The surge in criminal antitrust enforcement over the last decade has made it more important than ever for defense counsel to be completely familiar with all the pretrial activities that may take place in a criminal investigation. With a few notable exceptions, most of the Antitrust Division’s recent prosecutions of large national or international cartels have resulted in plea agreements rather than trials. To obtain the most favorable results for their clients, counsel must be prepared to handle a host of issues, ranging from the decision to seek leniency to analyzing the potential penalties under the Sentencing Guidelines. This paper aims to provide a "road map" for counsel.
I. PRE-INVESTIGATIVE STAGE
Before the government enforcement authorities are aware of any possible wrongdoing, you may approach appropriate enforcement personnel, either (a) to make a complaint on behalf of a consumer or competitor who suspects that it has been the victim of anticompetitive activity, or (b) on behalf of an individual or company who participated in wrongful conduct but wants to come forward, to make a full disclosure, and to offer cooperation in return for leniency or amnesty.
A. Complaints By Victims
1. Complaints From Disgruntled Consumers and Competitors.
a. Be prepared to provide all details that support your client's belief in the existence of a possible antitrust violation causing injury, as opposed to legitimate competition.
b. Your client’s complaint is more likely to be given serious consideration if you reveal at the time of your presentation any prior or ongoing business disputes between your client and the alleged perpetrators.
c. Your client should understand that the enforcement authorities will not be free to fully apprise you of the status of any investigation that results from your client’s complaint.
2. Consider Your Client’s Exposure.
a. Before making a complaint, consider whether your client has any "skeletons in the closet."
b. Consider whether the complaint could have unexpected or unintended results, such as opening up to scrutiny the entire industry in which your client operates.
c. If your client is a customer, assess the strength of the information that your client has now. Nothing can harm a business relationship more than an unprovable charge based on rumor, hearsay, or innuendo.
B. Internal Investigations
A complete treatment of corporate compliance programs and internal corporate investigations is beyond the scope of this paper. Nonetheless, a few observations are in order.
1. Under the Sentencing Guidelines, the presence of an "effective compliance and ethics program," as described in U.S.S.G. §8B2.1, may enable a client to obtain a reduced penalty. Familiarize yourself with your client’s compliance program and its procedures for detecting antitrust violations.
2. Early detection of a possible problem allows for thorough selfinvestigation without the pressure, disruption and cost of responding to an on-going government investigation.
3. Factors to Consider in Responding to an Internally Discovered Problem.
a. The initial question is whether to conduct an internal investigation.
(1) Where the government has not yet initiated its own investigation, but the client is aware of internal allegations of wrongdoing or an internal audit has exposed the existence of a wrongful scheme, management may be tempted not to conduct an investigation, hoping that the allegations or wrongdoing will never become public.
(2) It is advisable, however, in almost every case for the client to conduct an internal investigation, rather than to remain blind to misconduct for which it may be held liable.
b. Developing an appropriate plan of investigation and carrying it out requires attention to important considerations, including, among others: (1) Taking steps to cloak the investigation and its results with the protections of the attorney-client and work-product privileges. (2) Deciding whether in-house or outside counsel should conduct the investigation.
(3)Achieving the proper balance between taking necessary action and protecting the client from defamation charges by employees or third parties.
(4) Deciding on lines of reporting during the course of the investigation – to the general counsel, senior management, the chief executive officer, a special audit committee or the full board of directors.
c. Depending on what is uncovered – the nature and scope of the wrongdoing, the person(s) involved – the client may:
(1) Determine appropriate corrective action.
(2) Decide whether to disclose to the government the allegations and the client’s findings in response to those allegations.
(3)Formulate its defenses at an early stage in anticipation of later criminal or civil enforcement action or private lawsuit.
C. Determining Whether to Seek Leniency in the U.S. (Also Known as Amnesty)
1. A client must weigh the risks of disclosure against the odds of qualifying for and receiving amnesty, factoring in the potential penalties and costs of a lengthy investigation, trial and conviction.
