744 F.

2d 955
17 Fed. R. Evid. Serv. 880

KLITZMAN, KLITZMAN and GALLAGHER

v.
Robert J. KRUT, Vernon Holmes, W. Hunt Dumont, Michael
Milner, Appellants.
No. 84-5443.

United States Court of Appeals,

Third Circuit.
Argued Aug. 13, 1984.
Decided Sept. 17, 1984.

W. Hunt Dumont, U.S. Atty., Ralph A. Jacobs (Argued), Chief, Appeals

Div., Paul J. Dillon, Asst. U.S. Atty., Newark, N.J., for appellants.
Alfred C. DeCotiis (Argued), Richard T. Philips, DeCotiis & Philips,
West Orange, N.J., for appellee.
Before ALDISERT, Chief Judge, WEIS, Circuit Judge, and RE, Judge.*
OPINION OF THE COURT
ALDISERT, Chief Judge.

The government has appealed from the grant of a preliminary injunction

commanding the return of documents and records seized at a law office
pursuant to a search warrant. The district court held that the search and seizure
violated the fourth amendment because the search was overbroad, and granted
the injunction. After the government announced its intention to appeal
immediately, the district court placed the seized materials under seal. The
government then petitioned this court for relief from the injunction and
requested a stay of the order and an expedited briefing schedule. We granted
the stay, preserved the status of the materials under seal, and expedited the
appeal. Because we agree that the search was overbroad, we now affirm the
judgment of the district court granting the preliminary injunction, lift the stay,
and order the return of the seized materials to the law office.

I.
2

Charles Klitzman, an attorney, was the target of a grand jury investigation of an

alleged conspiracy to use the U.S. Mail to defraud insurance companies by
submitting fraudulent medical reports and inflated medical bills in personal
injury cases. As part of the investigation, U.S. Postal Inspectors searched
Klitzman's law office, Klitzman, Klitzman and Gallagher, in Asbury Park, New
Jersey.

There is no dispute as to the facts. The postal inspectors accomplished the

search pursuant to three search warrants. The first warrant authorized the
seizure of all closed or non-active files of personal injury claimants, business
bank account records of the firm, ledger books concerning trust accounts,
retainer and compensation agreements and financial records pertaining to
personal injury clients, records reflecting payments to attorneys, investigators,
and other third parties, case registers, legal diaries, telephone message books
and pads, visitors logs, telephone toll records, and any other evidence of a
conspiracy to defraud insurance companies. The magistrate issued the warrant
based on the affidavit of Postal Inspector Robert Krut detailing particular
examples of false or inflated medical bills submitted on behalf of Klitzman's
clients.

The second warrant authorized the seizure of certain open files of personal
injury claimants. The third warrant extended the scope of the search to include
the storage room of the law firm. The affidavits of Postal Inspector Vernon
Holmes formed the basis for these latter two warrants.

Government agents occupied Klitzman's office for a full day while performing
the search, resulting in the closing of the office to clients. The postal inspectors
required two trucks to haul away 2,000 files and numerous financial documents
seized at the law firm.

II.
6

In seeking a preliminary injunction to compel the government to return the

seized materials, plaintiff, the Klitzman firm, argued that: (1) there was no
probable cause for the issuance of the warrants; (2) the warrants lacked
sufficient particularity; (3) a search of a law office is per se unreasonable; and
(4) the search was overbroad. The district court rejected plaintiff's first three
contentions, implicitly resting its finding that plaintiff was likely to succeed on
the merits on the conclusion that the search was overbroad.

The government contended that the search warrant properly was limited "to
closed personal injury files which contained reports and bills for professional
services by medical practitioners, and other records associated with the
preparation and presentation of closed personal injury claims." Klitzman,
Klitzman & Gallagher v. Kurt, 591 F.Supp. 258, 268 (D.N.J.1984). The district
court, however, concluded that the warrant permitted a far broader search,
encompassing materials and documents from the entire range of Charles
Klitzman's individual law practice and also from much of the rest of the firm's
practice. The court found that the inspectors examined and seized materials
irrespective of their relationship to the alleged conspiracy, and regardless of
whether the files searched were open or closed. The court also determined that
the warrant allowed the seizure of files that contained potentially privileged
information, and many financial records that, even if not privileged, could not
be regarded as necessary or relevant to proving the alleged scheme to defraud
insurance companies.

