623 F.

2d 122
6 Fed. R. Evid. Serv. 997

In re Grand Jury Proceedings Gary KATZ, Witness.

Benjamin JAMIL, Intervenor-Appellant,
v.
UNITED STATES of America, Appellee.
No. 1221, Docket 80-1146.

United States Court of Appeals,

Second Circuit.
Argued May 14, 1980.
Decided July 1, 1980.

Barry I. Slotnick, New York City (Jay L. T. Breakstone, New York City,
of counsel), for intervenor-appellant.
David V. Kirby, Asst. U. S. Atty., Brooklyn, N.Y. (Edward R. Korman, U.
S. Atty., Eastern District of New York, Miles M. Tepper, Asst. U. S. Atty.,
Brooklyn, N.Y., of counsel), for appellee.
Before LUMBARD, MANSFIELD and MULLIGAN, Circuit Judges.
MULLIGAN, Circuit Judge:

Gary Katz, an attorney, was served with a subpoena on March 18, 1980
directing him to appear before a grand jury empanelled in the Eastern District
of New York which is investigating the unlicensed exports of devices on the
Munitions Control List in violation of the Arms Export Control Act of 1954, 22
U.S.C. 2778. The subpoena required Katz to testify and to bring with him "all
documents relating to any dealings or business with CCS, Communications
Control Systems, Benjamin Jamil or any company owned, operated or
controlled by Benjamin Jamil." Katz, who was thought by the Government to
be simply an employee of CCS, actually had served as an attorney for CCS as
well as Jamil personally. Katz obtained an adjournment of his appearance
before the grand jury from March 21 to March 25, 1980 and in the interim
sought the advice of the Westchester County Bar Association which informed

him that compliance with the subpoena would be "unethical" and "improper"
under the New York attorney-client privilege statute, N.Y.C.P.L.R. 4503
(McKinney Supp. Pamphlet 1964-1979).1
2

Upon discovering that Katz had served as an attorney for Jamil and CCS, the
Government modified its request. At the March 25 hearing Hon. Henry
Bramwell denied Katz' motion to quash the subpoena but orally amended it to
require Katz to produce all public documents or documents that had come into
the public record, relating to CCS or Jamil, or any company owned, operated or
controlled by Jamil.

Katz failed to appear before the grand jury on April 3, the date set for
compliance, and on the same day Jamil moved by order to show cause to
intervene and to quash the subpoena.

Oral argument on these motions was conducted on April 7, 1980. The court
denied the motion to intervene without explanation and held that the attorneyclient privilege does not extend to public documents or records publicly filed
and ordered compliance with the subpoena to that extent. Stay of the order
compelling production was denied.

On April 9,1980, appellant applied to this court for a stay of the enforcement
order pending resolution of this appeal. The next day attorney Katz appeared
before the grand jury and produced some of the requested documents, but
handed over to the district court a packet apparently containing the documents
that appellant claims are privileged, to be held under seal pending the outcome
of the motion for a stay. This court granted the stay on April 22, 1980. The
contents of the packet remain unknown.

* The Government did not raise any issue of appealability in its brief or on the
oral argument of this appeal. It is well settled that the denial of a motion to
intervene as of right is an appealable final order under 28 U.S.C. 1291. Shore
v. Parklane Hosiery Co., Inc., 606 F.2d 354, 356 (2d Cir. 1979). The
appealability of the denial of the motion to quash is equally clear. Generally, a
person who has been served with a subpoena may not appeal an order denying
a motion to quash without first resisting and undergoing the penalty of a
citation for contempt. Cobbledick v. United States, 309 U.S. 323, 60 S.Ct. 540,
84 L.Ed. 783 (1940). However, where the subpoena is directed against a third
party, the movant who claims that production of the subpoenaed material
would violate his fifth amendment privilege against self-incrimination is
permitted an immediate appeal. Perlman v. United States, 247 U.S. 7, 38 S.Ct.

