FILED

Case 2:11-cv-03695-RDP-TMP Document 313 Filed 08/21/15 Page 1 of 26

2015 Aug-21 PM 12:27

U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
)
DRUMMOND COMPANY, INC.,
)
)
Plaintiff,
)
)
v.
)
)
TERRENCE P. COLLINGSWORTH, et al., )
)
Defendants.
)

Case No 2:11-cv-3695-RDP
FILED WITH REDACTIONS
PURSUANT TO COURT
ORDER

DEFENDANTS BRIEF IN RESPONSE TO COURTS ORAL INSTRUCTIONS OF

AUGUST 17, 2015 TO BRIEF THE SCOPE OF QUESTIONING OF MR.
COLLINGSWORTH
Kenneth E. McNeil, Pro Hac Vice
Texas State Bar No. 13830900
Stuart V. Kusin, Pro Hac Vice
Texas State Bar No. 11770100
SUSMAN GODFREY LLP
1000 Louisiana Street, Suite 5100
Houston, Texas 77002-5096
Telephone: 713/651-9366
Facsimile: 713/654-6666
kmcneil@susmangodfrey.com
skusin@susmangodfrey.com
Lindsey Godfrey Eccles
Pro Hac Vice
WASB No. 33566
SUSMAN GODFREY LLP
1201 Third Avenue
Suite 3800
Seattle, Washington 98101
Telephone: 206/516-3880
Facsimile: 206/516-3883
leccles@susmangodfrey.com

Robert K. Spotswood
Michael T. Sansbury
William T. Paulk
SPOTSWOOD SANSOM &
SANSBURY LLC
One Federal Place
1819 Fifth Avenue North, Suite 1050
Birmingham, Alabama 35203
Tel: 205-986-3620
Fax: 205-986-3639
rks@spotswoodllc.com
msansbury@spotswoodllc.com
wpaulk@spotswoodllc.com

Attorneys for Terrence P. Collingsworth and Conrad & Scherer LLP

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Of Counsel for Defendants Terrence P. Collingsworth and Conrad & Scherer LLP
Christopher S. Niewoehner
Admitted pro hac vice
Steptoe & Johnson LLP
115 South LaSalle Street, Suite 3100
Chicago, IL 60604
Tel: 312-577-1240
Fax: 312-577-1370
cniewoehner@steptoe.com

Kendall R. Enyard
Savannah E. Marion
Admitted pro hac vice
Steptoe & Johnson LLP
1330 Connecticut Avenue NW
Washington, DC 20036
Tel: 202-429-6405
Fax: 202-429-3902
kenyard@steptoe.com
smarion@steptoe.com

ii

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TABLE OF CONTENTS
TABLE OF AUTHORITIES ......................................................................................................... iv
INTRODUCTION .......................................................................................................................... 1
BACKGROUND ............................................................................................................................ 3
ARGUMENT .................................................................................................................................. 5
I. Drummond has not satisfied the Eleventh Circuits test for invoking the crime-fraud
exception. .................................................................................................................................... 6
A. Drummond has not identified evidence that, if believed by a trier of fact, would
establish the elements of some violation that was ongoing or about to be committed............ 7
1. Drummond has not even identified the alleged violation, much less the elements of
that violation. ................................................................................................................... 8
2. Drummond has not produced evidence which, if unexplained, would be prima facie
proof of the existence of the exception. ......................................................................... 10
B. Even if Drummond had identified the alleged crime and produced prima facie evidence,
the Defendants should be given a chance to rebut that evidence. ......................................... 11
C. Drummond has not shown that the information at issue was created in furtherance of the
unidentified and unestablished crimes or frauds. .................................................................. 13
II. Even if Drummond could establish that information was exchanged in furtherance of a
crime or fraud, this Court would be required to conduct an in camera review of the
information. ............................................................................................................................... 16
III.
Even if Drummond overcame all of the hurdles with respect to the Defendants work
product, it would need to overcome the same hurdles with respect to the Defendants clients.19
CONCLUSION ............................................................................................................................. 19

iii

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TABLE OF AUTHORITIES
Cases
Clark v. United States,
289 U.S. 1 (1933) .............................................................................................................. 10
Cox v. Admr U.S. Steel & Carnegie,
17 F.3d 1386 (11th Cir. 1994) ................................................................................... passim
Criswell v. City of OFallon, Mo.,
No. 4:06CV01565 ERW, 2008 WL 250199 (E.D. Mo. Jan. 29, 2008) ............................ 10
Gutter v. E.I. Dupont De Nemours,
124 F. Supp. 2d 1291 (S.D. Fla. 2000) ..................................................................... 7, 9, 10
Haines v. Liggett Grp. Inc.,
975 F.2d 81 (3d Cir. 1992 ................................................................................................. 17
Harvey v. Standard Ins. Co.,
275 F.R.D. 629 (N.D. Ala. 2011)........................................................................................ 5
In re BankAmerica Corp. Secs. Litig.,
270 F.3d 639 (8th Cir. 2001) ............................................................................................ 14
In re Grand Jury Investigation (Schroeder),
842 F.2d 1223 (11th Cir. 1987) ................................................................................. passim
In re Grand Jury Subpoena Duces Tecum Dated Sept. 15, 1983,
731 F.2d 1032 (2d Cir. 1984)............................................................................................ 13
In re Grand Jury Subpoena,
419 F.3d 329 (5th Cir. 2005) .......................................................................... 12, 13, 14, 15
In re Grand Jury Subpoenas,
561 F.3d 408 (5th Cir. 2009) ............................................................................................ 18
In re Green Grand Jury Proceedings,
492 F.3d 976 (8th Cir. 2007) ...................................................................................... 17, 18
In re Richard Roe, Inc.,
68 F.3d 38 (2d Cir. 1995)............................................................................................ 14, 16
Jinks-Umstead v. England,
232 F.R.D. 142, 145-46 (D.D.C. 2005) ............................................................................ 12

iv

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Magnetar Techs. Corp. v. Six Flags Theme Park Inc.,

