'Evolution' Of Controversial Filter Teams Practice Is Underway

In this Law360 article, partner Jacquelyn Kasulis was quoted regarding the white collar bar’s evolution toward protocols surrounding the U.S. Department of Justice's use of government-backed filter teams.

An escalating tug-of-war between federal prosecutors and white-collar criminal defense lawyers over the U.S. Department of Justice's use of government-backed filter teams is fueling an evolution in the laws and protocols surrounding the controversial practice.

How that evolution ends remains uncertain as conflicts persist among the circuit-level appellate decisions on the issue and various U.S. attorneys' offices continue to follow different protocols for the use of filter teams, also known as taint or firewall teams, which sift through seized materials to pluck out attorney-client privileged information before it gets to prosecutors.

"There are wildly different rules in the different circuits," said Luke Cass, a white-collar partner at Womble Bond Dickinson LLP. "Eventually, the Supreme Court is going to have to take this up and decide if there is an approved process for using filter teams."

A series of high-profile cases in former President Donald Trump's orbit have further amplified the focus on privilege review teams and methods, including the seizure of documents and other materials from Trump's Mar-a-Lago residence and the offices of his former lawyers Michael Cohen and Rudy Giuliani.

Federal prosecutors also relied on a filter team to review materials seized from California lawyer Michael Avenatti, who formerly represented porn star Stormy Daniels in her legal disputes with Trump. But the team in that case apparently botched the job.

Avenatti won a mistrial in the Central District of California, where he was being tried on criminal charges of wire fraud, after a judge found in 2021 the government's taint team failed to disclose potential exculpatory evidence seized from Avenatti's law offices.

The Avenatti mistrial added to a growing list of filter team-related snafus. Last year, for instance, the trial of former Goldman Sachs managing director Roger Ng in the Eastern District of New York was delayed after a Justice Department filter team failed to share more than 15,000 nonprivileged documents with Ng's defense team.

A federal prosecutor in Ng's case described the situation as a "total institutional failure."

"The defense bar is seeing a little bit of an opening from these cases, and we're now trying to flip things so that we can get access to that seized information first," said Eddie Jauregui, a partner at Holland & Knight LLP and former federal prosecutor.

"But in an ongoing investigation, the Department of Justice will forever oppose that," he added, "because it will provide the defense with a sense of what the DOJ is investigating."

One Privilege, Different Views

Federal agents and prosecutors serving on filter teams work independently of the prosecution teams handling the cases in question.

Still, the defense bar has long been concerned about potential bias issues, because the teams, while walled off from the prosecution, work for the government. Ask any criminal defense lawyer about their thoughts on filter teams, and it's highly likely they'll say the fox is guarding the henhouse.

"The government has the power in these filter teams," said Ellen Podgor, a professor of white-collar criminal law at Stetson University College of Law. "They're picking the people on these teams. They're sending these teams in to evaluate attorney-client privilege."

Howard Srebnick, a partner at Black Srebnick PA, added: "The parade of horribles is that one day it's developed that somehow, either intentionally or unintentionally, members of these filter teams used privileged materials to build a case against a target."

Srebnick argued in a landmark firewall teams case, U.S. v. Korf et al., that the government was trampling on privilege holders' rights by having prosecutors and other Justice Department lawyers serve on taint teams.

The Eleventh Circuit disagreed and upheld the use of filter teams, as long as protocols are in place for the court to step in and review seized material that the teams determine to be nonprivileged, before it's turned over to the prosecution.

The 2021 decision in Korf conflicts with the Fourth Circuit's 2019 opinion in U.S. v. Under Seal , which held, in part, that filter teams were performing what should be the job of the courts — and that the Justice Department's use of filter teams was especially inappropriate given that the government was an "interested party in the pending dispute."

Before the Fourth Circuit gave a thumbs-down to filter teams, the Sixth Circuit decided in 2006's In Re: Grand Jury Subpoenas  that the problem with taint teams is that "the government's fox is left in charge of the appellants' henhouse, and may err by neglect or malice, as well as by honest differences of opinion."

"Everyone's talking about equal justice for everyone, but we have this geographical disparity when it comes to filter teams," Cass said. "If you're in the Eleventh Circuit you're probably going to be treated differently than if you were in the Fourth or Sixth. You shouldn't be treated differently in a criminal case just because you were indicted in Virginia or Miami. It's one privilege and the same law."