2. In general, under the Antitrust Division’s Corporate Leniency Policy, if, before an investigation has begun, a corporation comes forward with information about illegal conduct, amnesty from prosecution will be automatic if the corporation meets the following six conditions:
a. at the time the company reported the illegal activity, the Division has not yet received information concerning the illegal activity from any other source;
b. the corporation took prompt and effective action to terminate the unlawful activity upon its discovery;
c. the corporation reports the wrongdoing with candor and completeness, and provides full, continuing and complete cooperation to the Division throughout the investigation;
d. the confession of wrongdoing is a corporate act, as opposed to the actions of individual executives or officials;
e. the corporation makes restitution to injured parties, where possible; and
f. the corporation did not coerce another party to participate in the illegal activity, and was clearly not the leader or originator of the activity.
See U.S. Department of Justice, Antitrust Division, Corporate Leniency Policy (August 10, 1993), available at http://www.usdoj.gov/atr/public/guidelines/0091.htm.
3. Under the Corporate Leniency Policy, if a corporation qualifies for automatic amnesty by satisfying the above six requirements, its officers, directors and employees can also qualify for immunity if they admit their involvement in the illegal activity as part of the corporate confession, candidly and completely admit their involvement in the activity, and continue to assist the Division throughout the investigation.
a. Otherwise, they will be considered for immunity under the same standards as they have in the past.
b. The corporation should try to negotiate either amnesty or immunity for employees, or set up a framework within which they can make proffers and obtain immunity, to put the entire matter to rest. Even if the corporate client gets amnesty, the corporation still does not want its employees prosecuted, if for no other reason than to avoid an evidentiary trail to open the door for treble damage actions by private litigants.
4. If the corporation fails to meet the above six requirements, it may still gain amnesty, even after an investigation has begun, if it meets the following seven conditions:
a. the corporation was the first one to come forward and qualify for leniency with respect to the illegal activity in question;
b. the Division does not yet have evidence which is likely to result in a sustainable conviction against the company;
c. the corporation took prompt and effective action to terminate the unlawful activity upon its discovery;
d. the corporation reports the wrongdoing with candor and completeness, and provides full, continuing and complete cooperation to the Division throughout the investigation;
e. the confession of wrongdoing is a corporate act, as opposed to the actions of individual executives or officials;
f. the corporation makes restitution to injured parties, where possible; and
g. the Division determines that granting leniency would not be unfair to others, given the nature of the illegal activity, the confessing corporation's role in it, and how long it takes for the corporation to come forward. The primary considerations in this inquiry are how early the corporation comes forward and whether it was the leader or originator of the activity. The burden of satisfying this requirement increases as the Division comes closer to having evidence likely to result in a sustainable conviction.
5. New legislation passed in 2004 substantially increases the incentive to apply for amnesty. Under the Antitrust Criminal Penalty Enhancement and Reform Act of 2004, 15 U.S.C. § 1 note, a corporation that receives amnesty will pay only the damages attributable to its own commerce in a private damages action, so long as the corporation also cooperates with the plaintiffs in making their case against the remaining cartel members. This provision eliminates treble damages and joint and several liability for the successful amnesty applicant.
a. This provision will expire in five years, although it will still apply after the expiration date to an applicant accepted into the amnesty program within that time period.
b. The court in the private damages action must make a determination that the amnesty applicant provided satisfactory cooperation to the plaintiffs, including providing a full account of all facts known about the cartel.
c. An individual leniency applicant also may qualify for detrebling of damages.
6. If the corporation qualifies for leniency under the seven-factor test, corporate officers, directors, and employees admitting their involvement as part of the corporate confession will be considered for immunity from criminal prosecution on the same basis as they would have been had they approached the Division on their own.
7. Under the Antitrust Division’s Leniency Policy for Individuals, an individual may gain personal amnesty from prosecution, not as a part of a corporate proffer or confession, by coming forward, reporting the illegal activity, and meeting the following three conditions:
a. the Division had not previously received information about the illegal activity from any other source;
b. reporting the wrongdoing with candor and completeness, and providing full and continuing cooperation throughout the investigation; and c. the individual was neither a leader nor initiator of the illegal conduct, and did not coerce another party to participate in the conduct. See U.S. Department of Justice, Antitrust Division, Leniency Policy for Individuals (August 10, 1994), available at http://www.usdoj.gov/atr/public/guidelines/0092.htm.
8. If an individual does not qualify for amnesty under the leniency policy, he or she will be considered for statutory or informal immunity, determined on a case-by-case basis.
