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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? After Upjohn, how to secure ACP?

— Know facts to take appropriate internal action and decide — Specifically authorize an attorney in writing to
whether to self-report conduct the investigation for legal purposes
— Know facts to persuade government not ot investigate — Restrict the investigation to employees
— Take remedial action and craft defenses — Make clear in writing that it’s for securing legal
— Law may require an investigation advice
— May need to take action to avoid committing further — Give warnings about confidentiality
wrongs
— Keep the investigation confidential
— Part of an effective compliance program
— Have attorneys conduct the investigation
— Directors may fact civil liability for failing to follow-up on
“red flags”

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Scope Issues Upjohn Co. v. U.S.

— WPD applies only to documents prepared “in — Facts: An independent auditor found that an Upjohn
anticipation of litigation” subsidiary had bribed foreign subsidiaries; Upjohn
decided to conduct an internal investigation; as part of
¡ Hypo: Suppose CEO asks GC to prepare memo assessing that investigation, Upjohn’s general counsel sent out a
possible criminal liability for bribery so they can decide questionnaire to foreign managers; managers were
whether they can afford a new advertising campaign. instructed to treat the questionnaire as highly
¡ Litigation need not be actually pending confidential; Upjohn voluntarily disclosed the payments
¡ Prospect for litigation must be “real and specific” to the SEC, along with a list of managers who had
¡ Circuit split on whether litigation must be “primary purpose” responded to the questionnaire; the IRS issued a
¡ Hypo: Suppose GC previously drafted memo laying out his
summons for all files relevant to the investigation, and
theory of FCPA. Later possible bribery concerns arose. Upjohn declined on ACP and WPD grounds
— Issue: Do corporations get ACP and WPD.
— ACP does not cover business advice
— Holding: Yes.
¡ Business and legal advice often mixed

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Summary 1 Crime Fraud Exception

— ACP (“legal” communications) and WPP (work — No ACP or WPP if:

product “in anticipation of litigation”) ¡ Client made or received the communication with the intent to
further an unlawful or fraudulent act, and
— Help by corps (Upjohn)
¡ (Depending on jx) The client carried out unlawful or
¡ For same reasons we give to individuals
fraudulent act
¡ Without 5th , only defense against prosecutors
— Procedure
— How to protect (use atty, keep confidential, etc.) ¡ 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 — General Rule: Corporation holds ACP with corporate-
hired attorney; so only corp can waive
— Facts: Company withheld two documents, one of which
— Some courts recognize ACP between individual and
was a memo reflecting conversations between the vice corporate counsel if:
president and general counsel about campaign finance ¡ Employee approached corporate counsel for legal advice,
laws, and the other a memo of the general counsel ¡ Employee made clear he was seeking advice as an individual,
¡ Counsel saw fit to communicate with employee in his individual
— Takeaways: capacity,
¡ Keep track of timing ¡ The conversations were confidential, and
÷ If crime occurred before advice, no crime fraud exception
¡ The conversations did not concern matters within the company or
the general affairs of the company
÷ Temporal proximity between advice and crime not enough
¡ Note: The employee has the burden
¡ Keep track of who client is and who committed crime — Upjohn letters minimize understanding; ethical duty to
÷ Vice President ≠ corporation 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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