886 F. Supp. 2d 466 (D. Del. 2012) .................................................................................. 12
Matter of Feldberg,
862 F.2d 622 (7th Cir. 1988) .............................................................................................. 8
Med. Lab. Mgmt. Consultants v. Am. Broad. Companies, Inc.,
30 F. Supp. 2d 1182 (D. Ariz. 1998) ............................................................................ 9, 10
RCA Corp. v. Data Gen. Corp.,
Civ. A. No. 84-270-JJF, 1986 WL 15684 (D. Del. Oct. 27, 1986) ................................... 11
Research Corp. v. Gourmet's Delight Mushroom Co.,
560 F. Supp. 811 (E.D. Pa. 1983) ....................................................................................... 9
Shell Oil Co. v. Par Four Pship,
638 So. 2d 1050 (Fla. Dist. Ct. App. 1994) ........................................................................ 6
United States v. Soudan,
812 F.2d 920 (5th Cir. 1986) .............................................................................................. 9
United States v. Zolin,
491 U.S. 554 (1989) .............................................................................................. 16, 17, 18
Rules
Ala. R. Prof. Conduct 1.8(f) ............................................................................................................ 8
Fed. R. Civ. P. 9(b) ......................................................................................................................... 9
Fed. R. Evid. 104(a) ...................................................................................................................... 18
Treatises
Restatement (Third) of Law Governing Lawyers 72 cmt. c (2000) ............................................. 5
Restatement (Third) of Law Governing Lawyers 75 (2000) ........................................................ 5

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INTRODUCTION
Defendants Terrence Collingsworth and Conrad & Scherer, LLP, submit the following
brief in response to the Courts oral instructions to the parties on August 17, 2015, to brief the
scope of questions Mr. Collingsworth should be compelled to answer at his deposition.

Collingsworths communications with his client, Albert van Bilderbeek, regarding van
Bilderbeeks dispute with Drummond are protected by the attorney-client privilege and
the work product doctrine. Collingsworths communications with other lawyers at
Conrad & Scherer, which is a defendant in this case, about briefing prepared in this case
are also protected by the attorney-client privilege and work product doctrine.

If this Court intends to invoke the crime-fraud exception, whether for purposes of
Collingsworths deposition or at the hearing on Drummonds sanctions motion, then it
must proceed in accordance with the established procedures.

Those procedures require at least six essential steps:

o The Plaintiffs must specifically define the crime at issue.
o The Plaintiffs must establish in detail the prima facie evidence of that crime.
o The Defendants must be given an opportunity to provide a reasonable explanation
of the evidence.
o The Plaintiffs must establish that the information at issue was exchanged in
furtherance of the crime or fraud.
o If the Court is convinced that the information was exchanged in furtherance of a
crime or a fraud, the Court must inspect in camera the information that was
allegedly communicated in furtherance of the crime at issue before disclosing it to
the other side.
o This Court must issue an order making specific, detailed findings with respect to
each piece of information at issue.

In following those essential steps, the Court must take into account the following legal
principles:
o The crime-fraud exception is very, very rarely used in civil litigation.

The Defendants have not located a single case in which the Eleventh
Circuit has allowed a civil litigant to invoke the crime-fraud exception
successfully.

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The Eleventh Circuit has affirmed no civil cases invoking a crime-fraud

exception.

To the contrary, the Eleventh Circuit has only affirmed civil cases that
denied a crime-fraud exception and there are hardly any of those.

o The crime or fraud must be specifically delineatedfor example, perjury under

18 U.S.C. 1621.

It is improper to conflate a potential ethical violationsuch as a deliberate

and intentional failure to disclose discoverywith a criminal violation.

In order for a fraud to support this exception, the fraud must be of serious
nature and must have been undertaken with the specific intent to engage in
fraudulent activity.

o There must be actual evidence developed in the record satisfying the elements of
the alleged crime or fraud.
o Only then is this court permitted to look at specific privileged information, and
only then in camera.
o The crime-fraud exception should not be invoked where the legality of the
conduct at issue is fuzzy or uncertain. This is especially important in uncharted
territory like this case where the search for the truth is hampered by dangerous
criminal elements, threats of violence, and systematic corruption.

The Defendants are concerned that, in the rush for the upcoming hearing on the Motion
for Sanctions, the application of these clear legal principles to these six essential steps is
being overlooked.

The harm from waiver of privilege and production of documents before these steps are
completed creates the toothpaste and tube problem: once it is out, it cannot be put back
in.

If this Court truly is transforming the sanctions hearing over nondisclosure and spoliation
into an issue of crime or fraud, then the Court must put the Plaintiffs to their burden and
then allow the Defendants to respond.