417, 62 L.Ed. 950 (1918); In re Grand Jury Subpoena for New York State
Income Tax Records, 607 F.2d 566, 570 (2d Cir. 1979); United States v.
Guterma, 272 F.2d 344 (2d Cir. 1959). The theory of immediate appealability in
these cases is that the third party will not be expected to risk a contempt
citation and will surrender the documents sought, thereby letting the "cat out of
the bag" and precluding effective appellate review at a later stage. Maness v.
Meyers, 419 U.S. 449, 463, 95 S.Ct. 584, 42 L.Ed.2d 574 (1975); see United
States v. Ryan, 402 U.S. 530, 533, 91 S.Ct. 1580, 29 L.Ed.2d 95 (1971). Here
the cat apparently is still in the bag since the disputed documents are being held
under seal in the district court. Cf. United States v. Lavender, 583 F.2d 630,
632-33 (2d Cir. 1978). The order is therefore now appealable.
7

The denial of appellant's motion to intervene was error. Fed.R.Civ.P. 24(a) (2)
holds that anyone 'shall be permitted to intervene in an action' when

8 applicant claims an interest relating to the property or transaction which is the

"the
subject of the action and he is so situated that the disposition of the action may as a
practical matter impair or impede his ability to protect that interest, unless the
applicant's interest is adequately represented by existing parties."
9

Appellant's contention that his fifth amendment interests are threatened, and
that his attorney cannot be expected to protect those interests by being held in
contempt, presents a paradigmatic case of entitlement to intervention as of right.
See In re Grand Jury Proceedings, 604 F.2d 798, 800-01 (3d Cir. 1979);
Velsicol Chem. Corp. v. Parsons, 561 F.2d 671, 673 (7th Cir. 1977), cert.
denied, 435 U.S. 942, 98 S.Ct. 1521, 55 L.Ed.2d 538 (1978).

II
10

The Government argues here that the appellant has asked this court to decide
this appeal in a "vacuum" as we have no inkling of what "if anything" may be
contained in the packet of documents turned over to Judge Bramwell and now
under seal in that court. While this is certainly true it does not follow at all that
the appeal is without merit. Even if we were privy to the contents of the packet
we could not on the basis of the record before us determine whether Jamil's
claim of attorney-client privilege properly attaches and whether his fifth
amendment self-incrimination claim has validity, as there has been no hearing
to determine the applicability of either privilege to the documents.

11

The Government also urges that the burden of establishing the existence of the
attorney-client relationship and its applicability to the particular circumstances
presented is upon the party claiming the privilege. We agree and this court has

so held. United States v. Demauro, 581 F.2d 50, 55 (2d Cir. 1978). However, a
reading of the transcript of the April 7 hearing reveals that counsel for Jamil
was willing to proceed with a factual inquiry having Katz testify as to the
claimed privilege. The court nevertheless took the position that since the
subpoena had been amended to limit the production to "public documents,"
they could never be confidential or subject to the privilege. Therefore, it
apparently considered that a factual hearing was unnecessary. Jamil was thus
denied the opportunity to satisfy his burden.
12

It is conceded that Katz must and apparently has surrendered all of those public
documents which on their face refer to Jamil or CCS. However, appellant
argues that because the amended subpoena calls for the production by his
attorney of all public documents in his possession relating to "any company
owned, operated or controlled by Benjamin Jamil" it is overbroad and may call
for a "testimonial communication" protected under the attorney-client privilege,
in violation of the rule announced in Fisher v. United States, 425 U.S. 391, 96
S.Ct. 1569, 48 L.Ed.2d 39 (1975) and since followed by this court in United
States v. Praetorius, 622 F.2d 1054, 1062-63 (2d Cir. 1979); see Matter of
Grand Jury Subpoena Duces Tecum Served Upon John Doe, 466 F.Supp. 325,
326-27 (S.D.N.Y.1979). This issue was never addressed by the district court.

13

In Fisher the Court recognized that in some situations the "act of producing
evidence in response to a subpoena . . . has communicative aspects of its own,
wholly aside from the contents of the papers produced." 425 U.S. at 410, 96
S.Ct. at 1581. See also Andresen v. Maryland, 427 U.S. 463, 473-74, 96 S.Ct.
2737, 2744-2745, 49 L.Ed.2d 627 (1976).

