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8/9/2019 Doc 183: Goverments Motion for Disclosure Of Reliance On Advice Of Counsel 07/11/2007
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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
UNITED STATES OF AMERICA :: CRIMINAL INDICTMENT
v. :
: NO. 1:06-CR-337-CC
CHRISTOPHER STOUFFLET, et al. :
:
Defendants. :
GOVERNMENTS MOTION FOR DISCLOSURE OF
RELIANCE ON ADVICE OF COUNSEL
COMES NOW the United States of America, by its counsel, David
E. Nahmias, United States Attorney for the Northern District of
Georgia, and Randy S. Chartash, and Lawrence R. Sommerfeld,
Assistant United States Attorneys, and files this Motion For
Disclosure of Advice of Counsel Defense.
Defendant Christopher Stoufflet and six other individuals,
including five doctors, were charged in a fifty-one count
Indictment for their involvement in an Internet-based business that
distributed and dispensed controlled substances and other
prescription drugs to thousands of customers without valid
prescriptions. Specifically, Count One of the Indictment charges
defendant Stoufflet and others with conspiracy to violate the
controlled substance act; Counts Two through Four charge the
unlawful distribution and dispensing of controlled substances;
Count Five charges the defendants Christopher Stoufflet and Troy
Sobert with conspiracy to money launder; Counts Six through Forty-
Eight charge defendants Christopher Stoufflet and Troy Sobert with
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promotional and transactional money laundering; and Counts Forty-
nine through Fifty-one charge Christopher Stoufflet and Troy Sobert
with misbranding drugs held for sale after shipment into interstate
commerce.
This case centers around an Internet-based business,
escriptsmd.com, that defendant Christopher Stoufflet, together with
others, established and operated. In 2001, Stoufflet sought to
capitalize on the Internet boom by setting up an on-line business
to sell pharmaceutical products, including controlled substances.
Stoufflet's business enlisted physicians who would approve the
dispensing of drugs to customers who requested medication on-line.
Stoufflet would then cause the dispensing of the drugs, based on
the physician's prescriptions, to customers throughout the United
States.
Throughout the investigation of this matter and continuing up
to this date, the United States has sought to elicit whether
defendant Stoufflet would rely on advice of counsel at trial. In
various conversations with counsel for lead defendant Christopher
Stoufflet, counsel asserted that defendant Stoufflet consulted
various attorneys regarding the legality of on-line dispensing of
controlled substances and other prescription drugs. Current
counsel for defendant Stoufflet advised the government that he may
assert advice of counsel as a defense. The government urged
counsel for defendant Stoufflet to formally declare whether or not
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1Raising an advice of counsel defense waives the
attorney-client privilege. See, e.g., United States v.
Bilzerian, 926 F.2d 1285, 1292 (2d Cir. 1991)(cannot use
attorney-client privilege as both a shield and a sword); United
States v. Burger, 773 F. Supp. 1419, 1429 (D. Kan. 1991)(waiver
in context of pretrial discovery); McNeil-PPC, Inc. v. Procter &
Gamble Co., 138 F.R.D. 136, 137 (D.Colo. 1991); Coleco
Industries, Inc. v. Universal City Studios, Inc., 110 F.R.D. 688,
690-91 (S.D.N.Y. 1986); United States v. Mierzwicki, 500 F. Supp.1331, 1334 (D. Md. 1980) (fairness demands treating the defense
as a waiver of the attorney-client privilege). In asserting an
advice of counsel defense, a defendant, in essence, represents
that he fully disclosed all relevant facts to an independent
attorney, the attorney offered a legal opinion or rendered legal
advice on the legality of a proposed transaction, and the
defendant relied in good faith on this opinion or advice in
determining a course of action. See, e.g., C.E. Carlson, Inc. v.
SEC, 859 F.2d 1429, 1436 (10th Cir. 1988); United States v. Carr,
740 F.2d 339, 347 (5th Cir. 1984). This assertion is enough to
constitute a waiver of any associated attorney-client privilege,
because the communications with the attorneys would becomematerial to determining the defendants knowledge and intent.
See United States v. Plache, 913 F.2d 1375, 1380 (9th Cir. 1991);
United States v. White, 887 F.2d 267, 270 (D.C. Cir. 1989); In re
Von Bulow, 828 F.2d 94, 101 (2d Cir. 1987); United States v.
Aronoff, 466 F. Supp. 855, 862 (S.D.N.Y. 1979).
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it would raise the defense so that the issue could be fully
assessed by the government to determine whether it provides a valid
legal defense to the charges, and so the United States could
adequately prepare for trial. Defendant Stoufflet has not yet
notified the government of his intention of whether he was going to
rely on advice of counsel as a defense.
If an advice-of-counsel defense is first asserted at trial,
thus waiving defendants attorney-client privilege,1 the government
will then be in the difficult and unfair position of being forced
to respond in the middle of the trial to a large quantity of new
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information. To adequately respond to an advice-of-counsel defense
would require numerous interviews of the various counsel alluded to
by the defense, as well as the review by the United States of
substantial documentary evidence including those containing the
opinions or advice; all preliminary drafts of documents; attorney
notes containing material necessary to the preparation of
documents; and copies of other documents, the contents of which
were necessary to the preparation of the published document. See
United States v. (Under Seal), 748 F.2d 871, 875 n.7 (4th Cir.
1984). This would obviously result in a substantial delay with a
sitting jury.
