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Feds challenge grand jury rule on lawyers

Copyright © 2013 Albuquerque Journal

The U.S. Department of Justice contends an ethics rule adopted by the New Mexico Supreme Court making it difficult to subpoena lawyers is interfering with federal grand jury investigations.

An unusual complaint filed by the U.S. Attorney’s Office names the state Supreme Court and its disciplinary board as defendants, and takes aim at a rule the court adopted in 2008 with the intent of protecting attorney-client privilege.

The Justice Department contends in the complaint filed in U.S. District Court in Albuquerque that the rule puts federal prosecutors at risk of ethics sanctions for simply doing their jobs when they need to subpoena lawyers to testify in cases ranging from tax evasion to fraud to money laundering and public corruption.


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The state ethics rule says prosecutors can’t force lawyers to respond to a grand jury subpoena to testify about their clients if the information sought is available by other means, with ethics charges as the possible penalty for violating the provision.

Such subpoenas for lawyers are rare here – and no federal prosecutor has been brought up on ethics charges under the rule – but the U.S. Attorney’s Office says the fact the rule is on the books has a chilling effect.

It cites a recent case in which an attorney who had been subpoenaed challenged the subpoena by citing the rule. The documents said the prosecutor believed there was no feasible alternative source for the information. The federal court concluded the ethics rule did not apply but said “defense counsel could have asked the New Mexico Supreme Court to impose ethical sanctions against the prosecutor… .

“Situations like this will deter prosecutors from serving even subpoenas they believe are proper and will thereby hamper the law enforcement activities of the United States.”

Obligation to report

The concept of attorney-client privilege generally means that once someone has consulted an attorney, any communication between the client and the attorney is considered confidential.

Generally, attorneys have an obligation to report knowledge that a client has committed or is about to commit a fraud or other crime and may be subpoenaed to testify about it.

The U.S. Attorney’s Office in New Mexico has obtained authorization for only 61 federal subpoenas on lawyers since 1990, according to DOJ, and not all of those were served. But those that were used were “vital” in investigating and prosecuting a whole range of cases, from public corruption to money laundering to narcotics, the filing says.


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Federal authorities argue that important prosecutions – like the one against a woman who fraudulently obtained thousands of dollars in Federal Emergency Management Agency funds following the Cerro Grande Fire in 2000 – would not have been possible had the rule been in effect.

They also argue that the state has no authority to impose conditions governing legal practice in federal courts.

The state Supreme Court has asked that the lawsuit be dismissed, saying it was speculative, prematurely filed and describes no actual controversy that the federal court can tackle.

The state says the possibility that a federal prosecutor might someday be subject to disciplinary action for violating the rule “is substantially outweighed by the concrete harm that (state authorities) face if this lawsuit is allowed to proceed on such a flimsy basis.”

Lawyers for the Supreme Court contend the attorney-client relationship would be placed in “grave danger” should attorneys be forced to disclose confidential information in response to a federal subpoena.

The Justice Department’s complaint, filed April 30, asks the court for an injunction permanently barring the New Mexico Supreme Court, through its Disciplinary Board, from enforcing the rule against federal prosecutors “for otherwise lawful actions taken in the course of investigating or prosecuting any crimes against the United States.”

Attorney Paul Kennedy, a former Supreme Court justice now defending the court he served on, says in the filing that lawyers often counsel bitter pills, such as taking a guilty plea, making confidentiality critical.

“A lawyer’s ability to candidly dispense such hard advice – as well as the client’s ability to accept it – are founded on the trust established through the attorney-client relationship. To take away those protections is to take away the many benefits to all parties and the legal system …,” his filing says.

Sasha Siemel, the assistant U.S. attorney in New Mexico who serves as ethics adviser and professional responsibility officer, says in a statement on the record that the U.S. Attorney objected to the rule when it was proposed in 2008 – as did 10 district attorneys and the New Mexico attorney general.