11 N.Y.3d 223 (2008)
An attorney’s factual testimony regarding an internal investigation is admissible if it doesn’t express a personal opinion on the defendant’s guilt, and internal investigation materials are protected by qualified privilege unless a substantial need and undue hardship in obtaining equivalent information are demonstrated, or a waiver of privilege occurred.
Summary
This case concerns the convictions of former Tyco executives, Kozlowski and Swartz, for crimes related to corporate wrongdoing. The court addresses whether an attorney’s testimony during an internal investigation improperly conveyed an opinion on the defendants’ guilt, and whether the defendants’ subpoena seeking interview notes from the investigation was properly quashed. The court finds the testimony was factual and didn’t express an opinion and that the subpoenaed materials were protected by a qualified privilege, as the defendants failed to show a substantial need or inability to obtain the information elsewhere. The court also addresses the constitutionality of the fines imposed but finds that the fines were harmless if erroneous.
Facts
Kozlowski and Swartz, former executives at Tyco, were convicted of multiple counts of grand larceny and falsifying business records related to the misuse of company loan programs. They used the Key Employee Loan Program (KELP) and relocation loan program for personal expenses, such as artwork and residences. To cover these debts, they arranged for unauthorized bonus payments from Tyco’s Incentive Compensation Plan. The Compensation Committee, typically responsible for approving bonuses, was bypassed. After Kozlowski’s resignation, Tyco hired Boies Schiller to conduct an internal investigation into potential executive misconduct.
Procedural History
Kozlowski and Swartz were convicted after a nearly six-month trial. They appealed, arguing that the admission of Boies’s testimony and the quashing of their subpoena were erroneous. The Appellate Division affirmed the convictions. The defendants then appealed to the New York Court of Appeals.
Issue(s)
1. Whether the admission of David Boies’s testimony regarding the internal investigation, and the prosecutor’s summation comments thereon, improperly conveyed an opinion regarding defendants’ guilt.
2. Whether the trial court abused its discretion in quashing the defendants’ subpoena duces tecum seeking factual portions of interview notes and memoranda prepared during the internal investigation.
3. Whether the fines imposed under Penal Law § 80.00 violated Apprendi v New Jersey.
Holding
1. No, because the testimony was factual and didn’t express an opinion on the defendants’ guilt.
2. No, because the subpoenaed materials were protected by a qualified privilege, and the defendants failed to demonstrate a substantial need or an inability to obtain the information through other means.
3. The Court does not reach the question. Assuming without deciding that an Apprendi violation occurred, any error was harmless because the defendants’ trial testimony established gains that corresponded to or exceeded the fine amounts.
Court’s Reasoning
The Court reasoned that Boies’s testimony was limited to firsthand factual accounts of his investigation and conversations with Swartz and Tyco’s management. The testimony provided relevant facts for the jury to consider without expressing a personal opinion about the defendants’ guilt. The court distinguished this case from People v. Ciaccio, where a detective offered an opinion on the victim’s credibility. The court also found that the subpoena was properly quashed because the defendants failed to show a substantial need for the materials or an inability to obtain equivalent information elsewhere. The requested materials were deemed trial preparation materials protected by qualified privilege. The court emphasized that the defendants had access to the same witnesses and failed to demonstrate an attempt to secure independent interviews. Regarding the fines, the court assumed an Apprendi violation, which holds that any fact increasing the penalty for a crime beyond the statutory maximum must be submitted to a jury and proven beyond a reasonable doubt, but it found it harmless, as the defendant testified to the amount they gained in the crime, which was equal to, or exceeded, the fines.