Acc program - 11-2016

© 2016 Downey Law Group LLC. For educa!onal purposes only.

ProtectingPrivilegeasIn-HouseCounsel

MichaelDowneyDowneyLawGroupLLC

November2016

Duty ofConfidentiality

Attorney-ClientPrivilege(Common-InterestPrivilege)

Work-Product(Privilege)Protection

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Duty ofConfidentiality– Rule4-1.6

§ Alawyershallnotrevealinformation relatingtotherepresentationofaclientunlesstheclientgivesinformedconsent,thedisclosureisimpliedlyauthorizedinordertocarryouttherepresentation,orthedisclosureispermittedbyRule4-1.6(b).

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DutyofConfidentiality– Rule4-1.6

• Informationfromanysource

• Relatingtorepresentation

• Limiton"revelation"

• Limiton"use" inRule1.8

Client

Mediareports Opposingcounsel

Pleadings

Adverseparty

Thirdparty

Lawyer

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Rule4-1.13

"Alawyeremployedorretainedbyanorganizationrepresentstheorganizationactingthroughitsdulyauthorizedconstituents."

ConfidencesandClientProblems–Rule1.13(b)

Ifalawyerforanorganizationknowsthat[aconstituent]isengagedinaction,intendstoact,orrefusestoactinamatterrelatedtotherepresentationthatisaviolationofalegalobligationtotheorganization,oraviolationoflawwhichreasonablymightbeimputedtotheorganization,andislikelytoresultinsubstantialinjurytotheorganization,thelawyer shallproceedasisreasonablynecessaryinthebestinterestoftheorganization.

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ConfidencesandClientProblems–Rule1.13(b)

Indetermininghowtoproceed,thelawyershallgivedueconsiderationtotheseriousnessoftheviolationanditsconsequences,thescopeandnatureofthelawyer'srepresentation,theresponsibilityintheorganizationandtheapparentmotivationofthepersoninvolved,thepoliciesoftheorganizationconcerningsuchmatters,andanyotherrelevantconsiderations.Anymeasurestakenshallbedesignedtominimizedisruptionoftheorganizationandtheriskofrevealinginformationrelatingtotherepresentationtopersonsoutsidetheorganization.Suchmeasuresmayincludeamongothers:

(1) askingforreconsiderationofthematter;(2) advisingthataseparatelegalopiniononthematterbesoughtforpresentationto

appropriateauthorityintheorganization;and(3) referringthemattertohigherauthorityintheorganization,including,ifwarranted

bytheseriousnessofthematter,referraltothehighestauthoritythatcanactonbehalfoftheorganizationasdeterminedbyapplicablelaw.

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ReportingUp(andOut?)MORule4-1.13(c)If,despitethelawyer'seffortsinaccordancewithRule4-1.13(b),thehighestauthoritythatcanactonbehalfoftheorganizationinsistsuponaction,orarefusaltoact,thatisclearlyaviolationoflawandislikelytoresultinsubstantialinjurytotheorganization,thelawyermayresigninaccordancewithRule4-1.16.

Up

Out

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ReportingUpandOut– ModelRule

ModelRule1.13(c)Exceptasprovidedinparagraph(d),if

(1) despitethelawyer'seffortsinaccordancewithparagraph(b)thehighestauthoritythatcanactonbehalfoftheorganizationinsistsuponorfailstoaddress inatimelyandappropriatemanneranaction,orarefusaltoact,thatisclearlyaviolationoflaw,an

(2) thelawyerreasonablybelievesthattheviolationisreasonablycertaintoresultinsubstantialinjurytotheorganization,

thenthelawyermayrevealinformationrelatingtotherepresentationwhetherornotRule1.6permitssuchdisclosure,butonlyifandtotheextentthelawyerreasonablybelievesnecessarytopreventsubstantialinjurytotheorganization.

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Out

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ModelConfidentialityExceptions–ModelRule1.6

(1) topreventreasonablycertaindeathorsubstantialbodilyharm;

(2) topreventtheclientfromcommittingacrimeorfraudthatisreasonablycertaintoresultinsubstantialinjurytothefinancialinterestsorpropertyofanotherandinfurtheranceofwhichtheclienthasusedorisusingthelawyer'sservices;

(3) toprevent,mitigateorrectifysubstantialinjurytothefinancialinterestsorpropertyofanotherthatisreasonablycertaintoresultorhasresultedfromtheclient'scommissionofacrimeorfraudinfurtheranceofwhichtheclienthasusedthelawyer'sservices;

