Criminal Justice Insider

In the course of a white collar criminal investigation, it is common for federal law enforcement to execute a search warrant on a business. Typically, evidence of white collar crime comes in the form of hard or digital records. It is impossible for an investigator to review and analyze these records during the execution of the warrant itself. Accordingly, law enforcement officers often seize hard drives and paper records en masse for later review.

In their rush to collect evidence, there is the obvious risk that law enforcement will seize material protected by the attorney-client or other applicable privilege. To date, the government has used “taint teams” to protect against the risk that federal prosecutors will inadvertently review and use privileged material seized during the course of an investigation. A “taint team” is a team of prosecutors and federal agents who are unrelated to the investigation and charged with reviewing the seized materials solely to determine whether the information is privileged. If the determination is made that the material is privileged, the “taint team” will return it without disclosing it to the prosecutors in charge of the investigation. A “taint team” is not supposed to review the material for its content or disclose such content to the prosecution.

The prosecutors and the “taint team” members are all employees of the Department of Justice and are often part of the same office. The walls between them are artificial and there is no oversight over discussions between prosecutors and the “taint team.” Without knowing the content of the case, it can be difficult for a “taint team” to make accurate determinations whether the seized material is privileged. Accordingly, the white collar defense bar has often been critical of the efficacy of this practice.

That skepticism over the artificial walls between members of the “taint team” members and their fellow prosecutors has now extended to the Courts. In a case decided by the Court of Appeals for the Fourth Circuit, which is being closely watched by the white collar defense bar and the Department of Justice alike, the Fourth Circuit enjoined the review of potentially privileged records by a “taint team.”

In United States of America v. Under Seal, Case No. 19-1730, handed down on June 13, 2019, records were seized during a search warrant executed on a Baltimore law firm in connection with a money laundering investigation of one of the firm’s clients. The law firm moved the district court to enjoin the review of the privileged material, contending that the records seized, which related to a client of the firm, were subject to attorney-client or attorney-work product privileges. The district court, which had approved the use of a “taint team” on an ex parte basis prior to the execution of warrant, denied the motion. The law firm subsequently appealed from the ruling of the district court. On appeal, the Fourth Circuit reversed the district court, finding the use of a “taint team” to be improper.

The Court ruled that the use of a “taint team” violates constitutional notions of separation of powers insofar as it assigns the determination of privilege, a function of the judicial system established by Article III of the Constitution, to law enforcement, an agency of the executive branch empowered by Article II of the Constitution. Moreover, the Court recognized the practical problems in leaving “the Government’s fox in charge of guarding the Law Firm’s henhouse.” This reasoning attacked not just the use of a “taint team” in this instance, but the overall practice.

The Court also took issue with the decision to authorize the “taint team” ex parte. The Fourth Circuit found that the district court should have had an adversarial proceeding wherein the law firm could have advised the court on the nature of the seized material. In support of its reasoning, the Court invoked the recent case of President Trump’s former counsel, Michael Cohen, in which the district court held adversarial proceedings as to whether a “taint team” was appropriate. The Court also noted that in Michael Cohen’s case, a special master was ultimately appointed to assist the court in conducting a review of privilege, thus avoiding a separation of powers issue.

The Department of Justice has sounded the alarm on this decision. In seeking reconsideration on January 15, 2020, it noted that this decision has the potential to substantially disrupt their longstanding investigatory practices. The white collar bar has, in turn, approached this development with caution and reserve. Some defense commentators have noted that the ruling could result in greater caution by law enforcement in seeking and executing search warrants which may involve privileged material. Warrants seeking records have often been criticized by the defense bar as being overly broad and insufficiently particularized. Thus, jurisprudence which causes law enforcement pause to carefully consider its search warrant practices is welcome.

Other defense commentators believe that this ruling will result in increased costs for white collar defendants, impose an increased burden on the judiciary, and slow the review process without any cognizable benefit to the defendant or to the party on whom the warrant was executed.

We will continue to monitor whether this opinion is widely adopted by other federal judicial circuits and what impact it has on white collar investigations in New York and nationwide.

For more information on the topic discussed, contact:

• Adam M. Felsenstein  |  felsenstein@thsh.com  |  212-508-7533