9. The current Amnesty program has proved much more successful than its predecessor in encouraging corporations to come forward with reports of illegal activity, resulting in a "surge" of applications and generating many of the Antitrust Division’s criminal cases. See Scott D. Hammond, "An Update of the Antitrust Division’s Criminal Enforcement Program," Remarks Before the ABA Section of Antitrust Law 2005 Fall Forum (Nov. 16, 2005), available at http://www.usdoj.gov/atr/public/speeches/213247.htm.
a. One reason for the dramatic increase in amnesty applications may be the substantial increase in criminal fines, with fines of $100 million or more in nine cases and fines of $10 million or more against more than 50 corporate defendants. See id. Given the risk of a high fine, companies have a strong incentive to divulge illegal activities to the Division before their co-conspirators do so. For example, in several recent prosecutions in which some defendants paid massive fines and executives served jail sentences, the amnesty applicant paid no fine and cooperating executives received nonprosecution protection. Id.
b. "Amnesty Plus" allows companies currently being investigated for one violation to qualify for amnesty from prosecution for newlyreported violations. On the other hand, a company that participates in a second antitrust violation and does not self-report faces "Penalty Plus" – a potentially harsher penalty for failing to come forward on the second matter. Id.
10. Counsel should take care to be clear on the period of time covered by the amnesty agreement.
a. Recently, DOJ attempted to rescind an amnesty agreement that protected a firm from prosecution for cartel conduct prior to a specified date (January 15, 2003). DOJ claimed that the firm had represented that it stopped violating the law in March 2002, but actually continued the violations until October 2002. The court refused to allow DOJ to rescind the agreement. Stolt-Neilsen S.A. v. United States, 352 F. Supp. 2d 553 (E.D. Pa. 2005)
b. Following Stolt-Neilsen, DOJ may not agree to amnesty for all conduct up to the date of agreement, but may establish an earlier cutoff date.
11. Companies that are hesitant to apply for amnesty with the Division for fear of creating liability in foreign nations may have some reassurance in the form of the Division’s policy of not disclosing any information gained from an amnesty applicant to foreign antitrust agencies (unless the applicant agrees, usually because it is also seeking leniency in one or more foreign jurisdictions). Id.
D. Leniency Policies in Jurisdictions Other than the United States
1. If there is potential exposure in the European Union or other jurisdictions, consider whether to seek amnesty there at the same time as in the United States.
a. In Europe, leniency may be sought both from the EC and from Member States. The new European Competition Network has introduced greater cooperation between the EC and Member State antitrust authorities, and thus counsel should be prepared to approach the authorities in each country which may have jurisdiction over the matter to seek leniency.
2. The EC has no power to impose criminal sanctions (although some of its member states, such as the U.K., do). It may, however, impose large civil penalties on companies, and has done so with increasing frequency in recent years.
a. However, under the EC’s 2002 Leniency Program, a firm that informs the Commission of a cartel can obtain full immunity from fines if:
(1) no other party has disclosed evidence to the Commission concerning the cartel’s existence;
(2) the firm provides evidence and information which, in the Commission’s view, may enable the Commission to adopt a decision initiating an investigation;
(3) at the time of the submission, the Commission did not yet have sufficient evidence to adopt a decision initiating an investigation;
(4) the firm provides the Commission with all relevant evidence and information available to the firm, cooperates fully on a continual and expeditious basis, and swiftly answers Commission requests that may help to resolve factual issues;
(5) the firm ends its involvement in the activity no later than when it makes the initial disclosure to the Commission; and
(6) the firm has not taken steps to coerce "other undertakings" to participate in illegal activity. See Commission Notice (2002/C 45/03) on Immunity from Fines and Reduction of Fines in Cartel Cases, 2002 O.J. (C 45) 3-5, available at http://europa.eu.int/comm/competition/antitrust/leniency
b. A firm which informs the EC of a secret cartel may also obtain full immunity if:
(1) no other firm has yet obtained full immunity by meeting the above six requirements;
(2) no other party has disclosed evidence to the Commission concerning the cartel’s existence;
(3) the firm provides evidence and information which, in the Commission’s view, may enable the Commission to find an infringement of Article 81 of the E.C. Treaty, which prohibits agreements and practices that may affect trade between member states and that have as their object or effect the prevention, restriction or distortion of competition within the common market;
(4) at the time of the submission, the Commission did not yet have sufficient evidence to find an infringement of Article 81 of the E.C. Treaty;
(5) the firm provides the Commission with all relevant evidence and information available to the firm, cooperates fully on a continual and expeditious basis, swiftly answers Commission requests that may help to resolve factual issues;
(6) the firm ends its involvement in the activity no later than when it makes the initial disclosure to the Commission; and
(7) the firm has not taken steps to coerce "other undertakings" to participate in illegal activity. See id.
