Waiver of the attorney-client privilege and work product protection from Thompson to McNulty: A distinction without a difference?

University of Cincinnati Law Review

Volumn 76, Issue 3, 2008, Pages 1093-1118

  Weigand, Stephen ^a  

^a UNIVERSITY OF CINCINNATI   (United States)

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EID: 49849101190     PISSN: 00096881     EISSN: None     Source Type: Journal    
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References (172)

1. See infra Part V.A.
2. Memorandum from Paul J. McNulty, Deputy Attorney General, to Heads of Department Components and United States Attorneys (Dec. 12, 2006), available at http://www.usdoj.gov/dag/speeches/2006/mcnulty_memo.pdf [hereinafter McNulty Memo].
3. Memorandum from Larry D. Thompson, Deputy Attorney General, to Heads of Department Components and United States Attorneys (Jan. 20, 2003), available at http://www.usdoj.gov/dag/cftf/business_organizations.pdf [hereinafter Thompson Memo].
4. Memorandum from Eric Holder, Deputy Attorney General, to All Component Heads and United States Attorneys (June 16, 1999) [hereinafter Holder Memo].
5. See infra Part V.A.
6. See infra Part V.B.
7. Cf. Colin P. Marks, Corporate Investigations, Attorney-Client Privilege, and Selective Waiver: Is a Half-Privilege Worth Having at All?, 30 SEATTLE U. L. REV. 155, 157 (2006) (emphasizing the need for understanding the purposes of the attorney-client privilege and work product protection as a basis on which to evaluate purported problems with governmental agencies' requests for waiver).
8. See Swidler & Berlin v. United States, 524 U.S. 399, 403 (1998); Upjohn Co. v. United States, 449 U.S. 383, 389 (1981).
9. Upjohn, 449 U.S. at 389.
10. Id. at 390.
11. See Hunt v. Blackburn, 128 U.S. 464, 470 (1888) (stating that the attorney's "assistance can only be safely and readily availed of when free from the consequences or the apprehension of disclosure"). See also Trammel v. United States, 445 U.S. 40, 51 (1980) (stating that if the "professional mission is to be carried out," the lawyer must know as much information about the client and the client's reasons for seeking the lawyer's advice).
12. See RESTATEMENT(THIRD) OF THE LAW GOVERNING LAWYERS § 68 cmt. c (2000) (observing that the "law accepts the risks of factual error and injustice in individual cases in deference to the values that the privilege vindicates").
13. See, e.g., Westinghouse Elec. Corp. v. Republic of the Philippines, 951 F.2d 1414, 1423-24 (3d Cir. 1991) (explaining that the attorney-client privilege "protects only those disclosures - necessary to obtain informed legal advice - which might not have been made absent the privilege") (quoting Fisher v. United States, 425 U.S. 391, 403 (1976)); Weil v. Inv./Indicators, Research & Mgmt., Inc., 647 F.2d 18, 24 (9th Cir. 1981) ("Because it impedes full and free discovery of the truth, the attorney-client privilege is strictly construed.").
14. Cavallaro v. United States, 284 F.3d 236, 245 (1st Cir. 2002) (quoting 8 J.H. WIGMORE, EVIDENCE § 2292, at 554 (McNaughton rev. 1961)).
15. See Upjohn Co. v. United States, 449 U.S. 383, 390 (1981) (noting that the Supreme Court has applied the privilege to corporations (citing United States v. Louisville & Nashville R.R. Co., 236 U.S. 318, 336(1915))).
16. Id.
17. Id. at 390-97.
18. Id. at 391-92. (noting that middle-level and lower-level employees may often possess more relevant information than managers or directors, which the attorney needs to provide adequate counsel).
19. See id. at 394-95 (applying the attorney-client privilege to numerous employees' communications with corporate counsel that were made to obtain legal advice).
20. See Cavallaro v. United States, 284 F.3d 236, 245 (1st Cir. 2002) (noting that privilege does not continue to protect communications if the privilege is waived).
21. See United States v. El Paso Co., 682 F.2d 530, 540 (5th Cir. 1982) ("With the destruction of confidentiality goes as well the right to claim the attorney-client privilege.").
22. See In re Auclair, 961 F.2d 65, 69 (5th Cir. 1992) (observing that the presence of a third person removes the intent of confidentiality on which application of the privilege depends).