Furthermore, if there is a shift toward some kind of criminal sanctions, defendants are
entitled to immediate guidance from the Court because the rules of the road change and
much stricter, rigorous new procedures must be applied.

The Court should not skirt the rigorous process outlined above simply because the
immediate dispute arose over privilege objections in a deposition dealing with the two
issues Collingsworths communications with Albert van Bilderbeek and internal
Conrad & Scherer communications regarding briefing in this case.

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Colombia is a deeply troubled place for witnesses. Hundreds of people associated with
labor unions have been killed. Two Colombian courts have insisted that prosecutors investigate
Drummond. One Drummond official has been arrested and is under investigation in Colombia. A
Peace & Justice Commission body has demanded that more prosecution be done of those aiding
and abetting the AUC. A United States statute on terrorist activity has designated the AUC as a
terrorist organization, and it is a federal crime for any United States company to assist the AUC.
In that kind of troubled Colombian context, providing witness assistance payments is not
a crimedefendants have established this through the expert report of Professor Charles W.
Wolfram. See Exhibit 1 (Wolfram Decl.) Collingsworth did not commit a crime in arranging for
these witness assistance payments. Colombia is a tough world, and Collingsworth was operating
in uncharted territory in an effort to obtain justice for the families who, without dispute, have
been the victims of extreme injustice and violence. Witnesses and lawyers involved in
Drummond-related matters in Colombia faced real danger and threats; Colombia is rife with
inherent and systematic obstacles to pursuing a human rights; and Collingsworth was unable to
obtain truthful testimony from witnesses without providing for their, or their families safety.
The unrebutted declarations of Javier Pea, a former top DEA official, and Steven Tkach, the
former head of the Federal Witness Protection Program, underscore these points. See Exhibit 2
(Pea Decl.), Exhibit 3 (Tkach Decl.). There is simply no basis for invoking the crime-fraud
exception in these unprecedented circumstances.
BACKGROUND
During the deposition of Terrence Collingsworth, this Court was consulted over a dispute
regarding the scope of questions Collingsworth could be compelled to answer over privileged
objections with respect to two types of communications.

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The first type of communication was with Albert van Bilderbeek. Albert van Bilderbeek
is a client of Conrad & Scherer and Mr. Collingsworth. See Exhibit 4 (Decl. Albert van
Bilderbeek) 1. As a client, van Bilderbeek expected and believed that his conversations with
Mr. Collingsworth were protected by the attorney-client privilege and work-product doctrine. Id.
4. Collingsworth had this same understanding and expectation. See Doc. 69 (Collingsworth
Decl.) 72 & Doc. 69-51 (Attorney-Client Agreement); Exhibit 5 (Aug. 17, 2015 Collingsworth
Dep. Tr.) 316:20-23 (asserting privilege over communications with van Bilderbeek).
Collingsworth represented van Bilderbeek in connection with van Bilderbeeks dispute
with Drummond regarding Drummonds theft of oil concessions from van Bilderbeeks business
and the false imprisonment of van Bilderbeeks brother, Hendrik. Exhibit 4 2; Doc. 69 72. In
that regard, Collingsworth communicated to Jaime Blanco Maya (Blanco) that Collingsworth
thought that Albert van Bilderbeek would assist Blanco with funds towards his attorneys fees if
Blanco was able to investigate the facts regarding Drummonds illegal acquisition of the Llanos
Oil Company's oil concession in Colombia and provide that information to van Bilderbeek. Doc.
174-2 (Defs. 2nd Am. Supp. Objs. & Resps. Drummond Third ROG No. 2), at 5. Collingsworth
does not know the details of the final agreement reached between van Bilderbeek and Blanco. Id.

The second type of communication was with attorneys at Conrad & Scherer regarding the
preparation of, or knowledge of information in, briefs and other documents prepared in this case.

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ARGUMENT
The Court should not require Collingsworth to testify about the two types of
communications described above. Collingsworths communications with van Bilderbeek, his
client, regarding Blancos provision of investigation services to van Bilderbeek in connection
with van Bilderbeeks dispute with Drummond are protected by the attorney-client privilege and
work product doctrine. Harvey v. Standard Ins. Co., 275 F.R.D. 629, 631 (N.D. Ala. 2011) (The
attorney-client privilege applies to confidential communications between an attorney and his
client relating to a legal matter for which the client has sought professional advice. (internal
citation and quotation marks omitted)). Simply because Blanco was also a witness in this libel
case does not destroy the privilege that exists over these communications. Restatement (Third) of
Law Governing Lawyers 72 cmt. c (2000) (explaining that as long as communication was for
legal advice and was not predominately for another purpose, communication would be
protected).
Collingsworths communications with other lawyers at Conrad & Scherer, which is a
defendant in this case, regarding preparation of briefs and knowledge about the contents of briefs
are also protected by the attorney-client privilege and the work product doctrine. See Restatement
(Third) of Law Governing Lawyers 75 (2000) (If two or more persons are jointly represented
by the same lawyer in a matter, a communication of either co-client that otherwise qualifies as

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privileged . . . and relates to matters of common interest is privileged as against third persons,
and any co-client may invoke the privilege.); Shell Oil Co. v. Par Four Pship, 638 So. 2d
1050, 1050 (Fla. Dist. Ct. App. 1994) (Confidential communications between lawyers and
clients are privileged from compelled disclosure to third persons. This privilege covers
communications on legal matters between corporate counsel and corporate employees.).
Defendants recognize, however, that the Court may have been more interested in the
potential application of the crime-fraud exception rather than basic privilege and work product
principles. Thus, defendants brief focuses mainly on that issue.
This Court does not have a sufficient basis to apply the crime-fraud exception here to the
communications described above. First, the Plaintiffs have not met their burden of identifying a
crime or fraud. Second, the Plaintiffs have not proven a crime or a fraud. Third, the Defendants
have not been given an opportunity to respond to the evidence of a crime or fraud. Fourth, the
Plaintiffs have not proven that any of the information at issue was used in furtherance of a crime
or a fraud. Fifth, this Court has not verified, via in camera inspection, that the information at
issue was used in furtherance of a crime or a fraud.
I.

