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Myth Busting: The Attorney-Client Privilege and Work Product Doctrine

Kent Sullivan Tom Curvin

March 20, 2012

2 ©2012 Sutherland Asbill & Brennan LLP

Myths

• “Everything discussed with my client is privileged.”

• “Everything in my files is work product.”

• “Email communication between the business unit and its external expert is privileged - as long as I am copied.”

• “My analysis of a potential position that the company might take in interpreting certain regulations is work product.”


Busting: The Basics

Attorney-Client PrivilegeProtects confidential disclosures between attorney and client (in most places) made for the purpose of securing legal adviceSee Fed. R. Evid. 501 and Tex. R. Evid. 503(b)

Work Product DoctrineProtects materials prepared in anticipation of litigation or for trialSee Fed. R. Civ. P. 26(b)(3) and Tex. R. Civ. P. 192.5


Confidentiality

• Prohibitions against disclosure of confidential information:

Model Rules of Prof’l Conduct R. 1.6 Texas Disciplinary Rules of Prof’l Conduct R. 1.05

• Confidentiality Protection: Broader than the attorney-client privilege and work product doctrine

• Practice Tip: As a default, behave as though all information related to the representation is confidential


Attorney-Client Privilege


What Qualifies?

Restatement of the Law (3d) of the Law Governing Lawyers § 118:

Communication (oral, written, attorney notes re same)Made between privileged personsIn confidenceFor the purpose of seeking, obtaining or providing legal assistance


Privileged Persons: Generally

• Narrow view: Only client confidential information is covered

• Broad view: Communications from attorney to client (and among attorneys) are covered, even if the particular communication does not specifically disclose client confidences

But, this is NOT the rule everywhere, contrary to popular belief

• Practice Tip: Communications to the client should be make it clear that an attorney is responding to a request for legal advice based on confidential information received from the client


Privileged Persons: Corporate Client

• “Subject Matter” test: Made for the purpose of securing legal adviceCommunication was authorizedSubject matter within scope of employee’s dutiesStayed within the “need to know”

See Upjohn v. United States, 449 U.S. 383 (1981); In re Monsanto Co., 998 S.W.2d 917 (Tex. Ct. App. 1999)

• “Control Group” test: much narrower


Privileged Persons: External Experts

• Privileged only if necessary to assist the lawyer in giving legal advice

• Examples:AccountantInvestment BankerPublic Relations Professional

• Practice Tip: Have the attorney communicate with the external professionals, not the client, if the goal is to protect the work via privilege


“For the Purpose of Seeking Legal Advice”

• Legal advice, not business advice, is protected

• Lawyers as “cc’s” on a document: doesn’t work

• When lawyers wear two hatsIn-house counsel in dual rolesOutside counsel giving business advice on a deal

• Practice Tip: Legal advice must predominate


Internal Investigations: Upjohn

Upjohn warning is necessary when working with employees, management and staff during an internal investigation:

Who you representPrivilege belongs to the company; only the company can waiveMay want to inform if agreed to produce report or interviews to government or othersMemorialize that warnings are given (some use written warnings that employees sign)Keeping interviews confidentialAnswering questions

Practice Tip: A designated note-taker appointed by counsel is often useful to note warning and track documents used during interviews

See Upjohn Co. v. United States, 449 U.S. 383 (1981); United States v. Ruehle, 583 F.3d 600 (9th Cir. 2009); United States v. Ring, 628 F. Supp. 2d 195 (D.D.C. 2009)


Internal Investigations: Privilege Protection

Practice Tips: Maintain up front Use of outside counsel may help preserve privilegeCounsel can retain forensic experts

Versus use of internal resourcesTake care in creating report and circulating reportRegulators have moved away from requesting waivers; “cabined” requests


Internal Investigations: Ethics

• Attorneys have an ethical obligation to make clear to employees and other unrepresented persons who the attorney represents

See Model R. Prof’l Conduct 1.13(f); Tex. Disciplinary R. Prof’l Conduct 1.12(e); Model R. Prof’l Conduct 4.3; Tex. Disciplinary R. Prof’l Conduct 4.3

• Tex. Comm. on Prof’l Ethics, Op. 487 (Dec. 1992): Where a conflict arises between the employer and the employee, an attorney may withdraw from representation of the employee and continue to represent the employer as long as both employer and employee were advised of the potential adverse consequences of a joint representation


Licensing: Why important?

