Use or Abuse of Joint Defense Agreements: Which Is It for Manafort and Trump? (11/28/18)

I have previously written on joint defense agreements, both generally and in relationship to the special counsel investigation.  I collect the more pertinent prior blog entries related to Trump at the end of this blog entry.  I post this blog today because of the startling developments where Manafort's lawyers shared the information from Manafort's supposed / feigned cooperation with Trump's lawyers, a truly startling development.

I offer an excellent opinion piece: Ken White, Why Did Manafort Cooperate With Trump Over Mueller? (NYT 11/28/18), here.  Mr. White is (per the bio on the bottom):  "a former federal prosecutor, is a criminal defense lawyer and First Amendment litigator at Brown White & Osborn in Los Angeles, and a host of 'All the President’s Lawyers,' on radio station KCRW."  I have worked extensively and written on joint defense agreements and believe that Mr. White's discussion is spot on.  Highly recommended.

Here are the pertinent prior blogs (in reverse chronological order):

• All the President's Joint Defense Agreements (Federal Tax Crimes Blog 10/8/18), here.
• On Trump, Manafort and Joint Defense Agreements (Federal Tax Crimes Blog 9/14/18; 9/15/18), here.
• More On Joint Defense Agreements (Federal Tax Crimes Blog 5/15/18), here.
• On Joint Defense Agreements (Federal Tax Crimes Blog 11/23/17), here.

As an aside, the biggest case in which I was involved with was a case that spawned many great opinions, but the principal opinion in the case was United States v. Stein, 541 F.3d 130 (2d Cir. 2008), here (notice how many lawyers were for the defendants in the case).  I was quite familiar with JDAs before the Stein case, but dealt with JDAs in great nuance in that case.  The fun fact of particular interest in the case was that the prosecution team included Kevin Downing of DOJ Tax Division (where I used to work) at the trial level.  Kevin Downing is Manafort's lawyer (his picture is prominently displayed in the linked article.)  Let's just say that he was not an easy guy for me to deal with then.  Still, he is smart and very aggressive.  Of course, for those taking the trouble to read the opinion, the prosecution's aggressiveness resulted in 13 defendants in the sprawling tax evasion case having their prosecutions dismissed for prosecutorial abuse.

All the President's Joint Defense Agreements (10/8/18)

I have previously written on joint defense agreements ("JDAs") (in reverse chronological order):

• On Trump, Manafort and Joint Defense Agreements (Federal Tax Crimes Blog 9/14/18; 9/15/18), here.
• More on Joint Defense Agreements (Federal Tax Crimes Blog 5/15/18), here.
• On Joint Defense Agreements (Federal Tax Crimes Blog 11/23/17), here.

A very good discussion of JDAs in the special counsel's investigation appeared today, addressed to the general public:  Darren Samuelsohn, Trump team’s contact with Mueller targets could taint findings (Politico 10/8/18), here.  The author discusses the Trump legal team's use of JDAs and whether the use may have goals beyond those normally contemplated by JDAs.  I urge readers who are interested in the intersection of politics and the criminal law to read the article because I believe it is quite good.  (Full disclosure, I am quoted in the article.)

JAT Comments:

1.  In my experience, a participant in a JDA withdraws at least by the time the participant agrees to cooperate and tell all.  Of course, that participant will not be able to disclose items that the participant learned earlier from others in the JDA which are within the scope of the JDA.  And, if the participant disclosed information to the other participants that is confidential to himself within the scope of the JDA, the participant can still disclose that information to the prosecutors pursuant to the cooperation agreement.  The only prohibition on the cooperating participant is that he cannot disclose confidential information that the other participants in the JDA disclosed to him within the scope of the JDA.  So, to use the stark example discussed in the article, if Trump or Trump's lawyers disclosed to Manafort or Manfort's lawyers Trump's admission to a crime within the scope of the JDA, Manafort could not disclose that admission to the prosecutors and, if Manafort did disclose the admission in violation of the JDA, the prosecutors would not be able to use the admission, directly or indirectly, in criminally prosecuting Trump.  Other information that Manafort or his lawyers know that was not disclosed by Trump or his lawyers pursuant to the JDA can be disclosed to the prosecutor and can be used to prosecute Trump.

2.  The problem comes in separating what the witness, here Manafort, knows independent of the confidential information he received pursuant to the JDA.  If the prosecutor wants to prosecute Trump for a crime and uses information from a person in a JDA (here that would be Manafort), the prosecutor will have to prove that the prosecution is not based on any Trump confidential information that Manafort learned from Trump or his lawyers under the JDA.  Unless the parties in the criminal action can agree, that would require a Kastigar-like hearing where the prosecutor would have to prove that the case does not rely on that "tainted" information, directly or indirectly.  That can, in many cases, be an impossible burden and would require suppression of any possibly tainted evidence or even, if so intertwined with the prosecution, dismissal of the case.

