The Attorney-Client Privilege and Work Product Protection

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					                                                        The Attorney-Client Privilege
          Syllabus Changes
                                                        and Work Product Protection
  • Class #23: Change Supplement pages to
  • Class #24: Change Supplement pages to
    111-113 and 321-323
                                                           How Much Can Counsel Keep From
                                                             the Government’s Prying Eyes!

                                                   1                                                      2

The Attorney-Client Privilege:                                  Scope of the Privilege
                                                        • While the privilege protects confidential
        United Shoe                                       communications for the purpose of legal
 • Communication with an attorney (or agent of            representation, it does not protect a person’s
   the attorney)                                          (including the client’s) knowledge of the
 • For the purpose of seeking legal advice                underlying facts, even if that information is
 • Client intends that the information be kept            communicated to counsel confidentially.
   confidential (i.e. no 3rd party present, etc.)       • The rationale of the privilege is to encourage “full
                                                          and frank” communication with counsel, but it
  Swidler & Berlin [730]: The Privilege Lasts Forever     serves to frustrate discovery and therefore courts
                                                          claim that it should not to be extended any further
                                                          than necessary to promote the attorney-client
                                                   3                                                      4

                                                                   Who Should Investigate?
      Corporate Attorney-                                     • In re Six Grand Jury Witnesses: Counsel uses employees
                                                                of the investigative target to conduct the factual
    Client Privilege (Upjohn)                                   investigation and then communicate those facts to counsel.
 “[T]he privilege exists to protect not only the              • “[I]t seems plain that merely by asking witnesses to
 giving of professional advice to those who can                 conduct an analysis defense counsel may not thereby
 act on it but also the giving of information to                silence all the key witnesses on the cost aspects of the *
                                                                * * contracts under either claim of privilege. Were
 the lawyer to enable him to give sound and                     counsel to succeed in such a tactic, the government would
 informed advice.” [704]                                        never be able to conduct a full and complete investigation
                                                                of an alleged crime because the critical witnesses would
      Whose privilege is it? This question is
                            it                                  have been effectively silenced” [707]
     especially difficult for close corporations.             • The Lesson: Hire independent investigators & don’t be
                                                                too cheap!
                                                       5                                                                     6

  The Internal Investigation                                   Work Product: FRCP 26(b)(3)
• Stamp all documents generated in the investigation            [A] party may obtain discovery of documents and tangible
  “Privileged and Confidential: Attorney’s Work Product”        things otherwise discoverable under subdivision (b)(1) of
• An Attorney should coordinate (and even conduct) the          this rule and prepared in anticipation of litigation or for trial
  investigation                                                 by or for another party or by or for that other party's
• Make all statements Attorney Opinion Work-Product             representative (including the other party's attorney, consultant,
  [& only one set of notes by an attorney]                      surety, indemnitor, insurer, or agent) only upon a showing
• Create a confidential attorney-client relationship with       that [1] the party seeking discovery has substantial need of
  any outside consultant, and never use internal personnel      the materials in the preparation of the party's case and [2] that
  as part of the investigation except for in-house counsel.     the party is unable without undue hardship to obtain the
• Avoid creating excess documents with inculpatory              substantial equivalent of the materials by other means. In
  information that may be subpoenaed or subject to              ordering discovery of such materials when the required
  waiver.                                                       showing has been made, the court shall protect against
                                                                disclosure of the mental impressions, conclusions, opinions,
           Do lawyers “sell” the attorney-client                or legal theories of an attorney or other representative of a
          privilege and work product protection?                party concerning the litigation.
                                                       7                                                                     8

 Attorney Work Product Protection                                In Anticipation of Litigation: Adlman
• Ordinary/Fact Work Product: Documents,                         • Memorandum from accountant (Arthur Andersen) to in-house
  reports, and other items prepared in anticipation                counsel (Adlman) re: tax implications of restructuring two
                                                                   subsidiaries that would generate a large tax loss & likelihood of
  of litigation.                                                   IRS challenge.
• Opinion Work Product: Ordinary work product                    • “[W]hether the documents were prepared ‘because of’ existing
                                                                   or expected litigation”—a formulation that would include such
  that also contains the mental impressions,                       documents [at issue in this case], despite the fact that their
  conclusions, opinions, or legal theories of an                   purpose is not to ‘assist in’ litigation” [714] (Wright & Miller
                                                                 • “Whether it can fairly be said that the Memorandum was
   * Upjohn: “While we are not prepared at this                    prepared because of that expected litigation really turns on
   juncture to say that such material is always                    whether it would have been prepared irrespective of the
   protected by the work-product rule, we think a far              expected litigation with the IRS.” [716]
   stronger showing of necessity and unavailability . . .        • 2nd Cir. rejects the “primarily to assist in litigation” test
   would be necessary to compel disclosure.” [710]           9                                                                 10

                    Rationale                                     Lawyers and Business Advice
                                                                  • What significant business decision/contract does
  “Where the Rule has explicitly established a                      not involve the prospect of litigation?
  special level of protection against disclosure for
                                                                  • If a lawyer is invited to attend meetings, does that
  documents revealing an attorney's (or other                       make the discussions privileged?
  representative's) opinions and legal theories
                                                                  • Can the lawyer’s presence cloak the meeting with
  concerning litigation, it would oddly undermine                   work product protection?
  its purposes if such documents were excluded
                                                                  • If either the privilege or work product protection
  from protection merely because they were                          apply, does that argue in favor of greater lawyer
  prepared to assist in the making of a business                    involvement in business decisions? Does that
  decision expected to result in the litigation.”                   put lawyers at greater risk ethically, civilly
  [715]                                                             (malpractice) and criminally for their advice?
                                                            11                                                                 12

