INTRODUCTION TO U.S LAWS ON PRIVILEGE DOCUMENT REVIEW

Introduction:

“Privilege” is defined in the glossary to the Civil Procedure Rules (CPR) as “[t]he right of a party to refuse to disclose a document or produce a document or to refuse to answer questions on the ground of some special interest recognized by law.” “Privileged” documents are communications between a party and its legal advisors which those parties are not obliged to disclose during the disclosure and inspection process of an arbitration or litigation action, and generally relate to (e.g. legal professional privilege or litigation privilege). The privilege documents can be broadly classified under the attorney-client privilege and the work product doctrine.

The Attorney-Client Privilege:

The Attorney-Client Privilege protects communications made in confidence between a lawyer and a client for the purpose of seeking or giving legal advice without fear of discovery by third parties. The attorney-client privilege extends to both written and oral communications. The essential elements of the attorney-client privilege are detailed in Humphreys, Hutcheson, & Moseley v. Donovan, 755 F.2d 1211, 1219-1220 (6th Cir. 1985). The privilege extends to both outside and in-house counsel providing legal advice. United States v. United Shoe Mach. Corp., 89 F. Supp. 357, 360 (D. Mass. 1950). Further, communications to agents retained by the attorney (e.g., accountants, investigators, and consultants) would be privileged if those agents were retained because their services were necessary for effective legal representation. Andritz Sprout-Bauer, Inc. v. Beazer East, Inc., 174 F.R.D. 609, 632 (M.D. Pa. 1997). The attorney-client privilege also protects an attorney’s communication with corporate representatives if: (1) the communication was with an employee of the corporation; (2) the communication was made at the direction of a corporate superior so that the attorney could provide legal advice, and (3) the communication was within the scope of the employee’s duties. Upjohn Co. v. United States, 449 U.S. 383, 394 (1981). The attorney-client privilege protects only communications related to the rendition of legal services, not business advice. United States v. Horvath, 731 F.2d 557, 561 (8th Cir. 1984). However, advice concerning mechanics and tax consequences of alternative business strategies is considered to be legal, not commercial, in nature and thus may be privileged. In re Grand Jury Subpoena Duces Tecum (Rich), 731 F.2d 1032, 1036 (2nd Cir. 1984).

"A client is entitled to hire a lawyer, and have his secrets kept, for legal advice regarding the client's business affairs." United States v. Chen, 99 F.3d 1495, 1501 (9th Cir. 1996). Commercial transactions too are entitled to protection and “[t]he attorney-client privilege still applies . . . where business advice is incorporated into legal advice. See Western Trails, Inc. v. Camp Coast to Coast, 139 F.R.D. 4, 8 (D.D.C. 1991). The Ninth Circuit has recognized that:

[p]rofessional communications, made by client to attorney, or communications passing between client and attorney, are, upon principles of public policy, and from the necessity of preserving confidence in all matters of business where the assistance or agency of an attorney is required, held to be privileged from disclosure; and this privilege . . . embraces all communications made by the client to his attorney for and in the course of the business for which the attorney may be employed.

Baldwin v. Commissioner, 125 F.2d 812, 814 (9th Cir. 1942). The privilege extends to cover both the substance of the client's confidential communications and the attorney's advice in response thereto.

Work Product Doctrine:

The work product doctrine allows attorneys and clients to create documents and gather information in the course of rendering legal advice without fear that those documents may be discoverable by third parties. The doctrine protects information that is prepared by or for a lawyer or client in anticipation of litigation or for trial. Fed. R. Civ. P. 36(b)(3). The basic element for applying the work product doctrine is that the material must be prepared in anticipation of litigation. The “anticipation” requirement does not, however, require that a lawsuit already be on file. Upjohn Co. v. United States, 449 U.S. 383, 386-87, 397-402 (1981).

The Crime-Fraud Exception:

A legal advice, which was sought in furtherance of a crime, a fraud, tort or other misconduct, will not be protected either by the attorney-client privilege or by the work product doctrine. The “crime-fraud exception” applies depends on, first, whether the client was engaged in or planning to commit criminal or fraudulent conduct when he sought legal advice or whether he committed such an offense after receiving the advice, and, second, if so, was the advice obtained in furtherance of, or otherwise closely related, to that misconduct. In re: Grand Jury Investigation (Schroeder), 842 F.2d 1223, 1226 (11th Cir. 1987).

Conclusion:

This memorandum is only an introduction to attorney-client privilege and work product doctrine in United States. There are several federal courts decisions and different state laws for respective states on the attorney-client privilege and the work product doctrine that has not been discussed here for brevity. I have tried to summaries shortly some of the federal case laws on the privilege doctrine for a preliminary understanding of the attorney-client privilege and the work product doctrine.