Commonwealth v. Schultz , 2016 Pa. Super. 12 ( 2016 )

J-A22009-15
2016 Pa. Super. 12
COMMONWEALTH OF PENNSYLVANIA, IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
GARY CHARLES SCHULTZ,
Appellant No. 280 MDA 2015
Appeal from the Order Entered January 14, 2015
In the Court of Common Pleas of Dauphin County
Criminal Division at No(s):
CP-22-CR-0003616-2013
CP-22-CR-0005164-2011
BEFORE: BOWES, JENKINS, AND PLATT,* JJ.
OPINION BY BOWES, J.: FILED JANUARY 22, 2016
Gary Charles Schultz appeals from the order denying his pre-trial
motions to preclude the introduction of testimony of Attorney Cynthia
Baldwin1 and to quash certain criminal charges against him based on
violations of the attorney-client privilege.2 After careful review, we reverse
____________________________________________
1
Ms. Baldwin is a former Justice of the Pennsylvania Supreme Court.
Consistent with the parties and trial court below, and to avoid confusion, we
have not referred to her as Justice Baldwin since she was not acting in a
judicial capacity.
2
We have jurisdiction over this appeal pursuant to the collateral order
doctrine codified at Pa.R.A.P. 313. We discuss our jurisdiction in more detail
in the body of this opinion.
*
Retired Senior Judge assigned to the Superior Court.
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the trial court’s order in which it found that Schultz was properly represented
by Ms. Baldwin during his grand jury testimony as an agent of Penn State
and that no attorney-client privilege existed. For the reasons that follow, we
also hold that Schultz was constructively denied counsel during his grand
jury testimony and that Ms. Baldwin was incompetent to testify as to her
communications with him. Accordingly, we quash the counts of perjury,
obstruction of justice, and the conspiracy charge.
Part I: Factual and Procedural Background
In these actions, the Commonwealth has charged Schultz with two
counts of endangering the welfare of a child (“EWOC”), and one count each
of perjury, failure to report suspected child abuse, obstruction of justice, and
conspiracy.3 The charges stem from: 1) his treatment of allegations of
sexual misconduct against Gerald “Jerry” A. Sandusky, the former defensive
coordinator for the Penn State football team and founder of a non-profit
charity serving underprivileged youth, the Second Mile; and 2) his testimony
pertaining to his handling of those matters before an investigating grand
jury.4
____________________________________________
3
The Commonwealth filed a single conspiracy count, which included
conspiracy to commit perjury, obstruction of justice, and endangering the
welfare of a child.
4
Our recitation of the facts is based on the certified record, including the
grand jury presentments, unsealed testimony, and the factual findings of the
(Footnote Continued Next Page)
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Schultz is a retired Senior Vice President for Finance and Business for
the Pennsylvania State University (“Penn State” or “University”). As part of
the responsibilities in that position, Schultz oversaw Penn State campus
police. In 2009, the Pennsylvania Office of Attorney General (“OAG”) began
investigating allegations that Sandusky sexually abused children over an
extended period. As part of the investigation, the OAG convened a
statewide investigating Grand Jury. During the course of the investigation,
the OAG learned of sexual misconduct by Sandusky that occurred while he
was on the campus of Penn State in 2001, as well as an incident involving
inappropriate behavior with a minor in 1998.
The grand jury investigation revealed the following regarding the 1998
matter. That incident involved an eleven-year-old boy. See Thirty-Third
Statewide Investigating Grand Jury Sandusky Presentment, 11/4/11, at 18
(hereinafter Sandusky Presentment). Sandusky transported the victim from
the victim’s home to Penn State. Sandusky Presentment at 18. On the way
to the University, Sandusky placed his right hand on the boy’s thigh on
multiple occasions. Id. The pair lifted weights for approximately twenty
minutes before playing a game with a tape ball and cups. Id. Sandusky
_______________________
(Footnote Continued)
trial court that are supported by the record. Insofar as Appellant’s
testimony was not credited by the trial court, we have not relied on that
version of events. However, where the testimony was not in dispute, we
have considered it.
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then wrestled with the victim, before instructing the boy to shower. Id. The
youngster attempted to shower away from Sandusky, but Sandusky
beckoned him closer and told him that he warmed up a shower for the child.
Id. at 18-19. Sandusky grabbed the boy from around his waist, lifting him
into the air. Id. at 19. He also washed the boy’s back and bear hugged the
child from behind, before rinsing the child’s hair. Id.
When Sandusky returned the child to the boy’s home, the child’s
mother noticed that his hair was wet and became upset when she discovered
that he had showered with Sandusky. Id. She reported the matter to
University Police, who initiated an investigation. Id. University Police
conducted a wiretap on Sandusky, with the permission of the boy’s mother,
recording two conversations. Id. Sandusky admitted to showering naked
with the child and at one point stated that he wished he were dead. Id. at
20. He later told police that he hugged the child in the shower and admitted
that it was wrong. Id. No charges were ultimately filed.
The grand jury investigation also revealed that in 2001, former Penn
State assistant football coach, Michael McQueary, who had been a
quarterback at Penn State, witnessed Sandusky commit a sexual assault
against a minor victim in a locker room shower on the main campus of the
University in February of 2001. Id. at 6. McQueary, then a graduate
assistant, reported this incident to head football coach Joe Paterno the next
day, a Saturday. Id. at 7. Paterno, in turn, reported the matter to Athletic
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Director Tim Curley the following day. Id. Within two weeks of the shower
incident, McQueary met with Curley and Schultz. Id. McQueary, who
testified before the grand jury prior to January 12, 2011, said that he told
the pair that he believed he saw Sandusky having anal sex with a minor boy.
Id.
Schultz was originally subpoenaed in December of 2010 to testify
before the investigating grand jury on January 12, 2011. At the time,
Schultz was no longer employed by Penn State, having been retired for
approximately a year and one-half.5 Subpoenas were also issued for Curley
and Paterno. Penn State general counsel, Attorney Baldwin, accepted
service of the subpoena on Schultz’s behalf with his permission. 6 Ms.
Baldwin also agreed, at the request of Penn State President Dr. Graham
Spanier, to advise and be present for Schultz’s grand jury testimony. N.T.,
10/26/12, at 14. Ms. Baldwin met one time with Schultz prior to his
testimony. That meeting occurred on January 5, 2011.7 Ms. Baldwin related
to Schultz that, as a grand jury witness, he was entitled to an attorney who
____________________________________________
5
Schultz would later return on a temporary basis to his former position in
September of 2011 until November of 2011, when he was criminally
charged.
6
Ms. Baldwin was also served a subpoena duces tecum, Grand Jury
Subpoena 1179, for University documents. That subpoena sought
documents referencing or related to Jerry Sandusky.
7
Ms. Baldwin had previously met with Curley on January 3, 2011.
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could be present and consult with him during his testimony and that he
could retain his own lawyer. N.T. Schultz Hearing, 11/20/14, at 10-12; see
id. at 55. She indicated that she had spoken with Curley and Paterno and
that no conflict existed between their recollection and Schultz’s and she felt
comfortable appearing on behalf of both Curley and him. Id. at 54. Paterno
retained separate counsel.
Ms. Baldwin did not advise Schultz regarding his Fifth Amendment
right against self-incrimination. Ms. Baldwin also did not explain the
difference between her representation of Schultz in his individual capacity or
as an agent of his former employer, Penn State. Nonetheless, she did
inform Schultz that any information he told her was not confidential insofar
as she could relay it to the University Board of Trustees. Id. at 54. Ms.
Baldwin set forth,
I did tell Mr. Schultz that I was Penn State’s general
counsel. I could go in. I was going in with Mr. Curley. I was
not going in with Mr. Paterno. Mr. Paterno got his own counsel.
I told him that as long as there was no conflict, that I
could go in with him.
Id. Ms. Baldwin did not inform the Board of Trustees of Schultz’s
statements to her.
On the morning of his scheduled grand jury appearance, agents from
the OAG interviewed Schultz before he testified. Present for that interview
was Attorney Baldwin. Ms. Baldwin also attended the OAG interview of Tim
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Curley that same day. Following these interviews, but before Schultz
testified, Ms. Baldwin inquired with a deputy attorney general if Schultz and
Curley were targets of the criminal investigation. The prosecutor, Deputy
Attorney General Jonelle Eshbach, informed her that they were not targets
at that time.8 Id. at 17 (Schultz testified, “And while we were there, Ms.
Eshbach came in the room and talked with Ms. Baldwin. And I recall Ms.
Baldwin asking her, are my clients a target of the grand jury investigation.
And I recall Ms. Eshbach saying not at this time.”); see also id. at 60 (Ms.
Baldwin set forth, “[Ms. Eshbach] said, no, that they weren’t targets but I
don’t know.”).
Prior to Schultz’s testimony, Judge Barry Feudale, the Grand Jury
Supervising Judge, queried Ms. Baldwin regarding her representation of
____________________________________________
8
Despite the OAG’s representation that Schultz and Curley were not
targets, the OAG was already aware that McQueary had told investigators
that he reported a sodomy to Schultz and Curley, and it knew that there had
been no follow up police investigation. Thus, at that time, the OAG
ostensibly had a basis upon which to charge Curley and Schultz with failure
to report suspected child abuse. Hence, this claim was misleading.
Moreover, Ms. Baldwin would have been aware that Curley’s and Schultz’s
recollection of what McQueary told them was inconsistent since she was
present for both interviews and the testimony of both individuals.
Specifically, Schultz acknowledged that the behavior reported to him was
sexual in nature, but Curley denied that there was any indication of sexual
misconduct. The OAG, outside the presence of Ms. Baldwin, later explicitly
told the grand jury supervising judge that Schultz’s and Curley’s testimony
was not consistent. N.T., 4/13/11, at 10.
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Schultz and Curley in chambers in their presence. Specifically, the following
exchange occurred:
OAG: Judge, we’re here on Notice 29. We have some witnesses
to be sworn, Mr. Curley and Mr. Schultz.
Judge Feudale: Represented by?
Ms. Baldwin: My name is Cynthia Baldwin, general counsel for
Pennsylvania State University.
Judge Feudale: Will you be providing representation for both of
those identified witnesses?
Ms. Baldwin: Gary is retired but was employed by the university
and Tim is still an employee.
Notes of Grand Jury Colloquy, 1/12/11, at 7-8. Ms. Baldwin did not
expressly state that she represented Schultz solely in an agency capacity,
nor did she indicate that she did not represent him in his individual capacity.
The OAG did not express concern on the record over a potential conflict of
interest based on Ms. Baldwin appearing with both Schultz and Curley.
Judge Feudale, without requesting further clarification from Ms. Baldwin,
then advised the two men of their rights as grand jury witnesses. In
relevant part, he set forth:
As witnesses before the Grand Jury, you’re entitled to
certain rights and subject to certain duties which I am now going
to explain to you. All of these rights and duties are equally
important and it’s important that you fully understand each of
them.
First, you have the right to the advice and assistance of a
lawyer. This means you have the right to the services of a
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lawyer with whom you may consult concerning all matters
pertaining to your appearance before the Grand Jury.
You may confer with your lawyer at any time before,
during and after your testimony. You may consult with your
lawyer throughout your entire contact with the Grand Jury. Your
lawyer may be present with you in the Grand Jury room during
the time you’re actually testifying and you may confer with
her at that time.
You also may at any time discuss your testimony with your
lawyer and except for cause shown before this Court, you may
disclose your testimony to whomever you choose, if you choose.