c. Even if a firm does not qualify for full immunity, it may still qualify for a reduction in fines if:
(1) the firm provides the Commission with evidence of the suspected infringement – providing that the evidence strengthens the Commission's ability to prove the facts in question; and
(2) the firm terminates its involvement in the activity in question. See id.
d. The first firm to qualify for a fine reduction will earn a reduction of 30-50%. The second firm can obtain a 20-30% reduction, and all subsequent firms can gain a reduction of up to 20%. Within each of these categories, the amount of reductions in fines will be determined by evaluating the timing of the firm’s cooperation and the extent to which the firm’s evidence strengthens the Commission’s ability to prove the facts in question. See id.
2. Other jurisdictions
a. In Canada, criminal penalties may be assessed for antitrust violations. Amnesty may be granted in the following situations:
(1) The Competition Bureau is unaware of an offense, and the party is the first to disclose it; or (2) the Bureau is aware of an offense, and the party is the first to come forward before there is sufficient evidence to warrant a referral of the matter to the Attorney General.
(3) The party also must take effective steps to terminate its participation, not have been the instigator or the sole beneficiary in Canada, and must provide complete cooperation. See Canadian Competition Bureau, Immunity Program Under the Competition Act (September 2000), available at http://www.competitionbureau.gc.ca/internet/index.
b. The U.K. adopted criminal penalties for cartel conduct in the Enterprise Act of 2002. The U.K. also has a new amnesty program.
c. Japan amended its Anti Monopoly Act effective January 4, 2006 to substantially increase fines for cartel activity and expand the JFTC’s criminal investigative powers. In addition, Japan adopted an amnesty program for the first time.
d. Several other countries have new amnesty programs: Australia, Brazil, the Czech Republic, France, Germany, Ireland, Korea, New Zealand, and Sweden.
II. INVESTIGATIVE STAGE
A. Voluntary Requests for Information Versus Compulsory Process 1. Option to Avoid Formal Process.
a. The Antitrust Division may initiate an investigation with a request for voluntary production of documents and voluntary interviews.
b. The client may benefit from submitting to "voluntary" cooperation."
(1) In the voluntary response context, the staff is likely to be more flexible in narrowing the scope of the production.
(2) Likewise, the staff is likely to accept more readily the client’s interpretations of the requests and often will settle for a less than complete response.
(3) By contrast, once the case for formal process has been made by the staff and authority to issue a subpoena has been obtained, the staff is more inclined to use that authority.
B. Responding To A Grand Jury Subpoena For Documents
1. Evaluate Appropriateness of Issuing Your Own Press Release Regarding Receipt of Subpoena Especially If Client is a Publicly Traded Company.
2. Notify All Potentially Affected Units or Divisions of the Company of Government Investigation and Obligation to Preserve Documents.
a. Notify employees of legal obligation to preserve documents. Ordinarily, this directive comes from the company’s general.
b. A comprehensive treatment of electronic discovery guidelines is beyond the scope of this paper, but counsel must be familiar (or consult specialists who are familiar) with the preservation and handling of email and other electronic documents.
c. Advise employees of penalties for destruction of documents and obstruction of justice.
3. Select A Company Employee to be "Document Custodian" for Purposes of Complying with the Subpoena.
a. Involve the document custodian early in process to assist counsel in identifying appropriate company employees to interview and facilities, offices and files to be searched.
b. Involve the document custodian in management and supervision of document search sufficiently to provide that person with genuine knowledge that a complete, thorough search was made and to certify that the documents demanded by the subpoena (as modified) have been produced.
4. Initial Contact with the Prosecutor.
a. Inquire as to the status of your client – "target," "subject" or "witness." The Antitrust Division Grand Jury Practice Manual, Vol. I at IV-63 (Nov. 1991), defines a "target" as "a person as to whom the prosecutor or the Grand Jury has substantial evidence linking him/her to the commission of a crime and who, in the judgment of the prosecutor, is a putative defendant." A "subject" is defined as "a person whose conduct is within the scope of the Grand Jury's investigation." Id.
