4th Circuit orders law firms that worked with Snyder to turn over records

A pair of law firms that worked with medical malpractice lawyer Stephen L. Snyder on a deal that would later lead to his indictment on attempted extortion charges must turn over records in response to grand jury subpoenas, a federal appeals court ruled Wednesday.

The law firms, which are not named in the 42-page opinion, cannot withhold the records under work-product privilege, a three-judge panel on the 4th U.S. Circuit Court of Appeals decided.

The ruling is a loss for Snyder, who is accused in federal court of attempting to extort the University of Maryland Medical System in 2018 by threatening to go public about problems with their flagship hospital’s organ transplant program if UMMS didn’t agree to a $25 million sham consulting agreement.

In 2021, with his case pending, Snyder sought to block the government from issuing subpoenas to the two law firms, which he hired to help represent a woman whose husband died after a transplant, and another lawyer who worked for him.

Snyder had just won a favorable, albeit unusual, ruling related to discovery in his case: if he declined to ask the government to turn over its evidence against him, he reasoned, he shouldn’t be required to respond to discovery requests from federal prosecutors.

U.S. District Judge George Levi Russell III agreed, according to the 4th Circuit‘s opinion.

The government then sought to issue subpoenas in a separate, ongoing grand jury investigation. The grand jury issued subpoenas to Law Firm 1, Law Firm 2, and Lawyer 3 on Feb. 18, 2021, according to the opinion.

Snyder accused the government of abusing the grand jury process in order to circumvent the court’s earlier discovery ruling. A judge ordered the subpoena recipients to respond and allowed them to provide “privilege logs” explaining what information might be shielded under attorney-client privilege or other confidentiality protections afforded to lawyers.

The government and the law firms disagreed over what information was privileged, and a judge mostly ruled in favor of the government, spurring the appeal to the 4th Circuit.

The 4th Circuit first rejected the claim that government lawyers abused the grand jury process by issuing the subpoenas. According to the opinion, prosecutors provided a letter indicating that there is an ongoing investigation that could result in additional charges or defendants, though the current status of that investigation is unclear.

The 4th Circuit also found that documents related to Snyder’s proposed consultancy with UMMS are not shielded because they were not related to the transplant litigation. Snyder wanted to pursue a consulting deal even before he began representing the woman whose husband had died, the 4th Circuit found.

Though Snyder portrayed the consulting agreement as one piece of a larger settlement over the transplant claims, the panel concluded that “these positions amount to little more than negotiation tactics at best, or extortive pressures, at worst, geared towards the realization of his ideal outcome.”

The panel also agreed that the “crime-fraud exception” applied to Snyder’s communications.

“Simply because Appellants disagree with the ultimate outcome does not render the district court’s decision erroneous,” the panel wrote. “We cannot thus conclude that the court clearly erred by relying on the criminal indictment as sufficient evidence of fraud.”

Because grand jury proceedings take place in secret, Snyder is identified in the 4th Circuit’s opinion as “John Doe.” The law firms and lawyer who received subpoenas also are not named in the 4th Circuit’s opinion.

Still, it is possible to discern who most of the unnamed people are by referencing other public records.

One lawyer involved in the appeal is almost certainly Andrew J. Graham, whom Snyder referenced repeatedly as he tried to get UMMS to agree to the $25 million deal. Graham is widely viewed as an ethics specialist, and Snyder tried several times to bring him into negotiations with UMMS in an effort to show that his offer was legitimate, according to defense filings.

In an attorney grievance proceeding against Snyder from 2020, bar counsel wrote in a footnote that “Upon information and belief, Mr. Graham was led to believe that the consulting agreement was proposed by (a doctor with UMMS) and was legitimate. Upon information and belief, (Snyder) never advised Mr. Graham that the agreement was simply a cover for unlawful activities.”

Bar counsel at the time was Lydia Lawless, who has since gone to work at Graham’s firm, Kramon & Graham.

Graham did not immediately respond to a request for comment Wednesday afternoon.

Snyder declined to comment for this story.

A motion to dismiss the indictment against Snyder has been pending in U.S. District Court in Maryland during the appeal.

Prosecutors say that Snyder coupled his request for a $25 million consulting deal with a threat to take his claims about the transplant program to the news media or air self-produced videos about the issues he claimed to have discovered.

“I don’t care if I don’t do anything (for the money),” Snyder said, according to the indictment. The deal would ensure that Snyder was “conflicted out” of future lawsuits against UMMS.

Snyder denies the charges and has argued that the consultancy offer was a real effort to reach a deal with UMMS. Snyder’s defense team, led by Arnold Weiner, asked to withdraw from the case in March, after Snyder contacted Russell’s chambers directly in a call that the judge described as “disorganized and emotional.”

The government previously sought to have Weiner disqualified from the case, though the motion was filed under seal. Russell alluded to that motion during a discussion of the grand jury dispute in June.

Snyder was reinstated to the Maryland bar in January after consenting to a suspension when he was first indicted.

In his motion for reinstatement, Snyder said the protracted legal battle hurt his finances and forced him to draw on his savings and retirement assets to pay for his defense. Without his law license, Snyder was unable to work to replenish that money, he said.

Because Snyder has not been convicted of a crime, a majority of the Maryland Supreme Court agreed there was no basis to continue his suspension.