You also have the right to refuse to answer any question
pending a ruling by the Court directing you to respond if you
honestly believe there are proper legal grounds for your refusal.
In particular, you have the right to refuse to answer any
question which you honestly believe may tend to incriminate
you.
Should you refuse to answer any question, you may offer a
reason for your refusal, but you’re not obliged to do so. If you
answer some questions or begin to answer any particular
question, that does not necessarily mean you must continue to
answer your questions or even complete the answers you have
started.
Now, any answers you give to any question can and may
be used against you either for the purpose of a Grand Jury
Presentment, Grand Jury Report or a Criminal Information.
In other words, if you’re uncertain as to whether you may
lawfully refuse to answer any question or if any other problem
arises during the course of your appearance before the Grand
Jury, you may stop the questioning and appear before me, either
alone or in this case with your counsel, and I will rule on that
matter whatever it may be.
Id. at 8-10 (emphases added).
Schultz then entered the courtroom with Ms. Baldwin, who was seated
beside him during his testimony. At the outset, a deputy attorney general
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asked Schultz, “You are accompanied today by counsel, Cynthia Baldwin, is
that correct?” N.T., Grand Jury Proceeding, Notice No. 29, 1/12/11, at 3.
Schultz answered, “That is correct.” Id. Ms. Baldwin did not indicate at that
time that she represented Schultz solely in an agency capacity due to his
prior employment at Penn State or that she was not representing him in a
personal capacity. The Commonwealth proceeded to question Schultz about
the 1998 and 2001 incidents. He testified as follows.
Schultz stated that he was present for a meeting with Paterno and
Curley regarding the 2001 incident, id. at 5, as well as a later meeting with
McQueary. Id. at 9. Schultz related that, at the meeting involving Paterno
and Curley, Paterno told them that he had been informed by a graduate
student of disturbing and inappropriate behavior by Sandusky in the shower.
Id. Schultz maintained that it was reported that Sandusky had
inappropriately grabbed the young boy’s genitals. Id. at 10. Nonetheless,
Schultz did not consider the allegations to be too serious and expressly
denied that he had ever been told that Sandusky engaged in anal
intercourse with the victim. Id.
Curley and Schultz did not report the matter to police. However, they
did agree to instruct Sandusky that he was not permitted to bring children
from the Second Mile into the football building. Id. at 11. Nevertheless, no
other University official, outside of then-Penn State President, Dr. Graham
Spanier, was told of this edict. Schultz also believed that they requested the
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county child protection agency to investigate; id.; see also id. at 14,
however, no investigation by that agency ensued. Schultz and Curley both
reported to Spanier that an allegation against Sandusky regarding
inappropriate behavior with a young child in the showers of the football
building was reported by a Penn State employee. Id. at 17. The Second
Mile was also told of the incident, but not that Sandusky was witnessed
committing sodomy.
Schultz admitted that he did not attempt to learn of the identity of the
young boy involved in the 2001 matter. Id. at 14. In addition, he was also
questioned about notes and documents that he possessed that involved
Sandusky as follows:
OAG: Do you believe that you may be in possession of any
notes regarding the 2002 incident that you may have written
memorializing what occurred?[9]
Mr. Schultz: I have none of those in my possession. I believe
that there were probably notes taken at the time. Given my
retirement in 2009, if I even had them at them at that time,
something that old would have probably been destroyed. I had
quite a number of files that I considered confidential matters
that go back years that didn’t any longer seem pertinent. I
wouldn’t be surprised. In fact, I would guess if there were any
notes, they were destroyed on or before 2009.
____________________________________________
9
At the time, the Commonwealth referred to the 2001 shower crime as
occurring in 2002.
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Id. at 16.10 Schultz also expressed surprise upon learning that local police
had investigated the 1998 incident and generated a 95-page police report.
He submitted that there was no indication that a crime occurred in 1998.
On November 7, 2011, the Commonwealth charged Schultz with one
count each of perjury and failure to report suspected child abuse. Schultz
thereafter retained private counsel, and notified Ms. Baldwin, who had
retained her own attorney, via letter that Schultz considered Ms. Baldwin to
have been his personal attorney and that he did not waive any claim of
attorney-client privilege. That letter also directed Ms. Baldwin and her
attorney to invoke the attorney-client privilege if questioned by the OAG, the
United States Attorney General for the Middle District, and the Freeh Group,
an entity hired by Penn State to perform an internal investigation into its
handling of the Sandusky matters. Subsequently, on December 16, 2011,
the Commonwealth conducted a preliminary hearing against Schultz with
respect to the charges of perjury and failure to report. Ms. Baldwin did not
testify. The crimes were held for court and the Commonwealth filed a
criminal information on January 19, 2012.
____________________________________________
10
Notes were eventually discovered in Schultz’s Penn State office pertaining
to Sandusky after Schultz returned to work for Penn State in his previous
position. Schultz did not turn those documents over to the OAG.
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Meanwhile, the OAG, in December of 2011, had expressed significant
frustration with Ms. Baldwin’s failure to comply with its document subpoena
request and threatened the University and ostensibly her with possible
contempt of court “and any other appropriate measures applicable to
obstruction against the institution and those individuals responsible for these
decisions.” Letter from OAG to Ms. Baldwin, 12/19/11, at 2.11
____________________________________________
11
Although the University was charged with complying with Subpoena 1179
in December 2010, it was not until April 2012 that relevant documents were
turned over. Notably, although Ms. Baldwin informed University President,
Dr. Graham Spanier, of the subpoena and asked if he, Schultz, and Curley
had any documents, she apparently did not follow University protocol in
ensuring compliance with that subpoena. A grand jury report observed that
an “investigation into whether the University fully complied with the
subpoena determined that no effort was made to search the Athletic
Department, where Sandusky had been employed for over 30 years, or to
search any of the electronically stored data at the University or emails or
other documents[.]” Grand Jury Presentment No. 29, at 23. The Grand Jury
further concluded,
Penn State had in place a well-defined historical practice and
procedure for responding to subpoenas. Subpoenas that might
encompass electronically stored data (such as emails and
documents stored on a computer or network drive) would
routinely be sent to the specialized unit called the “SOS.” These
information technology professionals were trained and dedicated
to assembling responsive electronically stored data in response
to litigation needs or other legal process. None of the SOS
professionals were ever shown subpoena 1179, nor were they
directed to seek any information requested by subpoena 1179
before the arrests of Sandusky, Schultz, and Curley.
Id.
(Footnote Continued Next Page)
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Subsequently, the Commonwealth and Ms. Baldwin entered into discussions
about her testifying before the grand jury regarding the responses of
Schultz, Curley, and Spanier pertaining to her document requests related to
Sandusky. See N.T., Grand Jury Conference, 10/22/12, at 2 (“the Office of
Attorney General has been conversing with Cynthia Baldwin’s counsel and
eventually Cynthia Baldwin in the context of a proffer discussion.”).
On June 22, 2012, Ms. Baldwin, through her counsel, responded to
Schultz’s invocation of the attorney-client privilege. She asserted that she
was counsel for Penn State, that she had acted solely in an agency capacity
in representing Schultz, and that she did not represent him in an individual
capacity before the grand jury. In correspondence, Schultz again invoked
his attorney-client privilege to Judge Feudale and Ms. Baldwin, and copied
the letter to the OAG and counsel for Penn State.
New general counsel for Penn State, Michael Mustokoff, asked Judge
Feudale for a conference concerning privilege concerns before Ms. Baldwin
_______________________
(Footnote Continued)
Ms. Baldwin did assert in her grand jury testimony that she relied on
the Athletic Department, the President’s office, and Vice President’s office to
comply with the subpoena. Ms. Baldwin also informed the supervising grand
jury judge in April of 2011 that she “had the IT people—I’ve been pushing
the IT people and I believe that we can cull those [documents] out for you,
that we can do all of those.” N.T., 4/13/11, at 27. However, the grand jury
report reveals that, in addition to the SOS unit, other individuals employed
in the Penn State information technology department maintained that they
were not asked to locate such documents. Grand Jury Presentment No. 29,
at 23-24.
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testified before the grand jury on October 22, 2012. Mr. Mustokoff agreed
that Penn State waived the privilege for itself, but explicitly declined to
waive the University’s privilege as to communications between Ms. Baldwin
and Schultz. Specifically, Mr. Mustokoff wrote,
We have waived the University’s privilege as to those documents
with two critical exceptions:
...
(2) any communications between Justice Baldwin and Messrs.
Schultz and Curley. We have previously shared our concerns
about the Schultz/Curley communications with you and
memorialized them in our October 2, 2012 letter to Judge
Feudale.
Letter from Michael Mustokoff to Chief Deputy Attorney General Frank Fina,
10/19/12, at 1.
In preparation for Ms. Baldwin’s grand jury appearance, Judge Feudale
conducted a conference with counsel for Penn State, the OAG, and Ms.
Baldwin’s attorney on October 22, 2012. Schultz’s attorney was not
permitted to attend. Counsel for Penn State astutely noted that it could not
waive any privilege that Schultz might have and again declined to waive its
privilege as to communications between Ms. Baldwin and Schultz. The OAG,
through Attorney Frank Fina, submitted at that time that it would not
question Ms. Baldwin about matters that could involve potential confidential
communications between Schultz and Ms. Baldwin. Attorney Fina expressly
set forth,
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But at this point, Your Honor, we are willing to put Miss Baldwin
in the grand jury without addressing any of the issues related to
the testimony of Mr. Schultz and Mr. Curley and conversations
she had with them about that testimony and put that—put those
matters on hold until we get a Court determination regarding the
privilege and we can address that later on.
N.T., Grand Jury Conference, 10/22/12, at 6.12 Shortly thereafter, Attorney
Fina declared, “There may well be [privilege] claims down the road by
[counsel for Schultz and Curley], and perhaps even counsel for Graham
Spanier; but that is, you know, the risk that the Commonwealth is ready to
bear because we believe that we are soundly within the [University] waiver.”
Id. at 11.
Judge Feudale, relying on the representations of Attorney Fina, stated,
I’m satisfied based on what you placed on the record that [Ms.
Baldwin] is clearly able to proceed on testimony with the
stipulation that you communicated that you’re not going to get
into an inquiry as to her representation and what that meant
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12
Pa.R.Prof.Conduct 3.10 precludes a prosecutor from subpoenaing an
attorney to appear before a grand jury where the prosecutor is seeking to
compel the attorney to provide evidence regarding a person who is or has
been represented by the attorney. The rule reads in its entirety,
A public prosecutor or other governmental lawyer shall not,
without prior judicial approval, subpoena an attorney to appear
before a grand jury or other tribunal investigating criminal
activity in circumstances where the prosecutor or other
governmental lawyer seeks to compel the attorney/witness to
provide evidence concerning a person who is or has been
represented by the attorney/witness.
Pa.R.Prof.Conduct 3.10.
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with regard to Mr. Curley, Mr. Schultz, and perhaps, as you said,
also Mr. Spanier.
Id. at 11-12.13
Despite the foregoing representations by Mr. Fina, a number of the
Commonwealth’s questions to Ms. Baldwin before the grand jury precisely
implicated potential confidential communications.14 According to Ms.
Baldwin’s grand jury testimony, Schultz told her prior to his testimony that
he did not have any documents relating to the 1998 and 2001 Sandusky
matters. The Commonwealth specifically inquired of Ms. Baldwin,
OAG: Did they [Schultz, Curley, and Spanier] ever in any way, shape,
or form disclose to you when you were asking them for this material
anything about 1998 or 2001 and the existence of e-mails from those
events?