Drummond has not satisfied the Eleventh Circuits test for invoking the crime-fraud
exception.
The Eleventh Circuit applies a two-part test for invoking the crime-fraud exception. Cox

v. Admr U.S. Steel & Carnegie, 17 F.3d 1386, 1416 (11th Cir. 1994), op. modified on rehg, 30
F.3d 1347 (11th Cir. 1994); In re Grand Jury Investigation (Schroeder), 842 F.2d 1223, 1226
(11th Cir. 1987). The test is comprised of the following:
First, there must be a prima facie showing that the client was engaged in criminal
or fraudulent conduct when he sought the advice of counsel, that he was planning
such conduct when he sought the advice of counsel, or that he committed a crime
or fraud subsequent to receiving the benefit of counsel's advice. Second, there

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must be a showing that the attorneys assistance was obtained in furtherance of

the criminal or fraudulent activity or was closely related to it.
Cox, 17 F.3d at 1416 (quoting Schroeder, 842 F.2d at 1226). The first prong is satisfied by a
showing of evidence that, if believed by a trier of fact, would establish the elements of some
violation that was ongoing or about to be committed. Schroeder, 842 F.2d at 1226 (citations
omitted). The second prong is satisfied by a showing that the communication is related to the
criminal or fraudulent activity established under the first prong. Id. at 1227.
A.

Drummond has not identified evidence that, if believed by a trier of fact,

would establish the elements of some violation that was ongoing or about to
be committed.

The Eleventh Circuit has held the prima facie showing necessary to invoke the crimefraud exception is satisfied by a showing of evidence that, if believed by a trier of fact, would
establish the elements of some violation that was ongoing or about to be committed. Schroeder,
842 F.2d at 1226 (citations omitted). That showing must have some foundation in fact, for mere
allegations of criminality are insufficient to warrant application of the exception. Id. (citations
omitted). The Eleventh Circuit did not elaborate upon this ultimate burden in Cox because the
plaintiffs there failed to produce sufficient evidence showing the documents sought were made in
furtherance of or closely related to any crime or fraud to permit even an in camera review of the
communications involved. 17 F.3d at 1416-17.
Lower courts in the Eleventh Circuit, however, have elaborated upon the burden of proof
necessary ultimately to apply the crime-fraud exception and overcome privilege. See, e.g., Gutter
v. E.I. Dupont De Nemours, 124 F. Supp. 2d 1291 (S.D. Fla. 2000). In Gutter, the Southern
District of Florida found the prima facie standard adopted by the Eleventh Circuit contemplates
a hearing in which both parties are given the opportunity to present evidence and argument on

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whether the evidence, if believed by trier of fact, would be sufficient to support a finding that the
elements of the crime/fraud exception were met. Id. at 1307 (citation omitted). Thus:
In practice, this means that the party opposing the privilege on the crime/fraud
exception has the initial burden of producing evidence which, if unexplained,
would be prima facie proof of the existence of the exception. The burden of
persuasion then shifts to the party asserting the privilege to give a reasonable
explanation of its conduct.[] If the court accepts the explanation as sufficient to
rebut the evidence presented by the party opposing the privilege, then the
privilege remains. If the court does not find the evidence is sufficient to rebut the
prima facie case, then the prima facie case still exists and the privilege is lost.
Id. (citing Matter of Feldberg, 862 F.2d 622, 626 (7th Cir. 1988) (holding after prima facie
showing crime-fraud exception applies, party asserting privilege must come forward with
explanation to rebut: If the court finds the explanation satisfactory, the privilege remains.)).
1.

Drummond has not even identified the alleged violation, much less the
elements of that violation.

Before the Court can determine whether the elements of a violation have been
established, the violation itself must be identified. Drummond has not identified any criminal
statute that the Defendants have violated and has not identified any fraud that the Defendants
have committed with respect to the information at issue.
First, the communications with van Bilderbeek concerned whether van Bilderbeek would
pay someone elses legal fees. Paying someone elses legal fees is not a crime; indeed, it is not
even unethical, as the Rules of Professional Conduct in most jurisdictions allow a third party to
pay someone elses legal fees. See, e.g., Ala. R. Prof. Conduct 1.8(f). Nor is it illegal to pay a
non-witness for investigation services, including locating witnesses, which is what Blanco was
hired by van Bilderbeek to do. Thus, Collingsworths conversations with van Bilderbeek about
Blancos provision of investigative services, and van Bilderbeeks payment of Blancos criminal
legal fees as compensation for those services, were not made in furtherance any crime.