14

Thus, if as the Government suspects, Katz has in his custody certain certificates
of incorporation listing only dummy incorporators and not facially indicating
any ownership or control by Jamil, their very production under compulsion may
be a testimonial and incriminating communication.2 The act of turning over the
documents would constitute a communication by Katz to the effect that
appellant was connected with the corporations. Moreover, as the Government
obviously does not know the identity of these corporations or appellant's
relationship to them, the "existence and location of the papers" is not a
"foregone conclusion," and their production may well add much "to the sum
total of the Government's information." Fisher, supra, 425 U.S. at 411, 96 S.Ct.
at 1581. Finally, if the corporations are somehow linked to the scheme under
investigation by the grand jury, production may well be highly incriminatory of
appellant. In short, disclosure of such documents may well fall within Fisher's
proscription.

15

Again, we do not know the contents of the packet. But the court below did not
discuss the Fisher issue, resting instead simply on the proposition that a public
document may in no circumstances be subject to the attorney-client privilege.
The issue in our view is not resolved that simply. While the instrument may be
a public document, Jamil's interest in or relation to the document may well have
been confidentially divulged, and its compelled surrender by his attorney per se
may constitute a testimonial communication that tends to incriminate him.

16

The Government relies on a line of cases which have held that the disclosure of
the identity of a client is not privileged. Thus in United States v. Pape, 144 F.2d
778, 782 (2d Cir.), cert. denied, 323 U.S. 752, 65 S.Ct. 86, 89 L.Ed. 602
(1944), we observed:

17

The authorities are substantially uniform against any privilege as applied to the
fact of retainer or identity of the client. The privilege is limited to confidential
communications, and a retainer is not a confidential communication, although it
cannot come into existence without some communication between the attorney
and the at that stage prospective client. (citations omitted.)

18

However, this is not the issue here. Jamil is admittedly the client of Katz. The
Government is aware of that and is not simply seeking appellant's identity as
such but rather what interest that client may have in corporations other than
CCS.3

19

In Fisher the Court indicated that whether the privilege against selfincrimination attaches is not subject to categorical answers but depends upon
the facts and circumstances of each case. 425 U.S. at 410, 96 S.Ct. at 1580. Not
knowing the facts or circumstances we accordingly remand to the district court
to make the two pronged inquiry mandated by Fisher :

20

(1) Would the documents in issue be privileged under the fifth amendment had
they remained in the possession of Jamil and had the subpoena been directed to
him?

21

(2) Are they protected by the attorney-client privilege while in the possession
of Katz?The hearing and examination of the packet of materials should be in
camera and the proceeding itself should be privileged so that whatever
testimony is elicited will not constitute a waiver of any right the witness might
have. See Matter of Grand Jury Empanelled February 14, 1978, 603 F.2d 469,
474-75 (3d Cir. 1979). In the alternative, the court may simply limit the
subpoena so that it calls only for public documents which (1) relate to CCS or

(2) bear the name of Jamil.

22

So ordered.
LUMBARD, Circuit Judge (dissenting):

23

I dissent.

24

The record suggests that public corporate papers for corporations "owned,
operated or controlled by Benjamin Jamil" are among the documents which
Katz claims are privileged. In my view, the district court may compel an
attorney to produce documents or copies of documents which have been filed in
a public office. As the law is well-settled that an attorney must disclose the
identity of his client or of one who has paid him a fee, United States v. Strahl,
590 F.2d 10, 11 (1st Cir. 1978), cert. denied, 440 U.S. 918, 99 S.Ct. 1237, 59
L.Ed.2d 468 (1979); Matter of Fischel, 557 F.2d 209, 211-12 (9th Cir. 1977);
United States v. Tratner, 511 F.2d 248, 252 (7th Cir. 1975); United States v.
Ponder, 475 F.2d 37, 39 (5th Cir. 1973); Colton v. United States, 306 F.2d 633,
637, cert. denied, 371 U.S. 951, 83 S.Ct. 505, 9 L.Ed.2d 499 (1963), it follows
that an attorney must likewise disclose the identity of one who caused the
creation and filing of documents in a public office and that he must produce
those of such documents, or copies of such documents, as may be in his
possession.