Ms. Baldwin: Never.
OAG: We also know that Mr. Schultz had a file regarding Jerry
Sandusky in his office; and that in that file were documents
related to his retirement agreement.
____________________________________________
13
The Commonwealth did not raise any argument that Ms. Baldwin could
testify regarding any privileged communications as a result of the crime-
fraud exception to the attorney-client privilege. See In re Investigating
Grand Jury of Philadelphia County, 593 A.2d 402, 406-07 (Pa. 1991)
(crime-fraud exception excludes from protection those communications
between an attorney and client that are made for the purpose of committing
a crime or fraud).
14
In light of Attorney Fina’s representation to Judge Feudale, and mindful of
Pa.R.Prof.Conduct 3.10, we find his subsequent questioning of Ms. Baldwin,
absent prior judicial approval on the privilege question, to be highly
improper.
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There were drafts and other documents related to his
employment and his retirement and then there were handwritten
notes and e-mails pertaining to the 1998 crimes of Mr. Sandusky
and the 2001 crimes of Mr. Sandusky.
Again, same question, did he ever reveal to you the existence of
that Sandusky file or any of its contents?
Ms. Baldwin: Never. He told me he didn’t have anything.
N.T., 10/26/12, at 20. These inquiries related to compliance with the
subpoena duces tecum and directly incriminated Schultz in the commission
of the crime of obstruction of justice.
Following Ms. Baldwin’s testimony, that same day, in a second
presentment, the grand jury recommended additional charges against
Schultz for obstruction of justice and conspiracy. The Commonwealth filed a
second criminal complaint against Schultz on November 1, 2012, alleging
that Schultz committed the crimes of EWOC, obstruction of justice, and
conspiracy to commit obstruction of justice, conspiracy to commit perjury,
and conspiracy to commit EWOC. It also consolidated Schultz’s cases with
prosecutions against Curley and Spanier.
Preliminary hearings for Schultz, Curley, and Spanier were held on July
29, 2013 and July 30, 2013. Again, Ms. Baldwin did not testify. The
magisterial district court determined that a prima facie case existed against
Schultz and the case proceeded to the court of common pleas. Schultz filed
pre-trial motions to preclude Ms. Baldwin’s testimony due to a breach of the
attorney-client privilege, to quash the second grand jury presentment, and
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to suppress his own grand jury testimony and dismiss those charges that
arose out of that testimony due to a lack of representation at the grand jury
proceeding.
The court conducted a hearing on December 17, 2013. In support of
his pre-trial motions, Schultz sought to call Mr. Fina, Ms. Baldwin, and expert
witnesses to testify regarding Ms. Baldwin’s deficient representation. The
trial court precluded those witnesses from testifying. After receipt of
memoranda from the parties, the court conducted additional hearings on
November 20-21, 2014, to consider testimony regarding the scope of the
alleged attorney-client privilege between Ms. Baldwin and Schultz, Curley,
and Spanier. The court precluded testimony from all witnesses except Ms.
Baldwin and the three defendants. It also prevented Schultz and his counsel
from being present during the testimony of his co-defendants. Ms. Baldwin,
however, was present for the testimony of all three men and testified after
each of them testified.
Thereafter, in an order entered on January 14, 2015, the trial court
concluded that Schultz was not denied counsel during his grand jury
testimony on January 12, 2011, because Ms. Baldwin represented him as an
agent of Penn State. It further held that Ms. Baldwin did not represent
Schultz in an individual capacity, and that therefore her subsequent
testimony did not violate the attorney-client privilege.
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Schultz filed this interlocutory appeal, raising three issues for our
review.
I. Whether the appropriate standard for determining if a
witness, subpoenaed to testify before a Pennsylvania
Grand Jury and therefore entitled to the assistance of
counsel, is represented by counsel is the putative client’s
reasonable belief?
II. Whether the agency counsel relationship contemplated by
the trial court provide sufficient protection of the Grand
Jury Act’s right to counsel and the right against self-
incrimination inherent in the Act and in Article I, Section 9
of the Pennsylvania Constitution?
III. Whether Ms. Baldwin’s grand jury testimony violated Mr.
Schultz’s attorney-client privilege, requiring quashal of the
charges that depend on her testimony and preclusion of
such testimony in any future proceedings?
Appellant’s brief at 4.
We note that each of Appellant’s issues and arguments as well as the
response by the Commonwealth are intertwined. Therefore, we will address
Schultz’s positions together. However, before discussing the merits of
Schultz’s claims, we must first address our jurisdiction.
Part II. Jurisdiction
Ordinarily, this Court possesses jurisdiction to hear appeals from final
orders. In limited circumstances, however, we may consider interlocutory
appeals. One type of interlocutory appeal is that involving a collateral order.
Pursuant to Pa.R.A.P. 313, an “appeal may be taken as of right from a
collateral order of an administrative agency or lower court.” Pa.R.A.P.
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313(a). Rule 313 further defines a collateral order as an order “separable
from and collateral to the main cause of action where the right involved is
too important to be denied review and the question presented is such that if
review is postponed until final judgment in the case, the claim will be
irreparably lost.” Pa.R.A.P. 313(b).
The Pennsylvania Supreme Court has applied the collateral order
doctrine to permit interlocutory review in matters concerning attorney-client
privilege under various circumstances. See In re Thirty-Third Statewide
Investigating Grand Jury, 86 A.3d 204, 209 (Pa. 2014); Commonwealth
v. Harris, 32 A.3d 243, 251 (Pa. 2011); Ben v. Schwartz, 729 A.2d 547
(Pa. 1999). In Harris, supra, a case involving a PCRA appeal, our state
High Court expressly rejected a contrary United States Supreme Court
decision,15 stating, “we reaffirm our position in Ben that once material has
been disclosed, any privilege is effectively destroyed. Privileges exist as a
rule to promote frank discussions, and we respectfully disagree with the
United States Supreme Court that disallowing immediate appeals will not
chill such discussions.” Harris, supra at 249.
The first aspect of the collateral order doctrine, separability, exists
where consideration of the order at issue “does not implicate the merits of
the underlying dispute.” Commonwealth v. Wright, 78 A.3d 1070, 1077
____________________________________________
15
Mohawk Industries, Inc. v. Carpenter, 558 U.S. 100 (2009).
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(Pa. 2013). In the instant case, the order is separable from the main action
because it does not require a merits analysis of the underlying criminal
allegations. Whether Schultz is guilty of the offenses charged is independent
of his attorney-client privilege claim. Accordingly, the separability factor is
easily met.
The second consideration under the collateral order paradigm is
whether the interests involved are too important to be denied review. Here,
the order permits the disclosure of communications between an attorney and
an individual who asserts that he was a client for purposes of criminal
prosecution. Protection of the attorney-client privilege, in conjunction with
the scope of representation to be afforded an individual testifying before a
criminal investigating grand jury, involve rights deeply rooted beyond this
case. See Commonwealth v. Sandusky, 70 A.3d 886 (Pa.Super. 2013).
It is well-settled that the attorney-client privilege is one of the most
sacrosanct privileges that exists. Pointedly, it is at the heart of the American
judicial system. As our Supreme Court noted in Hall, supra, “even where
the privilege issue is not ‘controlling,’ or where an immediate appeal will not
materially advance the end of the case, the frank discussions that privileges
are meant to protect will be chilled if the opportunity for immediate
correction by an appellate court is not available. Harris, supra at 250.
Here, the privilege question presented not only involves the deeply rooted
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attorney-client privilege, but addressing the matter will materially advance
the case. The importance criteria is thus satisfied.
Finally, any privilege claim will be lost, the third requirement for a
collateral order, if Ms. Baldwin is permitted to testify regarding
communications with Schultz. In this respect, the Harris Court opined, “A
rule requiring parties to wait until final judgment to appeal an order
overruling a claim of privilege would both cause the privilege-holder's fears
to be realized and deprive the privilege-holder of any meaningful remedy.”
Id. at 249. Accordingly, we have jurisdiction to consider Schultz’s claim that
his communications with Ms. Baldwin were privileged, which necessarily
encompasses the scope of Ms. Baldwin’s representation.
To the extent that Schultz also argues that he was deprived of his
statutory right to grand jury counsel based on Ms. Baldwin’s insistence that
she did not represent him personally, we find that this position is inextricably
intertwined with the question of the scope of Ms. Baldwin’s representation
and whether an attorney-client privilege exists. We recognize that Pa.R.A.P.
313 must be narrowly applied on an issue-by-issue basis. See Rae v.
Pennsylvania Funeral Directors Association, 977 A.2d 1121, 1129 (Pa.
2009). In this regard, whether a person has been constructively denied his
or her statutory right to grand jury counsel, under the facts herein, presents
an issue of first impression as to whether it falls within the ambit of the
collateral order doctrine.
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First, the question is separable from the issue of Schultz’s guilt. See
Pa.R.A.P. 313(b); Wright, supra. The right to personal counsel at a grand
jury proceeding is completely independent of whether Schultz committed the
crimes alleged. We need not consider the underlying allegations in
reviewing whether Appellant was entitled to personal representation during
his grand jury testimony rather than the agency representation afforded by
Ms. Baldwin.
The second prerequisite to collateral order review, whether the
interests are too important to deny consideration, is also met. The interest
involved is the alleged denial of the right to counsel before a grand jury. In
affording the right to counsel inside the grand jury room, our legislature
sought to offer greater protections to individuals’ constitutional right against
self-incrimination when appearing in the grand jury setting. Both the right
to counsel and the constitutional right against self-incrimination are
foundational interests. See 42 Pa.C.S. § 4549(c); Pa.Const. Art. I, § 9.
The statutory right to counsel at a grand jury proceeding and the
concomitant right that counsel is intended to protect, the right against self-
incrimination, are, like the right to confrontation, of vital importance.
See Commonwealth v. McCloskey, 277 A.2d 764, 780 (Pa. 1971) (Eagan,
J., concurring and dissenting) (“I cannot see how an untrained layman can
be expected to possibly discern whether or not an answer to a particular
question will subject him to the danger of incrimination. To deny him the
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opportunity of adequate consultation with his counsel is to render his right
under the Fifth Amendment meaningless.”); Id. (“A potential defendant who
is brought before the Grand Jury without an attorney at his side is almost
helpless. He is faced with a barrage of questions, often improper in the
normal judicial setting, thrown at him by a group of reasonably intelligent
citizens excited at the prospect of playing both lawyer and detective. This
torrent of interrogation is, of course, directed by a skilled prosecutor capable
of utilizing the Grand Jury as the tool to obtain incriminating evidence from
the mouth of a nervous witness. The upset and confused witness does not
know whether to respond to the questions and risk having his answers used
against him at a trial or claim the Fifth Amendment, creating suspicion in the
eyes of the jurors and risking a contempt charge. In this atmosphere, the
proceeding takes on the attributes of a Star Chamber.”).
