crime-fraud exception in North Carolina

2022See, e.g., Miller, 357 N.C. at 330 (“Significantly, our General Assembly has not seen fit to enact . . . statutory provisions for the attorney-client privilege, and we must look solely to the common law for its proper application.”). by inducing them to sign licensing agreements that disclaimed a franchise relationship with WW when WW and Beth Vannoy knew WW’s disclaimer was false. 42 As a result, Plaintiffs argue that the crime-fraud exception should be applied to effect a waiver of privilege concerning all of WW’s communications regarding franchise law matters prior to 1 November 2011. 43 34

2021Given the importance of the attorney-client privilege to North Carolina’s jurisprudence and the resulting scrutiny that should be applied to any exceptions, Miller, 357 N.C. at 331 , parties advancing the crime-fraud exception must prove the prima facie case by a preponderance of the evidence.

2022In that regard, “the crime-fraud exception applies only when the client has engaged the services of a lawyer ‘in furtherance of future illegal conduct.’ ” Ford I, 2021 NCBC LEXIS 89 , at *21 (emphasis omitted) (quoting United States v. Zolin, 491 U.S. 554, 556 (1989)). 31.

2021Furthermore, the crime-fraud exception applies only when the client has engaged the services of a lawyer “in furtherance of future illegal conduct.” Zolin, 491 U.S. at 556 (emphasis added); see also In re Grand Jury Subpoena, 220 F.R.D. 130 , 151–52 (D.

2019The crime-fraud exception exists to recognize that “the attorney- client privilege cannot serve as a shield for fraud or as a tool to aid in the commission of future criminal activities; if a communication is not ‘made in the course of seeking or giving legal advice for a proper purpose,’ it is not protected.” Id. (quoting State v. Jennings, 333 N.C. 579, 611 , 430 S.E.2d 188, 204 (1993)); see State v. Davenport, 227 N.C. 475, 498 , 42 S.E.2d 686 , 702–03 (1947) (“[T]he communication must have been made in the course of seeking legal advice for a proper purpose; hence, no privilege exists wher

2019The crime-fraud exception exists to recognize that “the attorney- client privilege cannot serve as a shield for fraud or as a tool to aid in the commission of future criminal activities; if a communication is not ‘made in the course of seeking or giving legal advice for a proper purpose,’ it is not protected.” Id. (quoting State v. Jennings, 333 N.C. 579, 611 , 430 S.E.2d 188, 204 (1993)); see State v. Davenport, 227 N.C. 475, 498 , 42 S.E.2d 686 , 702–03 (1947) (“[T]he communication must have been made in the course of seeking legal advice for a proper purpose; hence, no privilege exists wher

2019The crime-fraud exception exists to recognize that “the attorney- client privilege cannot serve as a shield for fraud or as a tool to aid in the commission of future criminal activities; if a communication is not ‘made in the course of seeking or giving legal advice for a proper purpose,’ it is not protected.” Id. (quoting State v. Jennings, 333 N.C. 579, 611 , 430 S.E.2d 188, 204 (1993)); see State v. Davenport, 227 N.C. 475, 498 , 42 S.E.2d 686 , 702–03 (1947) (“[T]he communication must have been made in the course of seeking legal advice for a proper purpose; hence, no privilege exists wher

2019The crime-fraud exception exists to recognize that “the attorney- client privilege cannot serve as a shield for fraud or as a tool to aid in the commission of future criminal activities; if a communication is not ‘made in the course of seeking or giving legal advice for a proper purpose,’ it is not protected.” Id. (quoting State v. Jennings, 333 N.C. 579, 611 , 430 S.E.2d 188, 204 (1993)); see State v. Davenport, 227 N.C. 475, 498 , 42 S.E.2d 686 , 702–03 (1947) (“[T]he communication must have been made in the course of seeking legal advice for a proper purpose; hence, no privilege exists wher

2021Window World of Baton Rouge, 2019 NCBC LEXIS 54 at *45–46 (citing In re Napster Copyright Litig., 479 F.3d 1078, 1095 (9th Cir. 2007) (“requiring a moving party to establish the existence of the crime- fraud exception by a preponderance of the evidence is consonant with the importance of the attorney-client privilege.”). 44.

2019While the attorney-client privilege generally functions identically in both civil and criminal proceedings, see Swidler & Berlin, 524 U.S. at 408–09, several courts have recognized that the crime-fraud exception may apply differently in the grand jury context, see In re Napster Copyright Litig., 479 F.3d at 1094–95 (“[I]n a civil case the burden of proof that must be carried by a party seeking outright disclosure of attorney-client communications under the crime-fraud exception should be preponderance of the evidence.”); Haines v. Liggett Grp., Inc., 975 F.2d 81 , 97 n.8 (3d Cir. 1992) (“We co

2022“In applying the crime-fraud exception, ‘it is the client’s knowledge and intentions that are of paramount concern because the client is the holder of the privilege.’ ” Window World 2019, 2019 NCBC LEXIS 54 , at *47 (quoting United States v. Under Seal (In re Grand Jury Proceedings #5), 401 F.3d 247, 251 (2005)). 33.

