Tuesday, January 10, 2023

On Supreme Court Oral Argument in In Re Grand Jury On Issue of Principal or Significant Purpose for Attorney-Client Privilege (1/10/23; 1/11/23)

Yesterday, the Supreme Court held the much anticipated oral arguments in In Re Grand Jury (Sup Ct. No. 21-1397). See docket entries here. The oral argument audio is here, and the transcript is here

I discuss the acceptance of cert from the Ninth Circuit case In re Grand Jury, 23 F.4th 1088 (9th Cir. 2022), CA9 here and GS here, in the following blog:  Supreme Court Grants Cert to Determine Whether Dual-Purpose Communications Involving Legal and Non-Legal Advice (in Tax Return Preparation Setting) is Protected by Attorney-Client Privilege (10/3/22), here, where I addressed the question presented. The question is whether the attorney-client privilege, permitting the client to withhold evidence about an attorney-client privilege, requires that the "principal purpose" of the client communication be to seek legal advice or, instead, only a "significant purpose" of the communication to seek legal advice. For more on the issue, see the Federal Tax Crimes Blog linked above, but for even more ad nauseam on the issue, see the briefs on the merits at the Supreme Court docket entries linked above, both the parties' merits briefs and the many amicus curiae merits briefs. (In fairness, from my perspective, an experienced attorney can understand the arguments from the parties' merits briefs; the amicus briefs, in my opinion, add nothing of material value; I will say more about the amicus merits briefs at the end of the blog.)  For a general discussion of the attorney-client privilege, see my text, Federal Tax Procedure 860-873 (2022 Practitioner Ed.), SSRN here.

 I now offer some comments on the oral arguments. 

 CAVEAT: My high overview comment is that the arguments were packed mostly with glittering generalities rather than struggling with specific context in the case presented. The context arose in a grand jury investigation which requires secrecy of the events in the grand jury. Thus, we are not offered specifics of how the general issue of principal rather than significant arose. There are some more or less relevant examples from other cases used by the parties' counsel to frame the issue, but we don't know the specific context in the case before the court. Hence, much of the back and forth between the Justices and the parties' respective counsel is very general. That, in my mind, may be required by the grand jury context, but it does not offer the best context for fleshing out strengths and weaknesses in the parties' arguments. With that caveat, I offer the following:

1. The parties were represented at oral argument as follows:

            The petitioner (the taxpayer)

                        Daniel B. Levin, Munger Tolles & Olson, here,

            The Government

                        Masha G. Hansford, Ass't SG, LinkedIn profile here.

2. I read the transcript but listened only to portions of the audio, My first draft of this blog was going to include selected excerpts rather than my comments. Careful readers will already know that selecting excerpts is itself a way of commenting. So that is an argument that selecting excerpts meaningful to me may not be the best way to ask readers to understand the dynamics of the arguments. More importantly, as I started selecting the back and forth, I found that I really was not leaving much out. So, rather than impose on readers' time and patience, I just refer them to the full transcript and/or audio.

  • Added 1/11/23 12:00pm.  ScotusBlog has an excellent discussion of the arguments.  Stephen Gillers, Justices debate test for attorney-client privilege when lawyer’s advice has multiple purposes, SCOTUSblog (Jan. 10, 2023, 9:57 AM), https://www.scotusblog.com/2023/01/justices-debate-test-for-attorney-client-privilege-when-lawyers-advice-has-multiple-purposes/
    • I think Gillers' final comment in the final paragraph is on target.  The district courts have been dealing with the issue for years usually applying "the" or "a" predominant purpose and really have not been complaining.  The system has worked and, as one Justice stated, if it ain't broke, don't fix it. A litmus test that will decide all cases is impossible; rather, we should just let district courts decide the cases ad hoc balancing the interests (truth v. secrecy; client-attorney privilege) in the immediate context before them. (It sort of like negligence; there is no litmus test, but the system has worked for centuries without a litmus test, trusting the triers of fact (judges or juries) to do justice.)
  • Added 1/11/23 1:45 pm:  Further on the primary purpose test, Mr. Levin argued (Tr. 14, 17-19, 22-23) that, even when articulating the primary purpose test, in actuality courts were often, even usually, applying some less strict test (whether significant purpose test or even just bona fide). Along that line, the following dialog occurred:

JUSTICE JACKSON: -- but, if they're actually doing it, then it isn't a big change. You can't have it both ways. You just said I  think this is going to make a difference, and  now you're saying no, it's not because they're  already doing it in the way that we're asking  you to adopt.  

MR. LEVIN: Your Honor, I think it's going to make a difference because now we're here. That is, were this Court to say no, we are serious, primary purpose, 51 percent, that would send a message across federal courts and I would say state courts too because they obviously would pay attention. Were this Court to say no, we're going to anchor the test in the traditional privilege and we're going to say, if you can meet the standards and you can meet them in a real way, that is, there's no pretext, you're not trying to manufacture a privilege in some abusive way, then you have a privilege. And that is a clear and more predictable test that will appropriately protect attorney-client privilege.