Moreover, the second criterion is inextricably intertwined with the final
aspect of the collateral order doctrine in this case. After all, a right without
a remedy is meaningless. Here, if review was postponed until after trial, the
claim would be irreparably lost both in light of the privilege issues in play
and because there is no effective mechanism for attacking the constructive
denial of counsel at a grand jury proceeding on direct appeal.16
____________________________________________
16
We note that Schultz filed with the trial court a motion to certify its order
under 42 Pa.C.S. § 702(b), to allow an interlocutory appeal by permission
(Footnote Continued Next Page)
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In this latter respect, we point out that claims regarding pre-trial
matters at preliminary hearings have traditionally been held to be immaterial
after trial. See Commonwealth v. Ricker, 120 A.3d 349, 353 (Pa.Super.
2015) (citing Commonwealth v. Sanchez, 82 A.3d 943, 984 (Pa. 2013)
(finding that absence of counsel at preliminary hearing did not warrant relief
after conviction); Commonwealth v. Tyler, 587 A.2d 326 (Pa.Super.
1991)). In Ricker, this Court was faced with deciding whether an appeal
from a denial of a pre-trial habeas corpus motion was properly before us.
Although the case did not discuss the collateral order doctrine, we noted the
importance of the constitutional right being invoked, the right of
confrontation during a preliminary hearing, and that the question of whether
the defendant’s pre-trial rights were infringed was capable of evading review
if we awaited a final order. We found exceptional circumstances warranted
the exercise of jurisdiction. See also Commonwealth v. Kilgallen, 108
A.2d 780 (Pa. 1954) (exceptional circumstances warranted review of
interlocutory appeal from denial of motion to quash grand jury presentment
based on alleged infringement of defendant’s right against self-
incrimination).
_______________________
(Footnote Continued)
with other issues pertaining to the attorney-client relationship. The trial
court denied that motion. Schultz, subsequent to the filing of this appeal,
petitioned this Court for review under Pa.R.A.P. 1311, however, the Court
denied that petition.
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In light of Sanchez, supra, where our Supreme Court determined
that the lack of counsel at a preliminary hearing could not compel reversing
a finding of guilt after trial, despite the United States Supreme Court holding
that there is a Sixth Amendment right to counsel during a preliminary
hearing, see Coleman v. Alabama, 399 U.S. 1 (1970), failing to address
the right to grand jury counsel could result in the claim being lost. We
recognize that counsel serves different purposes at a grand jury proceeding
and a preliminary hearing. However, the Commonwealth maintained below
that Appellant’s claim regarding the constructive denial of counsel cannot be
remedied during a direct appeal, and must await collateral review under the
Post-Conviction Relief Act (“PCRA”). This is consistent with our Supreme
Court’s directive that claims of ineffective assistance of counsel generally
must await PCRA review. Commonwealth v. Grant, 813 A.2d 726 (Pa.
2002); Commonwealth v. Holmes, 79 A.3d 562 (Pa. 2013). Similarly,
this Court has held in situations where trial counsel was present, but the
defendant’s claim was that counsel’s representation before trial was so
deficient as to result in a constructive denial of counsel, that such a claim
must await post-conviction review. Commonwealth v. Britt, 83 A.3d 198,
201 (Pa.Super. 2013) (finding that although the defendant’s argument was
that counsel was per se ineffective, his claim more properly fell under the
traditional ineffectiveness paradigm and had to be deferred to PCRA
proceedings).
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Nevertheless, while claims of per se trial counsel ineffectiveness,
including the constructive denial of counsel, may be remedied via a PCRA
petition, the language of that statute applies to the truth-determining
process for adjudications of guilt and extends to proceedings where there is
a federal Sixth Amendment or Article I, § 9 Pennsylvania constitutional right
to counsel. Commonwealth ex rel. Dadario v. Goldberg, 773 A.2d 126,
130 (Pa. 2001) (“the language ‘so undermined the truth-determining
process that no reliable adjudication of guilt or innocence could have taken
place" merely represents a statutory adoption of the prejudice standard for
Sixth Amendment ineffective assistance of counsel claims . . . .Therefore, if
a petitioner claims that he or she was denied the effective assistance of
counsel in violation of the Sixth Amendment and Article I, Section 9 of the
Pennsylvania Constitution, Section 9543(a)(2)(ii) of the PCRA allows the
petitioner to seek relief.”). However, there is no Sixth Amendment right to
counsel at an investigative grand jury hearing, In re Groban's Petition,
352 U.S. 330, 333 (1957), nor does that hearing involve a proceeding
essential to either a guilt or sentencing determination, or an appeal
therefrom. See generally 42 Pa.C.S. § 9543 (defining eligibility for post-
conviction relief).
While there may exist a constitutional due process right to counsel at a
grand jury proceeding, in so far as there exists a statutory right to counsel,
a question still arises as to whether the PCRA was intended to remedy a
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constructive denial of counsel during an investigative grand jury proceeding.
But see Goldberg, supra at 130 (“all constitutionally-cognizable claims of
ineffective assistance of counsel may be reviewed in a PCRA petition”);
Commonwealth v. Masker, 34 A.3d 841 (Pa.Super. 2011) (en banc)
(Bowes, J., concurring and dissenting); but compare Masker, supra.
In Masker, a majority of this Court held that the statutory right to
sexually violent predator (“SVP”) hearing counsel did not result in an
ineffectiveness claim relative to SVP counsel that was cognizable under the
PCRA. There, counsel was representing the defendant during a joint
sentencing and SVP hearing. Unlike a grand jury proceeding, sentencing is
actually considered a critical stage of a “criminal prosecution” as that phrase
is used in the constitutional context. Commonwealth v. D'Amato, 856
A.2d 806, 821 (Pa. 2004). The Masker majority concluded that because the
claim did not challenge the defendant’s guilt, the PCRA did not provide an
avenue of relief. Similar to this matter, where there is also a statutory right
to grand jury counsel, there existed in that case a statutory right to SVP
counsel. Although the Masker Court premised its holding on the collateral
consequences doctrine, i.e., sex offender registration being a collateral
consequence of a conviction, Masker still renders it uncertain whether
Schultz can pursue PCRA review based on inadequate representation at a
grand jury proceeding. This is because grand jury proceedings are not
constitutionally considered part of a criminal prosecution and are not part of
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the truth-determining process for ascertaining guilt, prerequisites for
cognizability under the PCRA.
Moreover, in the civil context, our Supreme Court in discussing the
irreparable loss aspect of the collateral order doctrine, has opined that the
substantial costs an appellant will incur in going to trial in complex civil
litigation can be a factor that is to be weighed. Pridgen v. Parker
Hannifin Corp., 905 A.2d 422, 433 (Pa. 2006). Here, Schultz is likely to
incur significant costs proceeding to trial and, if convicted, obloquy, and a
substantial loss of liberty. Collateral appeals have also been permitted
where the right involved protects an individual from going to trial in the
double jeopardy area and claims involving the speech and debate clause of
the federal constitution. Abney v. United States, 431 U.S. 651, 660-62
(1977) (double jeopardy) Commonwealth v. Bolden, 472 Pa. 602, 373
A.2d 90 (Pa. 1977) (plurality opinion) (double jeopardy); Helstoski v.
Meanor, 442 U.S. 500, 506-08, (1979) (Speech or Debate Clause).
Further, if convicted, based on the Commonwealth’s own position, Schultz
will have to undergo a direct appeal, and if unsuccessful, then seek post-
conviction relief before his statutory right to counsel claim can be
determined. Indeed, part of the purpose of the collateral order doctrine, to
avoid piecemeal litigation, would actually be undermined if we did not
consider the intertwined arguments relative to counsel’s representation in
conjunction with the attorney-client privilege issue. For all of the
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aforementioned reasons, we find that we have jurisdiction over the claims
advanced in this appeal.
Part III. Standard and Scope of Review and General Principles
Governing Attorney-Client Privilege Questions
An issue concerning whether a communication is protected by the
attorney-client privilege presents a question of law. In re Thirty-Third
Statewide Investigating Grand Jury, supra at 215. Hence, our standard
of review is de novo and our scope of review is plenary. Id. “Although now
embodied in statute, the attorney-client privilege is deeply rooted in the
common law. Indeed, it is the most revered of the common law privileges.”
Commonwealth v. Chmiel, 738 A.2d 406, 414 (Pa. 1999) (internal
citations omitted). In a criminal matter, “counsel shall not be competent or
permitted to testify to confidential communications made to him by his
client, nor shall the client be compelled to disclose the same, unless in either
case this privilege is waived upon the trial by the client.” 42 Pa.C.S. § 5916.
This Court has opined, “Where legal advice of any kind is sought from
a professional legal adviser in his capacity as such the communications
relating to the purpose made in confidence by the client are at this instance
permanently protected from disclosure by himself or by the legal adviser
except the protection may be waived.” In re Gartley, 491 A.2d 851,
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858 (Pa.Super. 1985) (quoting 8 Wigmore, Evidence §§ 2292 at 554
(McNaughton rev. 1961)). Almost a century ago, our Supreme Court
posited,
the circle of protection is not so narrow as to exclude
communications, a professional person may deem unimportant
to the controversy, or the briefest and lightest talk the client
may choose to indulge with his legal adviser, provided he
regards him as such at the moment. To found a distinction on
such a ground, would be to measure the safety of the confiding
party by the extent of his intelligence and knowledge, and to
expose to betrayal these very anxieties which prompt those in
difficulty to seek the ear of him in whom they trust, in season
and out of season. The general rule is, that all professional
communications are sacred.
Alexander v. Queen, 253 Pa. 195, 203 (Pa. 1916). More recently, our
Supreme Court declared,
The purposes and necessities of the relation between a client
and his attorney require, in many cases, on the part of the
client, the fullest and freest disclosure to the attorney of the
client's objects, motives and acts. This disclosure is made in the
strictest confidence, relying upon the attorney's honor and
fidelity. To permit the attorney to reveal to others what is
so disclosed, would be not only a gross violation of a
sacred trust upon his part, but it would utterly destroy
and prevent the usefulness and benefits to be derived
from professional assistance. Based upon considerations
of public policy, therefore, the law wisely declares that all
confidential communications and disclosures, made by a
client to his legal adviser for the purpose of obtaining his
professional aid or advice, shall be strictly privileged; --
that the attorney shall not be permitted, without the consent of
his client, -- and much less will he be compelled -- to reveal or
disclose communications made to him under such
circumstances." 2 Mecham on Agency, 2d Ed., § 2297.
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Commonwealth v. Maguigan, 511 A.2d 1327, 1333-1334 (Pa. 1986)
(emphasis added). Our Supreme Court has further opined,
Recognizing that its purpose is to create an atmosphere that will
encourage confidence and dialogue between attorney and client,
the privilege is founded upon a policy extrinsic to the protection
of the fact-finding process. Estate of Kofsky, 487 Pa. 473, 409
A.2d 1358 (1979). The intended beneficiary of this policy is not
the individual client so much as the systematic administration of
justice which depends on frank and open client-attorney
communication. In re Search Warrant B-21778, 513 Pa. 429,
521 A.2d 422, 428 (1987); Estate of Kofsky, supra.
In re Investigating Grand Jury No. 88-00-3505, 593 A.2d 402 (Pa.
1991). In addition, “in Pennsylvania, the attorney-client privilege operates
in a two-way fashion to protect confidential client-to-attorney or attorney-to-
client communications made for the purpose of obtaining or providing
professional legal advice.” Gillard v. AIG Ins. Co., 15 A.3d 44, 59 (Pa.
2011).
The attorney-client relationship exists not only in one-on-one
situations between an individual and an attorney, but it can also exist in a
corporate environment in which general counsel or legal staff is present.
