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

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C. Corporate InvestigationsIt is common for corporationsto conduct internal investigationsregarding matters that come tothe attention of management.The materials created during theinvestigation are often later soughtby a government subpoena or civildiscovery request.While many communicationsregarding an internal investigationmay be privileged, there is no absoluteprotection over the facts garneredduring an internal investigation. Asfor the communications themselves,the attorney-client privilege doesnot apply unless the predominantintention of the communication is toobtain or to offer legal advice. 77 Bycontrast, the work product protectionmay be preserved even if a substantialportion of the investigative documentrelates solely to business matters. 78When reviewing privilege claimsasserted over communications frominvestigations, courts will examinewhether the investigation wasconducted primarily or solely for thepurpose of rendering legal adviceversus business advice 79 ; whetherthe investigation was conducted byan attorney providing legal advicerather than by an attorney actingsolely as an investigator or by nonlegalpersonnel 80 ; and whether theinvestigation was conducted inanticipation of imminent litigation oras a routine matter in response to thealways present concern that litigationis possible. 81A critical component of mostinternal investigations is interviewingemployees regarding their knowledgeof relevant events. Memorandagenerated by interviews conductedin anticipation of litigation generallyare deemed work product. However,verbatim or near verbatim statements(i.e., notes that attempt to trackthe actual statements made bythe witnesses) often are held to bediscoverable because the opposingparty demonstrates substantial needand undue hardship with respect tothe witness statements. Therefore, itis preferable for witness interviews tobe drafted as summaries of witnessstatements that do not attempt torecite any statements verbatim. 82Courts have allowed privilegeto attach in certain circumstanceswhere non-legal employees act at thebehest and direction of an attorney,the boundaries of which are factspecificand often are disputed.For example, courts frequentlyhave extended the attorney-clientprivilege to communications madeto investigators who have providednecessary assistance to attorneysand to interviews between in-housecounsel and employees. 83While an investigator’scommunications with in-housecounsel made in preparation forlitigation are usually protectedby the work product doctrine, 84investigations “prepared in theordinary course of business” usuallyare not. 85 For example, the MissouriCourt of Appeals decided aninvestigator’s communications within-house counsel for the Board ofHealing Arts were not privileged eventhough the corporation’s in-housecounsel was present when the boardcommenced the investigation, advisedthe board’s staff on how to conductthe investigation, communicatedwith the investigator throughout theinvestigation, and reviewed evidenceobtained in the investigation. 86 Thecourt concluded that the attorney’sinvolvement in the investigationdid not shield the investigativereports from discovery, noting thatonly actual, direct attorney-clientMarch-April 2012 / 87
communications are privileged. 87Because the board regularly investigatedcomplaints in its ordinary course ofbusiness, the attorney-client privilegedid not apply.Corporations concerned aboutmaintaining the confidentiality ofinvestigative materials should considerdelegating investigations to outsideor in-house counsel, rather than tonon-legal personnel. 88 Unless thereis a compelling reason to do so, thecompany should not take verbatimstatements or have statements signedby employee witnesses over which theyintend to assert the privilege. Instead,counsel should consider summarizinginformation provided by witnesses anddrafting memoranda that weave inthe attorney’s mental impressions andopinions. 89C. Disclosure to GovernmentEntitiesRecently, there has been increasedpressure on corporations to discloseprivileged information to be deemed“fully cooperative” with governmentinvestigations. For example, inAugust 2011, the Securities andExchange Commission (SEC) revisedits Enforcement Manual to allowinvestigators to request privilege waiverswith senior agency approval. 90 However,a voluntary presentation of privilegedinformation to the government, even ifintended to avoid the filing of charges,can waive the attorney-client privilege.The 8th Circuit presently recognizesa selective waiver doctrine, underwhich producing internal reports togovernment agencies may not waiveattorney-client privilege as to privatelitigants. 91 However, the clear trend– and the majority rule under federallaw – is that waiver to one governmentagency may constitute waiver to all,including other government agenciesand private litigation adversaries. 92For example, in In re Sulfuric AcidAntitrust Litigation, the court heldthat defendants waived any claim ofprivilege by producing documents tothe Department of Justice pursuant to asubpoena. 93 In many courts, disclosureto the government waives the privilegeeven when the disclosing party hasentered into a confidentiality agreementwith the government. 94Although disclosure of privilegedmaterials to the government can waivethe attorney-client privilege and workproduct protections, Federal Rule ofEvidence 502 may limit the scope ofsuch waiver. Under Federal Rule ofEvidence 502(a),when [a] disclosure made ina federal proceeding or to afederal office or agency …waives the attorney-clientprivilege or work-productprotection, the waiverextends to an undisclosedcommunication or informationin a federal proceeding only if:(1) the waiver is intentional;(2) the disclosed andundisclosed ucommunications… concern the same subjectmatter; and(3) they ought in fairness to beconsidered together.Also, the rules provide that aninadvertent disclosure of protectedinformation will not result in a subjectmatter waiver except in a situationwhere a party intentionally putsprotected information into litigation ina selective and misleading manner. 95D. Communication with an InsurerWhere an insured communicateswith an insurer for the purposeof establishing a defense, severalcourts have held that an insured’scommunication with its insurerremains privileged, at least where thecommunication is made for the specificpurpose of obtaining legal advicefor the provision of counsel. 96 Othercourts have rejected the idea that theinterests of the insured and insurer aresufficiently aligned for the privilegeto be maintained. 97 Some courts haverejected the extension of a privilegeto insurer/insured communicationson the additional ground that suchcommunications are made for a businessand not a legal purpose. 98Missouri, however, has found thatcommunications between an insuredand its liability insurer generally areprivileged. 99 This privilege covers abroad range of communications. Forexample, it covers any communicationsbetween a client and attorney even if noaction has been filed against the insuredand no attorney has been employedin reference to the occurrence. 100An incident report provided to aninsurer will be found to be privilegedif it was made in contemplation ofits use in litigation. 101 This insured/insurer privilege, however, is limited tocommunications as opposed to facts orbusiness records. 102 It may be invokedby the insurer or the insured but can bewaived only by the insured. 103E. Joint Defense PrivilegeThe joint defense privilege is similar,though not identical, to the attorney-clientprivilege. Courts consider it a logicalextension of the attorney-client privilegeand an exception to the waiver doctrinediscussed above. 104 When the same attorneyrepresents two parties, co-clientsusually may share communications withtheir common lawyer under the “jointdefense privilege” without destroyingconfidentiality. 105 The joint defenseprivilege “serves to protect the confidentialityof communications passing fromone party to the attorney for anotherparty where joint defense effort or strategyhas been decided upon and undertakenby the parties and their respectivecounsel.” 106 While not necessary, writtenjoint defense agreements are the bestevidence for proving the existence of ajoint defense agreement. 107The joint defense privilege onlyapplies where the parties seek88 / Journal of the MISSOURI BAR
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