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Friday, July 25, 2014

New Jersey Supreme Court Proposes “Crime Fraud” Exception to Marital Privilege Rule

Supreme Court of New Jersey – In State v. Terry & Savoy, A-71-12 (N.J. July 22, 2104) the Supreme Court of New Jersey affirmed the Appellate Division’s decision that wiretapped conversations between spouses that are otherwise privileged cannot be intercepted or otherwise introduced into evidence. However, because of public policy concerns, the Court proposed new language amending Rule 509 of the New Jersey Rules of Evidence to create a “crime-fraud” exception so that conversations such as the one intercepted in the case before the Court are admissible on a going forward basis.

Teron Savoy and Yolanda Terry were married. In 2010, the Ocean County Prosecutor investigated Savoy as the leader of a drug trafficking network. In connection with the investigation, the Prosecutor obtained court orders authorizing a wiretap of Savoy’s cell phones. Evidence obtained through the wiretaps included text messages between Savoy and Terry: among them was one in which Savoy asked Terry to collect money from a co-defendant to whom drugs allegedly had been lent; another involved a request by Savoy that Terry retrieve items from a car that had been seized and in which heroin had been found. At trial, Savoy and Terry moved to preclude the phone conversations and texts between them because the evidence was protected from disclosure by the marital privilege set forth in Rule 509 of the Rules of Evidence. The trial court denied the motion, but the Appellate Division reversed, finding that the communications were privileged. The Appellate Division noted, however, that a crime-fraud exception did not apply, but “strong public policy concerns supported applying a crime-fraud exception to the privilege.” Opinion, p. 5.

The Court explained that the marital privilege prevents only one spouse from testifying against the other. Tracing the history of how the marital privilege developed, the Court noted that “a marital communication loses its privileged character if it is overheard by a third party ‘either accidentally or by eavesdropping.’” Opinion, p. 9 (citations omitted). The State argued that a wiretap is akin to a neighbor overhearing or an eavesdropper, and thus the marital privilege should not apply to wiretapped evidence. The Court disagreed and held that under section 11 of the wiretap statute, N.J.S.A. 2A:156A-11, “no otherwise privileged wire, electronic or oral communication intercepted in accordance with, or in violation of, the provisions of this act, shall lose its privileged character.” Thus, a confidential communication between spouses, which would remain confidential in the absence of the wiretap, does not lose its privileged status by virtue of the wiretap.

 The Court rejected the State’s reading of the statute that the privilege is a personal one, so an eavesdropper may testify about the contents of the overheard communication. Citing the legislative history of section 11 of the wiretap statute, the Court determined that a “state authorized wiretap, unlike a private eavesdropper, does not destroy the privilege.” Opinion, p. 14. Any other reading of section 11 would render obsolete that part of the statute discussing the privileged nature of a communication overheard via wiretap.

 Although the statements retained their privilege, the Court proposed an amendment to the Rules of Evidence pursuant to the Evidence Act that would create a crime-fraud exception to the marital privilege. Noting that all eleven federal circuits and a number of states already have imposed a crime-fraud exception to the marital privilege, the Court recommended amending Rule 509 “to include a crime-fraud exception that is similar to the exceptions that apply in federal and state courts throughout the nation as well as other evidentiary rules in New Jersey.” Opinion, p. 20. Because the proposed rule change is “fundamental,” the Court submitted the proposed change for approval by joint resolution of the Legislature and for the Governor’s signature. The proposed amendment “should not protect a communication that relates to an ongoing or future crime or fraud in which the spouses were joint participants at the time of the communication.” Opinion, p. 26.




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