11th Circuit Holds Crime-Fraud Exception Applies to Attorney Misconduct


After the motions panel granted permission to bring an interlocutory appeal, the Eleventh Circuit held that the crime-fraud exception could overcome a claim of work product when attorneys, as opposed to their clients, were the ones allegedly guilty of misconduct.

Drummond Co. v. Conrad & Scherer, LLP, Nos. 16-11090 & 15-90031 (11th Cir. March 23, 2018), involves a complex dispute that began in prior litigation alleging Drummond supported paramilitary groups that had murdered private citizens in Columbia.  The former action yielded corroborating testimony from several witnesses, and after discovery was served regarding whether the witnesses were compensated in exchange for their testimony, the plaintiffs identified just three witnesses that had been paid.  After Drummond prevailed, it commenced a defamation action against the plaintiffs’ attorneys for sending letters detailing those allegations to the Dutch government and a Japanese company.  In response to discovery requests, as well as in hearings and other court filings, the attorneys reiterated that only three witnesses were paid in the underlying case.

Subsequently, however, it was revealed that three additional witnesses were paid via intermediaries, which the attorneys ultimately admitted.  But the lawyers refused to answer many categories of related questions at their deposition, claiming the information was protected by the attorney work product doctrine.  After finding a prima facie showing of criminal or fraudulent conduct was made, the district court found that each category of the requested discovery was sufficiently related to the claims and ordered a special master to, in camera, review documents and hear deposition testimony (potentially ex parte).  The district court then certified that its order involved controlling questions of law and that an immediate appeal might materially advance the litigation.  After declining to exercise its discretion to hear one such question, the Eleventh Circuit agreed to review whether the crime-fraud exception could be applied to overcome work product protection when an attorney – but not the client – is engaged in the crime or fraud.

Relying on prior precedent and that of the D.C. Circuit in an analogous context, the Eleventh Circuit held that the district court properly concluded the crime-fraud exception may be applied.  In doing so, it rejected the attorneys’ reliance on cases involving the scope of the attorney-client privilege rather than the relationship between the crime-fraud exception and attorney work product.  The Eleventh Circuit also disagreed with the argument that because an innocent attorney may continue to rely on work product when the client engaged in a crime or fraud, the converse must be true.  Instead, it reasoned that position would give an innocent client a right to veto any application of the crime-fraud exception, which would be contrary to the requirement to consider the totality of the circumstances to determine whether the policies favoring disclosure outweigh a client’s legitimate interest in secrecy.  Accordingly, the Eleventh Circuit affirmed the district court’s order that the crime-fraud exception could overcome work product protection based on attorney misconduct, even when the client was innocent of any wrongdoing.

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