Chapter 10 - § 10.5 • EXCEPTIONS TO THE ATTORNEY-CLIENT PRIVILEGE

• Jurisdiction: Colorado

§ 10.5 • EXCEPTIONS TO THE ATTORNEY-CLIENT PRIVILEGE

There are four exceptions to the attorney-client privilege: (1) the crime-fraud exception, (2) the fiduciary exception, (3) the Garner doctrine in shareholder derivative litigation, and (4) the testamentary exception. Each renders an otherwise valid attorney-client privilege inapplicable.

§ 10.5.1—Crime-Fraud Exception

Under state and federal law, a person may not interpose the attorney-client privilege when the consultation with the lawyer was in furtherance of the commission of a crime or fraud.

➤ Intervenor v. United States, 144 F.3d 653, 658 (10th Cir. 1998) (citing In re Vargas, 723 F.2d 1461, 1467 (10th Cir. 1983) (recognizing that the crime-fraud exception applies to both the attorney-client privilege and the work product doctrine); United States v. Pignatiello, 628 F. Supp. 68, 73 (D. Colo. 1986) (crime); People v. Tucker, 232 P.3d 194, 199 (Colo. App. 2009); In re Diasonics Secs. Litig, 110 F.R.D. 570, 575 (D. Colo. 1986) (fraud or ordinary torts); People v. Madera, 112 P.3d 688 (Colo. 2005); A v. Dist. Ct., 550 P.2d 315, 324 (Colo. 1976)).

"Where a client consults with an attorney for some illegal purpose from the beginning of the relationship, there is no need for an exception to normal privilege rules because the communications between lawyer and client strictly undertaken for an illegal purpose were never privileged in the first place. If, on the other hand, the attorney-client relationship is immaculate at its conception, but then devolves into attorney assistance in illegal activity, then all the communications between the client and the attorney are potentially privileged except those that are germane to some criminal or fraudulent goal."

➤ Plaza Ins. Co. v. Lester, No. 14-cv-01162-LTB-CBS, 2015 U.S. Dist. LEXIS 72438, at *26, 2015 WL 3528336, at *9 (D. Colo. June 4, 2015) (quoting Chevron Corp. v. Snaider, 78 F. Supp. 3d 1327, 1336 (D. Colo. 2015) (citing, White v. American Airlines, 915 F.2d 1414, 1423 (10th Cir. 1990))).

After a party has invoked the attorney-client privilege, the person seeking to abrogate the privilege under the crime-fraud exception has the burden to present a prima facie case that the advice was obtained in furtherance of an illegal or fraudulent act.

➤ Intervenor, 144 F.3d at 659-60.

The party claiming that the crime-fraud exception applies must present prima facie evidence that the allegation of attorney participation in a crime or fraud has some foundation in fact. The determination of whether such showing has been made is left to the sound discretion of the district court.

➤ In re Vargas, 723 F.2d at 1467; In re Grand Jury Proceedings, 727 F.2d 941, 946 (10th Cir. 1984).

The quantum of proof necessary for the application of the crime-fraud exception is "a prima facie showing that the exception applies to each document before the document is actually stripped of its privilege and admitted into evidence."

➤ Lee v. State Farm Mut. Auto. Ins. Co., 249 F.R.D. 662, 680 (D. Colo. 2008) (a prima facie showing exists where the plaintiff raises a reasonable inference of a crime or fraud) (quoting A v. Dist. Ct., 550 P.2d at 326)); Intervenor, 144 F.3d at 659-60 (a prima facie case is established by "substantial and competent evidence" that the defendant used its attorney's legal services in furtherance of a crime).

The party invoking the crime-fraud exception must present a prima facie showing of "facts 'adequate to support a good faith belief by a reasonable person that wrongful conduct sufficient to invoke the crime or fraud exception to the attorney-client privilege has occurred.'"

➤ People

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