Internal Investigations Blog

News and Opinions on Corporate Inquiries


Upjohn Warnings: The More Things Change the More They Stay the Same

Corporations and their non-lawyer managers place much value in protecting the workings of their business in general – and the results of their internal investigations in particular – through assertions of attorney-client privilege and the work product doctrine. Each is a separate and distinct protection, however, whose touchstones involve the use of lawyers; but neither is the automatic blanket protection that these companies and their officers commonly think them to be.

Perhaps it is due to too much television viewing, but a common belief is that any time one speaks to an attorney – or even in the presence of one – omerta automatically attaches. This is not even remotely the case. The inviolate confidentiality that envelopes communications with attorneys is only absolute in certain well-defined circumstances that are often not immune to litigation challenges by those who are hoped to be excluded from access.

In the case of attorney-client privilege, it generally attaches when the attorney-client relationship is created or – in many jurisdictions – at least when the client thinks that it has been cemented. In simplified terms, when the client believes that he has obtained the representation of counsel, the law shields communications between the two from disclosure to anyone else – unless authorized by the client – so as to encourage frank and open discussions between the parties on the matters giving rise to that representation.

The attorney-client privilege, however, does not encompass all discussions between lawyer and client. Comments made in the presence of third parties are not privileged. Although technically considered a waiver of the privilege, this operation gives life to the rule that one cannot hold secret that which has already been made known – even if it is but one person – outside of the attorney-client relationship.

The work product doctrine may shares one characteristic with the attorney-client – communications to or from the client – privilege but is a distinct entity. It protects the notes, impressions, and thought processes of lawyers while in litigation or in anticipation of litigation. This entails the tactical and strategic decision-making processes employed by lawyers and not the underlying facts of the case. Where the trial preparation notes or internal memoranda of corporate counsel may reference or otherwise note conversations with a client there may be some serendipitous protection afforded to those statements, but that is not the purpose of the work product doctrine.

So where an attorney prepping a witness for trial – the CFO of a company being prosecuted for an FCPA violation – finds that she has a prior perjury conviction, that fact communicated to him by her indeed will likely not be ascertained by the government through discovery or other procedures. But her disclosure of that criminal history – a fact – is not protected; that it is contained in the attorney’s notes and critical to his decision not to put her on the stand that demands it be covered by the work product doctrine.

The “non-automatic” application of these protections is commonly misunderstood, and perhaps never more so than in cases of internal investigations and related representations of organizational clients. Writing about case-law developments as regards Upjohn warnings, colleague Hayes Hunt provided a recent update that highlights once again the pitfalls of misunderstanding or misapplying the attorney-client privilege and work product doctrines in a corporate setting.

Upjohn warnings are the progeny of the Supreme Court’s decision in Upjohn v. United States, 449 U.S. 383 (1981) and require an organization’s counsel to explain to its officers and employees that the company – and not the officer or employee – holds the attorney-client privilege with regard to any statement given in the course of an internal investigation, and that it is the company alone who may elect to waive that privilege and disclose that statement to the government or other parties.

Last year saw the meat and potatoes of a patent infringement lawsuit between Google and Oracle. The U.S. Court of Appeals for the Federal Circuit ruled that a critical internal e-mail by a Google engineer – and sought to be shielded from discovery by Google – was not protected under Upjohn. This was because nothing indicated that the engineer had prepared the e-mail “in anticipation of litigation [implicating work product protection] or to further the provision of legal advice [implicating attorney-client privilege].” Despite Google having offered a declaration from its counsel that the e-mail was prepared at his request, the Federal Circuit rejected arguments in favor of attorney-client and/or work product protections because the content of the e-mail itself indicated that it was a response to a licensing inquiry from management and not a response to a request from counsel. See: In re Google, 462 F. App’x 975 (Fed. Cir. 2012).

In another case brought in state court in Pennsylvania, a Sherwin-Williams employee visited the site of a customer’s warehouse fire and then prepared two memoranda addressed to Sherwin-Williams’ in-house counsel about the event. In a subsequent lawsuit alleging that Sherwin-Williams’ products had caused the fire, the paint company sought to preclude discovery of these two pieces of correspondence.

The Pennsylvania court analyzed Sherwin-Williams’ privilege claim in accordance with Upjohn. It held that the employee’s memoranda did not become non-discoverable [under attorney client privilege] “solely by virtue of [their] having been communicated to counsel.” The court noted that the employee had visited the site of the fire on his own initiative to aid a client; had testified that he didn’t know whether he had prepared the memoranda on his own or had been directed to do so by counsel; and that Sherwin-Williams had produced no evidence that its counsel had requested the memoranda or that counsel was actively conducting an investigation at the time.
See: Custom Designs & Manufacturing v. Sherwin-Williams, 39 A.3d 372, 374 (Pa. Super. Ct. 2012).

Despite these two recent cases, the rules with regard to assertions of attorney-client privilege and the work product doctrine in the corporate world and in the wake of Upjohn are the same as they ever were: know your stuff and tread carefully. Therefore, it is imperative for attorneys conducting independent internal investigations and corporate counsel to be on the same page as communications between attorneys, clients, and employee witnesses are made and with an eye toward their potential discoverability or non-discoverability at a later date.

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