(4) tosecurelegaladviceaboutthelawyer'scompliancewiththeseRules;

(5) toestablishaclaimordefenseonbehalfofthelawyerinacontroversybetweenthelawyerandtheclient,toestablishadefensetoacriminalchargeorcivilclaimagainstthelawyerbaseduponconductinwhichtheclientwasinvolved,ortorespondtoallegationsinanyproceedingconcerningthelawyer'srepresentationoftheclient;

(6) tocomplywithotherlaworacourtorder;or(7) todetectandresolveconflictsofinterestarisingfromthelawyer'schangeofemploymentor

fromchangesinthecompositionorownershipofafirm,butonlyiftherevealedinformationwouldnotcompromisetheattorney-clientprivilegeorotherwiseprejudicetheclient.

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ClientWrong-Doing– ModelRule(1) toprevent reasonablycertaindeathor substantialbodilyharm;

(2) toprevent theclientfromcommittingacrimeorfraudthatisreasonablycertaintoresultinsubstantialinjurytothefinancialinterestsorpropertyofanotherandinfurtheranceofwhichtheclienthasusedorisusingthelawyer'sservices;

(3) toprevent,mitigateorrectifysubstantialinjurytothefinancialinterestsorpropertyofanotherthatisreasonablycertaintoresultorhasresultedfromtheclient'scommissionofacrimeorfraudinfurtheranceofwhichtheclienthasusedthelawyer'sservices;…

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ClientWrong-Doing– MissouriRule4-1.6(b)

Alawyermayrevealinformationrelatingtotherepresentationofaclienttotheextentthelawyerreasonablybelievesnecessary:(1) topreventdeathorsubstantialbodilyharmthatisreasonablycertainto

occur;(2) tosecurelegaladviceaboutthelawyer'scompliancewiththeseRules;(3) toestablishaclaimordefenseonbehalfofthelawyerinacontroversy

betweenthelawyerandtheclient,toestablishadefensetoacriminalchargeorcivilclaimagainstthelawyerbaseduponconductinwhichtheclientwasinvolved,ortorespondtoallegationsinanyproceedingconcerningthelawyer'srepresentationoftheclient;or

(4) tocomplywithotherlaworacourtorder.

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ExceptionstoConfidentiality– Illinoisb) Alawyermayrevealinformationrelatingtotherepresentationofaclienttotheextentthelawyer

reasonablybelievesnecessary:(1) topreventtheclientfromcommittingacrimeincircumstancesotherthanthosespecified

inparagraph(c);(2) topreventtheclientfromcommittingfraudthatisreasonablycertaintoresultinsubstantial

injurytothefinancialinterestsorpropertyofanotherandinfurtheranceofwhichtheclienthasusedorisusingthelawyer'sservices;

(3) toprevent,mitigateorrectifysubstantialinjurytothefinancialinterestsorpropertyofanotherthatisreasonablycertaintoresultorhasresultedfromtheclient'scommissionofacrimeorfraudinfurtheranceofwhichtheclienthasusedthelawyer'sservices;

(4) tosecurelegaladviceaboutthelawyer'scompliancewiththeseRules;(5) toestablishaclaimordefenseonbehalfofthelawyerinacontroversybetweenthelawyer

andtheclient,toestablishadefensetoacriminalchargeorcivilclaimagainstthelawyerbaseduponconductinwhichtheclientwasinvolved,ortorespondtoallegationsinanyproceedingconcerningthelawyer'srepresentationoftheclient;or

(6) tocomplywithotherlaworacourtorder.c) Alawyershallrevealinformationrelatingtotherepresentationofaclienttotheextentthelawyer

reasonablybelievesnecessarytopreventreasonablycertaindeathorsubstantialbodilyharm.

ProtectionofConfidences

Model Rule1.6(c):"Alawyershallmakereasonableeffortstopreventtheinadvertentorunauthorizeddisclosureof,orunauthorizedaccessto,informationrelatingtotherepresentationofaclient."

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WhatAre"Reasonable" Precautions

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EvaluationofSafeguards• Factorstobeconsideredindeterminingthereasonableness

ofthelawyer'seffortsinclude,butarenotlimitedto,– thesensitivityoftheinformation– thelikelihoodofdisclosureifadditionalsafeguardsarenot

employed– thecostofemployingadditionalsafeguards– thedifficultyofimplementingthesafeguards (and)– theextenttowhichthesafeguardsadverselyaffectthelawyer's

abilitytorepresentclients(e.g.,bymakingadeviceorimportantpieceofsoftwareexcessivelydifficulttouse)

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TwoAdditionalCaveats• Aclientmayrequirethelawyertoimplementspecialsecurity

measuresnotrequiredbythisRuleormaygiveinformedconsenttoforgosecuritymeasuresthatwouldotherwiseberequiredbythisRule.