3.  For this reason, JDAs can sometimes limit the benefit that prosecutors can get from cooperation from participants in a JDA and make prosecutors less willing to strike a deal with the participant if it appears that the evidence the participant has is tainted or potentially tainted.  This requires delicate negotiations in reaching a cooperation agreement (usually by plea).  Accordingly, in complex multi-target investigations, the marginal or less important actors may want to either not join a JDA or limit and carefully document what is received under the JDA so that that participant can maintain maximum flexibility in cooperation/plea negotiations.

On Trump, Manafort and Joint Defense Agreements (9/14/18; 9/15/18)

Paul Manafort reached a plea agreement with the special counsel that requires his cooperation with the special counsel.  See e.g.,  Spencer S. Hsu , Devlin Barrett and Justin Jouvenal, Manafort will cooperate with Mueller as part of guilty plea, prosecutor says (WAPO 9/14/18), here.   I noticed just a couple of days ago that Trump's vocal counsel, one Rudy Giuliani, claimed that Trump and Manafort had a joint defense agreement ("JDA").  Colin Kalmbacher, Giuliani Confirms Trump and Manafort Have Joint Defense Agreement for Mueller Probe, Share Confidential Information (Law & Crime 9/13/18), here.

I had not heard that Trump and Manafort had a JDA before (or had not recalled that I had heard that), so I was intrigued as to why Trump's vocal counsel, one Rudy Giuliani, would be making a point of it now.

I will speculate that one reason might be to taint any information that Manafort may give pursuant to the cooperation agreement.  How would that happen?  The essence of a JDA is to assure that privileged information shared among members of the JDA will be privileged as to all members.  Hence, if the prosecution (the special counsel) obtains an indictment of another member of the JDA (here Trump), the prosecution would have to prove that the prosecution is not based directly or indirectly on privileged information Trump shared with Manafort under the JDA.  (See On Joint Defense Agreements (Federal Tax Crimes Blog 11/23/17), here, where I discuss these concepts.)

But the issue here may not be ability to prosecute Trump but ability to share relevant information with Congress as to whether Trump should be impeached and convicted.  The rules that might require exclusion in a criminal prosecution of Trump would not apply in an impeachment proceeding.  In that sense, the issue is not whether Trump should be convicted of a crime but whether his conduct is sufficient to justify impeachment by the House and conviction by the Senate.  Manafort's use of the information he received under the JDA could be used for that purpose.

Addendum 9/15/18 2:45 am:

More On Joint Defense Agreements (5/15/18)

I previously wrote on joint defense agreements in response to news articles regarding the special counsel investigation of Russian meddling.  On Joint Defense Agreements (Federal Tax Crimes Blog 11/23/17), here.  I thought I would provide some update information that is less topical to the news cycle.

In United States v. Krug, 868 F.3d 82 (2d Cir. 2017), here, the Second Circuit rejected a claim of joint defense/common interest with respect to hallway communication between two clients to a joint defense agreement ("JDA").  One of the members of the JDA decided to cooperate with the Government.  In that cooperation, the cooperating defendant disclosed the contents of a "hallway" discussion between he and one of the other participants in the JDA.  Their lawyers were not present for that discussion.  The precise content of the discussion is redacted.  Based on the common interest privilege, the district court precluded the Government from using the testimony about the contents of the discussion.  The Government appealed.

The Court of Appeals reversed, thus permitting the Government to use the evidence.  The Court offers a good discussion of the privilege, illustrating the danger of applying the privilege beyond its intended scope.  The key discussion is short, so I excerpt it all.  Please note that I am using the "cleaned up" technique (see here) to make the excerpt more readable.

The underlying purpose of the attorney-client privilege is to encourage full and frank communication between attorneys and their clients. As a result, the attorney-client privilege creates a rule of confidentiality that recognizes that sound legal advice or advocacy serves public ends and that such advice or advocacy depends upon the lawyer's being fully informed by the client. To that end, the attorney-client privilege protects communications (1) between a client and his or her attorney (2) that are intended to be, and in fact were, kept confidential (3) for the purpose of obtaining or providing legal advice. 

In order to balance this protection of confidentiality with the competing value of public disclosure, however, courts apply the privilege only where necessary to achieve its purpose and construe the privilege narrowly because it renders relevant information undiscoverable. The parties asserting the privilege, in this case [Krug and Wendel], bear the burden of establishing its essential elements. 

The joint defense privilege, more properly identified as the common-interest rule, is an extension of the attorney-client privilege. It serves to protect the confidentiality of communications passing from one party to the attorney for another party where a joint defense effort or strategy has been decided upon and undertaken by the parties and their respective counsel.The common-interest rule protects only those communications made in the course of an ongoing common enterprise and intended to further the enterprise. As with all attorney-client privilege claims, a claim of privilege under the common-interest rule requires a showing that the communication in question was given in confidence and that the client reasonably understood it to be so given.  

Although the common-interest rule somewhat relaxes the requirement of confidentiality by defining a widened circle of persons to whom clients may disclose privileged communications, a communication directly among the clients is not privileged unless made for the purpose of communicating with a privileged person, the lawyer, agents of the client or of the lawyer who facilitate communications between the client and the lawyer, and agents of the lawyer who facilitate the representation. In this vein, we have stated that it is not necessary for the attorney representing the communicating party to be present when the communication is made to the other party's attorney under a common-interest agreement. Ultimately, what is vital to the privilege is that the communication be made in confidence for the purpose of obtaining legal advice from the lawyer.  

