An Essential Guide to Attorney-Client Privilege ... - the Missouri Bar

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These issues are even more complexfor in-house counsel, who frequentlyserve in many capacities, sometimessimultaneously. In-house counselmust determine the identity of theclient before engaging in confidentialand sensitive communications thatare intended to be privileged, beaware that the disclosure of protectedinformation to auditors and governmentofficials may waive the privilege, andtake steps to properly label privilegedcorrespondence and other documents toprevent inadvertent disclosure to thirdparties.Through thoughtful considerationof the issues that may arise during theirwork as in-house attorneys, and bybeing aware of the principles governingattorney-client privilege law in eachrelevant jurisdiction, in-house counselwill better protect the entities they serveand avoid potentially embarrassing andexpensive professional pitfalls.Endnotes1 Brian J. Christensen is a partner in theLabor and Employment and Litigation Groupsat Spencer, Fane, Britt & Browne, LLP anda former vice-president and associate generalcounsel for Litigation, Legal Systems andRecords Policy at H&R Block in Kansas City.Bret G. Wilson is the vice-president and generalcounsel of the National Beef Packing Company,LLC in Kansas City. The authors wish to extendtheir gratitude to Denise Portnoy, an associateat Spencer, Fane, Britt & Browne, LLP, for herinvaluable contribution to this article.2 See, e.g., United States v. Textron, Inc., 577F.3d 21 (1st Cir. 2009).3 Swidler & Berlin v. United States, 524 U.S.399, 403 (1998).4 State ex rel. Polytech, Inc. v. Voorhees, 895S.W.2d 13, 14 (Mo. banc 1995).5 Mohawk Indus., Inc. v. Carpenter, 130 S.Ct.599, 606 (2009).6 State v. Fingers, 564 S.W.2d 579, 582 (Mo.App. S.D. 1978); see also Wilcox v. Coons, 220S.W.2d 15, 18 (Mo. banc 1949).7 See State v. Pride, 1 S.W.3d 494, 505 (Mo.App. W.D. 1999); State v. Smith, 979 S.W.2d215, 220 (Mo. App. S.D. 1998).8 State v. Longo, 789 S.W.2d at 812, 815 (Mo.App. E.D. 1990).9 Polish Roman Catholic St. Stanislaus v.Hettenbach, 303 S.W.3d 591, 601 (Mo. App.E.D. 2010); Collins v. Mo. Bar Plan, 157 S.W.3d726, 736 (Mo. App. W.D. 2005).10 See Hettenbach, 303 S.W.3d at 601.11 Longo, 789 S.W.2d at 816; Pride, 1S.W.3d at 505 (no attorney-client privilege forconversation that took place after attorney-clientrelationship terminated).12 See Hilgedick v. Nothstine, 289 S.W. 939,941 (Mo. 1926).13 State Farm Mut. Auto. Ins. Co. v. Allen, 744S.W.2d 782, 787 (Mo. banc 1988); State ex rel.Headrick v. Bailey, 278 S.W.2d 737, 740 (Mo.banc 1955).14 State v. Longo, 789 S.W.2d 812, 815 (Mo.App. E.D. 1990); State ex rel. Great Am. Ins. Co.v. Smith, 574 S.W.2d 379, 383 (Mo. banc 1978).15 Longo, 789 S.W.2d at 815; see also GreatAm. Ins. Co., 574 S.W.2d at 384 (quoting withapproval ALI Model Code of Evidence, Rule209(d) (1942), and Comment on Clause (d));State ex rel. Syntex Agri-Bus., Inc. v. Adolf, 700S.W.2d 886, 888 (Mo. App. E.D. 1985).16 Longo at 815.17 Id.18 Syntex Agri-Bus., Inc., 700 S.W.2d at 889.19 Weinshenk v. Sullivan, 100 S.W.2d 66, 70(Mo. App. E.D. 1937).20 Upjohn Co. v. United States, 449 U.S. 383,396 (1981).21 Voorhees, 895 S.W.2d at 14 (citing GreatAm. Ins. Co., 574 S.W.2d at 385 n.6).22 McCaffrey v. Estate of Brennan, 533 S.W.2d264, 267 (Mo. App. E.D. 1976); In re Marriageof Hershewe, 931 S.W.2d 198, 201-02 (Mo. App.S.D. 1996).23 See Tyler v. Hall, 17 S.W. 319, 321 (Mo.1891); cf. Canty v. Halpin, 242 S.W. 94, 97 (Mo.banc 1922) (privilege did not bar testimony ofattorney’s wife, who was present when attorneyinterviewed client, because wife “was not anintermediary employed by her husband for thepurpose