• Whetheralawyermayberequiredtotakeadditionalstepstosafeguardaclient'sinformationinordertocomplywithotherlaw,suchasstateandfederallawsthatgoverndataprivacyorthatimposenotificationrequirementsuponthelossof,orunauthorizedaccessto,electronicinformation,isbeyondthescopeoftheseRules.

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Attorney-ClientPrivilege

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§ Acommunication§ Betweenalawyerandclient orprospectiveclient,orother"privilegedpersons,"

§ Thattheclientreasonablybelievesisconfidential§ Andwhosepurposeisto seekortoprovidelegaladviceorlegalservices

Restatement(Third)oftheLawGoverningLawyers

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Client Lawyer

RegardingLegalRepresentation

CorporateConstituents

• Scopeoftheprivilege• "Functionality" test(Upjohn)• Controlgrouptest

• Relayedadvice

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"Necessary" Agents– Kovel

Client Lawyer

Agent

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Keysto"Kovel"• "Agent" shouldserveasaninterpreterforcommunicationsbetweenlawyerandclient– Notusedtoobtaininformationfromthirdparties

• "Agent"mustbe"reasonablynecessary" forcommunications

• Communicationsmustbeconfidentialastothirdparties

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OwnershipofCorporatePrivilege

• Privilegeusuallytransferswithownershiporcontrolofthecompany

• Transferupon– Saleofcompany(stockversusassets)– Bankruptcyorreceiver

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ProtectionsforPrivilege

• Confidential?– Disclaimer– Limitedcirculation

• Betweenclientandlegalcounsel?– Identifyroleinsignatureblock

• Containlegaladvice?– Makereferencestolaw,roleascounsel,etc.

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CommunicationswithConstituents:“Upjohn”Warning

• Identityofclient– andthatconstituentisnot aclient– Possibilityofhiringpersonalcounsel– Whomightpayforpersonalcounsel

• Interviewisprivilegedandconfidential– Needgenerallytomaintainconfidentiality– Companycontrolsandmaywaive

• Anti-retaliationprotection

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Common-InterestPrivilege

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Common-InterestPrivilege

• Alsoknownasthe"jointdefense" or"jointprosecution" privilege

• Notaneworseparateprivilege• Expandswhoisinthe"coneofprivilege" –withwhommaylawyersandclientsspeakwithoutwaivingprivilege

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JointRepresentation

Client1 Client2

Lawyer

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JointDefense/CommonInterestPrivilege

Client1 Client2

Lawyer1 Lawyer2

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CommonInterestAgreement?

• Notrequiredforprivilege

• Maysuggestactioninconcert

• Benefits–Memorializeintent– Dealwithhandlingofinformation

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WorkProductProtection

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WorkProductProtection– MORule56.01(b)(3)

• SubjecttotheprovisionsofRule56.01(b)(4),apartymayobtaindiscoveryofdocumentsandtangiblethingsotherwisediscoverableunderRule56.01(b)(1)andpreparedinanticipationoflitigationorfortrialbyorforanotherpartyorbyorforthatotherparty'srepresentative,includinganattorney,consultant,surety,indemnitor,insurer,oragent,onlyuponashowingthatthepartyseekingdiscoveryhassubstantialneedofthematerialsinthepreparationofthecaseandthattheadversepartyisunablewithoutunduehardshiptoobtainthesubstantialequivalentofthematerialsbyothermeans.Inorderingdiscoveryofsuchmaterialswhentherequiredshowinghasbeenmade,thecourtshallprotectagainstdisclosureofthementalimpressions,conclusions,opinions,orlegaltheoriesofanattorneyorotherrepresentativeofapartyconcerningthelitigation.

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Rule56.01(b)(3)Parsed

§ [A]partymayobtaindiscoveryofdocumentsandtangiblethingsotherwisediscoverableunderRule56.01(b)(1)and

§ preparedinanticipationoflitigationorfortrial§ byorforanotherpartyorbyorforthatotherparty'srepresentative,

includinganattorney,consultant,surety,indemnitor,insurer,oragent,§ onlyuponashowing

– thatthepartyseekingdiscoveryhassubstantialneedofthematerialsinthepreparationofthecaseand

– thattheadversepartyisunablewithoutunduehardshiptoobtainthesubstantialequivalentofthematerialsbyothermeans.

