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Federal Judge Robert Pitman has ended Defendant Paul Kruse’s search of his former employer’s files, which may have helped him in his November criminal trial.
The judge granted Blue Bell Creameries’ motion to completely revoke the Kruse Subpoena Duces Tecum to Blue Bell Creameries. In a June 24 order, the Texas Western District trial judge explained what happened.
Pitman said following his May 24 order partially approving and partially denying Blue Bell’s rescission request, “The court ordered Blue Bell to perform an in-camera review of documents that responded to the first and second document requests in Kruse’s Rule 17 responded subpoena. Blue Bell created the potentially responsive documents for an in-camera review on June 8, 2021. “
After the review, the court confirmed that “the documents presented are subject to legal confidentiality and labor product doctrines,” the judge continued. “In addition, the court has not yet determined that the documents presented are ‘of such conclusive and exculpatory value’ to compel the admission of the evidence against the objection of the holder of the lawyer and client privilege.”
Kruse is the former president of Blue Bell and is charged with half a dozen federal crimes resulting from the ice cream company’s involvement in the 2015 Listeria outbreak. It is believed that Kruse had access to many documents at Blue Bell until he retired three years ago.
After reviewing documents in his chambers, Pitman Kruse’s subpoena motion under rule 17 cut off his legs.
“Because exceptional circumstances do not justify a ‘violation of privilege’ here, Kruse’s right in the fifth and sixth amendments do not justify the submission of documents,” added Pitman. “As such, Blue Bell is not required to produce the documents in response to Kruse’s subpoena under Rule 17.”
Blue Bell agreed to pay a record $ 19.35 million in fines, forfeitures, and penalties in 2020 to resolve the company’s criminal liability with the US Department of Justice. Shortly thereafter, a grand jury charged Kruse with conspiracy and sixfold fraud. His trial is due to begin on November 8th.
Before giving his waiver warrant, Pitman gave this background to the case:
“This case is due to the contamination of Blue Bell products with the bacterium Listeria monocytogenes (“ Listeria ”) between 2010 and April 20, 2015 and to Kruse’s alleged role in concealing possible and confirmed Listeria contamination of Blue Bell products . Kruse, the former CEO of Blue Bell, allegedly took steps and conspired with others to hide the contamination of Blue Bell products despite knowing that certain Blue Bell products contained Listeria.
“The alleged crimes were committed between February 19, 2015 and April 7, 2015, when Kruse allegedly learned that Blue Bell products tested positive for Listeria but took steps to hide the outbreak.
“The indictment accuses Kruse of a conspiracy and six cases of transfer fraud / attempted transfer fraud under Title 18. The government alleges that Kruse and others were involved in a conspiracy between February 13, 2016 and April 20, 2015 to suppress the Listeria outbreak in certain Blue Bell customers “through false and deceptive pretenses, representations and promises”.
The government also claims that Kruse sent six emails between February 19, 2015 and April 7, 2015 in support of the conspiracy to hide the Listeria outbreak from certain Blue Bell customers. “
Pitman allowed Kruse to summon Blue Bell on March 4th.
Between March 25, 2015 and April 25, 2015, Kruse searched for records for Hogan Lovell’s attorneys and eleven members of the Blue Bell management team.
The records searched included:
- (a) Listeria found in Blue Bell products or facilities,
- (b) Interactions with state, state, or local authorities in relation to Listeria found in and / or in Blue Bell products or facilities
- (c) Interactions with Blue Bell customers in relation to Listeria found in Blue Bell products or facilities. “
Blue Bell engaged Hogan Lovells on March 17, 2015 for legal advice regarding the Listeria outbreak. Kruse claims that the documents requested are “critical to his defense” because they are used in the trial to “negate the fraudulent intent that is an element of any of the charges against him.”
Blue Bell moved to overturn Kruse’s subpoena, arguing that attorney-at-law protects the documents requested and that the “overarching inquiries” reflected an attempt for “improper investigative purposes”.
Kruse fought against Blue Bell’s motion for annulment because the requested documents were “very relevant – even critical for his defense” and were admissible in court. He identified 1,782 documents that he believes respond to his subpoena. However, he estimates that “the total number of unique documents will not be greater than 500 and likely far less if duplicates are removed”.
Kruse suggested the court do a camera review of privileged documents while Blue Bell insisted on overturning the entire subpoena.
The Federal Criminal Procedure Code 17 (c) regulates the issuing of a subpoena tecum in a federal criminal case. The rule gives the court the power to reject motions that are “unreasonable or oppressive”.
According to rule 17, a subpoena must show that:
- The pre-loaded document is relevant.
- It is permissible.
- His request comes with reasonable specificity.
The court found that Kruse’s initial filing, which generally required all communications between Hogan Lovells’ attorneys and Blue Bell management regarding “Listeria found in Blue Bell products or facilities”, was not sufficiently specific to to meet this standard.
According to Pitman’s initial verdict, two of the other documents requested in Kruse’s subpoena were identified with “sufficient specificity” to meet the standard.
Kruse identified the two types of communications he sought between Hogan Lovells’ attorneys and Blue Bell management during a month that tended to show that he was relying on legal counsel in taking the actions at issue in his indictment.
Judge Pitman had originally agreed to overturn the second part of the subpoena.
“Because Kruse has failed to explain how the communication between Blue Bell management and Hogan Lovells’ attorneys in relation to interactions with federal, state or local authorities is’ relevant to the charges’ [he is] will be charged ‘”, the court will reject Kruse’s second application for a document.
But he kept up the third and last part. Here was his logic:
- With regard to the single remaining document request, the court recognizes that the advice of a lawyer may serve as “a means of demonstrating good faith and possible evidence that there is no fraudulent intent”.
- The document calls for communication between Hogan Lovells’ attorneys and Blue Bell management regarding “interactions with Blue Bell customers” that are relevant to whether the advice is following instructions from Kruse to employees, distributors and clients of the legal advisor contained.
- Since Kruse has alleged that the requested documents tend to negate his intention to defraud clients because he has relied on the advice of a lawyer, he has provided sufficient explanations to draw a “rational conclusion on relevance” for these documents to support.
Pitman then found that Kruse’s Fifth and Sixth Amendment Rights warrant a review of the documents in response to the Third Document Request to see if Kruse’s Fifth and Sixth Amendment Rights warrant their production.
66-year-old Kruse, longtime CEO of Blue Bell, is charged with conspiracy and fraud on six counts related to a fatal Listeria outbreak in 2015 involving the company’s ice cream products.
Kruse is a resident of Brenham, TX where Blue Bell Creameries is headquartered. It’s about 90 miles east of Austin.
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