The opinion of the court was delivered by: Robertson, District Judge.
Before the Court is the petition of the United States and the
Office of the Inspector General of the Legal Services Corporation
(LSC OIG) for summary enforcement of two administrative subpoenas
issued pursuant to section 6(a)(4) of the Inspector General Act
of 1978, 5 U.S.C. app. 3 § 1 et seq. (1994). Respondents Legal
Services of New York City (LSNY) and Legal Aid Bureau, Inc. (LAB)
resist the subpoenas, arguing that, on the particular facts
presented, it is unlawful for LSC OIG to demand the production of
the names of their clients, and would be unlawful for them to
reveal such information. Because only privileged materials may be
withheld from a response to the subpoenas; because the
attorney-client privilege is not properly invoked by respondents'
blanket objection; and because the LSC OIG's proposal to erect an
administrative "screen" to safeguard the names is not
unreasonable, I have concluded that the subpoenas must be
enforced.
LSC is a non-profit, tax-exempt corporation established by the
Legal Services Corporation Act of 1974, 42 U.S.C. § 2996 et
seq. (1994) (LSC Act). It makes annual grants to more than 200
legal services and legal aid organizations throughout the United
States. In 1999, Congress appropriated $300 million for legal
services, of which LSNY was granted $11,314,289, and LAB,
$3,208,162.
The Inspector General Act charges inspectors general within
federal departments and agencies to conduct, supervise and
coordinate audits relating to the operations of their respective
departments and agencies. The LSC is a "designated Federal
entity" to which the IGA applies, see 5 U.S.C. app. 3 §
8G(a)(2), and LSC OIG has the power to subpoena "all information,
documents, reports, answers, records, accounts, papers and other
data and documentary evidence necessary to the performance of the
functions assigned by the Inspector General Act." Id. If its
subpoenas are not complied with, the OIG may seek relief in a
federal district court. See id. § 6(a)(4).
Beginning in 1998, a series of OIG audits of LSC grantees
revealed inaccuracies in case reporting. Some grantees overstated
the number of cases they handled, or included in statistical
reports data from "cases" in which no legal services had been
provided. In the summer of 1999, the General Accounting Office
(GAO) conducted audits of case statistical data provided by five
LSC grantees, including LSNY and LAB. GAO concluded that
approximately 75,000 of the 221,000 cases reported to LSC by
these five grantees were questionable. A House Judiciary
subcommittee held hearings on September 29, 1999 on LSC
statistical data. A subsequent conference report accompanying the
appropriations bill for LSC's FY 2000 appropriations directed LSC
OIG to "assess the case service information provided by the
grantees, and . . . report to the Committees no later than July
30, 2000, as to its accuracy, as described in the House report."
H.Rep. No. 106-479, 145 Cong.Rec. H12230-02, 12308 (Nov. 17,
1999) (Conference Report on H.R. 3194, Consolidated
Appropriations Act, 2000).
On January 11, 2000, LSC OIG informed all LSC Executive
Directors of its plan to carry out Congress's mandate. Under the
plan, LSC OIG would require thirty grantees, selected at random,
to submit data in two phases, or "data calls." The first data
call required the production of the case number and legal problem
codes (e.g, housing, employment) for each case reported by the
grantee as closed during 1999. LSNY and LAB both complied with
the first data call and provided the requested information to LSC
OIG.
It is the second data call that presents the problem of this
case. That data call requires the production of the case number
and the client name for each case reported as closed during
1999. By letters dated March 14, 2000 and March 15, 2000,
respectively, LSNY and LAB informed LSC OIG that they would not
comply with this request. They asserted that disclosure of client
names would invade the attorney-client privilege and violate
ethics rules — that the client names could be linked with the
problem codes that had already been produced, thus revealing,
outside the attorney-client relationship, the motives behind
client decisions to seek legal assistance.
LSC OIG disagreed that the attorney-client privilege applied,
or that rules of professional responsibility could act as a bar
to its access to client names. Nevertheless, it created a
screening procedure designed to assure that nobody within LSC OIG
could or would link a client name with its associated legal
problem code.*fn1 With this system in place, LSC OIG served
subpoenas upon the custodians of records of the two respondents.
On March 29, LSNY objected. LSNY provided no client names, but
undertook to provide "unique client identifiers." On March 30,
LAB also objected. LAB provided full client names for cases in
which it was confident that the information had already been
disclosed to a third party, but it stated that, for all other
cases, it would provide only the client's first name and a unique
client identifier for the last name based on the client's first
name, last name and date of birth.
LSC OIG filed the instant petition for enforcement on April 25,
2000.
A. Attorney-Client Privilege
The organic LSC Act and the 1996 Omnibus Appropriations Act
both contain provisions protecting attorney-client privileged
information. See 42 U.S.C. § 2996h(d) ("neither the Corporation
nor the Comptroller General shall have access to any reports or
records subject to the attorney-client privilege"); § 509(h),
Pub.L. No. 104-134, 110 Stat. 1321, 1321-59 (exempting from
disclosure materials "subject to the attorney-client privilege").
Respondents submit that these protections apply to the OIG as
well; that a person's motivation for seeking ...