In-House Counsel Depositions: Navigating Complex Privilege Issues - - PowerPoint PPT Presentation

In-House Counsel Depositions: Navigating Complex Privilege Issues

Preserving the Attorney Client Privilege and

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Preserving the Attorney-Client Privilege and Maintaining Confidentiality

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A Live 90-Minute Teleconference/Webinar with Interactive Q&A

Today's panel features: David R. Cohen, Partner, K&L Gates, Pittsburgh Kenneth E. McKay, Partner, Locke Lord Bissell & Liddell, Houston David W. Stark, Partner, Faegre & Benson, Denver

Tuesday, February 23, 2010 The conference begins at: 1 pm Eastern p 12 pm Central 11 am Mountain 10 am Pacific

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I H C l D iti In-House Counsel Depositions

Attorney-Client Privilege Attorney-Client Privilege Work Product Doctrine D id W St k David W. Stark Faegre & Benson LLP Denver, Colorado February 23, 2010

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Attorney-Client Privilege

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• A communication
• made between privileged persons

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• in confidence

co de ce

• for the purpose of seeking obtaining or providing legal

for the purpose of seeking, obtaining, or providing legal assistance

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• without waiving the protection.

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Work Product Doctrine

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• Protects written materials
• prepared by an attorney

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• in anticipation of litigation

a c pa o

• ga o
• that reflect the attorney’s mental impressions conclusions

that reflect the attorney s mental impressions, conclusions,

• pinions or legal theories.

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The Purpose of the Privilege

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• To “encourage full and frank communication between

attorneys and their clients and thereby promote broader public interest in the observance of law and the administration of justice.” Upjohn v. United States, 499 U.S. administration of justice. Upjohn v. United States, 499 U.S. 383, 389 (1991).

• The privilege “rests on the need for the advocate and

counselor to know all that relates to the client’s reasons for ki t ti if th f i l i i i t b seeking representation if the professional mission is to be carried out.” Id.

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The Federal Definition

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• The Federal Rules of Evidence
• Rule 503(b) proposed in 1972

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• Rule 501

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• The privilege applies only if: (United States v United Shoe

The privilege applies only if: (United States v. United Shoe Machinery Corp., 89 F. Supp. 357, 358-59 (D. Mass 1950)).

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• As defined in Wigmore’s Evidence:

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State Definitions

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• Colorado
• Minnesota
• Minnesota
• California

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Elements of the Privilege

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• A communication
• made between privileged persons
• in confidence
• for the purpose of seeking, obtaining, or providing legal

i t t th li t assistance to the client

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• without waiving the protection. See, e.g., Restatement, The

Law Governing Lawyers §118 (Tentative Draft No. 1, 1988).

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Communication

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• Any act by the client that is intended to be a communication

to the attorney can create an attorney-client privilege.

• Communication may be oral, written, or even wordless

action.

• It may further extend to demonstrations, experiments, and
• ther actions
• ther actions.

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More on Communications

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• To and from an attorney
• Intended to be confidential
• Extends beyond death of client

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Corporations

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• Who is covered?
• Control Group
• Communications, not facts

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Privileged Persons

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• Clients
• Client’s attorney on behalf of the client
• Agents of the client or the attorney

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Corporations

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• Officers and directors
• Have the power to assert and waive the privilege.
• If replaced, they lose the ability to assert or waive it.
• New management always – and old management never –

has the right to assert privilege. g p g

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Confidence

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• Client expects the attorney to keep the communication

confidential and not reveal it to others.

– See, e.g., Doe v. District of Columbia, 2005 U.S. Dist. LEXIS 8578 (D.D.C. May 11, 2005).