The communications at issue in this case did not serve the interests that justify the privilege. The communications occurred outside the presence of any lawyer. Notwithstanding that the lawyers for the defendants were nearby and had recently been in communication with their clients, the excluded statements were not made for the purpose of obtaining legal advice from a lawyer, nor did the excluded statements share among defendants advice given by a lawyer, nor did the excluded statements seek to facilitate a communication with a lawyer. Here, the hallway discussion consisted of one member of the JDA (Wendel) conveying his independent, non-legal research to another member of the JDA (Krug) while noting he had sent the same research to his attorney. No legal advice was mentioned, much less shared or otherwise conveyed, among the co-defendants. The mere fact that the communications were among co-defendants who had joined in a joint defense agreement is, without more, insufficient to bring such statements within the attorney-client privilege. We know of no precedent applying the attorney-client privilege on such facts and we find no circumstances present here that could justify extending the attorney-client privilege to these communications. 

CONCLUSION 

For the reasons discussed above, we reverse the order of the district court. The government may offer the proffered testimony by Kwiatkowski regarding the hallway discussion at the trial of Krug and Wendel.

On Joint Defense Agreements (11/23/17)

Today's news includes an article indicating that Michael Flynn's lawyers had withdrawn from a joint defense/common interest agreement with President Trump's lawyers with respect to the acts being investigated by the Special Counsel, Robert S. Mueller III.  See A Split From Trump Indicates That Flynn Is Moving to Cooperate With Mueller (NYT 11/23/17), here.  Key excerpts are:

Lawyers for Michael T. Flynn, President Trump’s former national security adviser, notified the president’s legal team in recent days that they could no longer discuss the special counsel’s investigation, according to four people involved in the case — an indication that Mr. Flynn is cooperating with prosecutors or negotiating a deal. 

Mr. Flynn’s lawyers had been sharing information with Mr. Trump’s lawyers about the investigation by the special counsel, Robert S. Mueller III, who is examining whether anyone around Mr. Trump was involved in Russian efforts to undermine Hillary Clinton’s presidential campaign. 

That agreement has been terminated, the four people said. Defense lawyers frequently share information during investigations, but they must stop when doing so would pose a conflict of interest. It is unethical for lawyers to work together when one client is cooperating with prosecutors and another is still under investigation. 

The notification alone does not prove that Mr. Flynn is cooperating with Mr. Mueller. Some lawyers withdraw from information-sharing arrangements as soon as they begin negotiating with prosecutors. And such negotiations sometimes fall apart. 

Still, the notification led Mr. Trump’s lawyers to believe that Mr. Flynn — who, along with his son, is seen as having significant criminal exposure — has, at the least, begun discussions with Mr. Mueller about cooperating.

See also Why Trump should be nervous, but not panicking, after Michael Flynn’s lawyers cut off communication (WAPO 11/24/17), here.

For an interesting and entertaining comment on Trump's lawyer's reaction:  Hey Y’All, Jay Sekulow May Have No F**king Clue What He’s Doing (Above the Law 11/24/17), here.  The byline for the article is:  Trump's lawyer manages to put his foot in his mouth when "no comment" would have sufficed.

I thought this would be a good opportunity to offer readers some background on joint defense agreements.  I offer here the discussion of this topic in my, now discontinued publication, Federal Tax Crimes.  I discontinued this publication after writing Chapter 12: Criminal Penalties and the Investigation Function, in the publication Michael Saltzman and Leslie Book, IRS Practice and Procedure (Thomsen Reuters 2015).  Although discontinued, I think the excerpt on Joint Defense Agreements is still useful to understand the issues presented.

The key example I use in the excerpts is (footnotes omitted):

A and B are targets of a grand jury investigation.  A has engaged attorney X, and B has engaged you.  You and X are considering a JDA in which X will share with you otherwise privileged information he receives from A, and you likewise will share with X otherwise privileged information you receive from B.  A and B, and their respective attorneys, will commit under the JDA to maintain the confidentiality of the information so shared.  Is this really an attorney-client relationship between you and A?  If that is the case, can A object to your representing B if both are subsequently indicted or, worse, can the prosecutor urge that X and you are conflicted out in the criminal case because of that JDA?  Even if there is not strictly speaking a traditional full-bore attorney-client relationship between you and A, do you still have responsibilities to A with respect to using the information received from A or A’s attorney - specifically, can you use the information to benefit your client (B) even if it is adverse to A?  On a more mundane level, do you have to do a conflicts check with respect to A and will you thereafter be conflicted in future representation based upon the relationship between you and A under the JDA?  Can you continue to represent B if A’s and B’s interests diverge?  Should your client decide to plea bargain, can you bring to the negotiating table the information you learned from A (either directly or through A’s lawyer, X)?  Do you have malpractice exposure to A?

I discuss a Flynn-type situation as follows (footnotes omitted except that one footnote from a case is in the text):