Justice Jackson’s point is that, if the parties wanting the test to be “significant” rather than “primary” and the courts are already doing "significant" (or less than primary) in practice even when articulating a primary purpose test, shouldn’t the Supreme Court just let the issue alone because there has been no upswell of complaint from the district courts applying the test. Mr. Levin expressed concern that a Supreme Court statement that the test is “primary” (which the courts already stated they were applying even which in actuality applying a significant-type test) will add gravitas to the primary test and cause courts to change their practice to strictly limit the privilege. Does that mean that Mr. Levin’s client was imprudent in asking for cert in the first place? Perhaps, the Court could do a win-win for both parties simply by ducking the issue by saying that cert was improperly granted. As Justice Kagan said (Tr. 33): “I -- I'm wondering if  you would just comment on, you know, the ancient legal principle, if it ain't broke, don't fix it.”

3. Predicting an outcome from oral arguments is often risky. However, my sense is that the majority of the Court will opt either for "the principal purpose" test or perhaps "a principal purpose" test. I say that because the questioning about the "significant purpose" test pointed out real flaws that, in practice, could mean that the test would be met with only a nonfrivolous bona fide legal purpose, which could be met anytime a lawyer participates in a meeting or other exchange with the client (e.g., a board meeting or even a business meeting where the lawyer is there to spot issues or even just to make the meeting privileged because some of the discussion might relate to potential as yet unidentified legal issues that the lawyer might spot). That really seems too loosey-goosey to deny courts (including grand and petit juries) access to the true information.

4. I noted in the comments to my prior blog entry on granting cert (par. 1) that a number of amicus briefs had been filed in support of the petition for certiorari. Not surprisingly, a number of amicus briefs on the merits have been filed. I noted in my prior blog parenthetical skepticism about amicus briefs. I offer below more short discussions about such briefs (I exclude from these comments amicus briefs specifically invited by a court because of concern that the parties' merits briefs may not adequately flesh out the issues; in In re Grand Jury, the case discussed here, the Court did nothing that directly or indirectly invited amicus briefs):

  • Although two of the amicus briefs -- New York Intellectual Property Law Association and Association of Professional Responsibility Lawyers-- stated that they were in support of neither party, Mr. Levin stated in oral argument: "There's 13 amici in this case. They all came down on our side." That is the way I read those "in support of neither party" briefs as well.
  • I am skeptical of the value of amicus briefs uninvited by the court generally and certainly in this case. The only other reference in this oral argument to amicus briefs was the following which includes some flipping and flopping

JUSTICE ALITO: Some of the amici in  [*24] support of you say that communications are  privileged as long as any purpose of those communications is to obtain or provide legal  advice and no other well-established exception  applies. Do you agree with that? 

MR. LEVIN: I agree as long as it's -- as it's legitimate and meaningful. That is, I -- I -- if it is -- if it is really a facade, no, then I don't agree with that. It has to be a legitimate bona fide legal purpose.  

JUSTICE ALITO: Do you think there's a difference between something being significant and something being done not in good faith, not bona fide? 

 MR. LEVIN: Yes. I think the -- I think those are the flip side. 

 JUSTICE ALITO: So it's a change -- you've changed your position? You're not really arguing for a significant purpose; you're arguing for any legitimate purpose? 

MR. LEVIN: No, I don't -- I don't think -- I think that that's -- I mean, I guess what I would say is I don't think that's how I read -- I read our position as saying, if it's legitimate and bona fide, it would qualify as  [*25]  significant. I understand the Court could say  no, there's -- there's some higher quantum, and I think we'd still win under that, some higher quantum but less than 51 percent. So I think we would still win and some of the documents in  this case would be privileged under that  approach.

  •  My sense is that where the merits briefs are presented by competent lawyers (as was true in this case), the amicus briefs usually (that's an important limitation) offer nothing, dare I say, of "significant" value. Certainly, I think that on my admittedly quick review of the amicus briefs in this case, they did not offer anything not reasonably presented in the parties' merits briefs. I think that, in this case, the amicus were more friends of the parties than friends of the court just signaling to the court that they are interested as clients and attorneys in broadening the privilege to keep information from courts' administration of justice (which can have real monetary value to clients and their lawyers).
  • I offer a few sources I refer to in reaching my skepticism of amicus briefs (which appear to rarely be rejected in the Supreme Court but more so in the Courts of Appeals:
    • Joseph D. Kearney & Thomas W. Merrill, The Influence of Amicus Curiae Briefs on the Supreme Court, 148 U. Pa. L. Rev. 743 (2000).
    • Helen A. Anderson, Frenemies of the Court, the Many Faces of Amicus Curiae, 49 U. Rich. L. Rev. 361 (2015)
    • Allison Orr Larsen, The Trouble With Amicus Facts, 100 Va. L. Rev. 1757 (2014)
    • Allison Or Larsen & Neal Devins, The Amicus Machine, 102 Va. L. Rev. 1901 (2016)
    • A. E. Dick Howard, The Changing Face of the Supreme Court; 101 Va. L. Rev. 231, 272-275 (2015) (footnotes omitted). Since Professor Howard taught at UVA Law while I was there and offers a good summary, I quote his short discussion:)

