Attorney-Client Privilege and Work-Product Issues for In-House Counsel. August 5, Presented by: Kevin P. Allen

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1 Attorney-Client Privilege and Work-Product Issues for In-House Counsel August 5, 2016 Presented by: Kevin P. Allen LEGAL PRIMER: 2016 UPDATE AUGUST 5, 2016

2

3 What s the purpose? Why do we have an attorney-client privilege?

4 Restatement (Third) Law Governing Lawyers Elements 1. a communication 2. made between privileged persons 3. in confidence 4. for the purpose of obtaining or providing legal assistance for the client Restatement 68; In re Grand Jury, 705 F.3d 133 (3d Cir. 2012)

5 Privileged Person Client Lawyer Agents of either who facilitate communications Agents of lawyer who facilitate the representation Restatement 70

6 Facts v. Communication of Facts Facts Not Protected Communication of Facts Protected

7

8 Corporate Counsel Corporate Officer U.S. v. Norris, 722 F. Supp. 2d 632 (E.D. Pa. 2010), aff d, 419 Fed. Appx. 190 (3d Cir. 2011). When does corporate counsel also represent a corporate officer individually? The officer must show: 1. he approached counsel for the purpose of seeking legal advice; 2. he made it clear to counsel that he was seeking advice in individual capacity; 3. counsel did communicate with officer in individual capacity, despite conflicts; 4. communications were confidential; and 5. communications did not concern company matters.

9

10 Commonwealth v. Schultz, 133 A.3d 294 (Pa. Super. 2016).

11 Commonwealth v. Schultz, 133 A.3d 294 (Pa. Super. 2016).

12 Commonwealth v. Schultz, 133 A.3d 294 (Pa. Super. 2016). Nearly a presumption under Pennsylvania law that communications between a corporate officer and corporate counsel are privileged until an Upjohn warning ( corporate Miranda ) is issued.

13 and the Attorney-Client Privilege communications are as eligible as any other form of communication for attorney-client privilege protection However, s create their own unique set of risks and uncertainties particularly in the corporate setting

14 Critical Cases Vioxx, 501 F. Supp. 2d 789 (E.D. La. 2007). KBR, 756 F.3d 754 (D.C. Cir. 2014).

15 Lessons from Vioxx In a mixed purpose communication, the primary purpose must be legal for the privilege to apply Primary is not the same as significant or important. If purpose is equally legal and nonlegal, privilege will not apply. The burden on party asserting the privilege is greater because of . Document-bydocument affidavits are often needed.

16 Vioxx - Examples EXAMPLE: To: In-house Counsel From: Senior Vice President cc: CEO Re: Contract Damages One of our suppliers has breached its contract. Are we able to recover the profits that we lost from missed sale opportunities? PRIVILEGED

17 Vioxx - Examples EXAMPLE: To: Vice President - Sales Vice President - Marketing In-house Counsel From: Division President Re: Press Release [attached pdf] Attached is a proposed press release regarding the end of our acquisition negotiations. Please provide your comments on it. PRESUMPTIVELY NOT PRIVILEGED

18 In re: KBR, 756 F.3d 754 (D.C. Cir. June 27, 2014) Court rejects but-for test Endorses primary purpose test, but then broadens its protection Not the primary purpose but a primary purpose Announces one of the significant purposes test

19 To: From: Re: Date: Vice President B Manager A Products Sold February 20, 2013, 11:44 a.m. We had a good month. We sold 49,000. M.A. To: From: Re: Date: Manager A Vice President B Products Sold February 20, 2013, 10:03 a.m. How many widgets did we sell in January? VPB

20 To: Vice President B From: Outside Counsel Re: Damages Date: February 19, 2013 In order for me to determine the scope of the company s potential damages from the breach of contract, I need to know how many widgets the company sold in January. Please let me know.

21 To: Manager A From: Vice President B Re: Termination of John Smith Date: February 20, 2013, 12:33 p.m. We are obligated to make the severance payments to Smith. VPB

22 To: Vice President B From: In-House Counsel Re: John Smith Date: February 20, 2013, 11:12 a.m. As you requested, I ve looked over Smith s employment contract, and it is my preliminary opinion that he is entitled to severance payments. IHC

23 Preparatory Communications and Dissemination of Legal Advice The privilege protects certain communications even when counsel is not involved directly Preparatory communications Dissemination of legal advice

24 Copy me on all s so that we can take advantage of the attorney-client privilege

25 Vioxx Unethical Sanctionable Spoliation Suppression of Evidence Won t Stop Until Judges Take a Stand

26 Waiver/Inadvertence

27 Inadvertent Disclosure - Waiver 1. Reasonableness of precautions taken in view of the extent of the production; 2. Number of inadvertent disclosures; 3. Extent of the disclosure; 4. Delay and measures taken to rectify the disclosure; and 5. Interests of justice.

28 Red Vision v. National Real Estate, 108 A.3d 54 (Pa. Super. 2015).

29 Work Product Pennsylvania s rule (4003.3) is wildly different from the Federal rule (26(b)(3)) Pennsylvania Work Product Is Generally Discoverable Federal Work Product Is Generally Protected from Discovery Pennsylvania has no anticipation of litigation requirement for attorney work product

30 Pennsylvania Has Different Treatment for Attorney Work Product and Non-Attorney Work Product

31 Pennsylvania Has Different Treatment for Attorney Work Product and Non-Attorney Work Product Broader protection for attorney work product Very narrow protection for non-attorney work product Safety hazard example

32 Procedural Issues Erie Doctrine Attorney-Client Privilege - Substantive Work-Product Doctrine - Procedural Right to immediate appeal Federal No Pennsylvania Yes

33 Questions? Kevin P. Allen (412) LEGAL PRIMER: 2016 UPDATE AUGUST 5, 2016

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