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Second, Drummond has not identified any crime or fraud that was committed in the
Defendants legal filings. The level of fraud sufficient to invoke the crime-fraud exception
must be high. See Research Corp. v. Gourmet's Delight Mushroom Co., 560 F. Supp. 811, 820
(E.D. Pa. 1983) (As its name connotes, [the crime-fraud exception] encompasses only serious
unlawful activity. Hence, for the privilege to take flight, unlawful conduct, not mere inequity,
must be demonstrated.). In determining whether fraud sufficient to invoke the crime-fraud
exception exists, [t]he clients intent is central to this inquiry. Gutter v. E.I. Dupont De
Nemours, 124 F. Supp. 2d 1291, 1311-12 (S.D. Fla. 2000) (citing United States v. Soudan, 812
F.2d 920, 927 (5th Cir.1986)). Thus, the communications or work product created must be
conducted with the express purpose of promoting intended or continuing criminal or fraudulent
activity. Med. Lab. Mgmt. Consultants v. Am. Broad. Companies, Inc., 30 F. Supp. 2d 1182,
1207 (D. Ariz. 1998). In addition, under the Federal Rules of Civil Procedure, fraud must be
pleaded with particularity. Fed. R. Civ. P. 9(b). [T]he purpose behind requiring such
particularity is to provide a defendant fair notice of the substance of a plaintiff's claim so that the
defendant can formulate a defense. Bartronics, Inc. v. Power-One, Inc., 245 F.R.D. 532, 537
(S.D. Ala. 2007) (quoting MedImmune, 271 F. Supp. 2d at 772).
Drummond has not alleged what fraud was allegedly committed in Collingsworths
communications with Conrad & Scherer lawyers related to briefs prepared for this case. Without
knowing the precise nature of the alleged fraud, the Defendants and this Court are unable to
determine whether the specific misrepresentations at issue indeed constitute fraud. Nor can they
determine whether the fraud at issue rises to a level sufficient to invoke the crime-fraud
exception.

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Finally, although Collingsworth did not commit a crime or engage in fraud, to the extent
there is room for debate due to the highly unusual circumstances of obtaining truthful testimony
from witnesses in the tough world of Colombia, the crime fraud exception is still inapplicable.
Where the law is unsettled with regard to whether certain conduct is illegal, the crime-fraud
exceptionwhich is a narrow exception, Criswell v. City of OFallon, Mo., No. 4:06CV01565
ERW, 2008 WL 250199, at *5 (E.D. Mo. Jan. 29, 2008), cannot apply. See Med. Lab. Mgmt.
Consultants, 30 F. Supp. 2d at 1207 (holding that where it is not plausible that Defendants
knew or should have known that they would be liable for fraud, crime-fraud exception was not
applicable).
2.

Drummond has not produced evidence which, if unexplained, would be

prima facie proof of the existence of the exception.

Because Drummond has not identified the crimes or frauds at issue, it has not identified
the evidence that, in its view, establishes all of the elements of those crimes or frauds. Such
evidenceas opposed to allegationsis essential to invoking the crime-fraud exception. From
the inception of the crime-fraud exception in 1933, the Supreme Court has held it would be
absurd to say that the privilege could be got rid of merely by making a charge of fraud. Clark
v. United States, 289 U.S. 1, 15 (1933) (citation omitted). To drive the privilege away, . . . there
must be prima facie evidence that it has some foundation in fact. Id. (citation omitted); see
also Schroeder, 842 F.2d at 1226 (mere allegations of criminality are insufficient to warrant
application of the exception).

10

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B.

Even if Drummond had identified the alleged crime and produced prima
facie evidence, the Defendants should be given a chance to rebut that
evidence.

Lower courts in the Eleventh Circuit applying this prima facie standard have found the
party opposing the privilege on the crime/fraud exception has the initial burden of producing
evidence which, if unexplained, would be prima facie proof of the existence of the exception.
Gutter, 124 F. Supp. 2d at 1307. Only then does the burden of persuasion shift to the party
asserting the privilege to give a reasonable explanation of its conduct. Id. Because Drummond
has not met its initial burden, the Defendants have not been given sufficient notice of their
alleged wrongdoing so that they can be given an opportunity to explain it.
Nevertheless, it is likely that the Defendants, if given an opportunity, could provide a
reasonable explanation of [their] conduct. Id. For instance, as discussed above, it is not illegal
it is not even unethicalto pay the attorneys fees of another party. If Drummond were to argue
that Albert van Bilderbeeks payments to Mr. Blanco were in exchange for testimony, the
evidence would clearly contradict that argument. Mr. Otero has explained the context for Mr.
Blancos reasonable concern that his testimony about Drummond would expose him to greater
criminal penalties, which meant that he would incur additional attorneys fees. See Doc. 189-2
(Supp. Decl. of Ivan Otero Mendoza) 50-73. Mr. Blanco thus did not want to testify until he
had the attorneys fees to protect himself, but Mr. Blanco did not condition what he said on
payment. Id. 64-69. Rather, he gave his information first, and wished only to delay his
testimony until he had the resources to address the consequences in his criminal case. Id. And,
van Bilderbeek agreed to make these payments in order to obtain Blancos investigation services
for van Bilderbeeks own potential case against Drummond.