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Legal Advice

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• Must be made for the purpose of securing legal advice
• Primary purpose or “but for” test

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Without Waiver

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• Disclosure to a third party
• Placing it in issue

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Corporate Setting

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• Who is the client?
• Dual privilege
• Parent/Subsidiary
• Limited waiver

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Exceptions

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• Joint defense
• Common Interest
• Crime-fraud

C e aud

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Work Product

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• Documents
• Prepared for litigation or trial
• Two kinds:

1 Fact

• 1. Fact
• 2. Opinion

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Overcoming the Protection

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• Opinion

– Near absolute protection

• Fact

– Substantial need – Undue hardship

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Questions? Questions?

In-House Counsel Depositions: Navigating Complex Privilege Issues Navigating Complex Privilege Issues "Business vs Legal Advice" Business vs. Legal Advice

Febr ar 23 2010 February 23, 2010

Ken McKay

Litigation Partner Locke Lord Bissell & Liddell LLP 600 Travis, Suite 2800 Houston Texas

Atlanta, Austin, Chicago, Dallas, Houston, London, Los Angeles, New Orleans, New York, Sacramento, San Francisco, Washington, DC

Houston, Texas (713) 226-1127

A Different Standard? A Different Standard?

Courts have repeatedly held that there is no Courts have repeatedly held that there is no distinction between the standard to be li d f i h d t id l f applied for in-house and outside counsel for purposes of the attorney-client privilege.

S H C l i & Gl P d i l I 8 0 F S 2 (S D N Y 1 ) See Hertzog, Calamari & Gleason v. Prudential Ins., 850 F. Supp. 255 (S.D.N.Y. 1994); U.S. v. Mobil Corp., 149 F.R.D. 533 (N.D. Tex. 1993)

But there is a distinction, at least in application application.

2

Why is a different standard applied to in-house counsel? to in-house counsel?

Principally because in-house counsel often perform non- legal business functions within their organizations and h l i h i il l i di i i h h the law requires that privilege analysis distinguish the two Having attorneys serve in dual capacities is the most frequently-cited factor as a basis for q y denying a claim of privilege.

See Teltron, Inc. v. Alexander, 132 F.R.D. 394 (E.D. Pa. 1990); N.C. Elec. Membership

• Corp. v. Carolina Power & Light Co., 110 F.R.D. 511, 517 (M.D.N.C. 1986)

3

Satisfying the “Attorney” Requirement

• f the Attorney-Client Privilege
• f the Attorney-Client Privilege

General Rule: If an in-house counsel is acting in her capacity as an attorney, the attorney-client privilege applies. Where, however, counsel is acting as a business advisor or has

• nly limited involvement, the privilege does not apply.

"[T]he privilege is limited to confidential communications with an attorney acting in his professional legal capacity for the express purpose of securing legal advice As his professional legal capacity for the express purpose of securing legal advice. As a general rule, an attorney who serves a client in a business capacity may not assert the attorney-client privilege because of the lack of a confidential

• relationship. Thus, ordinary business advice is not protected."

Teltron, Inc. v. Alexander, 132 F.R.D. 394 (E.D. Pa. 1990). See also N.C. Elec. Membership

• Corp. v. Carolina Power & Light Co., 110 F.R.D. 511, 514 (M.D.N.C. 1986).

4

There is no Silver Bullet

No single factor is No single factor is dispositive in every case case.

See N.C. Elec. Membership Corp. v. Carolina Power & Light Co., 110 F.R.D. 511, 516 (M.D.N.C. 1986)

5

Examples of Potentially “Non-Legal” Functions Performed by In-House Counsel Functions Performed by In House Counsel

– Conducting investigations Conducting investigations – Fact-gathering regarding issues that may later be the subject of litigation j g – Regulatory compliance issues – Matters concerning the functioning of the entity Matters concerning the functioning of the entity

See e.g. Giffin v. Smith, 688 S.W.2d 112 (Tex. 1985) (General counsel's communications found not to be privileged despite his role in corporate investigation because there found not to be privileged despite his role in corporate investigation because there was no evidence that the communication was confidential).

