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Case 1:06-cr-00337-CC-JFK

Document 183

Filed 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.

:

GOVERNMENT’S 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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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 defendant’s 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

1 Raising an advice of counsel defense waives the

attorney-client privilege.

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 become material to determining the defendant’s 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).

See, e.g., United States v.

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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

advice-of-counsel during trial.

to

raise

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

Court’s

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 GOVERNMENT’S 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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