• Potential basis for attack on privilege See Gucci America, Inc. v. Guess?, Inc., No. 09-cv-4373 (S.D.N.Y. Apr. 8, 2010) (Gucci I); No. 09-cv-4373 (S.D.N.Y. Jan. 3, 2011) (Gucci II); Fin. Tech. Int’l, Inc. v. Smith, 49 Fed. R. Serv. 3d 961 (S.D.N.Y. 2000)

• Prohibitions against unauthorized practice of law

See Model R. Prof’l Conduct 5.5; Tex. Disciplinary R. Prof’l Conduct 5.05.


Licensing Scandals


Confidentiality

If client doesn’t intend or expect information to be kept confidential, it isn’t privileged

Security prospectuses

Tax returns

Filings with regulatory agencies

Press releases


“Transaction Work Product” - Privileged?

• Material in corporate lawyer’s files: draft contracts, prospectus, by-laws, opinion letters

• General rule: Do not expect it to be privileged

• Exception: Drafts that contain confidential information that was not included in the final version

• If circulated to bankers, lawyers on other side, it is not privileged

• Practice Tip: Avoid distributing privileged material to outside third-parties


Work Product Doctrine


What Qualifies?

• Prepared in anticipation of litigation or for trial

• Prepared by party, attorneys, and other representatives of party or attorneys


Prepared in Anticipation of Litigation

Timing + Motivation

• Litigation must be pendingor threatened or at least very likely (according to the most liberal approach)

• Information motivated bylitigation

Not prepared in ordinary course of businessWould have been prepared absent litigation: not protected


Case Study: Broadcom

Protected as Attorney-Client Privileged?

Protected as Work Product?


Waiver


Voluntary Disclosure

• Attorney-client PrivilegeAny waiver to non-privileged person = waiver

• Work productWaiver to adversary or conduit to adversary = waiver

• Example: Auditors


“Limited” or “Selective” Waiver

• Disclosure to adversary in litigation for tactical reason, such as settlement

• Does it work?WaiverEven with confidentiality agreementCan’t pick and choose

• Proposed Fed. R. Evid. 502 dealt with this, but failed


Waiver: Scope and Implications

• Attorney-client privilege: subject matter waiver often applies

• Opinion work product: typically no subject matter waiver

• Strategic implicationsThis stuff isn’t so bad. (But what about the other stuff?)“Horse out of the barn”Remember other cases, even ones not filed yet


Inadvertent Production

“Oops! Can I have that back?”

• Fed. R. Evid. 502

• Fed. R. Civ. P. 26(b)(5)

• Tex. R. Civ. P. 193.3(d)


Inadvertent Production: Ethics

Cooperation:

Model Rules of Prof’l Conduct R. 3.2, 4.4Texas Disciplinary Rules of Prof’l Conduct R. 3.02, 3.04


Owner of the Privilege


Who Owns the Privilege?

• Attorney-client privilege: the client, and only the client

• Work ProductAttorney has independent right to protect mental impressions (general rule)Default: Client owns everything it paid forAttorney must show good cause to keep work product confidential from client


Closing Thoughts

• Just because you’re a lawyer, not everything you say or write is privileged

• Even truly privileged and work product documents may see the light of day

Client may see themJudge may see them

• Selective disclosure often doesn’t work: consider the consequences of waiver before you do it


Questions?

[email protected]@Sutherland.com

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