Third Circuit Upholds Order to Disclose Legal Invoices, Rejecting Claims of Privilege

by Mike Mintz on June 25, 2012 · 0 comments

in martindale.com

Carl Greene, the former executive director of the Philadelphia Housing Authority (“PHA”) appealed an order denying his request for a temporary restraining order (“TRO”) and preliminary injunction to prevent the PHA from releasing invoices for legal services to the Department of Housing and Urban Development (“HUD”) for matters in which Greene was sued in his individual capacity and PHA covered the costs of his legal counsel.  Greene v. Philadelphia Housing Authority Civ. Action No. 11-2745 (3rd Cir.  4/20/12)

Greene asserted that the attorney-client privilege protected these invoices. The Third Circuit rejected Greene’s claim and upheld the District Court’s ruling requiring him to turn over the invoices.

Greene was sued several times in his individual capacity while at the PHA for conduct related to his executive capacity at the PHA, and the PHA provided him with legal counsel to defend him against the allegations.  HUD started investigating the PHA after receiving reports that it was expending exorbitant sums of money on outside counsel.  HUD was concerned that Greene was having the PHA pay for his personal legal services.  HUD issued subpoenas to obtain these legal invoices.  In the interim, HUD and the PHA entered into an agreement allowing HUD to act as the Board of Commissioners of the PHA and to administer all of PHA’s programs.  HUD appointed its chief operating officer as the only member of PHA’s Board of Commissioners.   In that capacity, the member demanded unredacted copies of Greene’s legal invoices.

Greene subsequently moved for a TRO and preliminary injunction in district court to prevent the PHA from releasing these legal invoices.  He claimed that the release of these invoices would divulge privileged attorney-client dealings in matters where he had a personal attorney-client relationship with the subject law firms.

In the course of the proceeding before the district court, PHA’s attorney submitted an affidavit that its review of the legal invoices did not reveal a single instance of billing entries raising the issue of attorney-client privilege for Greene. None of the invoices revealed meetings with counsel, legal analysis, or legal advice relating to Carl Greene in his individual capacity. The district court thereafter rejected Greene’s request for a TRO and preliminary injunction and Greene appealed to the Third Circuit.

On appeal, Greene contended that the district court erred in relying on the affidavit of the PHA attorney regarding the lack of attorney-client issues in the invoices and that, instead, the lower court should have conducted an in camera review of the legal invoices in order to determine if such a privilege existed.  The PHA contends that no personal attorney-client privilege was ever established between Greene and counsel provided by the PHA.  Moreover, even if such a relationship existed, Greene waived it when he submitted his legal invoices to the PHA for payment. The PHA also argued that the district court correctly relied upon the PHA’s attorney affidavit on the issue. The Third Circuit agreed with this last argument, finding the lower court’s reliance on the affidavit sound.  Consequently, the appellate court did not address the PHA’s other arguments.

The Third Circuit noted that the district court has broad discretion in fashioning a process that enables a fair adjudication of a challenge to a subpoena while maintaining control of its docket and managing its scarce resources. District courts can allow for in camera reviews of documents, additional affidavits and hearings.  In this instance, the parties had previously agreed to the procedure the district court subsequently implemented in reviewing the subject invoices. The Third Circuit found this procedure sound and held that the district court did not abuse its discretion in implementing the procedure that it did. The lower court allowed Greene the opportunity to explain his claim of privilege and to contest HUD’s subpoena. Moreover, Greene never pointed to a single matter covered by the invoices in which he believed he had a personal privilege. The district court only released the invoices to HUD after determining that the invoices did not contain any notes of personal meetings between Greene and his counsel, nor did they contain any legal analysis or legal advice to Greene individually.

Also, the lower court never prevented Greene from gathering evidence in support of his privilege claims and allowing PHA’s attorney to review the invoices and submit an affidavit did not prejudice Greene. Greene never requested from his law firms any invoices covering personal services rendered to him. Hence, Greene’s assertion of a personal privilege amounted to mere speculation.  Additionally, the district court had no duty to conduct a time-consuming in camera review of the invoices.  The process the district court employed obviated the need for an in camera review and avoided the unnecessary expenditure of the court’s limited resources.

Lastly, the court noted that even where disclosure is ordered by the court, and the information is later determined to be privileged, it does not result in a waiver of a privilege.  The court can issue an order pursuant to Fed. R. Evid. 502 (d) that the compelled disclosure does not constitute a waiver of privilege.

Having thrown out all of Greene’s contention, the appellate court upheld the lower court’s ruling and rejected Greene’s request for a TRO and preliminary injunction.

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