The warrant undeniably allowed the seizure of all file lists and appointment
books without regard to whether the materials had any connection to particular
alleged crimes or to personal injury cases in general. Moreover, as the district
court determined, the warrant required the impoundment of all closed personal
injury files, without requiring the postal inspectors to make any effort to
segregate the files according to physicians involved, types of personal injury
claims at issue, or other indicia that would protect the privacy interests of
uninvolved lawyers and clients. Id. The district court, therefore, held that the
search violated both the attorney-client privilege and the Privacy Protection
Act, 42 U.S.C. Sec. 2000aa-11,1 because the search included in its scope
materials emanating from confidential relationships between lawyers not
suspected of criminal activity and their clients.

III.
9

Although other issues are suggested in this appeal,2 we will consider only the
appeal from the injunctive order. We will invoke the familiar standards for
review of the grant or denial of a preliminary injunction. The law has entrusted
the power to grant or deny an injunction to the discretion of the trial court in the
first instance, and not to the appellate court. Unless that court abuses its
discretion, commits an obvious error in applying the law, or makes a serious
mistake in considering the proof, the appellate court must take the judgment of
the trial court as presumptively correct. National Land & Investment Co. v.
Specter, 428 F.2d 91, 95 (3d Cir.1970); Stokes v. Williams, 226 F. 148, 156 (3d
Cir.1915), cert. denied, 241 U.S. 681, 36 S.Ct. 728, 60 L.Ed. 1234 (1916). This
limited review is appropriate because a court nearly always bases the grant or

denial of an injunction on an abbreviated set of facts, requiring a delicate

balancing of the probabilities of ultimate success at final hearing with the
consequences of immediate irreparable injury that possibly could flow from the
denial of preliminary relief. United States Steel Corp. v. Fraternal Association
of Steelhaulers, 431 F.2d 1046, 1048 (3d Cir.1970).
10

In exercising its limited review of the grant or denial of preliminary injunctive

relief, the appellate court asks: (a) did the movant make a strong showing that it
is likely to prevail on the merits? (b) did the movant show that, without such
relief, it would be irreparably injured? (c) would the grant or denial of a
preliminary injunction substantially have harmed other parties interested in, or
affected by, the proceedings? (d) where lies the public interest? A.O. Smith
Corp. v. FTC, 530 F.2d 515, 525 (3d Cir.1976); see also Eli Lilly & Co. v.
Premo Pharmaceutical Laboratories, Inc., 630 F.2d 120, 136 (3d Cir.), cert.
denied, 449 U.S. 1014, 101 S.Ct. 573, 66 L.Ed.2d 473 (1980); Constructors
Association of Western Pennsylvania v. Kreps, 573 F.2d 811, 814-15 (3d
Cir.1978). With these criteria in mind, we turn to the arguments presented to us.

IV.
11

In granting the preliminary injunction, the district court made two essential
determinations. The court found that the law firm had made a strong argument
that it would prevail on the merits of the litigation, based on its claim that the
search was overbroad. Second, the court held that the plaintiff met its burden of
proving irreparable injury, amply demonstrating both that the law firm could
not function without many of the seized materials, and, more important, that the
seizure represented a gross imposition on the attorney-client privilege. We first
consider whether plaintiff carried its burden by making a strong showing that it
was likely to prevail on the merits.

A.
12

The district court correctly rejected plaintiff's other objections to the search,
finding that only the overbreadth claim was substantial. There is little doubt that
probable cause existed for a search of plaintiff's offices. Postal Inspector Krut's
affidavit, upon which the magistrate based the issuance of the primary warrant,
stated that postal inspectors had interviewed approximately thirty clients of the
Klitzman firm who testified as to the fraudulent activities. Probable cause,
therefore, existed to believe that a federal crime had been committed and that
plaintiff's office may have been "the place of concealment of evidence of the
crime." Zurcher v. Stanford Daily, 436 U.S. 547, 558, 98 S.Ct. 1970, 1978, 56
L.Ed.2d 525 (1978). Moreover, the magistrate's determination that probable

cause existed is entitled to great deference by a reviewing court. Illinois v.