23. Comment, Stuffing the Rabbit Back into the Hat: Limited Waiver of the Attorney-Client Privilege in an Administrative Agency Investigation, 130 U. PA. L. REV. 1198, 1207 (1982).
24. See Westinghouse Elec. Corp. v. Republic of the Philippines, 951 F.2d 1414, 1423-24 (3d Cir. 1991) (noting that the scope of the privilege is limited only to those communications that would not have been made absent the privilege, and that disclosure of the information to a third party waives the privilege).
25. See United States v. Kovel, 296 F.2d 918, 922 (2d Cir. 1961) (recognizing that disclosure to a non-lawyer could still permit protection of the privilege in limited circumstances).
26. Id. at 921 (holding that the privilege "must include all the persons who act as the attorney's agents").
27. Id. at 922 (noting that the privilege would apply if a lawyer directed a client to make confidential disclosures to an accountant so that the lawyer might be able to provide better legal advice).
28. See United States v. El Paso Co., 682 F.2d 530, 540 (5th Cir. 1982) (noting that disclosure to third parties, including accountants, auditors, and tax analysts, generally constitutes waiver).
29. See In re Antitrust Grand Jury, 805 F.2d 155, 163 (6th Cir. 1986) (noting that the work product doctrine covers "any document prepared in anticipation of litigation by or for the attorney," and may be invoked by either the attorney or the client, unlike the attorney-client privilege, which only the client may assert).
30. See Hickman v. Taylor, 329 U.S. 495, 510 (1947).
31. Id. at 510-11.
32. See Antitrust Grand Jury, 805 F.2d at 163.
33. Id.
34. Id.
35. Id. at 163-64 (noting that federal common law has created an almost absolute protection for opinion work product).
36. FED. R. CIV. P. 26(b)(3).
37. Id.
38. See Hickman v. Taylor, 329 U.S. 495, 510 (1947) ("Not even the most liberal of discovery theories can justify unwarranted inquiries into the files and the mental impressions of an attorney."); see also In re Murphy, 560 F.2d 326, 336 (8th Cir. 1977) (applying Hickman and holding that opinion work product is entitled to substantially greater protection than factual work product, while opining that the exception under Rule 26(b)(3) cannot be invoked to permit an adversary to have access to another attorney's opinion work product).
39. See United States v. Nobles, 422 U.S. 225, 239 (1975).
40. See Shields v. Sturm, Ruger & Co., 864 F.2d 379, 382 (5th Cir. 1989) ("[T]he mere voluntary disclosure to a third person is insufficient in itself to waive the work product privilege.").
41. See Am. Standard, Inc. v. Bendix Corp., 71 F.R.D. 443, 446 (W.D. Mo. 1976).
42. See GAF Corp. v. Eastman Kodak Co., 85 F.R.D. 46, 51-52 (S.D.N.Y. 1979).
43. See Nobles, 422 U.S. at 239.
44. See Harding v. Dana Transport, Inc., 914 F. Supp. 1084, 1099 (D.N.J. 1996) (finding an implied waiver of work product protection where defendant company asserted affirmative defense based on its investigation, requiring that defendant company product underlying documentation to plaintiff of investigation).
45. Handgards, Inc. v. Johnson & Johnson, 413 F. Supp. 926, 929 (N.D. Cal. 1976) ("The work product doctrine is an independent source of immunity from discovery, separate and distinct from the attorney-client privilege. Therefore, defendants' waiver of the attorney-client privilege does not necessarily mean that the protection afforded by the work product doctrine is also breached.") (citation omitted).
46. See infra Part V.C.
47. 572 F.2d 596 (8th Cir. 1977).
48. Id. at 599.
49. Id.
50. Id. at 611.
51. Id.
52. See id.
53. See infra notes 62-67 and accompanying text.
54. See, e.g., Dellwood Farms, Inc. v. Cargill, Inc., 128 F.3d 1122, 1127 (7th Cir. 1997).
55. 665 F.2d 1214, 1219 (D.C. Cir. 1981).
56. Id. at 1215.
57. Id. at 1220-21.
58. Id. at 1219.
59. Id. at 1220 (commenting that "we cannot see how the availability of a 'limited waiver' would serve the interests underlying the common law privilege for confidential communications between attorney and client").
