mani-
fested intention to seek professional legal advice." United States v.
Evans, 113 F.3d 1457, 1465 (7th Cir. 1997). An individual’s subjec-
tive belief that he is represented is not alone sufficient to create an
attorney-client relationship. See United States v. Keplinger, 776 F.2d
678, 701 (7th Cir. 1985)("We think no individual attorney-client rela-
tionship can be inferred without some finding that the potential cli-
ent’s subjective belief is minimally reasonable"); see also, In re.
Grand Jury Subpoena Duces Tecum, 112 F.3d 910, 923 (8th Cir.
1997) ("[W]e know of no authority . . . holding that a client’s beliefs,
subjective or objective, about the law of privilege can transform an
otherwise unprivileged conversation into a privileged one."). Rather,
the putative client must show that his subjective belief that an
attorney-client relationship existed was reasonable under the circum-
stances.4
3
This circuit has adopted the classic test to determine whether the
attorney-client privilege applies to certain communications or docu-
ments. The privilege applies only if (1) the asserted holder of the privi-
lege is or sought to become a client; (2) the person to whom the
communication was made (a) is a member of the bar of a court, or his
subordinate and (b) in connection with this communication is acting as
a lawyer; (3) the communication relates to a fact of which the attorney
was informed (a) by his client (b) without the presence of strangers (c)
for the purpose of securing primarily either (i) an opinion on law or (ii)
legal services or (iii) assistance in some legal proceeding, and not (d) for
the purpose of committing a crime or tort; and (4) the privilege has been
(a) claimed and (b) not waived by the client. United States v. Jones, 696
F.2d 1069, 1072 (4th Cir. 1982).
4
This court addressed the question of whether a corporate employee
could personally assert the attorney-client privilege for communications
with corporate counsel conducting an internal investigation in United
States v. Aramony, 88 F.3d 1369 (4th Cir. 1996). In Aramony, this court
affirmed the finding of the district court that Aramony was not the client
IN RE: GRAND JURY SUBPOENA 9
With these precepts in mind, we conclude that appellants could not
have reasonably believed that the investigating attorneys represented
them personally during the time frame covered by the subpoena. First,
there is no evidence that the investigating attorneys told the appellants
that they represented them, nor is there evidence that the appellants
asked the investigating attorneys to represent them. To the contrary,
there is evidence that the investigating attorneys relayed to Wakeford
the company’s offer to retain personal counsel for him at the compa-
ny’s expense, and that they told John Doe 1 that he was free to retain
personal counsel. Second, there is no evidence that the appellants ever
sought personal legal advice from the investigating attorneys, nor is
there any evidence that the investigating attorneys rendered personal
legal advice. Third, when the appellants spoke with the investigating
attorneys, they were fully apprised that the information they were giv-
ing could be disclosed at the company’s discretion. Under these cir-
cumstances, appellants could not have reasonably believed that the
investigating attorneys represented them personally.5 Therefore, the
district court’s finding that appellants had no attorney-client relation-
ship with the investigating attorneys is not clearly erroneous.6
of internal investigation counsel. The court noted that Aramony did not
seek legal advice; Aramony could not have reasonably believed that the
information he disclosed would be kept confidential; and internal investi-
gation counsel told Aramony that they were retained to represent the
company. Id. at 1390-92.
5
The district court made no finding as to whether the appellants, in
fact, believed that the investigating attorneys represented them person-
ally.
6
Appellants maintain the district court improperly relied on In Re
Bevill, Bresler, & Schulman Asset Mgmt. Corp., 805 F.2d 120, 123 (3d
Cir. 1986), in determining that appellants did not have an attorney-client
relationship with the investigating attorneys. They contend that Bevill
creates a litmus test this circuit has not adopted for determining whether
there is an attorney-client relationship between corporate employees and
corporate counsel. It is unnecessary to decide whether we find Bevill
fully consistent with our views on this matter because based on the cir-
cumstances we have identified, it would not have been objectively rea-
sonable for appellants to believe that the investigating attorneys
represented them personally.
10 IN RE: GRAND JURY SUBPOENA
The appellants argue that the phrase "we can represent you as long
as no conflict appears," manifested an agreement by the investigating
attorneys to represent them. They claim that, "it is hard to imagine a
more straightforward assurance of an attorney-client relationship than
‘we can represent you.’" We disagree. As the district court noted, "we
can represent you" is distinct from "we do represent you." If there
was any evidence that the investigating attorneys had said, "we do
represent you," then the outcome of this appeal might be different.