11

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Similarly, if Drummond were to argue that the Defendants violated discovery orders and
made false statements, it could not establish fraud. First, discovery violations typically do not
give rise to the crime-fraud exception: Generally, an erroneous judgment made in good faith
does not suffice to establish fraudulent intent. Likewise, the crime-fraud exception is not
triggered by the mere showing that an attorney has failed to produce certain documents in the
course of extensive discovery . . . . RCA Corp. v. Data Gen. Corp., Civ. A. No. 84-270-JJF,
1986 WL 15684, *2 (D. Del. Oct. 27, 1986) (citations omitted); see Jinks-Umstead v. England,
232 F.R.D. 142, 145-46 (D.D.C. 2005) (This court has not found any precedent, nor has
plaintiff provided any, that supports the expansion of the crime-fraud exception to errors made
during the discovery process.). This is true even when a party destroyed documents and
allegedly provided false interrogatories, knowingly concealed information, and fraudulently
induced a settlement. See Magnetar Techs. Corp. v. Six Flags Theme Park Inc., 886 F. Supp. 2d
466, 487-88 (D. Del. 2012) (holding that party did not make a prima facie case of crime or fraud
despite these actions).
Second, because the Defendants have now corrected those regrettable statements through
disclosures, supplementary interrogatory responses, and privilege logs provided to Drummond
and this Court, no fraud has been committed. Indeed, the Defendants came forward to correct the
mistaken representations in this case, which is powerful evidence of Defendants good faith.
That information was provided in time for this Court and Drummond to use it, both with respect
to this issue and any other. Collingsworth did not even benefit from his mistaken statements,
since, whether the payments were made to three witnesses or six does not affect the
appropriateness of those payments. Moreover, Drummond has suffered no harm from the
mistake because Defendants disclosed the additional payments before the crime-fraud motions

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were decided. While Collingsworths inaccurate statements harmed his credibility with this
Court, they harmed nothing else.
C.

Drummond has not shown that the information at issue was created in
furtherance of the unidentified and unestablished crimes or frauds.

[T]he proper reach of the crime-fraud exception when applicable does not extend to all
communications made in the course of the attorney-client relationship, but rather is limited to
those communications and documents in furtherance of the contemplated or ongoing criminal or
fraudulent conduct. In re Grand Jury Subpoena, 419 F.3d 329, 343 (5th Cir. 2005); see also In
re Grand Jury Subpoena Duces Tecum Dated Sept. 15, 1983, 731 F.2d 1032, 1038-41 (2d Cir.
1984) (holding [a]dvice sought in furtherance of a future or ongoing fraud is unprivileged;
communications with respect to advice as to past or completed frauds are within the privilege).
Therefore, even if Drummond has established all that it needs to establishand this Court rejects
the Defendants explanationthis Court must still examine every communication to determine
whether it was made in furtherance of the crime or fraud at issue.
The Fifth Circuit in In re Grand Jury Subpoena address[ed] the propriety of the scope of
the crime-fraud exception to the attorney-client and work product privileges on a record where
the grand jury subpoena compel[led] disclosure of all communications between the attorney and
his client . . . rather than discrete communications related to a particular issue or limited to
particular media. 419 F.3d at 340. Previous cases had all involve[d] the question of the
applicability and/or scope of the crime-fraud exception to specified documents or conversations
already limited to a certain time or context, rather than a challenge to a discovery request or a
subpoena seeking disclosure in toto. Id. The Fifth Circuit rejected the governments argument
that the attorney-client and work product privileges simply disappear with a prima facie showing,
and found the lower courts application of the crime-fraud exception was overly broad because

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it lacked the requisite specificity to reach only communications and documents no longer
protected by the attorney-client and work product privileges. Id. at 344.
First, unlike the government suggest[ed], no case stands for the proposition that, when a
prima facie showing is made . . . the privilege entirely disappears, subjecting everything in
connection with that client's representation with that attorney to disclosure. Id. Second, [i]n
assessing the proper scope of the crime-fraud exception's application to the attorney-client and
work product privileges, the Fifth Circuit looked to its sister circuits, which bolster[ed] [its]
conclusion that the reach of the crime-fraud exception does not extend to all communications
made in the course of the attorney-client relationship, but rather must be limited to those
communications made and documents produced in furtherance of the ongoing or future crime or
fraud, no longer protected by the privileges. Id. at 344-45.
For example, the Second Circuit in In re Richard Roe, Inc., 68 F.3d 38 (2d Cir. 1995),
held the crime-fraud exception does not apply simply because privileged communications
would provide an adversary with evidence of a crime or fraud, but rather applies only when the
court determines that the client communication or attorney work product in question was itself in
furtherance of the crime or fraud. Id. at 40 (emphasis in original). And the Eighth Circuit in In
re BankAmerica Corp. Secs. Litig., 270 F.3d 639 (8th Cir. 2001), vacated a disclosure order
because the district court focused only on plaintiffs threshold showing of fraud and then
assumed, without any further showing by plaintiffs, that all contemporaneous attorney-client
communications could be construed as in furtherance of the alleged fraud. Id. at 643.
The Fifth Circuit concluded, therefore, that the proper scope of the crime-fraud
exception must necessarily be limited to those attorney-client communications and work
products reasonably related to the furtherance of the ongoing or future crime or fraud at issue.