“When the client is a corporation, the privilege extends to communications
between its attorney and agents or employees authorized to act on the
corporation's behalf.” In re Condemnation by City of Philadelphia in
16.2626 Acre Area, 981 A.2d 391, 396 (Pa.Cmwlth. 2009) (citing Upjohn
Co. v. United States, 449 U.S. 383 (1981)). In Upjohn, the United States
Supreme Court analyzed the scope of the attorney-client privilege when the
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client is a corporation. Although Upjohn itself did not involve warnings or a
discussion of a lawyer’s explanation regarding the scope of his
representation, the Supreme Court observed that, under certain situations,
information about the extent of the attorney-client relationship between a
corporate counsel and an employee might be necessary. As a result of that
case, “Upjohn warnings” have evolved that specifically inform a corporate
employee that corporate counsel represents the corporation and not the
individual, and that the corporation possesses the attorney-client privilege.
See Grace M. Giesel, Upjohn Warnings, the Attorney-Client Privilege, and
Principles of Lawyer Ethics: Achieving Harmony, 65 U. Miami L. Rev. 109,
110-111 (Fall 2010).17
____________________________________________
17
In 2009, the American Bar Association, via its White Collar Crime
Committee, issued a report entitled “UpJohn Warnings: Recommended Best
Practices When Corporate Counsel Interacts with Corporate Employees.”
The report set forth that, at a minimum, counsel should provide a warning
before the interview and that the warning should be explicit and
unambiguous. The report maintained that if an attorney knowingly obtained
confidential information and then gave legal advice or provided legal
services, an attorney-client relationship existed. It continued that counsel
may also have a duty of confidentiality with a corporate employee because
the employee could be viewed as a prospective client. In that scenario, if
the employee reasonably believed he was seeking legal advice regarding to
his personal interests, a duty of confidentiality could arise. A portion of the
suggested UpJohn warning provided:
I am a lawyer for or from Corporation A. I represent only
Corporation A, and I do not represent you personally.
....
(Footnote Continued Next Page)
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In addition to the traditional attorney-client relationship and the
corporate environment, the attorney-client privilege also can exist in the
context of co-defendants and their attorney or attorneys. When multiple
defendants and their counsel engage in a common defense, the privilege is
not waived by the sharing of confidential information among the parties for
the benefit of the joint defense. See Commonwealth v. Scarfo, 611 A.2d
242 (Pa.Super. 1992), superseded by statute on other ground as stated in
Commonwealth v. Buck, 709 A.2d 892 (Pa. 1998); see also
Pa.R.Prof.Conduct 1.6(a).
Part V. The Grand Jury in Pennsylvania and the Advent of the
Statutory Right to Grand Jury Counsel
Underlying Schultz’s claims is the extent and scope of Ms. Baldwin’s
representation of him prior to and during his testimony before a criminal
investigating grand jury. Therefore, we begin our consideration of Schultz’s
issues with a brief discussion of the evolution of the grand jury in
_______________________
(Footnote Continued)
Your communications with me are protected by the attorney-
client privilege. But the attorney-client privilege belongs solely
to Corporation A, not you. That means that Corporation A alone
may elect to waive the attorney-client privilege and reveal our
discussion to third parties. Corporation A alone may decide to
waive the privilege and disclose this discussion to such third
parties as federal or state agencies, at its sole discretion, and
without notifying you.
Upjohn Warnings: Recommended Best Practices when Corporate Counsel
Interacts with Corporate Individuals, 2009 A.B.A. Sec. Crim. Just., at 3.
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Pennsylvania. The grand jury is an ancient mode of procedure. Appeal of
Hamilton, 180 A.2d 782, 790 (Pa. 1962) (Bell, C.J., dissenting). The
Pennsylvania Supreme Court has opined that the grand jury became
formalized in England in 1162. McCloskey, supra at 772 n.21. In
McNair’s Petition, 187 A. 498, 502 n.1 (Pa. 1936), our High Court posited
that the origins of the English grand jury has been attributed “to the Saxon
Kings, particularly to Ethelred in the tenth century, and others to William the
Conqueror, or his followers, in the eleventh century.” English grand juries
“originally decided matters in accordance with their personal knowledge or
their knowledge of neighborhood affairs. Later, they summoned witnesses,
investigated persons and conditions, made reports to the sovereign, and
gradually became an indicting grand jury.” Appeal of Hamilton, supra at
790.
The Pennsylvania Constitution of 1776 did not contain an express
requirement that a grand jury indictment be used to begin criminal
proceedings;18 however, in 1790, a clause was added to the Pennsylvania
Declaration of Rights requiring grand jury indictments to institute most
____________________________________________
18
The original Pennsylvania charter did refer to grand jury indictments.
Specifically, in § 27 of Chapter II, the Pennsylvania Constitution read, “All
prosecutions shall commence in the name and by the authority of the
freemen of the commonwealth of Pennsylvania; and all indictments shall
conclude with these words, ‘Against the peace and dignity of the same.’ The
stile of all process hereafter in this state shall be, The commonwealth of
Pennsylvania.”
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criminal proceedings. Article 9, § 10 of the 1790 charter read in pertinent
part, “That no person shall, for any indictable offence, be proceeded against
criminally by information, except in cases arising in the land or naval forces,
or in the militia, when in actual service in time of war or public danger, or,
by leave of the court, for oppression and misdemeanor in office.” James
Wilson, an influential framer of both the federal constitution and 1790
Pennsylvania Constitution remarked of the grand jury, “among all the plans
and establishments which have been devised for securing the wise and
uniform execution of the criminal laws, the institution of grand juries holds
the most distinguished place.” See Hurtado v. People of State of
California, 110 U.S. 516, 555 (1884) (Harlan, J., dissenting) (quoting 3
Wilson's Works).
The current Pennsylvania Constitution was amended to allow for the
frequent use of criminal informations. Hence, the typical manner of
instituting a criminal prosecution is no longer via a grand jury indictment.
Nevertheless, an investigating grand jury, as compared to an indicting grand
jury, is still an important part of Pennsylvania law.19 Historically, a witness
before a Pennsylvania grand jury did not have the right to have an attorney
____________________________________________
19
The Pennsylvania Supreme Court recently promulgated a criminal
procedural rule reinstituting the usage of criminal indicting grand juries in
cases involving witness intimidation. See Pa.R.Crim.P. 556 (adopted in
2012).
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present during his or her grand jury testimony. McCloskey, supra; see
also In re Groban’s Petition, supra. That changed in 1980 with the
adoption of the Investigating Grand Jury Act. That Act reads in salient part,
(c) Counsel for witnesses.--
(1) A witness subpoenaed to appear and testify before an
investigating grand jury or to produce documents, records
or other evidence before an investigating grand jury shall
be entitled to the assistance of counsel, including
assistance during such time as the witness is questioned
in the presence of the investigating grand jury. In the
event counsel of the witness' choice is not available, he shall be
required to obtain other counsel within a reasonable time in
order that the work of the grand jury may proceed.
(2) Such counsel may be retained by the witness or shall be
appointed in the case of any person unable to procure
sufficient funds to obtain legal representation.
(3) Such counsel shall be allowed to be present in the
grand jury room during the questioning of the witness
and shall be allowed to advise the witness but shall make
no objections or arguments or otherwise address the grand jury
or the attorney for the Commonwealth. The supervising judge
shall have the same power to remove such counsel from the
grand jury room as a judge has with respect to an attorney in
any court proceeding. Violation of this paragraph shall be
punishable as contempt by the supervising judge.
(4) An attorney, or attorneys who are associated in practice,
shall not continue multiple representation of clients in a
grand jury proceeding if the exercise of the independent
professional judgment of an attorney on behalf of one of
the clients will or is likely to be adversely affected by his
representation of another client. If the supervising judge
determines that the interest of an individual will or is likely to be
adversely affected, he may order separate representation of
witnesses, giving appropriate weight to the right of an individual
to counsel of his own choosing.
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42 Pa.C.S. § 4549(c) (emphases added).
Thus, the Grand Jury Act provides a right to counsel during the grand
jury proceeding itself. The supervising judge is charged with deciding
whether the witness’s interest will be adversely affected by an attorney
representing multiple clients. The provision that an attorney is allowed to be
present with his or her client during the individual’s testimony was added
because witnesses are confronted with “important and complex legal issues.”
H.R. 1319, 162nd Gen. Assem. Sess. 1978, at 3162 (sponsor of applicable
amendment to Grand Jury Act opining on the addition of permitting counsel
to attend grand jury proceeding).
Part VI. Parties’ Arguments
Schultz begins by pointing out that the Investigating Grand Jury Act
guarantees a statutory right to counsel during the witness’s grand jury
testimony. He maintains that because there is a statutory right to counsel,
there exists a right to effective assistance of such counsel. According to
Schultz, “the usual obligations of effective counsel – zealous and competent
representation, loyalty, and protection for the confidentiality of work product
and privileged communications – define the type of counsel to which a
witness is entitled under the Grand Jury Act.” Appellant’s brief at 26;
Commonwealth v. Albrecht, 720 A.2d 693, 699-700 (Pa. 1998) (rule
based right to PCRA counsel includes right to effective assistance of
counsel); see also Masker, supra (Bowes, J., concurring and dissenting)
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(statutory right to sexually violent predator hearing counsel includes right to
effective counsel).
Continuing, Schultz suggests that only a witness’s counsel can be
present for his client’s testimony during a grand jury proceeding. 42 Pa.C.S.
4549(c)(1); Pa.R.Crim.P. 231(A) (“The attorney for the Commonwealth, the
alternate grand jurors, the witness under examination, and a stenographer
may be present while the investigating grand jury is in session. Counsel for
the witness under examination may be present as provided by law.”).
Schultz submits that the Grand Jury Act “requires that the attorney give the
individual, and not the entity that once employed him, ‘independent
professional judgment’ and all that comes with it, including loyalty and
confidentiality.” Appellant’s brief at 27 (citing 42 Pa.C.S. § 4549(c)(4)). He
argues that the trial court’s ruling that Ms. Baldwin only represented Schultz
as an agent of her real client, Penn State, creates a second-class type of
partial representation that is not recognized under the common law or the
Pennsylvania Rules of Professional Conduct. Schultz avers that “[i]f Ms.
Baldwin was not acting as counsel for Mr. Schultz in his personal capacity,
her presence during the grand jury proceeding was in violation of the rules
governing grand jury secrecy, prejudicing Mr. Schultz.” Appellant’s brief at
29.
The trial court ruled that, because Ms. Baldwin represented Schultz as
an agent of Penn State, he was not denied counsel at the grand jury
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proceeding. Schultz counters that this agency-counsel relationship did not
provide sufficient protection of the Grand Jury Act’s right to counsel and of
his right against self-incrimination inherently protected in the Act’s
requirement for counsel. See Pa.Const. Art. I, § 9 (“in prosecutions by
indictment or information, . . . . he cannot be compelled to give evidence
against himself”). Schultz argues that the trial court’s concept of agency
representation herein “relieves the attorney of the duty to exercise loyalty
and independent judgment, to provide competent and diligent
representation to each client, to obtain each client’s informed consent,
preferably in writing, before proceeding with the representation, and to
maintain the client’s communications as confidential.” Appellant’s brief at
41. He adds that a person subpoenaed to testify in front of a grand jury is
“not always aware of ‘reasonable cause to apprehend danger’ and may not
know whether he should ‘exercise his right against self-incrimination.’” Id.
at 42 (quoting McCloskey, supra at 777). In this respect, Schultz
highlights that “[n]ot only are the stakes in giving testimonial evidence
before a grand jury high, they are also entirely personal.” Appellant’s brief at
42.