Furthermore, the statement actually made, "we can represent you,"
must be interpreted within the context of the entire warning. The
investigating attorneys’ statements to the appellants, read in their
entirety, demonstrate that the attorneys’ loyalty was to the company.
That loyalty was never implicitly or explicitly divided. In addition to
noting at the outset that they had been retained to represent AOL, the
investigating attorneys warned the appellants that the content of their
communications during the interview "belonged" to AOL. This proto-
col put the appellants on notice that, while their communications with
the attorneys were considered confidential, the company could choose
to reveal the content of those communications at any time, without the
appellants’ consent.
We note, however, that our opinion should not be read as an
implicit acceptance of the watered-down "Upjohn warnings" the
investigating attorneys gave the appellants. It is a potential legal and
ethical mine field. Had the investigating attorneys, in fact, entered
into an attorney-client relationship with appellants, as their statements
to the appellants professed they could, they would not have been free
to waive the appellants’ privilege when a conflict arose. It should
have seemed obvious that they could not have jettisoned one client in
favor of another. Rather, they would have had to withdraw from all
representation and to maintain all confidences. Indeed, the court
would be hard pressed to identify how investigating counsel could
robustly investigate and report to management or the board of direc-
tors of a publicly-traded corporation with the necessary candor if
counsel were constrained by ethical obligations to individual employ-
ees. However, because we agree with the district court that the appel-
lants never entered into an attorney-client relationship with the
investigating attorneys, they averted these troubling issues.
IN RE: GRAND JURY SUBPOENA 11
III.
Wakeford also claims that the documents in question are protected
by the joint defense privilege because of his common interest agree-
ment with AOL. However, the district court found that no common
interest agreement existed at the time of the interviews in March-June
2001. This finding was not clearly erroneous.
The joint defense privilege, an extension of the attorney-client priv-
ilege, protects communications between parties who share a common
interest in litigation. United States v. Schwimmer, 892 F.2d 237, 243-
44 (2d Cir. 1989); see also Aramony, 88 F.3d at 1392. The purpose
of the privilege is to allow persons with a common interest to "com-
municate with their respective attorneys and with each other to more
effectively prosecute or defend their claims." In re. Grand Jury Sub-
poenas 89-3 and 89-4, John Doe 89-129, 902 F.2d 244, 249 (4th Cir.
1990). For the privilege to apply, the proponent must establish that
the parties had "some common interest about a legal matter." Sheet
Metal Workers Int’l Assoc. v. Sweeney, 29 F.3d 120, 124 (4th Cir.
1994). An employee’s cooperation in an internal investigation alone
is not sufficient to establish a common interest; rather "some form of
joint strategy is necessary." United States v. Weissman, 195 F.3d 96,
100 (2d Cir. 1999); see also Aramony, 88 F.3d at 1392 ("To be enti-
tled to the protection of this privilege the parties must first share a
common interest about a legal matter.").
The district court found that "an agreement to share information
pursuant to a common interest did not exist prior to December 2001."
Uncontradicted affidavits submitted by counsel for AOL, including
Randall Boe, who participated in the March-June 2001 interviews,
support the court’s finding. Boe stated that, at the time of the inter-
views, AOL had not entered into an agreement with Wakeford regard-
ing their joint defense. There is no evidence showing that AOL and
Wakeford were pursuing a common legal strategy before December
2001. During the March-June 2001 interviews, AOL was in the early
stages of its internal investigation; there is no evidence that the inves-
tigating attorneys’ interviews with Wakeford were for the purpose of
formulating a joint defense. Indeed, the stated purpose of the inter-
views was to gather information regarding AOL’s relationship with
PurchasePro; it would have been difficult for AOL to know at that
12 IN RE: GRAND JURY SUBPOENA
time whether its interests were consistent with or adverse to Wake-
ford’s personal interests. The court’s finding was therefore not clearly
erroneous.
Because there is no evidence that Wakeford and AOL shared a
common interest before December 2001, we find no error in the dis-
trict court’s conclusion that Wakeford had no joint defense privilege
before that time.
IV.
After review of the district court’s factual findings and legal con-
clusions, we find no clear error. We find no error in the district
court’s conclusion that the appellants were not clients of the investi-
gating attorneys and therefore could not assert the attorney-client
privilege to prevent disclosure of the subpoenaed documents. Further,
we agree with the district court’s finding that, because Wakeford
failed to establish that he and AOL were cooperating in a common
defense before December 2001, he has no joint defense privilege
before that time. The district court therefore properly denied the
appellants’ motions.
AFFIRMED