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In re Grand Jury Subpoena, 419 F.3d at 347; see also id. at 346 (labeling what it had previously
termed the second element of the prima facie test as the proper scope of the crime-fraud
exception's application to the work product privilege); Schroeder, 842 F.2d at 1226 (requiring
as the second element a showing that the attorneys assistance was obtained in furtherance of
the criminal or fraudulent activity or was closely related to it). Thus, any loss of privilege under
the crime-fraud exception extends only to those documents directly created in furtherance of
the criminal or fraudulent activity or [] closely related to it. Cox, 17 F.3d at 1416; Schroeder,
842 F.2d at 1226. Otherwise, to put it simply, the crime-fraud exception swallows the privilege
rule. In re Grand Jury Subpoena, 419 F.3d at 347.
Therefore, even if Drummond somehow were able to present prima facie evidence of the
exceptions applicability, Drummond still would not be able to obtain all of Defendants
privileged communications and documents related to the alleged crime or fraud. See id. at 338
(rejecting argument that once the prima facie showing is made that the crime-fraud exception
applies, the attorney-client and work product privileges no longer exist and the privileges
disappear as to all communications). The Fifth Circuit was unable to identify, nor does there
exist, any case stand[ing] for the proposition that, when a prima facie showing is made . . . the
privilege entirely disappears, subjecting everything in connection . . . to disclosure. Id. at 344.
Instead, Drummond would only be entitled to that information that was exchanged in furtherance
of that crime or fraud. Drummond has not established that any of the information at issue was
exchanged in furtherance of any (unidentified and unestablished) crime or fraud.

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II.

Even if Drummond could establish that information was exchanged in furtherance

of a crime or fraud, this Court would be required to conduct an in camera review of
the information.
Any order by this Court requiring the disclosure of the Defendants privileged materials

must be limited to those documents directly related to the specific crime or fraud that the
evidence establishes was ongoing or anticipated when such documents were created. See, e.g., In
re Grand Jury Subpoena, 419 F.3d at 338-40 (reversing district courts opinion ordering
compliance with a subpoena that compelled disclosure of all communications between the
attorney and his client . . . rather than discrete communications related to a particular issue). To
ensure any disclosure order possesses the requisite specificity to reach only communications
and documents no longer protected by the attorney-client and work product privileges, id. at
344, this Court must specify the factual basis for the crime or fraud that the documents or
communications are deemed to have furthered, [and] which of the parties asserting claims of
privilege possessed a criminal or fraudulent purpose with respect to those documents or
communications . . . . In re Richard Roe, 68 F.3d at 41. Given that Drummond has not met the
threshold for a prima facie application of the crime-fraud exception, the Court need never reach
this issue. However, with respect to any party, any lifting of work product privilege based on the
crime-fraud exception must be extremely narrow and focus only on the documents or
communications that furthers the specific crime or fraud proven to have occurred. To comply
with these requirements, this Court must conduct an in camera inspection of the information at
issue, including, with respect to proposed testimony, reviewing answers to questions posed by
Drummond in camera. Before conducting that inspection, though, this Court must find that
Drummond has made the necessary threshold showing of a crime or fraud.

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In United States v. Zolin, 491 U.S. 554 (1989), the Supreme Court rejected [a] blanket
rule allowing in camera review as a tool for determining the applicability of the crime-fraud
exception, holding that [t]here is no reason to permit opponents of the privilege to engage in
groundless fishing expeditions, with the district courts as their unwitting (and perhaps unwilling)
agents. Id. at 571-72 (emphasis added). In fashioning a standard for determining when in
camera review is appropriate, the Court conclude[d] that a lesser evidentiary showing is
needed to trigger in camera review than is required ultimately to overcome the privilege. Id.
The Court devised the following standard:
Before engaging in in camera review to determine the applicability of the crimefraud exception, the judge should require a showing of a factual basis adequate
to support a good faith belief by a reasonable person, Caldwell v. District Court,
644 P.2d 26, 33 (Colo.1982), that in camera review of the materials may reveal
evidence to establish the claim that the crime-fraud exception applies. Once that
showing is made, the decision whether to engage in in camera review rests in the
sound discretion of the district court. The court should make that decision in light
of the facts and circumstances of the particular case, including, among other
things, the volume of materials the district court has been asked to review, the
relative importance to the case of the alleged privileged information, and the
likelihood that the evidence produced through in camera review, together with
other available evidence then before the court, will establish that the crime-fraud
exception does apply.
Id. at 572.
The Eleventh Circuit considered the crime-fraud exception and the Zolin standard for in
camera review in Cox. 17 F.3d at 1416-17. The plaintiffs in Cox argued the crime-fraud
exception applied because the defendant union made numerous false statements through its
counsel, as part of an effort to conceal their illegal actions. Id. at 1416. The district court
refused to apply the exception because there [was] no evidence showing the communication
furthered any crime or fraud, or . . . was connected with any crime or fraud. Id. The Court of
Appeals also found plaintiffs ha[d] failed to produce any evidence that the communications at