Schultz points out that witnesses face potential personal criminal
liability and that a corporation, unlike an individual, has no right against self-
incrimination. Indeed, while the corporate defendant can be criminally fined,
only the individual agents of the corporation face the onerous criminal
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punishment of incarceration.20 He continues that the Grand Jury Act is
intended to protect a witness’s right against self-incrimination by affording
that person the right to personal counsel for purposes of consultation during
questioning. He avers that the colloquy provided by the grand jury
supervising judge emphasizes the personal right to an attorney. In short, he
maintains, “[e]mployees, like Mr. Schultz, who testify in response to a grand
jury subpoena, necessarily do so in their individual capacities, and they
enjoy a personal privilege against self-incrimination that only they can
choose to waive.” Id. at 46.
While Schultz acknowledges that an attorney may limit her
representation of a client, he notes that the client must give informed
consent. See Pa.R.Prof.Conduct 1.2(c). The rules of professional conduct
define such consent as “consent by a person to a proposed course of conduct
after the lawyer has communicated adequate information and explanation
about the material risks of and reasonably available alternatives to the
proposed course of conduct.” Pa.R.Prof.Conduct 1.0(e). Schultz posits that
Ms. Baldwin did not discuss her limited representation with him, nor did she
____________________________________________
20
We do note that the Commonwealth has failed to cite a single case
where a witness testified before a grand jury in an organizational or
representative capacity and the testimony offered was used to prosecute the
individual in a personal capacity. In contrast, the United States Supreme
Court has held that a witness cannot be made to testify before a grand jury
as a representative of an organization because any testimony would be
personal. See Curcio v. United States, 354 U.S. 118, 123-124 (1957).
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receive informed consent from him. Lastly, Schultz highlights that Ms.
Baldwin did not seek a waiver from him regarding the attorney-client
privilege and Penn State expressly informed Judge Feudale and the OAG that
it did not waive its privilege as to communications between Ms. Baldwin and
Schultz. Thus, Schultz contends that his communications with Ms. Baldwin
in advance of his grand jury testimony remained confidential and
inadmissible and that Ms. Baldwin breached her obligation to him by
testifying in the later grand jury proceeding.
Schultz also distinguishes the non-precedential decisions relied on by
the trial court: In the Matter of Bevill, Bresler & Schulman Asset
Mgmt. Corp., 805 F.2d 120 (3d Cir. 1988), Maleski by Chronister v.
Corporate Life Ins. Co., 641 A.2d 1 (Pa.Cmwlth 1994), and United States
v. Norris, 722 F. Supp. 2d 632 (E.D. Pa. 2010). In those cases, the issues
did not involve representation by an attorney before an investigating grand
jury. Schultz contends that providing subpoenaed testimony in front of a
grand jury is not analogous to the aforementioned cases. He submits that a
grand jury witness, even a corporate employee, is subject to individual
criminal liability for testimony given before a grand jury and, in
Pennsylvania, unlike the federal system, the witness has a statutory right to
counsel to advise and protect the personal interests of the witness. Schultz
sets forth that “Ms. Baldwin made no statement that defined or limited her
role as counsel for Mr. Schultz, creating the impression that she was the
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lawyer that Judge Feudale’s colloquy and the statute envisioned, not merely
corporate counsel with a limited if any obligation to the witness.” Appellant’s
brief at 34.
In Schultz’s view, the proper standard for determining whether the
attorney-client privilege exists is based on the client’s reasonable belief. In
this regard, he maintains that he and Ms. Baldwin met to discuss his grand
jury appearance, and Ms. Baldwin agreed to appear with him, but she
neglected to properly or adequately explain the distinction between
representing him as an individual or as an agent of Penn State. Further,
Judge Feudale’s colloquy focused on Schultz’s right to counsel in the context
of personal representation and Ms. Baldwin did not place on the record any
limitations as to her representation.
Schultz asserts, with respect to the attorney-client privilege
implications, that “Ms. Baldwin’s personal opinion that she did not represent
Mr. Schultz personally does not matter.” Id. at 37. Rather, he argues that
the attorney-client privilege exists where:
1) The asserted holder of the privilege is or sought to become a
client.
2) The person to whom the communication was made is a
member of the bar of a court, or his subordinate.
3) The communication relates to a fact of which the attorney was
informed by his client, without the presence of strangers, for the
purpose of securing either an opinion of law, legal services or
assistance in a legal matter, and not for the purpose of
committing a crime or tort.
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4) The privilege has been claimed and is not waived by the
client.
Commonwealth v. Mrozek, 657 A.2d 997, 998 (Pa.Super. 1995).
Applying these principles, Schultz points out that Ms. Baldwin
identified herself as counsel for Schultz before his grand jury testimony and
did not limit or restrict her scope of representation at that time. Ms. Baldwin
is an attorney, and she and Schultz discussed one-on-one his subpoena and
required appearance before the grand jury. Those discussions were for
purposes of legal assistance and Schultz has invoked his privilege.
The Commonwealth responds to this aspect of Appellant’s argument by
arguing that the trial court correctly relied on Bevill. In its view, Bevill
addresses the scope of corporate counsel’s representation and whether that
representation extends to an individual employed by the corporation. The
Commonwealth concedes that the Mrozek test determines if an attorney-
client relationship exists. Hence, it acknowledges that Schultz and Ms.
Baldwin had an attorney-client relationship, but maintains that Ms. Baldwin
represented him in an agency capacity only. Since, according to the
Commonwealth, the question before the trial court was the scope of Ms.
Baldwin’s representation, it submits that the trial court appropriately relied
on Bevill and Maleski.
The Commonwealth also rejoins that Schultz was not represented in
his individual capacity by Ms. Baldwin and, therefore, no privilege exists. It
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further disputes his position that Ms. Baldwin could not be present at his
grand jury testimony unless she represented him personally. The
Commonwealth continues that an attorney can represent a person appearing
before a grand jury as a representative of an organization employing that
individual. It cites Pa.R.Prof.Conduct. 1.13, in support. That rule provides
in pertinent part, “A lawyer employed or retained by an organization
represents the organization acting through its duly authorized constituents.”
Pa.R.Prof.Conduct. 1.13(a). In addition, Rule 1.13(e), sets forth, “A lawyer
representing an organization may also represent any of its directors,
officers, employees, members, shareholders or other constituents, subject to
the provisions of Rule 1.7.” Rule 1.7 reads in relevant part:
(a) Except as provided in paragraph (b), a lawyer shall not
represent a client if the representation involves a concurrent
conflict of interest. A concurrent conflict of interest exists if:
(1) the representation of one client will be directly adverse to
another client; or
(2) there is a significant risk that the representation of one or
more clients will be materially limited by the lawyer's
responsibilities to another client, a former client or a third person
or by a personal interest of the lawyer.
(b) Notwithstanding the existence of a concurrent conflict of
interest under paragraph (a), a lawyer may represent a client if:
(1) the lawyer reasonably believes that the lawyer will be able to
provide competent and diligent representation to each affected
client;
(2) the representation is not prohibited by law;
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(3) the representation does not involve the assertion of a claim
by one client against another client represented by the lawyer in
the same litigation or other proceeding before a tribunal; and
(4) each affected client gives informed consent.
Pa.R.Prof. Conduct 1.7.
In the Commonwealth’s view, however, Ms. Baldwin did not represent
conflicting interests nor did she represent multiple clients. Instead, it posits
that she represented Penn State solely and, based on the information
provided by Schultz, Curley, and Spanier, the interests of Penn State and
those individuals did not diverge. It therefore neglects to discuss the
requirements of informed consent.
Part VII. Analysis
Under the particular facts herein, we find the trial court’s reliance on
Bevill, Maleski, and Norris to be erroneous. In Bevill, there were two
related proceedings: a Chapter 11 bankruptcy reorganization of a
corporation and the liquidation of a related corporation. Bevill, Bresler &
Schulman Asset Management Corporation (“AMC”) was involved in the
bankruptcy proceeding and Bevill, Bresler & Schulman, Inc., (“BBS”) in the
liquidation matter. Robert Bevill and John Rooney were principals in both
corporations.
There, the president of AMC, Gilbert Schulman, had consulted with the
law firm of Hellring, Lindeman, Goldstein, Siegal, & Greenberg, (“Law Firm”)
between March 25, 1985 and April 7, 1985. Bevill and Rooney were present
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for some of those meetings. Schulman, in the course of meeting with the
Law Firm, explained that he was consulting them for the purpose of
potentially representing him and Bevill personally or the two corporations.
Ultimately, on March 31, 1985, BBS retained the Law Firm to represent it.
During depositions, the trustee for AMC attempted to question
Schulman regarding his communications with the Law Firm, setting forth
that AMC waived its attorney-client privilege. Schulman’s counsel directed
Schulman not to answer and counsel for Bevill and Rooney also instructed
Schulman not to respond because the attorney-client privilege applied as
part of the joint defense doctrine. Thereafter, trustees for AMC and BBS and
the SEC, which was investigating the companies for fraud, filed motions
directing Schulman, Bevill, and Rooney to respond to the deposition
questions.
The district court conducted a hearing and directed Schulman, Rooney,
Bevill, the Law Firm, and several other principals to answer written
interrogatories regarding the scope of the Law Firm’s representation.
Rooney and Bevill asserted their Fifth Amendment rights. The district court
concluded that information sought about meetings before March 31 st with
Hellring was privileged. However, it determined that other communications
after that date were not. The district court ordered Schulman and Hellring to
answer the depositions from the trustees of both corporations and rejected
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Rooney and Bevill’s assertion of a joint defense privilege. Rooney and Bevill
contended that the order violated their individual attorney-client privilege.
The Third Circuit Court of Appeals framed the dispute as “center[ing]
on whether the individuals’ assertion of an attorney-client privilege can
prevent the disclosure of corporate communications with corporate counsel
when the corporation’s privilege has been waived.” Bevill, supra at 124.21
The Bevill Court held that Bevill and Rooney could not “assert their
personal privilege over the corporation’s waiver with regard to corporate
matters.” Id. at 125 (emphasis added). In doing so, the Bevill Court
noted that the district court had examined the claim of attorney-client
privilege under the following test:
First, they must show they approached counsel for the
purpose of seeking legal advice. Second, they must demonstrate
that when they approached counsel they made it clear that they
were seeking legal advice in their individual rather than in their
representative capacities. Third, they must demonstrate that the
counsel saw fit to communicate with them in their individual
capacities, knowing that a possible conflict could arise. Fourth,
they must prove that their conversations with counsel were
confidential. And, fifth, they must show that the substance of
their conversations with counsel did not concern matters within
the company or the general affairs of the company.
____________________________________________
21
Here, of course, Penn State declined to waive its own privilege as to
communications between Schultz and Ms. Baldwin. Further, Schultz was
consulting Ms. Baldwin about appearing before an investigative grand jury
regarding a criminal investigation into Jerry Sandusky.
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Bevill, supra at 125.22 The Third Circuit ruled that “[t]he test adopted by
the district court does not invade the personal privilege of the officers
because they do not have an attorney-client privilege with regard to
communications made in their role as corporate officials.” Id. It, however,
noted that the district court did not preclude Rooney and Bevell from
asserting a personal privilege as to communications not related to their role
as officers of the corporation. See also footnote 20.