60. Id. at 1216.
61. Id. at 1221.
62. United States v. Mass. Inst. of Tech., 129 F.3d 681, 686 (1st Cir. 1997) (stating that the creation of exceptions to waiver upon disclosure to third parties has "no logical terminus").
63. In re Steinhardt Partners, L.P., 9 F.3d 230, 235 (2d Cir. 1993) (citing Permian and holding that "selective assertion of privilege should not be merely another brush on an attorney's palette, utilized and manipulated to gain tactical or strategic advantage").
64. Westinghouse Elec. Corp. v. Republic of the Philippines, 951 F.2d 1414, 1425 (3d Cir. 1991) (refusing to adopt selective waiver on the grounds that the doctrine would not promote the purpose of the attorney-client privilege, namely full and frank communication between an attorney and client, and noting that instead the selective waiver doctrine would only encourage enhanced communication with government agencies, which would be a purpose not related to the privilege and would thereby extend the privilege too far).
65. In re Martin Marietta Corp., 856 F.2d 619, 623 (4th Cir. 1988) (holding that the Fourth Circuit has not recognized the concept of limited waiver, as any communication to an attorney that is not intended to remain confidential is not protected by the attorney-client privilege).
66. In re Columbia/HCA Healthcare Corp. Billing Practices Litig., 293 F.3d 289, 302-03 (6th Cir. 2002) (opining that the attorney-client privilege was never intended to foster communication between parties and the government, and the privilege is not to be treated as another means by which an attorney may gain a tactical advantage by picking and choosing his opponents).
67. Genentech, Inc. v. U.S. Int'l Trade Comm'n, 122 F.3d 1409, 1416-17 (Fed. Cir. 1997) (acknowledging that the Federal Circuit has never recognized selective waiver and is not aware of any compelling reason to adopt the doctrine, and therefore, the Federal Circuit upheld the traditional notion of waiver, stating, "Once the attorney-client privilege has been waived, the privilege is generally lost for all purposes and in all forums.").
68. In re Qwest Commc'ns Int'l Inc. Sec. Litig., 450 F.3d 1179, 1192 (10th Cir. 2006).
69. See id.
70. Id. at 1181-82.
71. Id.
72. Id. at 1201.
73. See infra Part IV.A-B.
74. See infra Part IV.D.
75. AM. CHEMISTRY COUNCIL ET AL., THE DECLINE OF THE ATTORNEY-CLIENT PRIVILEGE IN THE CORPORATE CONTEXT: SURVEY RESULTS 3 (2006), available at http://www.acc.com/Surveys/attyclient2.pdf [hereinafter SURVEY].
76. Holder Memo, supra note 4. See also Lance Cole, Revoking Our Privileges: Federal Law Enforcement's Multi-Front Assault on the Attorney-Client Privilege (and Why It Is Misguided), 48 VILL. L. REV. 469, 542 (2003) (discussing the creation and purpose of the Holder Memo).
77. See Holder Memo, supra note 4, § I.A.
78. Id. § II.B.
79. Id. § II.A. (internal cross-references omitted).
80. Id.
81. Thompson Memo, supra note 3.
82. Id. § II.A.
83. See Nolan Mitchell, Note, Preserving the Privilege: Codification of Selective Waiver and the Limits of Federal Power Over State Courts, 86 B.U. L. REV. 691, 695 (2006). See also Introduction to Thompson Memo, supra note 3 (stating that the focus of the revisions to the Holder Memo was the "increased emphasis on and scrutiny of the authenticity of a corporation's cooperation").
84. Thompson Memo, supra note 3, § VI.B.
85. Id. See also Holder Memo, supra note 4, § VI.B.
86. See Marks, supra note 7, at 174.
87. Thompson Memo, supra note 3, § VI.B.
88. Id.
89. Id.
90. See Marks, supra note 7, at 175-77 (contending that in the wake of Holder and Thompson, government agencies posses the authority to coerce waiver).
91. See Carmen Couden, Note, The Thompson Memorandum: A Revised Solution or Just a Problem?, 30 J. CORP. L. 405, 415-16 (2005) (asserting that requests for "voluntary" disclosures are essentially mandatory).