5. Negotiate with Prosecutor Compliance with Subpoena.
a. Often, a subpoena demands compliance within a short period of time. If you expect that the volume of documents may be large or that documents may be contained in multiple locations, it is wise to seek an extension of time for compliance.
(1) The extension will provide counsel with opportunity to gather information about nature of company’s files and evaluate potential problems with compliance.
(2) Establish a schedule for rolling production and set a target date for final compliance after negotiating modifications to, and narrowing, the subpoena.
b. Establish a cut-off date for the document search.
c. Negotiate modifications to the subpoena and narrow the scope and breadth of the document requests.
(1)Know the facts: the number of company locations to be searched, the nature of files and types of documents maintained by client, and the potential volume of documents.
(2) Make specific proposals for modifications and narrowing, such as narrowing definitions of markets, limiting the time period applicable for certain types of documents, excluding certain divisions, facilities or subsidiaries, or offering to provide summaries of voluminous documents.
(3) Confirm all agreements and understandings in writing immediately.
6. Raise All Relevant Objections Prior to Compliance.
a. If your attempts to negotiate the breadth, scope and meaning of the subpoena are unavailing, consider moving to quash or modify the subpoena.
b. Commonly cited grounds for motions to quash or modify include burden, irrelevance, lack of particularity and violation of constitutional rights.
7. Particular attention should be given to asserting Fifth Amendment protection against self-incrimination by "act of production." For thorough treatment of this subject, see Kenneth J. Melilli, Act-of-Production Immunity, 52 Ohio St. L.J. 223 (1991).
a. Rooted in the Fifth Amendment, the "act of production" privilege protects individuals from compelled self-incrimination. See United States v. Doe, 465 U.S. 605, 610-612 (1984).
b. Corporations and other collective entities, such as labor unions and partnerships, are not protected by the Fifth Amendment, and thus may not claim the "act of production" privilege. See Braswell v. United States, 487 U.S. 99, 104-109 (1988). See also In Re Grand Jury Witnesses, 92 F.3d 710, 712 (8th Cir. 1996).
c. Individuals within entities, however, may be able to claim the privilege.
(1) For example, the owner of a sole proprietorship may claim the privilege if testimonial communications are at stake. See Doe, 465 U.S. at 610-612.
(2) While custodians of corporate documents may not be able to claim the privilege to prevent the production of those documents (see, e.g., Braswell, 487 U.S. at 104-117; Grand Jury Subpoena Dated April 9, 1996 v. Smith, 87 F.3d 1198, 1200 (11th Cir. 1996)), the Fifth Amendment protects a custodian from further compelled oral testimony after he or she has produced and authenticated corporate records. See Braswell, 487 U.S. at 114; Grand Jury Subpoena Dated April 9, 1996, 87 F.3d at 1201.
(a) The fact that the custodian was the one to produce the documents is itself privileged: the government may use the incriminating records against the custodian, but the government may not tell a jury that it was the custodian who produced those records. See Braswell, 487 U.S. at 117-118; In Re Grand Jury Witnesses, 92 F.3d at 713.
(b) It is important to note, as well, that a custodian may keep personal papers, such as diaries. In these situations, such papers may be protected by the privilege. See In Re Grand Jury Proceedings, 626 F.2d 1051, 1054, n.2 (1st Cir. 1980). But see Matter of Grand Jury Subpoenas Dated October 22, 1991 and November 1, 1991, 959 F.2d 1158, 1165 (2d. Cir. 1992) (holding that copies of corporate records do not become an individual’s personal property merely because he has caused the copies to be made).
(3) Courts are split on whether the "act of production" privilege is available to former employees who are subpoenaed for corporate records in their possession. Compare In Re Three Grand Jury Subpoenas Duces Tecum Dated Jan. 29, 1999, 191 F.3d 173 (2d Cir. 1999) (privilege applies in such circumstances) with In Re Grand Jury Subpoena Dated November 12, 1991, 957 F.2d 807 (11th Cir. 1992) (privilege does not apply).
d. After determining whether a person qualifies to assert the "act of production" privilege, a court will determine whether the documents in question are protected by the privilege.
e. Only testimonial communications are protected by the Fifth Amendment. See United States v. Hubbell, 530 U.S. 27, 34 (2000). There are two general categories of testimonial communications which could possibly fall under the "act of production" privilege:
(1) Testimonial communications made through the contents of the documents released
(a) The contents of business records are not protected. See Braswell, 487 U.S. at 102.