The trial court herein imprecisely stated that Pennsylvania adopted the
five-part test outlined in Bevill, citing Maleski, supra. However, Maleski
was a non-binding single judge decision by the Commonwealth Court. It,
therefore, lacks precedential value. See 210 Pa.Code § 69.414(b) (“a single
____________________________________________
22
Both the Tenth Circuit Court of Appeals and the First Circuit Court of
Appeals have explained the fifth aspect of Bevill as follows,
The fifth prong of In Matter of Bevill, properly interpreted, only
precludes an officer from asserting an individual attorney client
privilege when the communication concerns the corporation's
rights and responsibilities. However, if the communication
between a corporate officer and corporate counsel specifically
focuses upon the individual officer's personal rights and
liabilities, then the fifth prong of In Matter of Bevill can be
satisfied even though the general subject matter of the
conversation pertains to matters within the general affairs of the
company.
In re Grand Jury Subpoena, 274 F.3d 563, 572 (1st Cir. 2001) (citing
Grand Jury Proceedings v. United States, 156 F.3d 1038, 1041 (10th
Cir. 1998)).
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judge opinion of [the Commonwealth] court, even if reported, shall be cited
only for its persuasive value and not as binding precedent.”). Further, this
Court is not bound by decisions by our sister court. See Estate of Brown,
30 A.3d 1200, 1205 n.2 (Pa.Super. 2011). Thus, Maleski can only serve as
persuasive authority and is not governing Pennsylvania law. Id.
While citing Maleski, the trial court did not discuss that case and
instead focused on Norris, supra.23 In Norris, a federal grand jury
investigating price fixing served a subpoena on Morganite. Morganite was a
United States subsidiary corporation of Morgan Crucible Company
(“Morgan”), a British corporation. Morgan hired a law firm to respond to the
subpoena and conduct an internal corporate investigation. Norris was a
corporate officer with Morgan. As part of the law firm’s investigation, and in
____________________________________________
23
Maleski involved a corporate liquidation matter of a life insurance
company, Corporate Life. The Commonwealth Court ordered that Corporate
Life be dissolved and liquidated. It also instructed Corporate Life to turn
over all of its files to a special counsel for the Insurance Commissioner.
Former counsel for Corporate Life, Berry & Martin, and two corporate officers
contended that certain materials were privileged and protected as work
product.
The judge in Maleski acknowledged that corporate officers may hold a
privilege as to communications with corporate counsel if they are seeking
individual representation. It then cited the five-part test discussed in Bevill,
supra. The court directed further proceedings to determine if various
communications were privileged. It did not rule that communications
between corporate counsel and officers of that corporation were not subject
to the attorney-client privilege.
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attempting to supply documents pertaining to the subpoena, Norris met with
counsel on at least two occasions and spoke with the attorney several other
times. Each meeting was initiated by counsel.
The attorney also appeared with Norris during a Canadian antitrust
interview and at an unrelated interview with the Federal Trade Commission.
Importantly, the attorney told Norris that he represented Morgan and did not
represent Norris in a personal capacity. Critically, counsel explicitly advised
Norris to retain independent counsel. Norris was not called as a witness to
testify before the grand jury and Morgan’s lawyer was not asked by Norris to
represent him. Further, the attorney and Norris did not discuss personal
legal matters concerning Norris. Morgan, unlike Penn State with regards to
communications between Ms. Baldwin and Schultz, also waived its privilege.
The Norris Court concluded that Norris failed to establish that corporate
counsel represented him in an individual capacity during the internal
investigation by Morgan.
As noted, the Commonwealth contends that Bevill controls, while
Schultz maintains that Mrozak is the proper governing precedent. We
agree with Schultz that the Bevill test is inapt. As noted above, Bevill and
Norris did not involve a corporate attorney consulting with, in this case, a
former employee, for purposes of that person’s preparation for testimony
before a criminal investigating grand jury and the attorney appearing and
being present during that grand jury testimony. Bevill and Norris involved
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federal litigation where the individual had no right to the presence of an
attorney during grand jury testimony. Thus, in this case there are additional
concerns regarding whether counsel adequately alerted Schultz to the
distinction between his right to statutory individual representation and
representing him solely as an agent of Penn State.
The intent of our legislature in affording counsel during a grand jury
proceeding was to protect the testifying individual’s rights, most vitally the
possibility of incriminating himself or herself. See McCloskey, supra at
144 (“Determining what is an incriminating statement is not always clear to
a layman.”). Hence, the right envisioned by the legislature is a personal
right. See Commonwealth v. Columbia Investment Corp., 325 A.2d
289 (Pa. 1974) (Nix, J., dissenting) (arguing in favor of counsel’s presence
during grand jury questioning in a pre-statutory right to grand jury counsel
case); see also McCloskey, supra 780-781 (Eagen, J., concurring and
dissenting) (arguing in favor of right to counsel during grand jury
testimony). Pointedly, the presence of the attorney in the grand jury room
would be rendered nugatory if that lawyer is not present for the purpose of
protecting the witness against incriminating himself.
In other contexts involving the right to counsel, Pennsylvania courts
have insisted that any waiver of counsel be made knowingly, intelligently,
and voluntarily. See Commonwealth v. Grazier, 713 A.2d 81, 82 (Pa.
1998) (“When a waiver of the right to counsel is sought at the post-
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conviction and appellate stages, an on-the-record determination should be
made that the waiver is a knowing, intelligent, and voluntary one.”); see
also Pa.R.Crim.P. 121.
Applying Mrozek, it is evident that an attorney-client relationship
existed. Mrozek espouses a four-part inquiry to determine if an attorney-
client relationship exists. First, the person asserting the privilege must show
that he is or sought to become a client. Instantly, Schultz met with Ms.
Baldwin to discuss the subpoena served on him to testify before a criminal
grand jury investigating Jerry Sandusky. Schultz was no longer employed
by Penn State when he discussed his appearance before the grand jury with
Ms. Baldwin. The subpoena, in contrast to the subpoena duces tecum, was
not for the University.24 It is beyond cavil that this meeting was for the
purpose of securing legal advice. The trial court itself found that Schultz
approached Ms. Baldwin for legal advice related to appearing before the
grand jury investigation into Jerry Sandusky.
The second prong of the Mrozek test is also unequivocally satisfied,
i.e., the person to whom the communication was made is a lawyer. There is
no dispute that Ms. Baldwin was a licensed attorney at the time she
____________________________________________
24
Had the subpoena been served on the University, Ms. Baldwin would not
have needed to ask permission from Schultz to accept service of the
subpoena. Thus, the trial court’s reliance on the OAG serving Schultz via
Ms. Baldwin rather than at his home is a non-sequitur.
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discussed Schultz’s legal options and requirements relative to the subpoena.
The third aspect of the Mrozek test examines whether the communication
between the attorney and putative client/client relates to facts told the
attorney or client, without the presence of strangers, in order to secure legal
opinions or services in a legal matter, and not for the purpose of committing
a crime or tort. The issues communicated and addressed were not general
business matters relative to the operation of the University, but pertained to
the criminal investigation into Jerry Sandusky. Indeed, unlike the cases
relied on by the trial court, this case did not involve discussions between
corporate counsel and officers of the corporation for purposes of operating
and running that business or an internal investigation into its business
practices.
Ms. Baldwin also communicated with Schultz and expressed her belief
that no conflict prevented her from representing Schultz and Curley. Thus,
ostensibly, Ms. Baldwin was aware of the potential for a conflict of interest
between Schultz and other individuals. The communication between Schultz
and Ms. Baldwin occurred one-on-one and she did not reveal those
communications to the Board of Trustees of Penn State, outside of possibly
Spanier.25 The communications concerned the rights and responsibilities of
____________________________________________
25
Ms. Baldwin expressly testified about what she disclosed to the Board of
Trustees as follows,
(Footnote Continued Next Page)
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Schultz relative to appearing before a criminal investigating grand jury and
not Penn State’s corporate rights. Finally, Schultz has claimed his privilege
and Penn State has expressly refused to waive any privilege relative to
communications between Ms. Baldwin and him. Thus, the last prong of the
Mrozek test has been met.
Moreover, Ms. Baldwin did not adequately explain to Schultz that her
representation of him was solely as an agent of Penn State and that she did
not represent his individual interests. Although Schultz was certainly aware
that Ms. Baldwin was general counsel for Penn State, it is unreasonable to
conclude that this awareness by a lay person ipso facto results in Schultz
knowing that she represented him solely in an agency capacity. As the
Bevill Court itself recognized, certain communications between corporate
counsel and an employee can be personally privileged.
While Ms. Baldwin could have limited the scope of her representation
during Schultz’s grand jury testimony or prior thereto, there is no support in
the record that such a limited representation was adequately explained to
_______________________
(Footnote Continued)
I gave the presentation, talking about the whole grand jury
process, talking about what had appeared in the newspaper,
talking about, you know, what we knew, not saying anything
about the testimony of Curley, Schultz, or Spanier because that
was—they could disclose—I can’t disclose their testimony and so
I told them about all of that.
N.T., 10/26/12, at 35.
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Schultz or that he provided informed consent to such a representation.
Additionally, the judge of the supervising grand jury did not colloquy Schultz
regarding any potential issue relative to Ms. Baldwin representing Schultz in
a non-individual capacity.26
Ms. Baldwin’s after-the-fact justifications for her own testimony were
not expressed on the record prior to Schultz’s testimony, nor is there
sufficient evidence that she properly advised Schultz of the limits of her
representation. Simply stating that she could reveal communications to the
Penn State Board of Trustees and was general counsel to the University was
decidedly inadequate. Pointedly, Ms. Baldwin’s statement that
communications could be shared with the Board of Trustees is consistent
with the joint attorney-client privilege concept. As Schultz notes in his reply
brief, “The fact that Ms. Baldwin shared confidential information among co-
clients, and correctly advised her co-clients that she would do so, does not
____________________________________________
26
Judge Feudale, in an opinion addressing motions filed by Spanier, Curley,
and Schultz, seeking quashal of the grand jury presentments, opined in
dicta, “In hindsight, perhaps I erred in not asking follow up question about
the role of corporate counsel Baldwin. I regret and perhaps committed error
in not asking any follow up questions but while I am unware of what the
response would have been, I fail to discern how such would persuade me at
this stage why [the] presentments should be dismissed.” Judge Feudale
Opinion, 4/9/13, at 11. Ultimately, Judge Feudale ruled that he lacked
jurisdiction to consider the motions in question. We agree with Judge
Feudale, to the limited extent that he erred in neglecting to properly probe
into the scope of Ms. Baldwin’s representation to ensure that Schultz,
Curley, and Spanier understood whether Ms. Baldwin was acting to protect
their interests or that of the University. See also 42 Pa.C.S. § 4549(c)(4).
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destroy the privilege; rather, it is a routine part of joint client
representation.” Appellant’s reply brief at 11-12.
Part VIII. Conclusion
As our Rules of Professional Conduct illustrate, communications
between a putative client and corporate counsel are generally privileged
prior to counsel informing the individual of the distinction between
representing the individual as an agent of the corporation and representing
the person in his or her personal capacity. See Pa.R.Prof.Conduct 1.2(c)
(lawyer may limit scope of representation provided the client gives informed
consent); Pa.R.Prof.Conduct 1.0(e) (defining “informed consent”); see also
Pa.R.Prof.Conduct 1.6(a) (“A lawyer shall not reveal information relating to
representation of a client unless the client gives informed consent, except for
disclosures that are impliedly authorized in order to carry out representation
and except as stated in paragraphs (b) and (c).”); see also
Pa.R.Prof.Conduct 1.18(b) (“Even when no client-lawyer relationship ensues,
a lawyer who has learned information from a prospective client shall not use
or reveal information which may be significantly harmful to that person”).