"This Has Become Institutionalized"

Filter team approaches also vary between U.S. attorneys' offices. For instance, the office for the Central District of California staffs its taint teams with dedicated privilege review attorneys rather than federal prosecutors, according to Jauregui, who served as a prosecutor in the office's fraud section from 2014 to 2020.

"The idea was to move away from a more ad hoc system that relied on assigning [assistant U.S. attorneys] from other sections to serve as the filter or taint AUSA on somebody else's case," he said. "That was a lot of work, stress and pressure. Frankly, it's not anything anybody wanted to do."

A spokesperson for the Central District office has not answered questions from Law360 about the filter team changes.

Meanwhile, the Department of Justice in 2020 created a dedicated division, which is referred to as the Special Matters Unit, to handle privilege reviews, litigate privilege-related issues connected to fraud cases and train fraud section prosecutors.

"What's happened is this has become institutionalized, and we're getting a virtual warehouse within the DOJ containing the privileged material of our citizens," Srebnick said. "Presumably, this is all walled off from the active prosecutors, but you have an army of lawyers who are part of this Special Matters Unit today, and tomorrow they may be transferred into the active prosecutions unit."

A spokesman for the DOJ has not responded to questions about the number of attorneys and agents in the Special Matters Unit, whether attorneys on the unit could at some point serve as federal prosecutors or how the government is safeguarding against the unit members' mishandling of privileged information.

More Pushback, More Scrutiny

As the government's use of filter teams has ramped up in the realm of white-collar crime, so too has pushback from the defense bar, spurring increased scrutiny from the courts.

In some instances, such as the seizure of materials from Trump's Mar-a-Lago residence and Cohen's law offices, courts have appointed special masters to review evidence for privilege issues, cutting filter teams out of the process.

Federal prosecutors opposed having a special master in the Mar-a-Lago and Cohen cases, but they requested a special master in Giuliani's case, suggesting a potential softening of the government's insistence on using filter teams.

"My sense is that the government is learning from some of its lessons where the courts have rejected their [privilege review] protocols, and so they're making adjustments by either asking for a special master, agreeing to a special master or coming up with protocols that have sufficient safeguards," said ex-federal prosecutor Claudius Modesti, a partner at Akin Gump Strauss Hauer & Feld LLP.

He added: "Generally, courts also seem to be moving in the direction of giving the party whose materials were seized the chance to review them before they go to the prosecution team, which is an important intervention point. Then there's an opportunity for the court to weigh in if there's a dispute about what's privileged or not, before it goes to the prosecution team."

Jacquelyn Kasulis, a partner at Kirkland & Ellis LLP and an ex-federal prosecutor in the Eastern District of New York who frequently dealt with filter teams, said the white-collar bar is in the midst of an "evolution toward bespoke filter team protocols."

"It's about addressing all of the specific issues that are presented to the court while not putting the court in a situation where it needs to make a determination on each and every document," she said. "Increasingly, many judges don't want to be in that situation — they just don't have the resources for this, which is incredibly time-consuming."

"I Don't See This Stopping"

The U.S. Supreme Court has not waded into the conflict over filter teams, and experts say that's unlikely to happen in the foreseeable future — primarily because privilege review is highly fact-specific and protocols tend to be designed on a case-by-case basis.

"That makes it more difficult to have a hard-and-fast rule," said Ballard Spahr LLP partner Celia Cohen, an ex-federal prosecutor and former in-house counsel for JPMorgan Chase & Co.

While the piecemeal approach to privilege review persists, white-collar defense lawyers and prosecutors will continue to grapple over filter teams. The defense should make the first move, as early as possible, when proposing review protocols, according to experts.

"You want to come up with a reasonable proposal that won't slow down the government," Cohen said. "So it's having a timeline and not delaying issues, but also making sure that you have protocols that allow you, as the defense attorney, to review what's going to the prosecutors before it goes there."

While Jauregui, the partner at Holland & Knight, noted that the defense bar has become bolder about pushing to access seized information before the prosecution, he acknowledged that the effort is rarely successful.

But that could change as pressure mounts on prosecutors.

"We will continue down this path where defendants are rightfully very concerned about the way in which this material is viewed and processed and ultimately used, and defendants are very quick to challenge the protocols that are in place," Kasulis said.

"Because these inquiries are so fact-specific and defendants have gotten a lot of traction in challenging them, they've gotten a lot of protections in place that are quite helpful," she added. "I don't see this stopping. I do see this continuing to evolve over time. But I don't see firewall teams going away anytime soon."