Attorney-Client Privilege and

Work Product Doctrine

CORPORATE CRIMES

UNIVERSITY OF IOWA, COLLEGE OF LAW

 Privilege

 Privilege: protects evidence from discovery and

serves to restrict grand jury inquiries, warrants,
subpoenas, etc.
 Federal Rule of Evidence 501: “The common law . . .
governs a claim of privilege.”
 Attorney-Client Privilege

 Purpose: facilitate provision of legal advice

 Waiver: disclosure to a third party
 Absolute
 Elements (for detail, see p. 879)
 Communication to or from lawyer

 For purpose of securing or providing legal advice

 Confidentiality maintained
 Email Hypo

From: Barry Zuckercorn, Esq.

To: Sam Serius, CEO
Date: 1/1/11
Subject: Re: Help!

You should immediately return the $5k you received.

It looks too much like a kickback.

BZ
 Work Product Doctrine

 Fed. R. Civ. P. 26(b)(3)(A): “Ordinarily, a party may not

discover documents and tangible things that are
prepared in anticipation of litigation by or for another
party or its representative (including the other party’s
attorney, consultant, surety, indemnitor, insurer, or
agent).”
 Purpose: Promote the vitality of the adversarial system
 Waiver: disclosure to adverse party
 Not Absolute: adverse party can break privilege is the
protected information is not otherwise available
 Does not apply to documents recording an attorneys mental
processes
 Breakout Discussion

Why do we have ACP and WPD for corporations? Do

their differences from individuals tell in favor of or
against it?
 Why conduct internal investigations?

 Know facts to take appropriate internal action and decide

whether to self-report
 Know facts to persuade government not ot investigate
 Take remedial action and craft defenses
 Law may require an investigation
 May need to take action to avoid committing further
wrongs
 Part of an effective compliance program
 Directors may fact civil liability for failing to follow-up on
“red flags”
 After Upjohn, how to secure ACP?

 Specifically authorize an attorney in writing to

conduct the investigation for legal purposes
 Restrict the investigation to employees
 Make clear in writing that it’s for securing legal
advice
 Give warnings about confidentiality
 Keep the investigation confidential
 Have attorneys conduct the investigation
 Scope Issues

 WPD applies only to documents prepared “in

anticipation of litigation”
 Hypo: Suppose CEO asks GC to prepare memo assessing
possible criminal liability for bribery so they can decide
whether they can afford a new advertising campaign.
 Litigation need not be actually pending
 Prospect for litigation must be “real and specific”
 Circuit split on whether litigation must be “primary purpose”
 Hypo: Suppose GC previously drafted memo laying out his
theory of FCPA. Later possible bribery concerns arose.
 ACP does not cover business advice
 Business and legal advice often mixed
 Upjohn Co. v. U.S.

 Facts: An independent auditor found that an Upjohn

subsidiary had bribed foreign subsidiaries; Upjohn
decided to conduct an internal investigation; as part of
that investigation, Upjohn’s general counsel sent out a
questionnaire to foreign managers; managers were
instructed to treat the questionnaire as highly
confidential; Upjohn voluntarily disclosed the payments
to the SEC, along with a list of managers who had
responded to the questionnaire; the IRS issued a
summons for all files relevant to the investigation, and
Upjohn declined on ACP and WPD grounds
 Issue: Do corporations get ACP and WPD.
 Holding: Yes.
 Summary 1

 ACP (“legal” communications) and WPP (work

product “in anticipation of litigation”)
 Help by corps (Upjohn)
 For same reasons we give to individuals

 Without 5th, only defense against prosecutors

 How to protect (use atty, keep confidential, etc.)

 Crime Fraud Exception

 No ACP or WPP if:

 Client made or received the communication with the intent to
further an unlawful or fraudulent act, and
 (Depending on jx) The client carried out unlawful or
fraudulent act
 Procedure
 Evidence that, if believed, would establish elements of crime or
fraud; probable cause or reasonable basis; sufficient to compel
party asserting privilege to come forward and explain
 In re Sealed Case (D.D.C.)