(b) The contents of private business papers and nonbusiness personal documents may or may not be protected. See generally Melilli, supra, at 265 n.94 (detailing the split between the courts on this issue).
(2) Testimonial communications made as a result of the act of releasing the documents. This can arise where:
(a) The holder of the documents is not legally entitled to be in possession of the documents, as production would constitute testimony as to unlawful possession. See, e.g., In Re Grand Jury Subpoenas Duces Tecum Dated Jan. 29, 1999, 191 F.3d 173, 183 (2d Cir. 1999).
(b) The very existence of the documents is at dispute, as production would demonstrate the existence of the documents. See Doe, 465 U.S. at 614 n.13; Fisher v. United States, 425 U.S., 391, 410 (1976).
(c) The production of the documents authenticates them, as it obviates the government’s need to do so at trial. See Doe, 465 U.S. at 614 n.13; Fisher, 425 U.S. at 410.
C. Responding To A Grand Jury Subpoena For Testimony
1. Initial Contact With Prosecutor.
a. Inquire as to the status of your client – "target," "subject" or "witness."
b. Make preliminary inquiries as to availability of pre-testimony interview and immunity. 2. Evaluate Conflicts of Interest and Multiple Representation Issues.
a. In the interest of cost savings, efficiency and increased access to information, the corporation may ask counsel to represent multiple subjects of an investigation. For example, a company may request its outside counsel to represent both the entity and its employees.
b. Multiple representation by a single attorney in grand jury investigations can raise several problems:
(1) If, for example, you represent a company, and you seek to represent individual employees in connection with a grand jury appearance, you should conduct a preliminary interview of the witness to determine the propriety of multiple representation.
(2) At the outset of the interview, you should advise the individual of your status as counsel for the entity and explain that the attorney-client privilege is held by the entity, not the individual.
(3) If the individual has a good faith basis to assert the Fifth Amendment privilege for certain conduct, an inherent conflict exists for a lawyer representing both the entity and the individual, and separate counsel is advisable.
(4) The individual may require independent counsel for advice about whether a waiver is in his or her best interest.
(5) You should try to assist the individual in selecting separate counsel to help assure that you have a good working relationship with that individual's counsel.
(6) Even if the individual were to consent to a waiver, be wary of representing multiple witnesses or subjects during an investigation, particularly if anyone you represent is likely to become a defendant.
(7) An actual conflict may arise as evidence develops during the course of the investigation; if the individual ultimately becomes a witness at trial and the entity is a defendant, you may be precluded from representing the entity at trial. The concern is that the lawyer – who represents a defendant at trial but previously had an attorney-client relationship with a witness for the government – will either make use of the witness’ confidences and secrets to help the defendant, or will respect the witness’ confidences and secrets and thereby harm the defendant.
c. Multiple representation in grand jury investigations – representing multiple "targets" or "subjects" – can raise additional problems:
(1) Representation of multiple witnesses may lead to the possible compromise of the lawyer’s independent judgment owed to one client because of considerations of the interests of the other client. For example, the Antitrust Division may refuse to negotiate immunity or plea agreements with an attorney representing two "targets" or "subjects," thereby forming a conflict and forcing the attorney to sever the multiple representation.
(2) Further conflict issues can arise when one client determines that it is in his best interest to cooperate in a grand jury investigation and to seek immunity from prosecution in return for his testimony against the entity client or another individual client; at the same time, the entity client may determine to disassociate itself from the individual’s actions in an effort to minimize its involvement with the wrongful conduct.
(3) Two clients may require different litigation strategies that are adverse to each other’s interest, for example, the entity may wish to plea bargain while the individual may want to proceed to trial.
