12/17/19

Privilege
Attorney-Client Privilege and
Work Product Doctrine — Privilege: protects evidence from discovery and
serves to restrict grand jury inquiries, warrants,
subpoenas, etc.
CORPORATE CRIMES
— Federal Rule of Evidence 501: “The common law . . .
UNIVERSITY OF IOWA, COLLEGE OF LAW governs a claim of privilege.”

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Attorney-Client Privilege Email Hypo

— Purpose: facilitate provision of legal advice From: Barry Zuckercorn, Esq.

— Waiver: disclosure to a third party To: Sam Serius, CEO
— Absolute Date: 1/1/11
— Elements (for detail, see p. 879) Subject: Re: Help!
¡ Communication to or from lawyer
¡ For purpose of securing or providing legal advice
You should immediately return the $5k you received.
¡ Confidentiality maintained
It looks too much like a kickback.

BZ

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Work Product Doctrine Breakout Discussion

— Fed. R. Civ. P. 26(b)(3)(A): “Ordinarily, a party may not Why do we have ACP and WPD for corporations? Do
discover documents and tangible things that are their differences from individuals tell in favor of or
prepared in anticipation of litigation by or for another
party or its representative (including the other party’s against it?
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

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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”
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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
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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.)
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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
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.
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
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In re Sealed Case (D.D.C.) Individual ACP Within Corporation

— 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
— 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

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Scope of Privilege Waiver Partial Waiver

— Scope of waiver — Situation where privilege waived as to some

¡ Old Rule: extends to all items that cover the same subject materials but not all
¡ Current Rule (Fed. R. Evid. 502): Waiver of privilege as to A — Parties in federal proceedings can enter into
extends to B only if:
confidentiality agreements
÷ Waiver as to A was intentional
÷ B concerns the same subject as A — Without court order, unenforceable against third
÷ A and B ought in “fairness” to be considered together parties
¢ ACP: other party would be greatly prejudiced by nondisclosure

¢ WPP: privilege claimant seeking advantage by partial disclosure

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Implied Waiver Inadvertent Production

— Talking about two circumstances — No waiver if:

¡ Inadvertent disclosure ¡ Took reasonable steps to prevent, and
¡ Individual within corporation tries to waive privilege for ¡ Took reasonably prompt steps to claw back
himself but not corporation
— Relevant factors:
— Courts apply a fairness standard to the latter ¡ Scope of discovery
¡ Generally, no waiver where defendant: ¡ Extent of the disclosure
÷ Doesn’t reveal substantive information,
¡ Number of documents to be reviewed
÷ Doesn’t mislead the court, and ¡ Time constrains
÷ Doesn’t prejudice the other side
¡ Use of advanced analytical software
¡ Also relevant: whether the individual was compelled to testify,
¡ Efficient system for managing records
whether he was aided by an attorney, and whether he is the
“alter ego” of the corporation — Scope?

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Exceptions to ACP Waiver Selective Waiver

— Third party is also a privileged party — Situation where waiver limited to party to whom
— “Magic Circle” materials disclosed
¡ Non-attorney assistants to attorney — 8th Circuit allows, but most other circuits reject it
¡ Non-attorney experts needed to facilitate provisions of legal — Workaround: court orders and confidentiality
advice
agreements
¡ Parent corporation of subsidiary client
¡ Parties to joint defense agreements

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Breakout Discussion Other Privileges

Thinking about the purposes behind ACP, what other — Tax Advice Privilege
kinds of privileges might make sense? ¡ 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

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Other Privileges, cont’d Summary 2

— Self-Evaluation Privilege — Crime/Fraud Exception

¡ Some jurisdictions allow it in securities audits, product safety
¡ Communication made or received with the intent to further an
unlawful or fraudulent act, and
assessments, accounting records, environmental audits, equal
¡ The client must have carried out unlawful or fraudulent act
employment compliance
— Generally corps hold ACP/WPD in investigations
¡ Elements:
¡ Meaning only they can waive
¢ The information must result from a critical self-analysis by the
¡ Upjohn letters
party seeking protection
¢ The public must have a strong interest in preserving the free
— Waiver
flow of the type of information sought ¡ ACP—disclosure to third party
¢ The information must be of the type whose flow would be ¡ WPP—disclosure to adversary
curtailed if discovery were allowed ¡ Scope—intentional, same subject, fairness (502)
¢ Expectation of confidentiality and confidentiality preserved ¡ Inadvertent waiver—reasonableness of precaution and response
¡ Court orders for partial and selective waiver

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