6

Dual Capacities Dual Capacities

In-house counsel routinely handle mixed business and legal functions, sometimes with dual titles such as – Corporate Secretary – Vice President Board Member – Board Member These are sometimes perceived to be capacities separate from their legal functions Apparently, an even higher standard is sometimes applied where such is the case: “[I] i i h h h i i f ll dl i il d “[I]n a situation where the author or recipient of allegedly privileged documents functions as a corporate manager as well as an attorney, efforts must include clear designation of those communications sent

• r received in his capacity as a legal advisor ”
• r received in his capacity as a legal advisor.

Hardy v. New York News, Inc., 114 F.R.D. 633, 644 (S.D.N.Y. 1987)

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How Does an In-House Attorney Meet this Burden? Meet this Burden?

Court's finding in Hardy Court s finding in Hardy “Al h h f h d [ ] dd d “Although some of the documents [were] addressed to [in-house counsel], there was nothing to indicate h [h ] d i d f h that [he] requested or received any of the documents at issue, or the information contained i h i h i f l l d i d in them, in the capacity of a legal advisor and solely for the purpose of rendering advice to the i ” corporation.”

Hardy v. New York News, Inc., 114 F.R.D. 633, 644 (S.D.N.Y. 1987).

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Applicable Test Applicable Test

The client’s communication must be for the primary or dominant purpose of soliciting legal, rather than business, advice.

See N.C. Elec. Membership Corp. v. Carolina Power & Light Co., 110 F.R.D. 511, 514 (M.D.N.C. 1986); Teltron, Inc. v. Alexander, 132 F.R.D. 394, 396 (E.D. Pa. 1990) ("[must be able to] clearly demonstrate that the advice to be protected was given in a professional legal capacity."); U.S Postal Serv. V. Phelps Dodge Ref. Corp., 852 F. Supp. 156 (E.D.N.Y. 1994).

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Factors to be Considered Factors to be Considered

• Is the subject “ordinary business activities”?

Whether the subject matter of the document is primarily business-oriented, such as documents discussing cost , g information, technical data, contract negotiations, delivery problems or lobbying efforts.

See Coleman v. Am. Broad. Cos., 106 F.R.D. 201, 205 (D.C. Cir. 1985) (concluding that communications between an attorney and another individual which relate to business, rather than legal matters, do not fall within the protection

• f the privilege.); N.C. Elec. Membership Corp. v. Carolina Power & Light Co., 110 F.R.D. 511, 514 (M.D.N.C. 1986).

Stated differently, would the document have been prepared whether or not the attorney was sent a copy?

U.S Postal Serv. V. Phelps Dodge Ref. Corp., 852 F. Supp. 156, 163 (E.D.N.Y. 1994).

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Factors to be Considered Factors to be Considered

• Do the documents specifically request legal
• Do the documents specifically request legal

advice or, if generated by counsel, reference the request for legal advice? q g

See N.C. Elec. Membership Corp. v. Carolina Power & Light Co., 110 F.R.D. 511, 516 (M.D.N.C. 1986)

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Factors to be Considered Factors to be Considered

• Was the communication

confidential? Wh h h d i Whether the document in question is simply marked “Memorandum” with no Memorandum with no notation of confidentiality

See N.C. Elec. Membership Corp. v. Carolina Power & Light Co., 110 F.R.D. 511, 516 (M.D.N.C. 1986)

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This is not just a question of labeling. Does the communication itself reveal any y confidential information?

See N.C. Elec. Membership Corp. v. Carolina Power & Light Co., 110 F.R.D. 511, 514 (M D N C 1986 (M.D.N.C. 1986

13

Factors to be Considered Factors to be Considered

Did the attorney have only “Limited Involvement” in the Matter?

• Whether the document is addressed to a number of individuals, only
• ne of whom is in-house counsel
• “Copying the Lawyer” does not create a privileged document.

An entity cannot shield its business transactions from discovery simply by funneling its communications through an attorney.