2019In applying the crime-fraud exception, “it is the client’s knowledge and intentions that are of paramount concern because the client is the holder of the privilege.” Id. at 251 .

2022Sys., Inc., 37 Va. Cir. 535, 538 (Cir. Ct. 1995) (determining that any materials created after the alleged misconduct were not subject to the crime-fraud exception). 38.

2022Significantly for present purposes, North Carolina courts apply the crime-fraud exception only where “the documents containing the privileged materials bear a close relationship to the client’s existing or future scheme to commit a crime or fraud.” Ford I, 2021 NCBC LEXIS 89 , at *20 (citation omitted); see also, e.g., United States v. Under Seal (In re Grand Jury Investigation), 352 F. App’x 805, 810 (4th Cir. 2009) (concluding that documents that “were in furtherance of the alleged scheme” bore “the requisite close relationship”); United States v. Moazzeni, 906 F. Supp. 2d 505, 515 (E.D.

2022Significantly for present purposes, North Carolina courts apply the crime-fraud exception only where “the documents containing the privileged materials bear a close relationship to the client’s existing or future scheme to commit a crime or fraud.” Ford I, 2021 NCBC LEXIS 89 , at *20 (citation omitted); see also, e.g., United States v. Under Seal (In re Grand Jury Investigation), 352 F. App’x 805, 810 (4th Cir. 2009) (concluding that documents that “were in furtherance of the alleged scheme” bore “the requisite close relationship”); United States v. Moazzeni, 906 F. Supp. 2d 505, 515 (E.D.

2022Significantly for present purposes, North Carolina courts apply the crime-fraud exception only where “the documents containing the privileged materials bear a close relationship to the client’s existing or future scheme to commit a crime or fraud.” Ford I, 2021 NCBC LEXIS 89 , at *20 (citation omitted); see also, e.g., United States v. Under Seal (In re Grand Jury Investigation), 352 F. App’x 805, 810 (4th Cir. 2009) (concluding that documents that “were in furtherance of the alleged scheme” bore “the requisite close relationship”); United States v. Moazzeni, 906 F. Supp. 2d 505, 515 (E.D.

2022Significantly for present purposes, North Carolina courts apply the crime-fraud exception only where “the documents containing the privileged materials bear a close relationship to the client’s existing or future scheme to commit a crime or fraud.” Ford I, 2021 NCBC LEXIS 89 , at *20 (citation omitted); see also, e.g., United States v. Under Seal (In re Grand Jury Investigation), 352 F. App’x 805, 810 (4th Cir. 2009) (concluding that documents that “were in furtherance of the alleged scheme” bore “the requisite close relationship”); United States v. Moazzeni, 906 F. Supp. 2d 505, 515 (E.D.

2021Furthermore, the crime-fraud exception applies only when the client has engaged the services of a lawyer “in furtherance of future illegal conduct.” Zolin, 491 U.S. at 556 (emphasis added); see also In re Grand Jury Subpoena, 220 F.R.D. 130 , 151–52 (D.

2021Furthermore, the crime-fraud exception applies only when the client has engaged the services of a lawyer “in furtherance of future illegal conduct.” Zolin, 491 U.S. at 556 (emphasis added); see also In re Grand Jury Subpoena, 220 F.R.D. 130 , 151–52 (D.

2019Although “the attorney-client privilege is one of the oldest recognized privileges for confidential communications” and “promote[s] broader public interests in the observance of law and the administration of justice[,]” Dickson v. Rucho, 366 N.C. 332, 340 , 737 S.E.2d 362, 368 (2013) (quoting Swidler & Berlin v. United States, 524 U.S. 399, 403 (1998)), there exists a crime-fraud exception to the privilege, which 23 The Special Master was not asked to consider, and thus did not consider, the applicability of the crime-fraud exception.

2019While the attorney-client privilege generally functions identically in both civil and criminal proceedings, see Swidler & Berlin, 524 U.S. at 408–09, several courts have recognized that the crime-fraud exception may apply differently in the grand jury context, see In re Napster Copyright Litig., 479 F.3d at 1094–95 (“[I]n a civil case the burden of proof that must be carried by a party seeking outright disclosure of attorney-client communications under the crime-fraud exception should be preponderance of the evidence.”); Haines v. Liggett Grp., Inc., 975 F.2d 81 , 97 n.8 (3d Cir. 1992) (“We co

2019While the attorney-client privilege generally functions identically in both civil and criminal proceedings, see Swidler & Berlin, 524 U.S. at 408–09, several courts have recognized that the crime-fraud exception may apply differently in the grand jury context, see In re Napster Copyright Litig., 479 F.3d at 1094–95 (“[I]n a civil case the burden of proof that must be carried by a party seeking outright disclosure of attorney-client communications under the crime-fraud exception should be preponderance of the evidence.”); Haines v. Liggett Grp., Inc., 975 F.2d 81 , 97 n.8 (3d Cir. 1992) (“We co