Defendant Stoufflet should not be permitted to mount trial by
ambush, raising an advice-of-counsel defense in the midst of trial,
thus effectively preclude the United States from fully
investigating this avenue of defense and responding appropriately.
As the Aronoff court opined:
Where a privilege-holder has made assertions about
privileged communications, but has attempted to bar
other evidence of those communications, there is a
serious danger that his assertions are false or
misleading. Thus, where his assertions have been
offered on a material issue in a judicial proceeding,
his privilege should be revoked at least with respect
to any communications whose disclosure might affect
the fact finder's judgment as to that issue.
United States v. Aronoff, 466 F. Supp. 855, 862 (S.D.N.Y. 1979).
The Local Rules and Standing Order of this Court requires each
defendant to provide reciprocal discovery to the government within
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twenty-one days of trial. Other than a mere page produced by a
single doctor, no documents have been produced by any defendant.
Nevertheless, defendant Stoufflet may attempt to rely on advice-
of-counsel through the testimony of witnesses, particular
considering that two of the co-owners of his business have pled
guilty and may testify against him. Therefore, the issue of
providing notice to the government is still ripe for decision. The
United States cannot interview or otherwise obtain discovery from
the attorneys as to privileged information until the privilege is
waived, but the waiver may not occur until the middle of trial
testimony. The government thus moves for advance notice as to
whether defendant Christopher Stoufflet intends to raise
advice-of-counsel during trial.
While not specifically requiring that a defendant provide
pretrial notice of reliance on the advice-of-counsel, the Federal
Rules of Criminal Procedure do provide for pretrial notice of three
other types of defenses: alibi (Rule 12. 1), insanity (Rule 12.2),
and public authority (Rule 12.3). According to the Advisory
Committee Notes, advance notice as to those defenses is required to
permit the government to prepare for trial and to avoid the
necessity of continuances in the middle of the trial. See, e.g.,
Advisory Committee Note to Rule 12.2. The three enumerated
defenses as to which notice must be given under the rules share a
basic characteristic with advice-of-counsel: they are ordinarily
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fact-intensive defenses that are likely to create substantial
problems of fairness and efficiency if raised for the first time
during the trial. In addition, the requirement as to the insanity
defense involves, under ordinary circumstances, pretrial disclosure
by the defense of otherwise arguably privileged information.
Accordingly, there is nothing inherently unconstitutional, or
otherwise improper, to require a defendant make pretrial disclosure
of his intention to assert a certain type of defense, especially
where the disclosure involves arguably privileged information. As
is evident with respect to the defenses listed above, disclosure
may be appropriate even where the decision whether to assert the
defense may substantially affect the defendant's decisions to
testify or to put on a defense case.
This Court has inherent authority to impose disclosure and
notice requirements outside the Federal Rules of Criminal
Procedure. See, e.g., United States v. Beckford, 926 F. Supp. 748,
755-58 (E.D.Va.1997) and cases cited therein. It is certainly
within the Courts authority in managing its docket and in
conserving public resources to avoid a substantial delay during the
middle of trial by requiring disclosure of the intent to rely on
advice of counsel.
On the eve of trial it is no longer a viable defense strategy
to be coy about whether to formally rely upon advice-of-counsel as
a defense. The time is late to raise advice of counsel and also
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allow the government adequate time to prepare for trial.
Accordingly, defendant Stoufflet should be required to provide
notice to the government on whether he is going to rely on advice-
of-counsel. If he is unwilling to so notify the government, then he
should be precluded from raising such a defense at trial, and,
specifically, from inquiring of any witness, and making any
argument, about advice or conduct undertaken as a result of advice
of counsel.
If defendant Stoufflet intends to follow-through at trial with
his reliance on the advice-of-counsel, the government must be
permitted the requested discovery under Rule 16(b)(1)(A).
Immediate production of this information is necessary to allow the
government sufficient time prior to trial to review documents and
interview witnesses. Since defendant Stoufflet has not declared
whether he intends to rely on advice of counsel, the government is
effectively precluded from fully investigating this avenue of
defense and responding appropriately. In essence, defendant
Stoufflet would be allowed to raise this defense without rebuttal.
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For the foregoing reasons, the GOVERNMENTS MOTION FOR
DISCLOSURE OF RELIANCE ON ADVICE OF COUNSEL should be GRANTED.
Dated: July 11, 2007.
Respectfully submitted,
DAVID E. NAHMIAS
UNITED STATES ATTORNEY
/s/ Randy S. Chartash
RANDY S. CHARTASH
ASSISTANT U.S. ATTORNEY
Georgia Bar No. 121760
/s/ Lawrence R. Sommerfeld
LAWRENCE R. SOMMERFELD
ASSISTANT U.S. ATTORNEY
Georgia Bar No. 666936
600 Richard B. Russell Building
75 Spring Street, S.W.
Atlanta, GA 30303
(404) 581-6009
(404) 581-6181 (facsimile)
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CERTIFICATE OF COMPLIANCE WITH LOCAL RULE 5.1B
This is to certify that the foregoing document was formatted
in accordance with Local Rule 5.1B in Courier New font, 12 point
type.
CERTIFICATE OF SERVICE
This is to certify that I have this day served upon counsel of
record in this case a copy of the foregoing document via the
Electronic Case Filing system of the United States District Court
for the Northern District of Georgia.
This 11th day of July, 2007.
/s/ Randy S. Chartash
RANDY S. CHARTASH
ASSISTANT U.S. ATTORNEY
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