Gates, 462 U.S. 213, 103 S.Ct. 2317, 2330, 76 L.Ed.2d 527 (1983).
13

Little doubt also exists that the warrants issued were sufficiently particular.
They described in detail the premises to be searched and the items to be seized,
leaving nothing to the discretion of the officers executing the warrants.
Andresen v. Maryland, 427 U.S. 463, 480, 96 S.Ct. 2737, 2748, 49 L.Ed.2d 627
(1976). In fact, when confusion arose as to whether the first warrant permitted
open files to be seized or a storage room to be searched, the postal inspectors
obtained separate warrants that authorized, with particularity, these activities.

14

A search of a law office is not, as plaintiff argued below, per se unreasonable.

Courts consistently have upheld searches of law offices where, as here, the
attorney at issue was the target of a criminal investigation. See, e.g., Andresen
v. Maryland, 427 U.S. 463, 96 S.Ct. 2737, 49 L.Ed.2d 627 (1976); In re
Application of the United States for an Order, 723 F.2d 1022 (1st Cir.1983);
National City Trading Corp. v. United States, 635 F.2d 1020 (2d Cir.1980); cf.
O'Connor v. Johnson, 287 N.W.2d 400 (Minn.1979) (per se rule against law
office searches when attorney not suspected of criminal wrongdoing). We
therefore believe that the correct approach to this issue, as articulated by the
district court, is not to immunize law offices from searches, but to scrutinize
carefully the particularity and breadth of the warrant authorizing the search, the
nature and scope of the search, and any resulting seizure. Accordingly, we now
address plaintiff's contention regarding the scope of the search.

15

We conclude that substantial support exists for the view that the search of the
Klitzman firm was overbroad. The warrants, albeit particular, authorized the
postal inspectors to search all client files, open or closed, to determine which
personal injury case files to seize. The warrants also allowed the seizure of all
of the firm's financial records, file lists, and appointment books, regardless of
whether those documents were connected in any way to the personal injury
files sought by the grand jury. In effect, the warrants authorized virtually a
wholesale search and seizure of the business records of the firm. As such, we
believe that, as the district court found, plaintiff was likely to succeed on the
merits of its claim that the search was overbroad and therefore constitutionally
infirm.

B.
16

We also agree with the district court that the Klitzman firm suffered irreparable
harm. The law firm has been denied the use of a major source of daily working
materials. Files in a law office serve much the same precedential purpose for

the firm's personnel as reported court decisions serve for the legal profession
generally. Legal memoranda and summaries prepared for specific cases,
pleadings, interrogatories, unreported opinions, legal research recorded in
correspondence to and from the office--all serve as indispensable working tools
for the functioning of an established law office. To deny these materials to
lawyers is to expose them to irreparable harm.
17

More important, in our view, is the effect of the seizures on third parties, either
interested in, or affected by, the government's action. Specifically, we address
the attorney-client privilege. The attorney-client privilege is the oldest
confidential communications privilege known to the common law. "Its purpose
is to encourage full and frank communication between attorneys and their
clients and thereby promote broader public interests in the observance of law
and administration of justice. The privilege recognizes that sound legal advice
or advocacy serves public ends and that such advice or advocacy depends upon
the lawyer's being fully informed by the client." Upjohn Co. v. United States,
449 U.S. 383, 389, 101 S.Ct. 677, 682, 66 L.Ed.2d 584 (1981). The privilege
"rests on the need for the advocate and counselor to know all that relates to the
client's reasons for seeking representation if the professional mission is to be
carried out." Trammel v. United States, 445 U.S. 40, 51, 100 S.Ct. 906, 913, 63
L.Ed.2d 186 (1980). The privilege's purpose is to encourage clients to make a
full disclosure to their attorneys. Fisher v. United States, 425 U.S. 391, 403, 96
S.Ct. 1569, 1577, 48 L.Ed.2d 39 (1976).