C.  More Amicus Briefs

The years since the Warren Court have seen a dramatic increase in the filing of amicus curiae briefs. The number of amicus briefs filed between 1986 and 1995 increased by 800% over the number filed between 1946 and 1955.  At least one amicus brief is now filed in more than 95% of cases.  In addition, the likelihood of the Court's referring to an amicus brief in an opinion has risen sharply since 1950; since 1994, about one-third of majority opinions have cited one or more such  [*273]  briefs. Marquee cases are magnets for amicus briefs; the 2012 case reviewing challenges to the Affordable Care Act, National Federation of Independent Business v. Sebelius, attracted the most amicus briefs ever filed in any case, with 136; 285 the case involving California's Proposition 8, banning same-sex marriage, Hollingsworth v. Perry, came in second, garnering 96 amicus briefs. 

The Court's "open door" policy makes it easier to file amicus briefs. Supreme Court Rule 37 requires that a potential amicus file a motion for permission for leave to file if one of the parties to the case has withheld consent. 288 In the 1940s and early 1950s, the Court often withheld permission. From the 1960s onward, however, the Court's attitude toward amicus briefs became more permissive. Currently, the Court grants nearly all motions for leave to file at both the certiorari and merits stages. This open door policy has meant that the interests represented in amicus briefs are more diverse; amici in the modern era include individuals (often law professors), corporations, governments, charitable organizations, public interest law firms, advocacy groups, business and trade organizations, and unions. In the Warren Court era, the amicus brief was predominantly associated with liberal causes, but today conservative interests are quite active in filing such briefs. Moreover, amici, who at one time were thought of as being involved only in constitutional cases, now appear in virtually the full range of Supreme Court litigation. 

The explosion in the number of amicus filings may reflect many Supreme Court practitioners' belief that amicus briefs influence the justices; [*274]  empirically, however, the question remains hotly contested. The only findings that appear to have been consistently replicated are the Solicitor General's unique degree of success in filing amicus briefs, supporting the winning side around three-quarters of the time, and the statistical significance of the correlation between involvement of amici at the certiorari phase and the Court's granting certiorari. Surveys reveal that former Supreme Court clerks believe most amicus briefs to be duplicative; finding a truly useful amicus - one that presented new arguments and added to the understanding of either the justice or the clerk - was like finding "diamonds in the rough." Once they found such a gem, however, clerks typically passed the brief along to the justice, who would usually read it. 

Organizations may also choose to file or co-sponsor an amicus brief for reasons unrelated to influencing the Court. An organization may wish to show its members that it is actively pursuing their interests, the better to generate recruits, contributions, or publicity. The organization may hope to build relationships with like-minded groups. Or, an organization may choose to sign on as a co-sponsor to an amicus brief simply because it supports the cause but wishes to avoid the expense of filing its own brief.

The rise in amicus briefs may also reflect a kind of arms race - the belief of adverse parties that they need to match each other amicus for amicus. Data support this theory, revealing that adverse parties often submit the same number of amicus briefs. This arms race hypothesis, which can lead to the amici effectively cancelling each other out, could  [*275]  also help explain the sparse empirical support for the influence of amici at the merits stage: If there is parity in amici, the net influence of any individual brief may be significantly diminished. Because the reputation of the name on the brief may contribute to the brief's influence, a perceived need to match the influence of amicus briefs supporting an adverse party's position further contributes to the consolidation of a Supreme Court Bar. If one party hires an experienced advocate to file an amicus brief, the other party will likely do so as well, leading to a self-perpetuating cycle that has entrenched the elitism and professionalization of cases and arguments before the modern Court.

 5. Since former Judge Posner of the Seventh Circuit is a keen observer of the federal judiciary, I thought the following from the Kearney & Merrill article cited above is helpful (pp. 745-746, footnotes omitted):

Chief Judge Richard Posner of the Seventh Circuit has written that the amicus briefs filed in his court provide little or no assistance to judges because they largely duplicate the positions and arguments advanced by the parties. Those who share this assessment regard such filings a [*746] largely a nuisance-imposing unwarranted burdens on judges and their staffs with few, if any, mitigating benefits. According to those who harbor this negative assessment, the judicial system would be improved if amicus filings were prohibited or at least sharply curtailed.

6. For a frolic and detour on the Latin term amicus curiae, see CIC Servs Petition for Rehearing En Banc Petition Denied with Hyperbolic Concurring and Dissenting Opinions (8/29/19; 8/31/19), here, at Addendum par. 2.

7. Finally, in a separate case involving an issue of the confluence of administrative law, the APA and tax, the Supreme Court yesterday denied cert in Oakbrook Land Holdings, LLC v. Commissioner, 28 F.4th 700 (6th Cir. 2022), Sup. Ct. Dkt here.  The denial as presented in the order list, p. 14, here is (emphasis supplied by JAT):


 The motion of National Taxpayers Union Foundation for leave to file a brief as amicus curiae is granted. The petition for a writ of certiorari is denied. 

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