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issue furthered or were closely related to an effort on the Unions part to conceal the illegal
actions of its negotiators. Id. at 1417. The Eleventh Circuit affirmed the district courts decision
refusing to permit even an in camera review of the communications involved. Id.
Although the Court [in Zolin] did not specify the level of proof necessary to trigger the
crime-fraud exception, it suggested that a higher burden than that required for in camera review
would be necessary to overcome the privilege. In re Green Grand Jury Proceedings, 492 F.3d
976, 983 (8th Cir. 2007); see also Zolin, 491 U.S. at 572 (stating a lesser evidentiary showing is
needed to trigger in camera review than is required ultimately to overcome the privilege);
Haines v. Liggett Grp. Inc., 975 F.2d 81, 96 (3d Cir. 1992) (The district court in this case
correctly observed that the decision to engage in in camera review implicates a much more
lenient standard of proof than the determination to apply the crime/fraud exception) (citation
omitted).
[B]efore a district court may engage in in camera review at the request of the party
opposing the privilege, that party must present evidence sufficient to support a reasonable belief
that in camera review may yield evidence that establishes the exceptions applicability. Zolin,
491 U.S. at 574-75. This threshold showing to obtain in camera review must be met by using
only non-privileged evidence. See id. at 573 (finding Fed. R. Evid. 104(a) establishes that
materials that have been determined to be privileged may not be considered in making the
preliminary determination of the existence of a privilege). Drummond has not made the
threshold showing. See Cox, 17 F.3d at 1416-17 (affirming the district courts decision refusing
to permit even an in camera review of the communications involved where plaintiffs failed to
produce any evidence showing the communications furthered any crime or fraud). The Court

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should not permit Drummond to engage in [a] groundless fishing expedition[], with the district
court[] as their unwitting (and perhaps unwilling) agent[]. Zolin, 491 U.S. at 571.
III.

Even if Drummond overcame all of the hurdles with respect to the Defendants
work product, it would need to overcome the same hurdles with respect to the
Defendants clients.
When work product is at issue, the crime-fraud exception applies differently from how it

applies to the attorney-client privilege. Because the work product privilege protects not just the
attorney-client relationship but the interests of attorneys to their own work product, both the
attorney and the client hold the privilege. In re Green Grand Jury Proceedings, 492 F.3d at 980
(citation omitted). Thus, a waiver by the client of the work product privilege will not deprive
the attorney of his own work product privilege, and vice versa. In re Grand Jury Subpoenas,
561 F.3d 408, 411 (5th Cir. 2009) (citation omitted). If this Court were to conclude that the
Defendants created the work product at issue in furtherance of a crime or a fraud, that conclusion
alone would be insufficient to require production of the information. Before production can be
required, this Court must also conclude that the Defendants client or clients exchanged the work
product in furtherance of a crime or fraud. Drummond can make no such showing.
CONCLUSION
The Defendants respectfully request that, in evaluating the applicability of the crimefraud exception in this case, this Court (1) require the Plaintiffs to specifically identify the
alleged crime or fraud, (2) require the Plaintiffs to make a prima facie showing that the alleged
crime or fraud was committed, (3) allow the Defendants an opportunity to rebut the Plaintiffs
evidence, and (4), if it is persuaded that a crime or fraud was committed, conduct an in camera
inspection of the information to determine whether that information was exchanged in
furtherance of the alleged crime or fraud.

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DATE: August 21, 2015.

Respectfully submitted,
/s/ William T. Paulk
Robert K. Spotswood
Michael T. Sansbury
William T. Paulk
SPOTSWOOD SANSOM & SANSBURY LLC
1819 5th Ave. N.
Suite 1050
Birmingham, AL 35203
Phone (205) 986-3620
Fax (205) 986-3639
rks@spotswoodllc.com
msansbury@spotswoodllc.com
wpaulk@spotswoodllc.com
Attorneys for Terrence P. Collingsworth and
Conrad & Scherer, LLP

OF COUNSEL FOR DEFENDANTS:

Kenneth E. McNeil, Pro Hac Vice
Texas State Bar No.: 13830900
Stuart V. Kusin, Pro Hac Vice
Texas State Bar No.: 11770100
1000 Louisiana Street, Suite 5100
Houston, Texas 77002-5096
Telephone: 713/651-9366
Facsimile: 713/654-6666
Lindsey Godfrey Eccles, Pro Hac Vice
WASB No. 33566
SUSMAN GODFREY LLP
1201 Third Avenue
Suite 3800
Seattle, Washington 98101
Telephone: 206/516-3880
Facsimile: 206/516-3883
leccles@susmangodfrey.com
Christopher S. Niewoehner
Admitted pro hac vice

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Case 2:11-cv-03695-RDP-TMP Document 313 Filed 08/21/15 Page 26 of 26

Steptoe & Johnson LLP

115 South LaSalle Street, Suite 3100
Chicago, IL 60604
Tel: 312-577-1240
Fax: 312-577-1370
cniewoehner@steptoe.com
Kendall R. Enyard
Savannah E. Marion
Admitted pro hac vice
Steptoe & Johnson LLP
1330 Connecticut Avenue NW
Washington, DC 20036
Tel: 202-429-6405
Fax: 202-429-3902

CERTIFICATE OF SERVICE
I HEREBY CERTIFY that, on August 21, 2015, I electronically filed the foregoing with
the Clerk of Court using the CM/ECF system, which will send notification of such filing to the
following:
William Anthony Davis, III
H. Thomas Wells, III
Benjamin T. Presley
STARNES DAVIS FLORIE LLP
P.O. Box 59812
Birmingham, AL 35259
(205) 868-6000
fax: (205) 868-6099
Sara E. Kropf
LAW OFFICE OF SARA KROPF PLLC
1001 G St. NW, Suite 800
Washington, DC 20001
(202) 627-6900

/s/ William T. Paulk

William T. Paulk

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