18

Documents within the scope of the attorney-client privilege are "zealously

protected." 8 C. Wright & A. Miller, Federal Practice and Procedure Sec. 2017
(1970); see Chore-Time Equipment, Inc. v. Big Dutchman, Inc., 255 F.Supp.
1020, 1021 (W.D.Mich.1966) ("[I]t generally is acknowledged that the
attorney-client privilege is so sacred and so compellingly important that the
courts must, within their limits, guard it jealously."); In re Grand Jury Subpoena
Duces Tecum, 391 F.Supp. 1029, 1034 (S.D.N.Y.1975) (where one part of a
memorandum is privileged and doubts exist as to other parts, doubt resolved in
favor of application of the privilege).

19

The privilege extends to verbal statements, documents, and tangible objects

conveyed by both individual and corporate clients to an attorney in confidence
for the purpose of any legal advice. 8 J. Wigmore, Evidence Sec. 2292 (J.
McNaughton rev. ed. 1961). See also United States v. Liebman, 742 F.2d 807
(3d Cir.1984). Although the privilege belongs to the client and only he may
waive it, an attorney may assert the privilege on his client's behalf. McCormick
on Evidence Sec. 92 (E. Cleary 3d ed.1984). Moreover, the canons of ethics
make the attorney's common law obligation to maintain the secrecy of his

communications with his client a professional mandate. See Model Rules of

Professional Conduct Rule 1.6 (1983); Model Code of Professional
Responsibility DR 4-101 (1980).
20

No one can deny that the government's action in this case completely
disregarded any concept of the attorney-client privilege. The materials the
postal inspectors searched for and seized pursuant to the warrants constituted
the existing records of an entire law practice. The government made no attempt
to limit the seizure to files of clients who may have alleged that their medical
bills were overstated or to materials involving the medical personnel allegedly
involved in the fraudulent scheme under investigation. Rather, this government
rampage potentially or actually invaded the privacy of every client of the
Klitzman firm. The government well knew, prior to the search, that the client
files contained privileged communications, yet the government took not one
step to minimize the extent of the search or to prevent the invasion of the
clients' privacy guaranteed by the attorney-client privilege.

21

However devoid of professionalism the irresponsible actions of the postal

inspectors were--and we find this lack of professionalism to be profound--we
are even more distressed by the actions of the office of the United States
Attorney for the District of New Jersey. That office affixed its imprimatur of
approval to a rampant trampling of the attorney-client privilege and, equally
important, the work product doctrine.

22

Moreover, lawyers (other than Charles Klitzman) who were not under
investigation became the objects of the search and seizure. Congress has
recognized that privacy interests are implicated when the government
indiscriminately uses search warrants to obtain documentary evidence. The
Privacy Protection Act of 1980, 42 U.S.C. Secs. 2000aa to 2000aa-12, is
applicable when law enforcement agents attempt "to obtain documentary
materials in the private possession of a person when the person is not
reasonably believed to be a suspect in such offense ...." 42 U.S.C. Sec. 2000aa11(a). As set forth in note 1, supra, this statute evidences a special concern for
privacy interests in cases in which a search for or seizure of documents would
intrude upon a known confidential relationship, such as that between a lawyer
and client. Only one lawyer in the firm, Charles Klitzman, and one employee,
Robert O'Marra, were the focus of the postal inspectors' investigation, and the
inspectors directed this investigation to only one aspect of Charles Klitzman's
practice--representation in personal injury cases. Thus, because both the postal
inspectors and the United States Attorney's Office, which approved the
inspectors' action, knew that lawyers not targets of the investigation practiced
in the Klitzman office, the government should have adhered to the restrictions

imposed by this statute.

23

Additionally, the inspectors, and especially the United States Attorney's Office,
also should have been aware of, and followed, the "Guidelines on Methods of
Obtaining Documentary Materials Held by Third Parties," 28 C.F.R. Secs. 59.1.6 (1983), issued by the Department of Justice pursuant to the Privacy
Protection Act. These regulations establish certain criteria and procedural
requirements that the government must meet before using a search warrant to
obtain documentary materials held by disinterested third parties. The
regulations define "disinterested third party" as "a person or organization not
reasonably believed to be--(1) A suspect in the criminal offense to which the
materials sought under these guidelines relate; or (2) Related by blood or
marriage to such a suspect...." Id. Sec. 59.2(b). The regulations further
recognize the problems that inure when the disinterested third party is an
attorney. Section 59.4(b) sets forth specific procedures the government must
follow before obtaining a warrant to search an attorney's office. The
Department of Justice recognized that such searches are extremely sensitive
because the executing officers often are exposed to confidential information,
including information protected under the attorney-client privilege and the
work product doctrine.

