Previous
In addition to the attorney-client privilege, corporations enjoy work product protection for material developed by corporate lawyers in anticipation of litigation. As with the attorney-client privilege, the work product protection is afforded equally to in-house and outside counsel. Shelton, 805 at 1326, n. 3. The work product doctrine affords a form of immunity from production of documents and other tangible things prepared by the attorney. The scope of work product protection depends on whether the documents sought to be produced contain mental impressions and private thoughts of the attorney. The more this is so, the less likely production will be ordered. See generally ABA/BNA Lawyers’ Manual, 91:2211.
The work product doctrine covers a broader range of material than the attorney-client privilege, because it is not limited solely to communications from the client. On the other hand, in order to receive work product protection, documents must have been prepared in anticipation of litigation. The test is "whether, in light of the nature of the document and the factual situation in the particular case, the document can fairly be said to have been prepared or obtained because of the prospect of litigation. But the converse of this is that even though litigation is already in progress, there is no work product immunity for documents prepared in the regular course of business rather than for purposes of litigation." Simon, 816 F.2d at 401. Thus, to insure work product protection, counsel should be prepared to demonstrate that the documents at issue are not merely business planning documents, but are involved in litigation strategy and enhance the bringing or defending of a particular lawsuit. Simon, id. at 400.
Corporations frequently have a need to engage in self-critical evaluation. Doing so, however, poses certain risks. If the company finds a problem and remedies it, that company may believe it should be in a better position than if it hadn't looked at all. In order to guarantee that result, some commentators have urged for, and some courts have recognized, a privilege for self-critical analysis. See, e.g., Note, The Privilege of Self-Critical Analysis, 96 Harv. L. Rev. 1083 (1983); Wylie v. Mills, 195 N.J. Super. 332, 478 A.2d 1273 (1984). The privilege goes beyond the scope of the existing attorney-client and work product privileges but applies in a more limited context. See generally, ABA/BNA Lawyers’ Manual, at 91:2210-2211.
Missouri has not yet recognized such a privilege. In fact, Missouri courts, considering similar arguments, refused to recognize an analogous privilege for hospital peer review. See State ex rel. Chandra v. Sprinkle, 678 S.W.2d 804, 805, 807 (Mo. 1984).9 It is far from clear whether Missouri would accept such a privilege if the issue were squarely presented in an appropriate case. Kansas has addressed the issue in Kansas Gas & Electric v. Eye, 246 Kan. 419, 789 P.2d 1161 (1990). In that case, the court adopted a balancing test to determine whether a self-analysis privilege should be adopted. Applying that test, the court seemed to indicate that such a privilege could be recognized in an appropriate case, but found the case at hand not to be such a case. Id. at 1166-1168. Thus, at best, the privilege will be recognized on a case-by-case basis.
It is probably fair to say that a corporation desiring to engage in critical self-assessment and evaluation must do so without any guarantee that the fruits of that evaluation will be privileged from subsequent disclosure. This is particularly true since the standards governing recognition of a privilege will vary from jurisdiction to jurisdiction, and the forum in which the privilege will need to be asserted probably cannot be anticipated.
Depending on the circumstances, the attorney-client privilege may provide limited protection for investigations conducted by attorneys in which legal advice is sought and provided. It should be noted that, whether the attorney-client privilege or the "nascent privilege of self-critical analysis," Wylie, 478 A.2d at 1276, is relied upon, the underlying information and documents being investigated will not be privileged. With the attorney-client privilege, only communications with counsel that are the subject of legal analysis will be protected, and with the critical self-analysis privilege, only the evaluative portion of the self-analysis will be free from disclosure. Note, 96 Harv. L. Rev. at 1093.
An attorney may, in appropriate circumstances, represent both a corporation and affiliated entitles. See infra at 112-13. In doing so, the attorney must take care to preserve the confidences and secrets of the affiliate and may disclose them only with the consent of the affiliate. Massachusetts Ethics Opinion 83-9 (1983). The issue of what constitutes confidential information of the parent and of the affiliate, however, can be problematic at times and can affect the scope of the attorney-client privilege.
Missouri affords a high degree of protection to the attorney-client privilege in these circumstances. In State ex rel. Syntex Agri-Business Inc. v. Adolf, 700 S.W.2d 886 (Mo. App. 1985), the court addressed the issue of "whether distribution of otherwise privileged communications between separate corporate entities comprising a single family of corporations waives the attorney-client privilege." Id. at 888. Relying on Missouri's broad protection of the privilege and recognizing the "practicalities of modern business practices," id. at 888-889, the court held that "an officer or employee of a holding or affiliated company can receive legal advice from counsel employed by a wholly-owned subsidiary or affiliate without destroying the confidentiality of the communication . . . ." Id. at 889. At least where a wholly-owned subsidiary or affiliate is involved and where there is a reasonable need to know, "the presence of a representative of a parent or affiliated company at a legal briefing of a subsidiary, and vice versa, does not destroy confidentiality of communication between counsel and client." Id. at 888, quoting from Insurance Company of North America v. Los Angeles Superior Court, 108 Cal. App. 3d 758, 166 Cal. Rptr. 880, 887 (1980); see also Weil Ceramics & Glass Inc. v. Work, 110 F.R.D. 500, 503 (E.D.N.Y. 1986); Roberts v. Carrier Corp., 107 F.R.D. 678, 686-688 (N.D. Ind. 1985).
More difficult questions regarding privilege are raised where a corporate entity divests itself of a subsidiary who subsequently chooses to waive the privilege. Although generally "[n]ew managers installed as a result of a takeover, merger, loss of confidence of shareholders, or simply normal succession may waive the attorney-client privilege with respect to communications made by former officers and directors, " Weintraub, 471 U.S. at 349, the matter becomes more complicated in certain situations and it may be necessary to closely examine the relationship between the entities before a conclusion on waiver can be made. See e.g., In re Grand Jury Subpoenas, 902 F.2d 244 (4th Cir. 1990); In re Santa Fe Trail Transportation Company, 121 B.R. 794 (N.D. Ill. 1990); Polycast Technology Corp. v. Uniroyal, Inc., 125 F.R.D. 47 (S.D.N.Y. 1989).
| Previous |
Next |