See U.S Postal Serv. V. Phelps Dodge Ref. Corp., 852 F. Supp. 156 (E.D.N.Y. 1994); Teltron, Inc. v. Alexander 132 F.R.D. 394, 396 (E.D. Pa. 1990); Hardy v. New York News, Inc., 114 F.R.D. 633 (S.D.N.Y. 1987)

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"Limited Involvement" (Cont ) Limited Involvement (Cont.)

• Whether the document is addressed to counsel vs. “cc” and whether

Whether the document is addressed to counsel vs. cc and whether many others, outside of the legal function, were addressees

• Wh th

th d t f t h “ l”

• Whether the document refers to her as “counsel”
• Whether the documents were segregated from other, non-privileged

g g , p g documents.

• Whether the document was marked as “Privileged” and/or

g “Confidential”

See Hardy v. New York News, Inc., 114 F.R.D. 633,644 (S.D.N.Y. 1987); U.S Postal Serv. V. Phelps Dodge Ref. Corp., 852 F. Supp. 156 (E.D.N.Y. 1994).

15

Communications Involving In- H N L House Non-Lawyers

• What about non-lawyer staff communicating with business people?

Is there a way to cloak that work i e internal investigations with Is there a way to cloak that work, i.e. internal investigations, with privilege? Assumption: Work being done at the direction of legal counsel; initial e-mail indicates being conducted at the direction of counsel indicates being conducted at the direction of counsel But: "…documents prepared for review by both legal and nonlegal staff are not privileged, because the documents cannot be said to have been made for the primary purpose of seeking legal advice." p y p p g g

In re Central Gulf Lines, Nos. CIV.A.97-3829, 99-1888, 2000 WL 1793395, at *2-4 (E.D. La. Dec. 4, 2000).

See also, U.S Postal Serv. V. Phelps Dodge Ref. Corp., 852 F. Supp. 156 (E.D.N.Y. 1994);

16

Best Practices Best Practices

• Make strategic decisions regarding which types of documents to protect

Make strategic decisions regarding which types of documents to protect

• Reconsider dual titles and perhaps dual functions, where possible
• Make a practice of specifically referencing the request for “legal advice” or of the

“legal advice” being provided

• Address communications to counsel rather than using “cc”
• Label documents to be protected as “Attorney-Client Privileged” and

Label documents to be protected as Attorney Client Privileged and “Confidential”

• Where absolutely critical to protect privilege, involve outside counsel

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In House Counsel Depositions: Navigating Complex Privilege Issues

David R. Cohen February 23, 2010

Introduction

P f i

• Purpose of seminar:
• Provide practical information/advice re privilege
• Discuss:
• Discuss:
• Standards for Attorney-Client Privilege
• Standards for Work Product Protection
• Protecting Privilege
• Practical Steps for Preparing for Depositions
• Tactical Considerations at Depositions

act ca Co s de at o s at epos t o s

1

Should You Challenge a Deposition of Counsel?

• Is the noticed deponent aware of facts that are legitimate
• Is the noticed deponent aware of facts that are legitimate

subjects of discovery?

• Has the company put the advice of counsel at issue?
• Has counsel been noticed as harassment or for other

Has counsel been noticed as harassment or for other improper purposes?

• Is the notice procedurally proper?
• Does the notice satisfy rule requirements?

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• Was service proper?
• If the corporation is not a party:
• Does a subpoena accompany the notice?
• Does the issuing court have jurisdiction?
• Did the serving party obtain the proper commissions?

2

Challenges to Deposition

• Challenging notice may be best alternative if:
• Defect is clear
• Defect is clear
• Notice party had no non-privileged information
• Serving party being unreasonable

S i ti ti ti bl

• Serving parties motives are questionable
• You can obtain leverage re scope, length of depo
• You do not mind the expense of the challenge

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• Options for challenging include:
• Negotiations with opposing counsel
• Proactively move for a protective order
• Proactively move for a protective order
• Serve objections & force motion to compel
• Failing to file or serve a written response can be

i k

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risky

Simple compliance may be the best option if…

• Requested discovery is legitimate
• You want to use counsel as a witness
• Any Defect is debatable or just technical in nature

