There are some bashers on the boards deliberately misquoting a post by a FOOL POSTER. Here is one example: "Judge charges Rambus lawyers with crime-fraud:...", when in fact the poster said, "... I am VERY WORRIED about the judge's decision to invoke the "crime fraud" exception to the attorney client privilege:..." The poster went on to say, "Generally, a Judge has to make a finding that there is evidence of the "crime or fraud" before he can disregard the attorney client privilege and let this kind of discovery happen." And he went on further to say, "Of course, on the most recent docket entry, RMBS was granted a stay of that part of the judge's order, which means he's holding the ruling in abeyance and thinking about it a second time with rebriefing by the parties; however this could be absolutely HUGE in terms of the case.
Remember fraud charges were brought up by Infineon. The judge can't just dismiss these charges without seeing what evidence Infineon has. In effect the judge is waiting for the evidence to act on this issue.
The following will help you to better understand why Rambus will not be subject to this action...
firms.findlaw.com
The Crime/Fraud Exception To The Attorney-Client Privilege
Most communications between a client and an attorney are "privileged." This means that the attorney cannot be required to testify to what the client told the attorney or vice versa. Attorney-client communications in writing or stored electronically are similarly privileged in general. A major exception comes into play where the client hires the attorney in order to learn how to commit fraud or a crime or uses the attorney to do so.
No attorney-client privilege exists where a purpose of the consultation is "to commit or plan a crime or a fraud". Cal. Evid. Code §956. To uncover such nonprivileged communications, it is proper for an opposing attorney to quiz an ex-employee about the relationship between the employer and its attorneys. The fraud in question can include discovery abuses in pending litigation amounting to a "fraud on the court." Although there is no "fraud/crime exception" to a claim of attorney work-product privilege, the court may order work product to be disclosed if nondisclosure would result in an injustice by unduly prejudicing the innocent party. State Farm Fire & Cas. Co. v Superior Court (Taylor) (1997) 54 Cal.App.4th 625.
Cal. Evid. Code §956:
Services Used to Commit or Plan a Crime or Fraud
There is no privilege under this article if the services of the lawyer were sought or obtained to enable or aid
anyone to commit or plan to commit a crime or a fraud.
This case is discussed at 19 CEB Civ.Lit.Rptr. 169 (6/97). The authors repeatedly refer to the "disclosure of privileged information," but the salient point of the case is that there is no privilege to begin with. Thus, although it is usually improper for an attorney to seek out attorney-client communications from a former employee, it is good lawyering to do so where the communications involved are not privileged in the first place under §956. Taylor, 54 Cal.App.4th at 714 [attorney "would have been remiss in representing his clients had he not followed up on the contact with Ms. Zuniga", the former employee of State Farm]. State Farm’s alleged behavior in this case, by the way, was shocking.
Federal law is similar to the California rule. In U.S. v Chen (9th Cir, 1996) 99 F.3d 1495 criminal defendants were charged with conspiracy and tax evasion. Their scheme was to report the value of imported goods truthfully to the U.S. Customs Service, but to inflate these values on their income tax returns, thereby reducing their income taxes after the goods were sold at a profit. At some point, the Chens realized that the discrepancy between their customs forms and their tax forms might embarrass them. So they explained to their attorneys that they wanted the attorneys to communicate with Customs that they had under-reported their Customs duties and to pay the balance due. (The extra duties being less than the income tax, one assumes.) The lawyers, unaware that they were communicating false information, proceeded to write the customs officers as instructed and to pass along the client’s money for the "unpaid" customs duties. Since the clients’ purpose in communicating with the attorneys was to further their crimes of conspiracy and tax evasion, the attorney-client communications were outside
the privilege. As in Taylor, a former employee tipped off the other side. In general, it is not necessary that the attorneys know of the unlawful course of conduct or that they are being used in furtherance of such a scheme. The focus of the exception is on the client, not the attorney: "It is the client’s knowledge and intentions that are of paramount concern to the application of the crime-fraud exception; the attorney need know nothing about the client’s ongoing or planned illicit activity for the exception to apply." In re Grand Jury Proceedings (9th Cir 1996) 87 F3d 377, 381. See also, U.S. v Laurins (9th Cir 1988) 857 F2d 529, 540.
The crime-fraud exception also applies if the attorney, rather than the client, initiated the crime: "[I]f the trial court determines that the client was an active participant in criminal activity, the privilege is waived notwithstanding any assertion that it was the attorney who initiated that activity." People v. Superior Court (Bauman & Rose) (1995) 37 Cal.App.4th 1757, 1768, n. 4. [Note the misuse of the "waiver" language here. There is no "waiver" because there is no privilege to begin with.]
The leading U.S. Supreme Court case on the crime/fraud exception to the attorney-client privilege is U.S. v Zolin (1989) 491 US 554. In this case, the IRS, as part of its marathon investigation of the tax returns of L. Ron Hubbard, founder of the Church of Scientology (the Church), sought to enforce a summons it had served upon a court clerk; the IRS demanded that the court clerk produce documents, including two tapes, in his possession in conjunction with a lawsuit pending in state court . The Church objected that the attorney-client privilege barred the disclosure of the tapes. The IRS argued, among other things, that the tapes fell within the "crime-fraud" exception. The Supreme Court held that, in appropriate circumstances, "in camera" review of allegedly privileged attorney-client communications may be used to determine whether the communications fall within the crime-fraud exception. However, before the trial court may conduct an "in camera" review at the request of the party opposing the privilege, that party must present evidence sufficient to support a reasonable belief that such review may reveal whether to conduct an "in camera" review rests in the discretion of the trial court. The party opposing the privilege may use any relevant nonprivileged evidence, lawfully obtained, to meet the threshold showing, even if its evidence is not "independent" of the contested communications. (In this case, for instance, portions of the disputed tapes had been lawfully obtained from a former member of the Church and the IRS used those tapes to argue in favor of disclosure of the remaining tapes.)
Of course, the privilege remains intact if the client merely discloses past crimes to the attorney. It is only when the client is consulting the attorney in order to learn how to commit future fraud or a future crime--or is using the relationship in furtherance of an existing scheme involving fraud or a crime--that the crime/fraud exception comes into play. |