 Seems to be same case as Sun Diamond

 Facts: Company withheld two documents, one of which
was a memo reflecting conversations between the vice
president and general counsel about campaign finance
laws, and the other a memo of the general counsel
 Takeaways:
 Keep track of timing
 If crime occurred before advice, no crime fraud exception
 Temporal proximity between advice and crime not enough

 Keep track of who client is and who committed crime

 Vice President ≠ corporation
 Individual ACP Within Corporation

 General Rule: Corporation holds ACP with corporate-

hired attorney; so only corp can waive
 Some courts recognize ACP between individual and
corporate counsel if:
 Employee approached corporate counsel for legal advice,
 Employee made clear he was seeking advice as an individual,
 Counsel saw fit to communicate with employee in his individual
capacity,
 The conversations were confidential, and
 The conversations did not concern matters within the company or
the general affairs of the company
 Note: The employee has the burden
 Upjohn letters minimize understanding; ethical duty to
provide
 Scope of Privilege Waiver

 Scope of waiver
 Old Rule: extends to all items that cover the same subject

 Current Rule (Fed. R. Evid. 502): Waiver of privilege as to A

extends to B only if:
 Waiver as to A was intentional
 B concerns the same subject as A
 A and B ought in “fairness” to be considered together
 ACP: other party would be greatly prejudiced by nondisclosure

 WPP: privilege claimant seeking advantage by partial disclosure

 Partial Waiver

 Situation where privilege waived as to some

materials but not all
 Parties in federal proceedings can enter into
confidentiality agreements
 Without court order, unenforceable against third
parties
 Implied Waiver

 Talking about two circumstances

 Inadvertent disclosure
 Individual within corporation tries to waive privilege for
himself but not corporation
 Courts apply a fairness standard to the latter
 Generally, no waiver where defendant:
 Doesn’t reveal substantive information,
 Doesn’t mislead the court, and
 Doesn’t prejudice the other side
 Also relevant: whether the individual was compelled to testify,
whether he was aided by an attorney, and whether he is the
“alter ego” of the corporation
 Inadvertent Production

 No waiver if:
 Took reasonable steps to prevent, and
 Took reasonably prompt steps to claw back

 Relevant factors:
 Scope of discovery
 Extent of the disclosure
 Number of documents to be reviewed
 Time constrains
 Use of advanced analytical software
 Efficient system for managing records

 Scope?
 Exceptions to ACP Waiver

 Third party is also a privileged party

 “Magic Circle”
 Non-attorney assistants to attorney

 Non-attorney experts needed to facilitate provisions of legal

advice
 Parent corporation of subsidiary client

 Parties to joint defense agreements

 Selective Waiver

 Situation where waiver limited to party to whom

materials disclosed
 8th Circuit allows, but most other circuits reject it
 Workaround: court orders and confidentiality
agreements
 Breakout Discussion

Thinking about the purposes behind ACP, what other

kinds of privileges might make sense?
 Other Privileges

 Tax Advice Privilege

 IRS Restructuring and Reform Act of 1998 (26 U.S.C.
7525(a)(1 )
 Extends ACP to “federally authorized tax practitioners”

 Accountant-Client Privilege
 Recognized in some states
 Other Privileges, cont’d

 Self-Evaluation Privilege
 Some jurisdictions allow it in securities audits, product safety
assessments, accounting records, environmental audits, equal
employment compliance
 Elements:
 The information must result from a critical self-analysis by the
party seeking protection
 The public must have a strong interest in preserving the free
flow of the type of information sought
 The information must be of the type whose flow would be
curtailed if discovery were allowed
 Expectation of confidentiality and confidentiality preserved
 Summary 2

 Crime/Fraud Exception
 Communication made or received with the intent to further an
unlawful or fraudulent act, and
 The client must have carried out unlawful or fraudulent act
 Generally corps hold ACP/WPD in investigations
 Meaning only they can waive
 Upjohn letters
 Waiver
 ACP—disclosure to third party
 WPP—disclosure to adversary
 Scope—intentional, same subject, fairness (502)
 Inadvertent waiver—reasonableness of precaution and response
 Court orders for partial and selective waiver