In re Grand Jury Subpoena for Documents in the Custody of Bekins Record Storage Co., 62 N.Y.2d 324 (1984)

A client cannot assert the attorney-client privilege for documents in their lawyer’s possession if the documents were not created for litigation or to seek/provide legal advice, and they are not otherwise privileged. The mere fact that documents were confidentially shared with a lawyer does not make them privileged communications.

Summary

A grand jury investigating loan fraud issued a subpoena to a record storage company for files of a law firm (“C & D”) representing two individuals (“A” and “B”). The individuals sought to quash the subpoena, claiming attorney-client privilege, work product protection, and Fifth Amendment rights. After an in camera review, the lower court ordered most documents disclosed. The New York Court of Appeals held that the Fifth Amendment privilege against self-incrimination does not extend to the contents of voluntarily prepared business papers and that most of the documents were not protected by the attorney-client privilege because they were either business-related or contracts between the clients, not confidential communications with the attorney. However, a letter from the client to the attorney regarding settlement negotiations was protected.

Facts

• A grand jury was investigating potential loan fraud.
• The grand jury subpoenaed Bekins Record Storage Co., which stored files of the law firm C & D, who represented individuals A and B, targets of the investigation.
• The subpoena demanded all files relating to C & D’s representation of A and B.
• A and B moved to quash the subpoena, arguing attorney-client privilege, work product protection, and Fifth Amendment protection.

Procedural History

• Supreme Court conducted an in camera review of the documents.
• Supreme Court granted the motion to quash for documents in 19 files but ordered disclosure for the rest.
• The Appellate Division quashed the subpoena for two additional documents and affirmed the Supreme Court’s order in all other respects.
• The New York Court of Appeals granted leave to appeal.

Issue(s)

1. Whether documents that would be protected by the Fifth Amendment privilege against self-incrimination in the client’s hands remain protected after being transferred to the attorney.
2. Whether certain documents constitute privileged attorney-client communications.

Holding

1. No, because the Fifth Amendment privilege does not extend to the contents of voluntarily prepared business papers.
2. No, for most documents because they were either business-related, contracts between the clients, or communications unrelated to legal advice; Yes, for one document (Document No. 121) because it was a confidential letter from the client to the attorney regarding settlement negotiations.

Court’s Reasoning

• Fifth Amendment Claim: The court relied on United States v. Doe, stating that the Fifth Amendment does not protect the contents of voluntarily prepared business papers. The court acknowledged the concern that responding to a subpoena and authenticating documents might be compelled, incriminating testimony, but stated that this was a factual determination that had not been properly raised in the lower courts.
• Attorney-Client Privilege: The court stated that the privilege protects “evidence of a confidential communication made between the attorney or his employee and the client in the course of professional employment” (CPLR 4503, subd [a]). The communication must be for the purpose of obtaining legal advice from an attorney consulted for that purpose (Matter of Priest v Hennessy, 51 NY2d 62, 68-69). The court reasoned that Document No. 36 was conveyed while the attorney was acting as a commercial consultant, and Document No. 148 was a communication unrelated to legal advice. Neither was protected.
• Executed Contract (Document No. 98): The court held that a completed contract is a communication between the contracting parties (the clients), not a confidential communication from client to attorney. Therefore, it is not protected by the attorney-client privilege.
• Settlement Negotiation Letter (Document No. 121): This was a letter from the client to the attorney relating the results of settlement negotiations. The court found this to be “the classic situation of the discussion by a person of a matter under litigation with his or her attorney,” and therefore protected.