Eleventh Circuit Evaluates Investment Company’s Objections to Order Compelling it to Produce Documents

A grand jury had issued two subpoenas to an accounting firm and an investment company in connection with a suspected illegal tax-shelter scheme. The accounting firm consented to producing the documents and proposed that the possible third-party privilege holders review the documents and provide a privilege log. Initially, the investment company complied, providing a privilege log of the documents the accounting firm had provided, but shortly after, claimed the documents the government sought after were protected by attorney-client privilege and work-product protections.  The government invoked the crime-fraud exception to negate the privilege and compel document production. In Re: Grand Jury Investigation, Nos. 23-10155, 23-10901 (11th Cir. Oct.16, 2024).

The United States District Court for the Northern District of Georgia denied the investment company’s motion to intervene and granted the government’s motion to compel the accounting firm to comply with the subpoena. The court also ruled that the crime-fraud exception applied compelling the investment company, the accounting firm, and other third parties to produce the requested documents. The court concluded its order stating, “The Clerk is DIRECTED to close this case.” The Investment company timely appealed, though it had not first stood in contempt of the court order. The question before the Court of Appeals was whether the investment company could immediately appeal a grand jury subpoena to produce documents, or whether it first needed to stand in contempt.

The Eleventh Circuit dismissed the appeal for lack of jurisdiction. The court held that the investment company’s failure to stand in contempt before appealing foreclosed immediate appellate review. The court reaffirmed that a witness must “first face the threat of languishing in jail” for the situation to become so disconnected from the main proceedings as to permit an appeal. Despite the investment company’s attempts to demonstrate that the language of the intervention order constituted a final judgment, the district court disagreed, maintaining that grand jury-related orders are generally not appealable unless the appellant stands in contempt. Moreover, the court held that the Perlman exception did not apply because the investment company could have conserved its privilege arguments by standing in contempt, which would have allowed appellate review. The Perlman doctrine was inapplicable as there were procedural alternatives the investment company could have taken. In Re: Grand Jury Investigation, Nos. 23-10155, 23-10901 (11th Cir. Oct.16, 2024).