Quick Summary
The IRS (plaintiff) contested the Church of Scientology’s (defendant) claim of attorney-client privilege over taped conversations, invoking the crime-fraud exception. The dispute centered on whether this exception could be established via in camera review of the materials.
After lower courts required independent evidence outside of the privileged materials, the Supreme Court held that in camera review was permissible, provided a threshold showing of evidence suggesting crime-fraud involvement was met. The Supreme Court remanded for consistent proceedings with this standard.
Facts of the Case
The Internal Revenue Service (IRS) (plaintiff) was investigating the tax returns of L. Ron Hubbard, founder of the Church of Scientology (Church) (defendant), and sought to introduce tape recordings of meetings between Church representatives and its attorney. The IRS claimed these tapes were subject to the crime-fraud exception to the attorney-client privilege.
The IRS asked the district court to conduct an in camera review of the tapes to determine if the privilege applied. After the district court and the court of appeals refused to listen to the tapes or review transcripts provided by the IRS, the IRS appealed to the Supreme Court of the United States.
The issue was whether the crime-fraud exception to the attorney-client privilege required independent evidence or could be resolved through in camera inspection of the contested communications.
Procedural History
- The IRS sought access to documents and tapes filed under seal as part of an investigation into L. Ron Hubbard’s tax returns.
- The district court ruled that the tapes were privileged attorney-client communications and did not fall under the crime-fraud exception.
- The Court of Appeals for the Ninth Circuit affirmed, requiring independent evidence, aside from the communications themselves, to apply the crime-fraud exception.
- The IRS appealed to the Supreme Court of the United States.
I.R.A.C. Format
Issue
Whether the crime-fraud exception to attorney-client privilege requires independent evidence or can be determined through in camera inspection of the materials in question.
Rule of Law
The crime-fraud exception to attorney-client privilege allows for in camera review by a district court under certain circumstances when it is believed that communications were made in furtherance of future illegal conduct.
Reasoning and Analysis
The Supreme Court held that neither Rule 104(a) nor federal common law prohibits in camera review for determining whether attorney-client communications fall within the crime-fraud exception. The Court reasoned that absolute prohibition against such review would be inconsistent with the purpose of the privilege and would impede the functioning of the judicial system.
However, before conducting an in camera review, a party must present evidence sufficient to support a reasonable belief that such review may yield evidence establishing the exception’s applicability. This threshold showing can be met by any relevant evidence, lawfully obtained, not adjudicated to be privileged.
Conclusion
The Supreme Court vacated the judgment of the Court of Appeals and remanded the case for further proceedings consistent with its opinion, allowing for in camera review if a threshold evidentiary showing is made.
Key Takeaways
- In camera review is permissible in determining applicability of the crime-fraud exception to attorney-client privilege.
- A threshold showing of evidence is required before a court may conduct an in camera review.
- The party opposing privilege may use any nonprivileged evidence to support their request for in camera review.
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References
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