of facilitating communications betweenattorney and client”).24 State v. Hardin, 558 S.W.2d 804, 807 (Mo.App. W.D. 1977).25 State v. Panter, 536 S.W.2d 481, 484 (Mo.App. W.D. 1976).26 State v. Carter, 641 S.W.2d 54, 57 (Mo.banc 1982), cert. denied, 461 U.S. 932 (1983).27 See Ratcliff v. Sprint Mo., Inc., 261 S.W.3d534, 549 (Mo. App. W.D. 2008).28 State ex rel. Tillman v. Copeland, 271S.W.3d 42, 45 (Mo. App. S.D. 2008); State exrel. Mo. Highways & Transp. Comm’n v. Legere,706 S.W.2d 560, 566 (Mo. App. S.D. 1986); seealso State ex rel. Cain v. Barker, 540 S.W.2d 50,57-8 (Mo. banc 1976).29 State ex rel. Ford Motor Co. v. Westbrooke,151 S.W.3d 364, 367 (Mo. banc 2004); see alsoState Esquire rel. Friedman v. Provaznik, 668S.W.2d 76, 80 (Mo. banc 1984).30 Westbrooke, 151 S.W. at 366 n.3.31 See In re Grand Jury Subpoena, 357 F.3d900, 907-09 (9th Cir. 2004); Maine v. U.S. Dep’tof the Interior, 298 F.3d 60, 69 (1st Cir. 2002);United States v. Adlman, 134 F.3d 1194 (2d Cir.1998); Nat’l Union Fire Ins. Co. v. Murray SheetMetal Co., 967 F.2d 980, 984 (4th Cir. 1992);Binks Mfg. Co. v. Nat’l Presto Indus., Inc., 709F.2d 1109, 1118-19 (7th Cir. 1983); Simon v.G.D. Searle & Co., 816 F.2d 397, 401 (8th Cir.1987).32 See Simon, 816 F.2d at 401, quoting 8Charles Alan Wright, Et Al., FederalPractice & Procedure, § 2024 (1970).33 Rule 56.01(b)(1) (emphasis added).34 Id.35 Diehl v. Fred Weber, Inc., 309 S.W.3d 309,323 (Mo. App. E.D. 2010).36 Diehl, 309 S.W.3d at 323-24.37 Id.38 Id.39 Bd. of Registration for the Healing Arts v.Spinden, 798 S.W.2d 472, 478 (Mo. App. W.D.1990).40 State ex rel. Day v. Patterson, 773 S.W.2d224, 228 (Mo. App. E.D. 1989).41 Maher v. Maher, 951 S.W.2d 669, 674-75(Mo. App. E.D. 1997).42 Brief and Appendix of Respondent at29, State ex rel. Reif v. Jamison, SC88987 (Mo.2008); available at http://www.courts.mo.gov/SUP/index.nsf/0/d6fc972c141cfaf6862574cd0071690b/$FILE/SC88987_Missouri_Baptist_Medical_Center_Brief.pdf; see also State ex rel.Atchison, Topeka & Santa Fe Ry. Co., 898 S.W.2d550 (Mo. banc 1995).43 Westbrooke, 151 S.W.3d at 367.44 Diehl, 309 S.W.3d at 323; Edwards v. Mo.State Bd. of Chiropractic Examiners, 85 S.W.3d10, 26 (Mo. App. W.D. 2002).45 Edwards, 85 S.W.3d at 26.46 See Porter ex rel. Alyward v. Gottschall, 615S.W.2d 63 (Mo. banc 1981).47 Upjohn Co. v. United States, 449 U.S. 383(1981).48 Gucci America, Inc. v. Guess?, Inc., 271F.R.D. 58, 70 (S.D. N.Y. 2010).49 See Upjohn, 449 U.S. at 395; In re GrandJury Subpoena Duces Tecum, 731 F.2d 1032, 1037(2d. Cir. 1984).50 See e.g. Rowe v. E.I. DuPont de Nemours& Co., Civil Nos. 06-1810-RMB-AMD,06-3080-RMB-AMD, 2008 WL 4514092,at *7-8 (D. N.J. Sept. 30, 2008) (utilizing“‘predominantly legal’ test” and requiringshowing that in-house counsel were engagedin “predominantly legal” communications forapplication of privilege); In re Seroquel Prods.Liab. Litig., No: 6:06-md-1769-Orl-22DAB,2008 WL 1995058, at *4 (M.D. Fla. May7, 2008 ) (defendant did not meet burden ofshowing that communications with in-housecounsel related to legal matters); In re VioxxProd. Liab. Litig., 501 F.Supp.2d 789, 797 (E.D.La. 2007) (recognizing difficulty of applyingattorney-client privilege to “modern corporatecounsel [who] have become involved in all facetsof” corporations and requiring “clear showing”in-house counsel “was acting in his professionalMarch-April 2012 / 91