S l i d i b f i d

• Supplying deponent is best way of creating record

that there is no legitimately discoverable information information

• You want to avoid fees of the challenge
• Opponent will agree to limits or restrictions as

Opponent will agree to limits or restrictions as favorable as the court or discovery master will likely grant

4

Other Tactical Responses

• Objecting: even if you opt to comply with the notice,

consider serving objections in advance to:

• Demarcate privileged or work product areas that will be
• ff-limits to spur up-front agreements or strengthen later
• ff-limits to spur up-front agreements or strengthen later

defenses

• In the case of a corporate notice, object to overbroad or

ambiguous topics

• Reciprocating

If h l i i d f d i ’

• If you have legitimate grounds for deposing opponents’

counsel, noticing their depositions can often lead to more productive negotiations and/or better behavior

5

p g during depositions

Issues Related to Deposition Preparation

• Document Review
• Recognize that documents or conversations that

refresh the witness’s recollection or that the witness

• therwise relies on in her testimony.
• Draw Clear Lines on Privilege/Work Product
• Draw Clear Lines on Privilege/Work Product
• Waiving privilege on particular documents or

discussions may inadvertently waive privilege on the y y p g subject matter generally

• Conversely, making subjects off-limits in depositions

can make them off limits for trial testimon can make them off-limits for trial testimony

• Understand the Risks and Rules Going in
• Discuss strategy in advance but remind the witness

6

• Discuss strategy in advance but remind the witness

that only you get to be the lawyer at the depo!

Tricky Issues At the Deposition

• Instructions Not to Answer
• May Be Risky

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• May Be Necessary
• Be Prepared Going In, But Don’t Be Afraid to Confer on

Privilege Issues During the Deposition

• Be Prepared to Seek Immediate Court Intervention

H dli Y “B ”

• Handling Your “Boss”
• They Need to Focus on Being the Witness—You Are the

Lawyer Lawyer

• They Need to Clearly Understand What is at Issue

Versus What is Privileged/Off-Limits and Provide You the F l F d i Obj

7

Factual Foundation to Object

Work Product Doctrine

FRCP 26(b)(3) provides a qualified immunity from discovery for:

• Documents and tangible things otherwise discoverable, that

are: Prepared in anticipation of litigation or for trial; and

• Prepared in anticipation of litigation or for trial; and
• Prepared by, or for a party (e.g., prepared by attorney)
• r prepared by or for that party's representative (e g
• r prepared by, or for that party s representative (e.g.,

prepared by a consultant hired by litigation counsel)

• Temporal limitations – anticipating litigation (there is a

reasonable expectation that litigation will occur) and the materials were produced in response to that palpable threat

• Be Careful of the Anticipation/Preservation Dilemma

8

• Be Careful of the Anticipation/Preservation Dilemma

Practical Tips for Maintaining Privilege

• Addressing all potentially privileged communications "to" the attorney can

be better than only listing attorneys as “ccs”;

• If in-house counsel wears multiple hats (i e he/she is both General
• If in-house counsel wears multiple hats (i.e., he/she is both General

Counsel and VP for Business Affairs), all legal communications should be clearly directed to General Counsel (business discussions should be directed to the VP for Business Affairs) directed to the VP for Business Affairs)

• Consider including outside counsel, as well as inside counsel, in the

communication loop.

• Consider adding a (“Legal”) identifier to the email domain of those in the
• Consider adding a ( Legal ) identifier to the email domain of those in the

legal department to make such individuals easily identifiable to others involved with potentially privileged communications.

• Selectively mark documents as "Attorney-Client Privileged“ and/or “Work
• Selectively mark documents as Attorney Client Privileged and/or Work

Product” if requesting or providing legal advice or if preparing for litigation.

• If privileged communications are also sent to non-legal recipients mark

9

If privileged communications are also sent to non legal recipients, mark the document with a “Do Not Forward” reminder