92. SURVEY, supra note 75, at 3.
93. Id.
94. Id.
95. Id. at 4.
96. Id.
97. Letter from Former Senior Justice Department Officials to Alberto Gonzales, Attorney General (Sept. 5, 2006) [hereinafter Gonzales Letter] (urging preservation of the attorney-client privilege and work product protection by altering Thompson Memo policies). See also Conference of Chief Justices, Res. 9: In Support of the Establishment of State Committees on Attorney-Client Privilege (Aug. 2, 2006), available at http://ccj.ncsc.dni.us/ resol9StateCommitteesOnAttorneyClient Privilege.html (noting that "some law enforcement and regulatory authorities have adopted policies, practices and procedures that could have the effect of eroding the attorney-client privilege and work-product doctrine").
98. Gonzales Letter, supra note 97, at 1.
99. Id.
100. Id.
101. Id. at 2.
102. Id.
103. Id.
104. Id.
105. United States v. Stein, 435 F. Supp. 2d 330, 364-65 (S.D.N.Y. 2006).
106. Id. at 336.
107. McNulty Memo, supra note 2.
108. Introduction to McNulty Memo, supra note 2.
109. Id.
110. See generally Executive Summary of DOJ McNulty Memorandum, available at http://www.abanet.org/poladv/priorities/privilegewaiver/ 2006dec12_privwaiv_dojexecsum.pdf.
111. McNulty Memo, supra note 2, § III.A.
112. Id.
113. Id. § VII.B(2).
114. Id.
115. See Executive Summary of DOJ McNulty Memorandum, supra note 110, at 1 ("When prosecutors wish to seek privileged attorney-client communications, legal advice or non-fact attorney work product....") (emphasis added).
116. McNulty Memo, supra note 2, § VII.B(2).
117. Id.
118. Id.
119. Id.
120. Id.
121. Id.
122. Id.
123. Id.
124. Id.
125. Id.
126. Id.
127. Id.
128. Id. The McNulty Memo provides two exceptions to Category II information, namely "legal advice contemporaneous to the underlying misconduct when the corporation or one of its employees is relying upon an advice-of-counsel defense" and "legal advice or communications in furtherance of a crime or fraud, coming within the crime-fraud exception to the attorney-client privilege." Id. These two kinds of information should be treated as Category I information.
129. Id. See also discussion supra Part II.B.
130. See cases cited supra note 38.
131. McNulty Memo, supra note 2, § VII.B(2).
132. Id.
133. Id.
134. Id.
135. Id.
136. Press Release, Karen J. Mathis, President, American Bar Association, Revisions to the Justice Department's Thompson Memorandum (Dec. 12, 2006), available at http://www.abanet.org/poladv/priorities/privilegewaiver/ 2006dec12_privwaiv_pr.pdf.
137. Id.
138. Press Release, Fredrick J. Krebs, President, Association of Corporate Counsel, DOJ's "McNulty Memorandum" Falls Far Short on Prosecutorial Reforms, Says Association of Corporate Counsel (Dec. 12, 2006), available at https://secure.acca.com/php/cms/ndex.php?id=34& action= item&item_id=20061212_1402.
139. Id.
140. Press Release, Stanton D. Anderson, Senior Counsel, U.S. Chamber of Commerce, New DOJ Policy Does Not Adequately Protect Attorney-Client Privilege (Dec. 12, 2006), available at http://www.uschamber.com/press/releases/ 2006/december/06-190.htm.
141. Id.
142. Id.
143. 153 CONG. REC. S42-01, at S181-82 (daily ed. Jan. 4, 2007) (statement of Sen. Specter).
144. Id.
145. David Z. Seide, Department of Justice McNulty Memo Curtails Controversial Portions of Thompson Memo - Legislation Introduced in the Senate (Dec. 13, 2006), http://www.wilmerhale.com/publications/whPubsDetail.aspx?publication= 3507.
146. See supra Part IV.D.
147. McNulty Memo, supra note 2, § VII.B(2).
148. Id.
149. Id.
150. See Nathan Fishbach, The McNulty Memo: Why It Matters to Corporate Counsel, WIS. L.J., Jan. 15, 2007, available at http://www.wislawjournal.com/archive/2007/0115/forum-011507.html ("[I]t is expected that the McNulty Memo will encourage greater consistency among prosecutorial offices in deciding whether there is a 'legitimate need' since the same four criteria will be used in all DOJ offices.").