legal capacity.”).51 Radiant Burners, Inc. v. Am. Gas Ass’n,320 F.2d 314 (7th Cir. 1963).52 449 U.S. 383 (1981).53 Id. at 394-95.54 Id.55 Diversified Indus., Inc. v. Meredith,572 F.2d 596, 608-09 (8th Cir. 1977).See Restatement (Third) of the LawGoverning Lawyers § 73 (2000).56 Diversified Indus., Inc., 572 F.2d at 609.57 See generally Brian E. Hamilton,Conflicts, Disparity and Indecision: TheUnsettled Corporate Attorney-Client Privilege,1997 Ann. Surv. Am. L. 629 (1999).58 Id.59 Id.60 Resurrection Healthcare & Factory Mut.Ins. Co. v. GE Health Care, No. 07 C 5980,2009 WL 691286 (N.D. Ill. Mar. 16, 2009).61 Id.62 DeLaporte v. Robey Bldg. Supply, Inc., 812S.W.2d 526, 531 (Mo. App. E.D. 1991) citingDiversified Indus., Inc., 572 F.2d at 609.63 DeLaporte, 812 S.W.2d at 531.64 See, e.g., Allianz Ins. Co. v. GuidantCorp., 869 N.E.2d 1042, 1055 (Ill. App.Ct. 2007); Sterling Fin. Mgmt., L.P. v. UBSPaineWebber, Inc., 782 N.E.2d 895 (Ill.App. Ct. 2002) (applying Illinois law andcontrol group test over New York law basedon the court’s analysis under Comment dof the Restatement); State v. Heaney, 689N.W.2d 168, 174-75 (Minn. 2004) (adoptingRestatement (Second) and identifying otherjurisdictions that have done so).65 Palmer v. Fisher, 228 F.2d 603 (7thCir.1955), cert. den. 351 U.S. 965 (1956);Engl v. Aetna Life Ins. Co., 139 F.2d 469(2d Cir. 1943); Merlin v. Aetna Life Ins. Co.,180 F.Supp. 90 (S.D. N.Y.1960); Munzer v.Swedish Am. Line, 35 F.Supp. 493 (S.D. N.Y.1940); Spray Prods. Corp. v. Strouse, Inc., 31F.R.D. 244 (E.D. Pa.1962); Padovani v. Liggett& Meyers Tobacco Co., 23 F.R.D. 255 (E.D.N.Y. 1959); Berdon v. McDuff, 15 F.R.D. 29(E.D. Mich. 1953); cf. Ex parte Sparrow, 14F.R.D. 351 (N.D. Ala.1953).66 Connolly Data Sys., Inc. v. Victor Techs.,114 F.R.D. 89, 91-92 (S.D. Cal. 1987)(where communications took place in andparties to the communications were locatedin California, such that client’s expectation ofconfidentiality would have stemmed from thelaw of California, and not law of the forum inwhich action was pending, governed privilegeissue); Ford Motor Co. v. Leggat, 904 S.W.2d643, 646-48 (Tex. 1995) (law of Michigan,rather than that of forum state, applied tomanufacturer’s claim that report by generalcounsel to manufacturer’s policy and strategycommittee was subject to attorney-clientprivilege where Michigan had most significantrelationship to the communication).67 An analogous problem may arise when a92 / Journal of the MISSOURI BARdeposition is sought to be taken in a state otherthan the state of trial. To date, the courts ofthe deposition state generally have refused toadmit evidence of a communication privilegedunder their local law, but it would appear thatin all of these cases the deposition state wasalso the state of most significant relationshipwith the communication. See e.g. In Re Walsh,243 N.Y.S.2d 325 (N.Y. App. Div. 1963);Application of Queen, 233 N.Y.S.2d 798 (N.Y.App. Div. 1962); In re Franklin WashingtonTrust Co., 148 N.Y.S.2d 731 (N.Y. App. Div.1956).68 Gray v. Bicknell, 86 F.3d 1472, 1482 (8thCir. 1996); Profit Mgmt Dev., Inc. v. Jacobson,Brandvik & Anderson, Ltd., 721 N.E.2d 826,835 (Ill. App. Ct. 1999).69 See e.g. Ryan v. Gifford, Civil Action No.2213-CC, 2007 WL 4259557, at *3 (Del.Ch. Nov. 30, 2007) (“attorney-client privilegeprotects communications between [outsidecounsel] and its client, the Special Committee”absent waiver or good cause); In re BCE West,L.P., No. M-8-85, 2000 WL 1239117, at *2(S.D. N.Y. August 31, 2000).70 Id.71 See Ryan v. Gifford, Civil Action No.2213-CC, 2008 WL 43699, at *5 (Del. Ch.Jan. 2, 2008) (presence of board membersacting in their personal capacity duringcounsel’s presentation waived the privilege);but see In re BCE West, L.P., No. M-8-85,2000 WL 1239117, at *2 (S.D. N.Y. Aug. 31,2000) (communications with the board werepart of transaction process and did not destroythe special committee’s privilege).72 254 F.R.D. 371, 378 (N.D. Cal. 2008).73 Couch v. United States, 409 U.S. 322(1973); see Cavallaro v. United States, 284F.3d 236, 246 (1st Cir. 2002); United States