When corporate counsel clarifies the potential inherent conflict of
interest in representing the corporation and an individual and explains that
the attorney may divulge the communications between that person and the
attorney because they do not represent the individual, the individual may
then make a knowing, intelligent, and voluntary decision whether to
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continue communicating with corporate counsel. This is all the more
essential where the purpose of the individual seeking advice relates to an
appearance and testimony before a criminal investigating grand jury.
Absent a privilege existing for preliminary communications, the
putative client cannot have full and frank discussions with the attorney in
order to determine whether it would be appropriate for that lawyer to
represent him or her in an individual capacity. See Chmiel, supra at 422-
423 (“The purpose of the privilege is not to further the fact-finding process,
but to foster a confidence between attorney and client that will lead to a
trusting and open dialogue.”); Upjohn, supra at 389 (“Its purpose is to
encourage full and frank communication between attorneys and their
clients.”).
Furthermore, the attorney might be unable to make a determination
as to whether he or she could represent that individual personally if the
putative client believes full disclosure will not be kept confidential. See In
re Thirty-Third Statewide Investigating Grand Jury, supra at 216-217
(internal citations and parenthetical omitted) (“The attorney-client privilege
is intended to foster candid communications between counsel and client, so
that counsel may provide legal advice based upon the most complete
information from the client. The central principle is that a client may be
reluctant to disclose to his lawyer all facts necessary to obtain informed legal
advice, if the communication may later be exposed to public scrutiny.”).
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Insofar as Ms. Baldwin has repeatedly maintained that she did not
represent Schultz’s individual interests, absent an adequate colloquy or
other evidence reflecting acquiescence to such limited representation for
purposes of her presence during his grand jury testimony, we find that
Schultz’s statutory right to counsel during his grand jury testimony was
infringed. Indeed, we agree that Ms. Baldwin’s acknowledged agency
representation of Schultz during his grand jury testimony, without proper
and adequate explanation and informed consent to allow limited
representation, left Schultz constructively without personal counsel for
purposes of his grand jury appearance. Where an attorney purports to offer
only limited representation before and at a grand jury proceeding, we find
that a putative client must be made expressly aware of that fact. See
Pa.R.Prof.Conduct 1.2 (attorney may limit scope of representation provided
client gives informed consent); Pa.R.Prof.Conduct 1.0 (defining informed
consent); see also Pa.R.Prof.Conduct 1.18(b) (communications between
prospective client and attorney are privileged). We add that Ms. Baldwin did
not provide anything akin to Upjohn warnings.
As Schultz consulted with Ms. Baldwin for purposes of preparing for his
grand jury testimony relative to a criminal investigation into Jerry Sandusky,
and reasonably believed she represented him, and Ms. Baldwin neglected to
adequately explain the distinction between personal representation and
agency representation, and give appropriate warnings to Schultz, we
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conclude that all the communications between Schultz and Ms. Baldwin were
protected by the attorney-client privilege. Consequently, Ms. Baldwin
breached that privilege by testifying before the grand jury with respect to
such communications.
Having reached these determinations, we must now address the
proper remedy. Schultz seeks quashal of the perjury, obstruction of justice,
and related conspiracy charges, as well as preclusion of Ms. Baldwin from
testifying in any other proceedings relative to his privileged communications
with her. With respect to the latter position, it is beyond cavil that an
attorney cannot reveal privileged communications between herself and her
client. Ms. Baldwin was and is incompetent to testify against Schultz.
Accordingly, we preclude Ms. Baldwin from testifying in future proceedings
regarding privileged communications between her and Schultz, absent a
waiver by Schultz.
In regards to Schultz’s position that the challenged charges be
quashed, we find McCloskey, supra, enlightening. In McCloskey, an
evenly divided Superior Court had affirmed a decision to quash indictments
and suppress evidence against a number of defendants. The Commonwealth
appealed to our state Supreme Court. Central to this case, the court therein
looked to “whether, or to what degree, a subpoenaed witness and potential
defendant before an investigating grand jury is entitled to the assistance of
counsel to aid him in asserting his right against self-incrimination[.]”
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McCloskey, supra at 766. At that time, counsel was not permitted to be
present inside the grand jury room while the witness testified.
The McCloskey Court declined to hold that a witness was
constitutionally entitled to counsel being present inside the hearing room.
Nonetheless, McCloskey held that a witness must be instructed that he or
she may refuse to answer a question and come before the court with counsel
to obtain a ruling regarding issues of self-incrimination. It found that a
number of the witnesses therein were not properly advised about their right
against self-incrimination. The Court noted that the recommendations in the
grand jury presentment proposing that the individuals be indicted “were
clearly based in part on their incriminating testimony before the
investigating grand jury.” Id. at 779. It then quashed the indictments
because the presentment and indictments were based in part on
“constitutionally impermissible testimony[.]” Id..
This Court, in a plurality decision, has also previously applied
McCloskey. Commonwealth v. Cohen, 289 A.2d 96 (Pa.Super. 1972)
(plurality). In Cohen, the defendant was indicted based on an investigating
grand jury recommendation. He sought to quash the indictments and
suppress his statements to the investigating grand jury. Cohen alleged that
he was denied the right to the advice of counsel and that the supervising
judge failed to adequately apprise him of his right against self-incrimination.
The trial court denied those motions, but certified its order for purposes of
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effectuating an interlocutory appeal. The Cohen plurality determined that
the court failed to adequately inform the defendant that “should a problem
arise while he is being interrogated or should he be doubtful as to whether
he can properly refuse to answer a particular question, he can come before
the Court accompanied by counsel and obtain a ruling as to whether he
should answer the question.” Id. at 98. The Cohen Court ruled that the
defendant was deprived of his constitutional rights and that the grand jury
indictments relied on Cohen’s testimony. Accordingly, it quashed.
In the present case, we acknowledge that Schultz was advised
regarding his right against self-incrimination before his own grand jury
testimony. However, he was not aware that Ms. Baldwin was not appearing
with him in order to protect his interests and therefore unable to provide
advise concerning whether he should answer potentially incriminating
questions or invoke his right against self-incrimination. Since Schultz was
constructively without counsel during his grand jury testimony, and he did
not provide informed consent as to limited representation, we agree that his
right against self-incrimination was not protected by Ms. Baldwin’s agency
representation, and the appropriate remedy is to quash the perjury charge
arising from the first grand jury presentment.
With respect to the criminal counts arising from the second grand jury
presentment, which followed Ms. Baldwin’s testimony, we find instructive
State v. Wong, 97 Haw. 512 (2002). In Wong, the Hawaii Attorney
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General’s Office called a former tax attorney of one of the individuals
ultimately charged in the case to testify before a grand jury.27 The state did
not seek a court ruling regarding the scope of the attorney’s testimony
against his former client. The attorney neglected to notify his client that he
was going to testify and did not receive a waiver of the attorney-client
privilege from his client. The attorney invoked the crime-fraud exception to
the attorney-client privilege during his own testimony to explain his
disclosures. Relying in part on the Hawaii Rule of Evidence 104, which is
substantially equivalent to the same numbered Pennsylvania Rule of
Evidence,28 the Hawaii Supreme Court noted that preliminary questions
____________________________________________
27
The Hawaii prosecutors also attempted to procure testimony from
additional lawyers; however, they raised privilege issues, and there was a
court ruling on the extent to which they could testify. See State v. Wong,
97 Haw. 512, 515 n.3 (2002).
28
At the time of Ms. Baldwin’s testimony, Pennsylvania Rule of Evidence
104 read,
(a) Questions of admissibility generally. Preliminary
questions concerning the qualifications of a person to be a
witness, the existence of a privilege, or the admissibility of
evidence shall be determined by the court, subject to the
provisions of subdivision (b). In making its determination
it is not bound by the rules of evidence except those with
respect to privileges.
See former Pa.R.E. 104(a). The rule was subsequently amended after Ms.
Baldwin testified but reflects no substantive change.
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regarding the existence of a privilege are to be decided by the court. The
Court continued,
when a prosecutor seeks arguably privileged testimony, the
prosecutor must either (1) give notice to the person who might
claim the privilege and the person's counsel, so that the person
or the person's attorney can seek judicial review of any claim or
privilege or waive the privilege, or (2) give notice to the person's
counsel and, if the person's counsel does not raise the privilege
and seek judicial review, the prosecutor must seek the court's
ruling on the privilege issue. In the latter instance, the
prosecutor should proceed with the understanding that if the
person who might claim the privilege has not been given notice
and an opportunity to be heard on the issue of privilege, a
court's allowance of testimony may be overturned after the
holder of the privilege can be heard by the court.
Wong, supra at 521. The Wong Court highlighted that the state elicited
the attorney’s testimony without distinguishing between matters that were
privileged and determined that allowing the testimony was in error. In
quashing the indictments therein, it reasoned,
If the illegal or improper testimony clearly appears to have
improperly influenced the grand jurors despite the presence of
sufficient evidence amounting to probable cause to indict the
defendant, the defendant would be entitled to a dismissal.
Where a defendant's substantial constitutional right to a fair and
impartial grand jury proceeding is prejudiced, a quashing of the
indictment emanating therefrom is an appropriate remedy.
Id. at 526.
Instantly, despite Schultz invoking his privilege, despite the Rules of
Professional Conduct requiring a hearing on the privilege issue prior to Ms.
Baldwin’s testimony, see Pa.R.Prof.Conduct 3.10, despite the Rules of
Evidence mandating that the court determine privilege questions concerning
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a witness’s testimony before he or she testifies, see Pa.R.E. 104, and
despite Penn State’s general counsel, Mr. Mustakoff, acknowledging the
issue, and Deputy Attorney General Fina paying lip service to the privilege
concerns, Judge Feudale failed to have a hearing before Ms. Baldwin
testified. We acknowledge that Attorney Fina misled Judge Feudale by
claiming that the Commonwealth would not inquire into matters concerning
Ms. Baldwin’s communications with Schultz, Curley, and Spainer. In this
regard, we highlight that:
[a prosecutor] is the representative not of an ordinary party to a
controversy, but of a sovereignty whose obligation to govern
impartially is as compelling as its obligation to govern at all; . . .
As such, he is in a peculiar and very definite sense the servant of
the law, . . . He may prosecute with earnestness and vigor --
indeed, he should do so. But, while he may strike hard blows,
he is not at liberty to strike foul ones. It is as much his duty to
refrain from improper methods calculated to produce a wrongful
conviction as it is to use every legitimate means to bring about a
just one.
Berger v. United States, 295 U.S. 78, 88 (1935).
Attorney Fina stated that the Commonwealth assumed the risk of
proceeding without a clear determination regarding the privilege concerns at
play, which is precisely the risk that has now borne fruit in the form of a
challenge to the charges flowing in part from such foul blows. Since the
obstruction of justice and related conspiracy charges in this matter relied
extensively on a presentment from an investigating grand jury privy to
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impermissible privileged communications, we quash the counts of
obstruction of justice and the related conspiracy charge.
The charges of perjury, obstruction of justice, and conspiracy are
hereby quashed. Order reversed. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 1/22/2016
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