151. Memorandum from Robert D. McCallum, Jr., Acting Deputy Attorney General, to Heads of Department Components and United States Attorneys (Oct. 21, 2005).
152. Cf. Introduction to McNulty Memo, supra note 2 (stating that the McNulty Memo supersedes the policies of both Thompson and McCallum).
153. See Seide, supra note 145.
154. See supra Part IV.D.
155. See Press Release, Patrick Leahy, U.S. Senator, Reaction of Senator Patrick Leahy, Ranking Member and Incoming Chairman, Senate Judiciary Committee, to Revisions to the Thompson Memorandum (Dec. 12, 2006), available at http://leahy.senate.gov/press/200612/121206.html (expressing pleasure about the DOJ's new guidelines, but stating that he "remain[ed] concerned that, depending on how the new policies are implemented, prosecutors may still be able to inappropriately consider a corporation's waiver of this important privilege"). See also Steven P. Solow, The McNulty Memo: The DOJ and the Waiver of the Attorney-Client Privilege, CORP. COUNSELOR, Feb. 2007, at 1 (opining that the true test of the new policy will be the way in which it is implemented, while asking, "[I]s [the McNulty Memo] truly a new policy, or will it just be a bureaucratic hurdle on the same bad policy path?").
156. Cf. Press Release, supra note 138 ("Our research shows that more often than not, requests for waiver are not asked for outright, but are coercively inferred.").
157. McNulty Memo, supra note 2, § VII.B(2).
158. See Fishbach, supra note 150.
159. Id. (arguing that the McNulty Memo "provides valuable insights to corporations since it assists them in analyzing (and framing their responses to) allegations of corporate misconduct").
160. See 153 CONG. REC. S42-01, at S181-82 (daily ed. Jan. 4, 2007) (statement of Sen. Specter) (rejecting the McNulty Memo as insufficient in protecting the attorney-client privilege, while proposing the Attorney-Client Privilege Protection Act of 2007). Specter contended that the bill "will protect the sanctity of the attorney-client relationship by prohibiting federal prosecutors and investigators from requesting waiver of attorney-client privilege and attorney work product protections in corporate investigations." Id.
161. McNulty Memo, supra note 2, § VII.B(2).
162. See Solow, supra note 155, at 1 (noting that there is "little question that even the threat of unrestricted waiver requests chilled the ability of businesses to have legal counsel guide those compliance efforts").
163. Cf. Texaco Inc. v. Dagher, 547 U.S. 1, 5 (2006) ("[W]e have expressed reluctance to adopt per se rules... 'where the economic impact of certain practices is not immediately obvious.'") (citations omitted); Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l Planning Agency, 535 U.S. 302, 326 (2002) ("[W]e still resist the temptation to adopt per se rules in our cases involving partial regulatory takings, preferring to examine 'a number of factors' rather than a simple 'mathematically precise' formula."); Blasius Indus., Inc. v. Atlas Corp., 564 A.2d 651, 661 (Del. Ch. 1988) (rejecting a per se rule that would prohibit a board of directors from interfering with shareholder voting rights, noting at times there may be a compelling justification for such interference).
164. Cf. SURVEY, supra note 75, at 4 (observing that third party litigation is one of the primary consequences of a government investigation). Accordingly, codifying the selective waiver doctrine would provide that waiver to a governmental agency would not act as a waiver to third parties that might file lawsuits following an investigation.
165. FED. R. EVID. 502(C) (proposed 2006).
166. Id.
167. Letter from Susan Hackett, Senior Vice President and General Counsel, Association of Corporate Counsel, to the Honorable David F. Levi, Chair, Standing Committee on Rules of Practice and Procedure 3 (Jan. 9, 2007), available at http://www.acc.com/public/policyattyclient/ accfre502comments.pdf.
168. Id.
169. Id. (arguing that the "government should not be empowered to request or demand waivers in the first place").
170. Id.
171. FED. R. EVID. 502(c) (proposed 2006).
172. S. 186, 110th Cong. (2007). See also 153 CONG. REC. S42-01, at S181-82 (daily ed. Jan. 4, 2007) (statement of Sen. Specter, introducing the Attorney-Client Privilege Protection Act).