Baird v. Koerner

United States Court of Appeals for the Ninth Circuit · Evidence

EvidenceAttorney-client privilegeattorney-client privilegeclient identityprivileged communicationsIRS summonscivil contemptCalifornia privilege law

Facts

Baird, a tax attorney, was consulted in August 1956 by accountants and another attorney concerning undisclosed taxpayers whose returns were incorrect and whose taxes had been understated, at a time when no government investigation was pending. After discussing defenses and the advantages of making payment, Baird received $12,706.85 from the taxpayers' attorney and sent a cashier's check to the District Director of Internal Revenue in Baltimore with a letter stating the payment represented additional amounts due from one or more unidentified taxpayers. Baird did not know the taxpayers' names, but he refused to identify the accountants or the attorney who employed him when later summoned by the IRS, claiming attorney-client privilege. The district court ordered him to answer and held him in contempt when he refused.

Issue

Whether, in an IRS enforcement proceeding, an attorney may invoke the attorney-client privilege to refuse to disclose the identity of the persons who employed him to transmit an anonymous payment of additional taxes. Relatedly, whether federal courts in this civil context should apply forum-state law to determine the scope of that privilege.

Rule

In this civil context, the nature and extent of the attorney-client privilege are governed by the law of the forum state. Although client identity is ordinarily not privileged, the privilege extends to identity when disclosure would itself convey information that would ordinarily be part of a privileged communication; this determination is made case by case, with attention to circumstances such as pending litigation, third-party employment, future crime or fraud, or the attorney's own criminal exposure.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In a civil summons-enforcement proceeding filed in federal court in San Diego, attorney Nora Patel refuses to identify the client who retained her to deliver an anonymous payment for past state licensing fees. California privilege law would protect the identity because disclosure would reveal the client's admission of delinquency, but a contrary federal practice would not.

Which law should the federal court use to determine whether the identity is privileged?

Explanation. The majority held that in this civil context the nature and extent of the attorney-client privilege are governed by the law of the forum state. The mere fact that the matter is in federal court or arises from federal authority does not itself create a controlling federal privilege rule displacing forum-state law.