24

Section 59.4(b)(1)(i) provides that the government should not use a search
warrant to obtain documentary material held by a third party unless the use of a
less intrusive alternate means appears to jeopardize substantially the
availability or usefulness of the material sought. More important, the regulation
provides that no application for a search of a disinterested attorney's office shall
be submitted without the approval of the appropriate Deputy Assistant Attorney
General of the Department of Justice. Id. Sec. 59.4(b)(2). Additionally, Sec.
59.4 requires that when the government executes a warrant, the search must
minimize, to the greatest extent practicable, scrutiny of confidential materials.
Id. Sec. 59.4(b)(4). In this case, the government proceeded as if this statute and
these Department of Justice regulations were nonexistent.

25

We recognize that the statute and the regulations do not by their terms extend to
an attorney, such as Charles Klitzman, who is the target of a criminal
investigation. That one member of a firm is a suspect, however, does not act to
forfeit the statutory protection afforded other lawyers in the firm who have no
connection with the illegal activity. If, as here, the search is not confined
strictly to the documents held by the subject of the investigation and for which
he alone is responsible, then it appears that the provisions of the statute and
regulations must be followed.

V.
26

For the above reasons, we affirm the judgment of the district court granting the
preliminary injunction and ordering that the government return the files and
materials to the firm of Klitzman, Klitzman and Gallagher. In so doing, we now
set forth a procedure that the parties should follow in any subsequent proper
government effort to obtain documentary materials from the Klitzman firm.

27

If the government requests specific materials, the Klitzman firm should have
the right, in the first instance, to provide the documents voluntarily. If the law
firm declines to produce the documents, the district court should institute a
workable procedure to protect the interests of the litigants. The procedure
should accommodate the needs of the investigating authorities and at the same
time protect the significant interests of Klitzman clients who have no
connection with the subject of the investigation and also the interests protected
by the work product doctrine. California has adopted rather elaborate
procedures in this respect.3 Although it is impossible to utilize the full
California panoply, the district court and the parties may explore the possible
use of a master to assist the court.

28

For example, upon application by the government to the district court, which
still has jurisdiction in these proceedings, and at the expense of the government,
the court could appoint a master to examine in camera any material that the law
firm objects to producing. The master could be considered a special officer of
the court with full judicial immunities to preserve all confidences encountered
and could make a ruling, which either party could then appeal to the district
court. Such a procedure would vindicate both the interests of the government in
investigating and prosecuting crimes and the confidentiality interests of the law
office.

VI.
29

We have considered the contentions of the appellants relating to the issuance of

the preliminary injunction and will affirm the judgment of the district court
ordering the government to return the materials to the appellee law office. We
will also lift the stay of the judgment heretofore entered.

Honorable Edward D. Re, Chief Judge of the United States Court of

International Trade, sitting by designation

The Privacy Protection Act demands generally "a recognition of special

concern for privacy interests in cases in which a search or seizure for such
documents would intrude upon a known confidential relationship such as that
which may exist between clergyman and parishioner; lawyer and client; or
doctor and patient ...." 42 U.S.C. Sec. 2000aa-11(a)(3)

Appellees asserted a claim for damages under Bivens v. Six Unknown Named
Agents of Federal Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29
L.Ed.2d 619 (1971), and the government countered with an immunity defense
that it also asserts in this appeal. Because the district court has stayed
consideration of the Bivens aspect of this case until the related criminal dispute
is resolved, we will not meet the immunity issue in this accelerated appeal

Cal. Penal Code Sec. 1524(c)-(f) (West 1982) requires the court to appoint a
special master at the time of the issuance of the search warrant who will
accompany the person who will serve the warrant at the law office. The statute
sets forth elaborate provisions to protect confidential matters