 Dual-Purpose Documents — Torf                                         Substantial Need: GJ Subpoena
• Documents created for corporation that entered into a
  Consent Order with the government that required future                  Dated October 22, 2001
  monitoring of environmental compliance.                             • Grand jury subpoena to former attorney for target of
• “The question of entitlement to work product protection               investigation into tax fraud to testify about a meeting with
  cannot be decided simply by looking at one motive that                IRS CID Agents, and attorney asserts work-product
  contributed to a document's preparation. The                          regarding her observations/recollection.
  circumstances surrounding the document's preparation
  must also be considered.” [Supp. 75]                                • “For the attorney to be subpoenaed to testify to the
• “The withheld documents, however, just like the others,               observations made in the course of that preparation in
  were prepared by Torf, at least in part, to help McCreedy             order to help the putative adversary prove the offense as
  advise and defend Ponderosa in anticipated litigation                 to which the attorney was providing representation would
  with the government. Thus, the withheld documents fall                do substantial injury to the values that justify the work
  within the broad category of documents that were                      product doctrine.” [717]
  prepared for the overall purpose of anticipated                     • Is this attorney opinion work product?
  litigation.” [Supp. 75]
                                                              13                                                               14

    3rd Party Documents as Work                                               Fiduciary “Exception”
    Product: Mercator Corp. [720]                                     • Fausek: “When a corporation asserts the privilege
• Subpoena to law firm for records of Swiss bank accounts of
                                                                        in an action by shareholders, it is entitled to
  corporate target of GJ investigation.                                 prevent disclosure of such information only if the
• “To fit within what we have repeatedly characterized as a             policy underlying the privilege requires
  ‘narrow exception’ to the general rule that third-party               withholding evidence when balanced against the
  documents in the possession of an attorney do not merit work          rights of shareholders and the fundamental
  product protection, the party asserting the privilege must show       responsibility of every person to testify. [722]
  ‘a real, rather than speculative, concern’ that counsel's thought
  processes ‘in relation to pending or anticipated litigation will    • Wiseman: “[W]here a plan fiduciary retains
  be exposed through disclosure of the compiled documents.”             counsel in order to defend herself against the plan
• “Similarly troubling is the firm's failure to identify or submit      beneficiaries (or the government acting in their
  the responsive documents for in camera review, a practice             stead), the attorney-client privilege remains intact.”
  both long-standing and routine in cases involving claims of
  privilege.”                                                           [723]
                                                               15                                                              16

Client Identity & Fee Information                                  Waiver (or, Sauce for the Goose)
• “[T]he identity of the client, the amount of the fee, the       • Nobles: “[When] counsel attempts to make a testimonial
  identification of payment by case file name, and the              use of [privileged communications or work product]
  general purpose of the work performed are usually not             materials the normal rules of evidence come into play
  protected from disclosure by the attorney-client                  with respect to cross-examination and production of
  privilege.” [In re Grand Jury Subpoena @ 726]                     documents.” [738 n.14]
• “[W]e are sure that disclosure of this information would        • Bilzerian: “[T]he attorney-client privilege cannot at once
  identify a client of Hagen's who is potentially involved in       be used as a shield and a sword. A defendant may not
  targeted criminal activity which, on this record, would           use the privilege to prejudice his opponent’s case or to
  lead to revealing that client's motive to pay the legal bills     disclose some selected communications for self-serving
  for some of Hagen's other clients. And motive, we think,          purposes. Thus, the privilege may implicitly be waived
  is protected by the attorney-client privilege.”                   when defendant asserts a claim that in fairness requires
  [Subpoenaed GJ Witness @ 728]                                     examination of protected communications. [741]
                                                          17                                                                18

Waiving the Corporation’s Privilege:                              Federal Prosecution of Corporations:
In re Grand Jury Proceedings (Doe)                                Cooperation & Voluntary Disclosure
• “[I]t does not necessarily follow that a corporate officer        General Principle: In determining whether to charge a
  testifying in his individual capacity can waive the               corporation, that corporation's timely and voluntary
  corporate privilege without that entity’s consent . . . While
                                                                    disclosure of wrongdoing and its willingness to
  these cases can illustrate that, in some circumstances, a
  corporation may impliedly waive its privilege through             cooperate with the government's investigation may be
  the testimony of one of its officers, they hardly stand for       relevant factors. In gauging the extent of the corporation's
  the proposition that this must always be the case.” [736]         cooperation, the prosecutor may consider the
• “[T]he issue is not whether the reference to the attorney’s       corporation's willingness to identify the culprits within
  advice was a deliberate attempt at exculpation, but rather        the corporation, including senior executives, to make
  whether it was a deliberate attempt on the part of the            witnesses available, to disclose the complete results of its
  corporation to exculpate itself, as opposed to Witness’s          internal investigation, and to waive attorney-client and
  effort to exculpate himself personally.” [736-37]                 work product protection. [Supp. 355]
  Weintraub: Current management controls the privilege
                                                  19                                                                        20

One factor the prosecutor may weigh in assessing the adequacy of a
corporation's cooperation is the completeness of its disclosure
including, if necessary, a waiver of the attorney-client and work
product protections, both with respect to its internal
investigation and with respect to communications between
specific officers, directors, and employees and counsel. Such
waivers permit the government to obtain statements of possible
witnesses, subjects, and targets, without having to negotiate
individual cooperation or immunity agreements. In addition, they
are often critical in enabling the government to evaluate the
completeness of a corporation's voluntary disclosure and
cooperation. Prosecutors may, therefore, request a waiver in
appropriate circumstances. The Department does not, however,
consider waiver of a corporation's privileges an absolute
requirement, and prosecutors should consider the willingness of a
corporation to waive the privileges when necessary to provide
timely and complete information as only one factor in evaluating
the corporation's cooperation. [Supp. 356]