v.Frederick, 182 F.3d 496, 502 (7th Cir. 1999);see e.g. In re Honeywell Int’l, Inc. Sec. Litig., 230F.R.D. 293, 297 (S.D. N.Y. 2003) (disclosureto company’s auditor waives the attorney-clientprivilege); see Medinol, Ltd. v. Boston ScientificCorp, 214 F.R.D. 113 (S.D. N.Y 2002).74 Section 326.322.1, RSMo Supp. 2011.75 Ayers Oil Co. v. Am. Bus. Brokers, Inc.,No. 2:09 CV 02 DDN, 2009 WL 2592154,at *2 (E.D. Mo. Aug. 20, 2009), citing Sears,Roebuck & Co. v. Gussin, 714 A.2d 188, 193(Md. 1998); Fed. Ins. Co. v. Arthur Anderson &Co., 816 S.W.2d 328, 331 (Tenn. 1991).76 Semi-Materials Co., Ltd. v. MEMC Elec.Materials, Inc., No: 4:06CV1426 FRB, 2010WL 3038086, at *3 (E.D. Mo. Aug. 3, 2010)(addressing applicability of accountant-clientprivilege to relationship between externalauditor and corporation, but holding thatprivilege had been waived to the extentdefendant invoked the advice of the externalauditor as a defense to plaintiff’s claims in thecase).77 Diversified Indus., Inc., 572 F.2d at 603.78 Id.79 Diversified Indus., Inc., 572 F.2d at 603(report prepared by outside counsel basedon interviews with corporate employees notprotected by attorney-client privilege becausecounsel “was employed solely for the purposeof making an investigation of facts and tomake business recommendations with respectto future conduct of Diversified”); see alsoNavigant Consulting, Inc. v. Wilkinson, 220F.R.D. 467, 476 (N.D. Tex. 2004).80 Cataldo v. Nat’l Grid USA, No.20065120, 2008 WL 496718, at *6 (Mass.Super. Ct. Feb. 15, 2008) (concludingthat investigation report prepared underthe direction of in-house counsel was notprivileged because the substance of the reportwas very similar to a parallel investigationreport prepared by business personnel,members of the two investigation teamsoverlapped, and the independence of the teamswas questionable.81 In re Syncor ERISA Litig., 229 F.R.D.636, 645 (C.D. Cal. 2005) (documentsprepared during internal investigation “werecreated with the intent to disclose … tothe Government [and] … thus were neverprivileged.”); In re Aqua Dots Prods. Liab.Litig., 270 F.R.D. 322, 327-28 (N.D. Ill.2010) (whether the predominant intentionof the party is to obtain legal advice is a factintensiveinquiry and high level of detaildemanded from the party).82 See Coito v. Super. Ct., 106 Cal. Rptr. 3d342, 351 (Cal. Ct. App. 2010) (“hold[ing] thatwritten and recorded witness statements, [evenif] taken by counsel, are not attorney workproduct.”); but see Sandra T.E. v. S. BerwynSch. Dist 100, 600 F.3d 612, 622-23 (7thCir. 2009) (finding that use for impeachmentof notes of attorneys’ interviews with schooldistrict employees during investigation ofsexual abuse was not substantial need); Treatv. Tom Kelley Buick Pontiac GMC, Inc., No.1:08-CV-173, 2009 WL 1543651, at *9 (N.D.Ind. June 2, 2009) (holding witness interviewnotes “reflecting counsel’s mental impressionsabout what counsel deemed important” wereprotected work product).83 See e.g. United States v. McPartlin,595 F.2d 1321, 1335-36 (7th Cir. 1979)(statements made to investigator acting asattorney’s agents); Sanchez v. Matta, 229F.R.D. 649, 660 (D. N.M. 2004) (employeecommunications to investigator acting as agentof employer’s counsel); Welland v. Trainer, No.00 Civ. 00738(JSM), 2001 WL 1154666, at*3 (S.D. N.Y Oct. 1, 2001) (employee servingas investigator was attorney’s agent); Carter v.Cornell Univ., 173 F.R.D. 92, 95 (S.D. N.Y.1997) (communications to employee whoseduties normally did not include conductinginvestigations for in-house counsel specificallyasked to conduct investigation), aff’d 159 F.3d1345 (2d. Cir. 1998) (summary order).84 See, Edwards, 85 S.W.3d at 27.
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