3. Evaluate Risk of Self-Incrimination and Seek Immunity.
a. In the context of a criminal investigation, a good rule of thumb is to assert the privilege if the client has any exposure of criminal prosecution. As recognized by the government itself, there is a real risk of self-incrimination "in the context of most antitrust Grand Jury investigations involving conspiracies to restrain trade since conspiracies can be proved by a ‘course of conduct,’ and only a single act is needed to connect an individual to a conspiracy once its existence is shown." Grand Jury Manual, Vol. 1 at V-5 and V-6.
b. In determining whether to grant your immunity request, the government considers various factors (Grand Jury Manual, Vol. 1 at V-16 to V-20):
(1) The seriousness of the offense, and the importance of the case in achieving effective enforcement of the criminal laws;
(2) The value of the potential witness’ testimony or information to the investigation or prosecution;
(3) The likelihood of the witness promptly complying with the immunity order and providing useful testimony;
(4) The person’s culpability relative to other possible defendants;
(5) The possibility of successfully prosecuting the witness without immunizing him; and
(6) The possibility of adverse harm to the witness if he testifies pursuant to a compulsion order.
c. If your client’s testimony will provide the government with an important piece of its case, either by providing key information that it does not have or by corroborating critical testimony, and will assist the government in prosecuting others, there is a good chance your client will be granted immunity.
d. In making its decision, the government will perform a balancing exercise: it will weigh the expected value of the testimony against the damage of allowing a potentially culpable individual "off the hook." In this process, the government will routinely seek a "proffer" of the witness’ expected testimony, either from the witness directly or through counsel.
(1) Attorney proffer.
(a) The government usually first seeks an attorney proffer, which counsel may give by providing hypothetical facts that would form the basis of the expected testimony.
(b) Counsel should be prepared to make a thorough hypothetical proffer of the client’s testimony, and expect that the government will ask counsel to supplement the proffer with further hypothetical information and details.
(c) the government may offer immunity based on the hypotheticals, or it may insist on a proffer directly from the client.
(2) Client proffer.
(a) Typically an in-person interview of the client by the government with counsel present.
(b) Counsel should seek to obtain at least a written limited grant of immunity before the interview takes place, which would permit the government only to make use of the information learned at the interview for the purpose of pursuing leads or as a basis for cross-examination or rebuttal to subsequent inconsistent testimony.
(c) This grant of immunity is generally more limited than "use" immunity; the government can still indict your client based on evidence obtained from other sources, including sources developed from the information your client revealed during the interview. e. Counsel should also consider "informal" immunity, as opposed to formal immunity granted by a court.
(1) With the protections of informal immunity, your client may agree to be interviewed by the government in advance of the grand jury appearance, or in lieu of appearing before privilege.
(2) Typically, informal immunity is referred to as "letter immunity," which, like court ordered immunity, precludes use by the government of any evidence of wrongdoing given by your client in the interview.
(3) Also with the protections of informal immunity, your client may agree to testify before the grand jury.
4. Prepare Your Client and Compile Interview and Debriefing Memoranda.
a. Beyond reviewing documents with your client and nailing down his or her version of events, there are several important aspects of preparing for a government interview or a grand jury appearance that should not be overlooked.
(1) Through cooperative joint defense arrangements and other industry contacts, counsel should be fully familiar with all possible subjects of questioning.
(2) During preparation of client, counsel should touch on all possible subjects of questioning, even if they go beyond counsel’s understanding of the client’s area of knowledge; if there are to be any "surprises," you want to hear about them before they come out for the first time during the interview, or worse, during the debriefing after the client has testified before the grand jury.
(3) The client should be alert to questions invading the attorney-client and other privileges, and be instructed to excuse himself from the grand jury room to consult with counsel if, at any time, it is unclear whether a privilege applies; in general, if your client has any cause for concern during his testimony he should excuse himself to consult with counsel.
b. Preparation of interview and debriefing memoranda is of critical importance.
(1) During a government interview, counsel should take notes on the questions asked by the government and the client’s responses, as well as any documents referred to or shown to the client.
(2) Similarly, immediately following the grand jury appearance, counsel should debrief the client on what documents were shown and everything that was said and done in the grand jury room – by the prosecutors, the grand jurors, and the client.
(3) The interview and debriefing notes should be compiled into memoranda and should include thoughts and mental impressions of counsel to protect them as work-product.
(4) Preparing such memoranda is particularly important when the testimony is given under some form of immunity, requiring counsel to know with precision the areas that were inquired into and the information that was transmitted by his client to the government.
(5) The memoranda is also important as a source of information:
(a) for possible later negotiations with the government;
(b) to prepare your client if he is called as a witness at trial; and
(c) to provide an oral report to joint co-counsel as part of a joint defense.
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