25

The grand jury subpoena, as modified by Judge Bramwell, requires Katz to

produce all public documents or documents that have come into the public
record relating to CCS, Communications Control Systems, and Benjamin Jamil
or any company owned, operated, or controlled by Jamil. By producing such
records, the attorney would only be disclosing the acts of his client which have
caused certain records to be made public. The attorney would not thereby
disclose any communications which are or were intended to be confidential and
protected from judicial process. Testimony regarding delivery and filing is
simply evidence of an overt act done by the client. In no respect would the
attorney be disclosing anything which can fairly be considered to have been a
confidential communication. Indeed, the purpose of the client's act is to cause
the attorney to do something which is and must be public in order to be
effective.

26

Of course, it is true that responses to a subpoena which calls for such

documents may give the grand jury information which it does not already have.
Doubtless disclosure and production by an attorney showing that Jamil pays the

bill and calls the tune would add to what the government already knows and
may be highly incriminating. To enable the government to obtain such evidence
is precisely why we have grand juries and why their subpoenas should be
enforced unless it is clear that disclosure would impair the salutary purpose of
encouraging frank communications between a client and an attorney. In the
situation before us, no salutary purpose is served by making it more difficult
for the government to find out who is attempting to obtain the advantages of
anonymity and secrecy by using the public facility of incorporation. If an
attorney must say who paid him money, on what theory can he shield the client
who has caused him to obtain the public benefits of incorporation by the public
filing? Surely the grand jury may require an attorney who has paid the state a
filing fee for a particular incorporation to disclose the name of the client who
pays the bill; nor is there any reason why an attorney cannot be required to
disclose whatever fees have been paid by that client or other corporation.1 It
simply saves everybody's time to permit the inquiry to be directed at the outset
to the particular party and corporations under investigation. Those who seek the
benefits which the laws of our states allow them through the limited liability
and the possible tax advantages of the corporate structure should not be heard
to complain when a grand jury seeks to determine their activities, or the scope
of their corporate-sheltered activities, by directing its inquiries to the one party
best qualified to know what has been done publicly and to produce such
records.
27

The investigation of white collar manipulation which engages the attention of

law-enforcement officers ought not to be made unnecessarily difficult by
specious semantics about confidential communications. I would affirm the
order of the district court as modified to relate to all public documents and
publicly filed documents caused to be filed by Jamil, CCS, or Communications
Control Systems.

It should be noted that, as this is a federal grand jury proceeding, the federal
common law rule of attorney-client privilege applies. Fed.R.Evid. 501,
1101(d); see In re Grand Jury Subpoena, 599 F.2d 504, 509 (2d Cir. 1979);
United States v. Kovel, 296 F.2d 918, 921 n.2 (2d Cir. 1961)

The subpoena is directed toward Katz, and thus forces the appellant to do
nothing. Absent any compulsion appellant can claim no fifth amendment rights.
Fisher makes clear, however, that documents transferred by a client to his
attorney for the purpose of obtaining legal advice are protected by the attorneyclient privilege if they would be unobtainable while in the client's possession.
Fisher, supra, 424 U.S. at 402-05, 96 S.Ct. at 1576-1578; see United States v.

Authement, 607 F.2d 1129, 1131-32 n.1 (5th Cir. 1979) (per curiam); Matter of
Grand Jury Empanelled February 14, 1978, 603 F.2d 469, 475 (3d Cir. 1979)
3

We have recognized that information not normally privileged may come within
the privilege if disclosure would have the effect of giving testimony which is
itself privileged. Thus in Colton v. United States, 306 F.2d 633, 637 (2d Cir.
1962), cert. denied, 371 U.S. 951, 83 S.Ct. 505, 9 L.Ed.2d 499 (1963), Judge
Lumbard indicated that the identity of an attorney's client, not itself privileged,
may become privileged where "the identification of the client may amount to
prejudicial disclosure of a confidential communication, as where the substance
of a disclosure has already been revealed but not its source."

Incorporation in New York, for example, requires the payment of fees to the
department of state under N.Y.Exec.Law 96(9)(b) and N.Y.Tax Law 180