On February 12, 2014, in In re Grand Jury Subpoena, the US Court of Appeals for the Third Circuit clarified the circumstances under which a court may examine a witness in camera to determine whether evidence is protected by the crime-fraud exception to the attorney-client privilege (No. 13-1237, (3d Cir. Feb. 12, 2014)).

A corporation and its president (the client) were targets of a grand jury investigation regarding alleged violations of the Foreign Corrupt Practices Act (FCPA). The grand jury served a subpoena on the client's former attorney, and the corporation and the client intervened, arguing that the information sought was privileged. The government moved to enforce the subpoena based on the crime-fraud exception to the attorney-client privilege. After questioning the attorney in camera, the district court found that the crime-fraud exception applied. The district court compelled the attorney to testify in front of the grand jury.

The intervenors appealed, arguing that the district court:

The Third Circuit held that the district court properly applied the standard established by the US Supreme Court in United States v. Zolin to determine whether an in camera review should be used to determine the applicability of the crime-fraud exception (491 US 554 (1989)). Zolin permits an in camera review where the proponent of the exception shows a factual basis adequate to support a good faith belief by a reasonable person that in camera review of the materials may reveal evidence establishing that the exception applies (491 US at 557).

Although Zolin involved an in camera review of documents, rather than an examination of a witness, the Third Circuit held that the standard was appropriate. The Zolin court noted that an in camera review creates three concerns:

The intervenors here argued that an in camera examination of a person created a fourth concern: witness recollection.

The Third Circuit ruled that a court should weigh all of these concerns against the need to determine whether the crime-fraud exception was applicable to decide whether an in camera examination would be appropriate. The court noted that establishing a different standard for oral communications than that for documents could lead nefarious clients to communicate with counsel orally to protect their criminal communications with a higher standard. The Third Circuit found that a district court could address the due process implications on a case-by-case basis. While an oral examination would place a burden on the court, the Third Circuit did not consider the burden so great that oral communications should receive greater protection than documents. The Third Circuit further held that a court could question a witness in a manner that would ensure that the testimony elicited was accurate. The court also noted that the witness would be under oath.

Applying Zolin, the Third Circuit held that the in camera examination was appropriate here. The Third Circuit also held that the district court properly excluded the intervenors from the examination due to the need for grand jury secrecy.

Finally, the court found that the district court did not abuse its discretion in determining that the crime-fraud exception applied. The exception applies when the client intends to commit a crime or fraud when he consults the attorney and then uses the consultation to further the crime or fraud. Here, the client came to the attorney with a particular course of action in mind. The attorney advised the client against that course of action and explained why it might run afoul of the FCPA. The client pursued that course of action, modifying its plans only slightly. It was possible that the client used the attorney's advice to modify its plans in a way that might avoid detection by the authorities.