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Penn State Cover-Up Ruling And The Right To Counsel

A Pennsylvania appeals court, in companion cases Commonwealth v. Schultz and Commonwealth v. Spanier, has overturned the trial court’s ruling regarding the admissibility of testimony from Pennsylvania State University’s former general counsel, Cynthia Baldwin, and the validity of charges brought against university officials relating to perjury, obstruction of justice and conspiracy. The Superior Court held her testimony inadmissible with respect to confidential communications she had with university officials, and to quash the above charges because the grand jury relied heavily on Baldwin’s testimony.

Factual Background

In the wake of the Jerry Sandusky sex abuse scandal at Pennsylvania State University, the Pennsylvania Attorney General’s Office turned its investigative focus on the university and a number of its high-ranking officials. Athletic director Tim Curley, vice president for business and finance Gary Schultz and university president Graham Spanier were among those officials. Ultimately, a Pennsylvania grand jury issued a presentment recommending charges against these three men and they were prosecuted. In the course of its investigation, the Pennsylvania Attorney General’s Office issued a subpoena to the university for documents related to Sandusky. Two incidents in particular — from 1998 and 2001 — drew the attorney general’s attention based on allegations that victims of Sandusky’s abuse brought their claims to the attention of the university. The attorney general, in turn, sought to determine the university’s, and by extension its officers’, knowledge of the events. As part of this investigation, the attorney general subpoenaed the individual officers to appear before a grand jury and testify. In preparation for their testimony, the officials consulted with Baldwin, in private, and she never indicated to them that she represented the university solely rather than each of them in their individual capacities. She never advised of a conflict of interest. When in court, she presented herself as representing each individual by announcing that she was appearing on their behalf. Before the officials testified, the presiding judge did advise them of their right to counsel and their right to remain silent, but no one ever indicated that Baldwin’s representation was limited to the university and the individuals in their official capacity only. The judge did not question the individuals about their understanding of Baldwin’s role and her representation of them only in their official, rather than individual capacity. Subsequent to the testimony of the individual officers, the university still had not produced documents the attorney general sought and threatened the university and Baldwin with contempt and possible criminal sanction. The attorney general then discussed Baldwin’s testifying before the grand jury through her independently retained counsel. The university hired a new general counsel, who agreed to waive privilege with respect to the university but declined to waive the privilege with respect to two of the officials — Curley and Schultz — because an attorney-client relationship may have existed between them and Baldwin. Before Baldwin testified, the attorney general, who happened to be Frank Fina now embroiled in the so-called “porn gate” email scandal with Attorney General Kathleen Kane, represented that he would not question Baldwin with respect to confidential communications between Baldwin and Curley, Schultz, or Spanier. The attorney general maintained that he would ask questions that remained within the university’s waiver of the privilege with respect to itself. Despite this representation, he asked about, and Baldwin gave answers concerning, confidential conversations. Following her testimony, prosecution began against the individual defendants.

The Trial Court’s Ruling

Pretrial, the defendants moved to preclude testimony by Baldwin that was confidential and potentially subject to the attorney-client privilege on the grounds that they had an attorney-client relationship with her and so their confidential communications are privileged. They also moved to quash the information based on their constructive denial of their right to counsel. The trial court denied these motions, adopting the prosecution’s argument that Baldwin represented the university solely, that she was representing Curley, Schultz and Spanier but only in their official capacity as agents of the university, and therefore they were not denied their right to counsel before the grand jury and Baldwin’s testimony did not implicate the privilege with respect to their individual capacity.

The Grand Jury Process in Pennsylvania

Pennsylvania law does not require a grand jury to bring charges. Prosecutors still use investigating grand juries to investigate potential cases and recommend charges by a presentment. In 1980, the Pennsylvania Legislature passed a law that afforded witnesses before an investigating grand jury the right to an attorney to protect the vital right against self-incrimination. Obviously, witnesses before a grand jury can often become the target of criminal prosecution as happened in this case.

The Court’s Analysis

The Superior Court focused on the existence of the statutory right to counsel, the actions of Baldwin giving the impression that she represented each official, the lack of any “Upjohn warnings” given to the individuals, the inadequacy of the colloquy given by the presiding judge, and the sanctity of the attorney-client privilege as well as the right against self-incrimination. The Superior Court did not agree with the trial court that the right to counsel could be maintained by providing an attorney that represents the organization, and the individuals, but only in their official capacity as agents of the organization. In its holding, the court acknowledged that testimony before a grand jury is deeply personal and individual, and places the witness alone at risk of incarceration. For the statutory right to counsel at a grand jury to have any meaning, the individual must have an attorney representing them in their own capacity and advancing their own interests. Thus, the Superior Court overturned the trial court’s holding and quashed the charges for perjury, obstruction of justice, and related conspiracies and precluded testimony from Baldwin with respect to confidential communications.

Implications of This Holding in Pennsylvania and Beyond

Corporate counsel always stands in a precarious position when conducting any internal investigation under threat of government intervention. For this reason, the “Upjohn warnings” have a long history of usage throughout the country. The U.S. Supreme Court’s holding in Upjohn v. United States extended the attorney-client privilege to nonmanagement employees. The warnings are typically given by corporate counsel to the individual employees to advise them that the attorney represents the company, not the individual, and that the company controls the privilege. A control over the flow of information is often the critical part of any government investigation. The government wants more information about what happened and the organizations and individuals investigated may have competing reasons to share more or less of that information. In this case, Baldwin gave no Upjohn warnings, and the individuals believed that she represented them in addition to the university. Their belief was reasonable based on the attorney’s actions. The decision highlights the importance for in-house counsel to contact outside counsel early in the process of an internal investigation to help avoid such conflicts. Corporate counsel subject themselves to possible ethics complaints and malpractice claims if they do not pay close attention to their loyalties and fail to avoid the appearance of representing multiple parties. This scenario also should make high-ranking officers and directors of corporations leery of trusting the corporation’s lawyer. The trial court would have allowed their conversations with corporate counsel to form the basis of charges against them, even when they reasonably believed the attorney represented them in their individual capacities as well. The Pennsylvania Supreme Court may ultimately agree with the trial court rather than the Superior Court if they hear an appeal on the issue. Whenever the government seeks information for a corporation, it is critical for the individuals involved in the activity under investigation to obtain their own independent counsel to protect their own rights and object to any government overreach. This holding makes it clear that the individual officers have a right to such independent counsel and that they must know about that right. The holding also specifically grants privilege, and the status of an attorney-client relationship, to any communications made before the corporate counsel clarifies his or her position as representing the corporation only. The Superior Court’s rejection of the argument that corporate counsel can limit his or her representation to the individuals in their official capacities absent such a warning upholds the concept that the right to counsel afforded by statute in a grand jury proceeding has real meaning. It acknowledges the dangers individuals face in testifying before a grand jury. It also has obvious implications for the prosecution at issue and should influence the manner of investigation in future cases absent a reversal by the Supreme Court.




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