Commercial Litigation and Arbitration

Posthumous Waiver of Attorney-Client Privilege Must Be in the Interest of the Decedent or the Estate — Reputational Damage to Decedent Benefitting Personal Representative / Executor Precludes Waiver

United States v. Yielding, 657 F.3d 688 (8th Cir. 2011):

A jury found Geffrey A. Yielding guilty of two federal offenses: one count of aiding and abetting a violation of the so-called Medicare anti-kickback statute, in violation of 42 U.S.C. § 1320a-7b(b)(2) and 18 U.S.C. § 2, and one count of aiding and abetting the falsification of a document, in violation of 18 U.S.C. §§ 1519 and 2. The district court imposed concurrent sentences of 60 months' imprisonment for the anti-kickback conviction and 78 months' imprisonment for the document falsification conviction, to be followed by three years of supervised release. The court also ordered Yielding to pay $944,995.84 in restitution. We affirm Yielding's convictions, vacate the sentence due to procedural error, and remand for further proceedings. ***

Jack Lassiter and Erin Cassinelli Couch represented Kelley Yielding in 2006 in connection with the federal investigation into the payments from ANI to Wall. This representation apparently lasted until Kelley's death in October 2006. On March 18, 2009, Yielding served Lassiter with a subpoena requiring his presence at trial and requiring him to produce his entire file regarding the representation of Kelley Yielding. See Fed. R. Crim. P. 17.

Lassiter and Couch moved to quash the subpoena pursuant to Federal Rule of Criminal Procedure 17(c)(2). The attorneys argued that their file contained "significant amounts" of information protected by the attorney-client privilege and the work-product doctrine, including communications between Kelley Yielding and Couch. The district court granted the motion in part, ruling that Lassiter and Couch were not required to produce any documents or to testify about any matters that they contended were protected by the attorney-client privilege or work-product doctrine.

Yielding argues that, as the personal representative of Kelley Yielding's estate, he holds Kelley's attorney-client privilege and can waive that privilege at will. He also contends that due process considerations require a waiver of Kelley's attorney-client privilege. It is not clear whether Lassiter and Couch withheld any documents based on the attorney-client privilege that were not also covered by the work-product doctrine, and Yielding does not challenge the district court's ruling on work product. But even assuming there is not complete overlap, for the reasons that follow, we see no abuse of discretion in the district court's decision to quash the subpoena.

In the absence of a relevant federal rule, statute, or constitutional provision, federal common law governs questions of privilege in federal criminal proceedings. Fed. R. Evid. 501; United States v. Espino, 317 F.3d 788, 795 (8th Cir. 2003). "The attorney-client privilege is the oldest of the privileges for confidential communications [*707] known to the common law." Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S. Ct. 677, 66 L. Ed. 2d 584 (1981). [**31] This privilege protects confidential communications between a client and her attorney made for the purpose of facilitating the rendition of legal services to the client. United States v. Horvath, 731 F.2d 557, 561 (8th Cir. 1984). The privilege belongs to and exists solely for the benefit of the client. Henderson v. United States, 815 F.2d 1189, 1192 (8th Cir. 1987).

In Swidler & Berlin v. United States, 524 U.S. 399, 410, 118 S. Ct. 2081, 141 L. Ed. 2d 379 (1998), the Supreme Court recognized that the attorney-client privilege generally survives the death of a client. Proposed Federal Rule of Evidence 503, which this court has described as "a useful starting place for an examination of the federal common law of attorney-client privilege," In re Grand Jury Subpoena Duces Tecum, 112 F.3d 910, 915 (8th Cir. 1997) (internal quotation omitted), provided that the attorney-client privilege could be claimed by the personal representative of a deceased client. Proposed Fed. R. Evid. 503(c), reprinted in 56 F.R.D. 183, 236 (1972). Other authorities likewise have recognized that a client's personal representative may invoke and waive the client's attorney-client privilege after the client's death. See Restatement (Third) of the Law Governing Lawyers § 86(1)(a); Unif. R. Evid. 502(c).

A personal representative of a deceased client generally may waive the client's attorney-client privilege, however, only when the waiver is in the interest of the client's estate and would not damage the client's reputation. See 8 Wigmore, Evidence § 2329 (McNaughton rev. 1961); 81 Am. Jur. 2d Witnesses § 335; E.S. Stephens, Annotation, Waiver of Attorney-Client Privilege by Personal Representative or Heir of Deceased Client or by Guardian of Incompetent, 67 A.L.R.2d 1268, § 1 (2009). The cases that have considered this question in detail recognize that a posthumous waiver must be in the interest of the deceased client's estate. See, e.g., Dist. Attorney for the Norfolk Dist. v. Magraw, 417 Mass. 169, 628 N.E.2d 24, 26-27 (Mass. 1994); Eicholtz v. Grunewald, 313 Mich. 666, 21 N.W.2d 914, 916-17 (Mich. 1946); Mayorga v. Tate, 302 A.D.2d 11, 752 N.Y.S.2d 353, 356 (N.Y. App. Div. 2002) (per curiam) (collecting cases). This rule furthers the purposes of the attorney-client privilege by reducing uncertainty about the privilege's posthumous application and encouraging "full and frank" discussions between clients and their attorneys. See Swidler & Berlin, 524 U.S. at 409-10.

Yielding acknowledges that he sought to waive Kelley Yielding's attorney-client privilege in order to use the privileged communications against Kelley's interest. He wanted to impeach any of her statements introduced by the government, see Fed. R. Evid. 806, and to admit statements against her penal interest for the purpose of inculpating Kelley and exculpating himself. See Fed. R. Evid. 804(b)(3). Although the proposed waiver would not be in the interest of the decedent's estate, Yielding argues that Kelley already was implicated in the government's investigation and thus could not suffer further reputational harm as a result of a waiver. We are unconvinced. An admission by Kelley Yielding of complicity in a kickback scheme — if she made such an admission to her attorneys — could do far more damage to Kelley's reputation than a mere investigation.

Yielding also contends that due process considerations require a waiver of Kelley's privilege. Yielding did not raise this argument before the district court, so we review only for plain error. See Fed. R. Crim. P. 52(b). We conclude that Yielding has not shown plain error, because he established neither an obvious error nor a reasonable probability that the outcome would have been different absent the alleged error. See United States v. Olano, 507 U.S. 725, 732, 113 S. Ct. 1770, 123 L. Ed. 2d 508 (1993). The Supreme Court in Swidler & Berlin merely acknowledged the possibility that "exceptional circumstances implicating a criminal defendant's constitutional rights might warrant breaching the privilege." 524 U.S. at 408 n.3 (emphasis added). The law does not clearly establish that due process requires such a breach. And even if Kelley Yielding had made inculpatory statements to her attorneys, it is unlikely that such statements would have swayed the outcome of Yielding's trial, given the strong evidence that Yielding himself played a central role in the kickback scheme and cover-up. There was no plain error warranting relief.

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