2019While the attorney-client privilege generally functions identically in both civil and criminal proceedings, see Swidler & Berlin, 524 U.S. at 408–09, several courts have recognized that the crime-fraud exception may apply differently in the grand jury context, see In re Napster Copyright Litig., 479 F.3d at 1094–95 (“[I]n a civil case the burden of proof that must be carried by a party seeking outright disclosure of attorney-client communications under the crime-fraud exception should be preponderance of the evidence.”); Haines v. Liggett Grp., Inc., 975 F.2d 81 , 97 n.8 (3d Cir. 1992) (“We co

2019While the attorney-client privilege generally functions identically in both civil and criminal proceedings, see Swidler & Berlin, 524 U.S. at 408–09, several courts have recognized that the crime-fraud exception may apply differently in the grand jury context, see In re Napster Copyright Litig., 479 F.3d at 1094–95 (“[I]n a civil case the burden of proof that must be carried by a party seeking outright disclosure of attorney-client communications under the crime-fraud exception should be preponderance of the evidence.”); Haines v. Liggett Grp., Inc., 975 F.2d 81 , 97 n.8 (3d Cir. 1992) (“We co

2019While the attorney-client privilege generally functions identically in both civil and criminal proceedings, see Swidler & Berlin, 524 U.S. at 408–09, several courts have recognized that the crime-fraud exception may apply differently in the grand jury context, see In re Napster Copyright Litig., 479 F.3d at 1094–95 (“[I]n a civil case the burden of proof that must be carried by a party seeking outright disclosure of attorney-client communications under the crime-fraud exception should be preponderance of the evidence.”); Haines v. Liggett Grp., Inc., 975 F.2d 81 , 97 n.8 (3d Cir. 1992) (“We co

2019While the attorney-client privilege generally functions identically in both civil and criminal proceedings, see Swidler & Berlin, 524 U.S. at 408–09, several courts have recognized that the crime-fraud exception may apply differently in the grand jury context, see In re Napster Copyright Litig., 479 F.3d at 1094–95 (“[I]n a civil case the burden of proof that must be carried by a party seeking outright disclosure of attorney-client communications under the crime-fraud exception should be preponderance of the evidence.”); Haines v. Liggett Grp., Inc., 975 F.2d 81 , 97 n.8 (3d Cir. 1992) (“We co

2019While the attorney-client privilege generally functions identically in both civil and criminal proceedings, see Swidler & Berlin, 524 U.S. at 408–09, several courts have recognized that the crime-fraud exception may apply differently in the grand jury context, see In re Napster Copyright Litig., 479 F.3d at 1094–95 (“[I]n a civil case the burden of proof that must be carried by a party seeking outright disclosure of attorney-client communications under the crime-fraud exception should be preponderance of the evidence.”); Haines v. Liggett Grp., Inc., 975 F.2d 81 , 97 n.8 (3d Cir. 1992) (“We co

2019“While [a prima facie] showing may justify a finding in favor of the offering party, it does not necessarily compel such a finding.” Duplan Corp., 540 F.2d at 1220 (emphasis added).

2019State v. McGrady, 368 N.C. 880, 892 , 787 S.E.2d 1, 10 (2016); see Napster Copyright Litig., 479 F.3d at 1095–96 (concluding “preliminary questions concerning the existence or non-existence of the attorney-client privilege—including whether the crime-fraud exception terminate[s] the privilege—must be established under [Federal Rule of Evidence] 104(a).” (citations and quotation marks omitted)).

2019State v. McGrady, 368 N.C. 880, 892 , 787 S.E.2d 1, 10 (2016); see Napster Copyright Litig., 479 F.3d at 1095–96 (concluding “preliminary questions concerning the existence or non-existence of the attorney-client privilege—including whether the crime-fraud exception terminate[s] the privilege—must be established under [Federal Rule of Evidence] 104(a).” (citations and quotation marks omitted)).

2019Although “the attorney-client privilege is one of the oldest recognized privileges for confidential communications” and “promote[s] broader public interests in the observance of law and the administration of justice[,]” Dickson v. Rucho, 366 N.C. 332, 340 , 737 S.E.2d 362, 368 (2013) (quoting Swidler & Berlin v. United States, 524 U.S. 399, 403 (1998)), there exists a crime-fraud exception to the privilege, which 23 The Special Master was not asked to consider, and thus did not consider, the applicability of the crime-fraud exception.

2019Although “the attorney-client privilege is one of the oldest recognized privileges for confidential communications” and “promote[s] broader public interests in the observance of law and the administration of justice[,]” Dickson v. Rucho, 366 N.C. 332, 340 , 737 S.E.2d 362, 368 (2013) (quoting Swidler & Berlin v. United States, 524 U.S. 399, 403 (1998)), there exists a crime-fraud exception to the privilege, which 23 The Special Master was not asked to consider, and thus did not consider, the applicability of the crime-fraud exception.