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Work-ProductProtection

Alawyer'sinvolvementisnotrequired

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FederalRule26(b)(3)(A)DocumentsandTangibleThings.Ordinarily,apartymaynotdiscoverdocumentsandtangiblethingsthatarepreparedinanticipationoflitigationorfortrialbyorforanotherpartyoritsrepresentative(includingtheotherparty'sattorney,consultant,surety,indemnitor,insurer,oragent).

But,subjecttoRule26(b)(4),thosematerialsmaybediscoveredif:(i)theyareotherwisediscoverableunderRule26(b)(1);and(ii)thepartyshowsthatithassubstantialneedforthematerialstoprepareitscaseandcannot,withoutunduehardship,obtaintheirsubstantialequivalentbyothermeans.

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Work-ProductProtection

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TwoTypesofWorkProduct

• "Ordinary" workproduct• "Opinion" workproduct

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OpinionWorkProduct– FullProtectionunderRule56.01

Inorderingdiscoveryof[workproduct]whentherequiredshowinghasbeenmade,thecourtshallprotectagainstdisclosureofthementalimpressions,conclusions,opinions,orlegaltheoriesofanattorneyorotherrepresentativeofapartyconcerningthelitigation.

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OpinionWorkProductunderFederalRule26(b)(3)(B)

• ProtectionAgainstDisclosure.Ifthecourtordersdiscoveryofthosematerials,itmustprotectagainstdisclosureofthementalimpressions,conclusions,opinions,orlegaltheoriesofaparty'sattorneyorotherrepresentativeconcerningthelitigation

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NotesonIllinoisWorkProduct

• Noprotectionof"ordinary" workproduct• Noprotectionof"non-attorney" workproduct

• Only"attorneyopinionworkproduct" isprotected

"Loss" ofPrivilege

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Waiver

§ Attorney-ClientPrivilege– Expresswaiver– At-issuewaiver– Disclosure

• WorkProduct– Expresswaiver(byclientorfirm)

– At-issuewaiver– Disclosure– whereinconsistentwithpurposeorlitigationadvantage

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Example§ MarthaStewartisbeinginvestigatedforinsidertrading§ StewartprepareschronologyofeventsaroundImClonestock

sale– Stewartsendschronologytoherlawyers– Stewartsendschronologytoherdaughter

§ Isattorney-clientprivilegewaived?§ Iswork-productprotectionwaived?

Crime-FraudException

• Key– communicationsarenot(really)forthepurposeofgivingorreceivinglegaladvice,buttocommitacrime

• USv.Williams(8th Cir.2013)– defendantaskedlawyertosmugglecellphoneintoprison

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Application

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"Test"§ Legalcounselreceiveswordthathospitalmaybesuedforpatientcare

§ Legalcounselrequestsinvestigationofwhatoccurred– Recordsaregathered–Witnessesareinterviewed– Scanresultsarecordonedforpreservation

Stateexrel.Kosterv.Cain (MoAppWD2012)

• Garnishmentaction• Interrogatoriesrequiredlawfirmtoidentifyamountofclientmoneyinfirm'spossession

• Courtheldtheseinterrogatoriesdidnotseekprivilegedinformation

• Also,informationdidnotbecomeprivilegedsimplythroughtransfertoattorney

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Nealv.Denney(W.D.Mo.2013)

§ Defendantpleadsguilty,thenchallengesguiltypleabyclaimingineffectiveassistanceofcounsel

§ Maylawyertestifyagainstdefendant?§ Maylawyerdefendagainstineffectiveassistancechallengeandcontinuetherepresentation?

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TwoQuotesfromDenney• Conflict– "itwouldbeunrealistictoimposeanobligationontrialcounsel

towithdraweverytimeacriminaldefendantcomplainsaboutcounsel'srepresentation.Norcanwedemand...thattrialcounselremainsilentinresponsetoaclient'saccusationsofineffectiveassistancewhencounselwouldbefreeinapost-convictionproceedingtodefendtheaccusationswithoutrecrimination."

• Privilege– "Thedutyofconfidentialityisindistinguishablefromthedutytomaintaintheattorney-clientprivilege...."

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Carrv.Anheuser-BuschCos.(8th 2012)

• CarrchallengeddenialofseverancebenefitsunderA-B'sERISAplan

• Discoveryissues– Emailsrelatingto"proceduralduties" owedtoplanbeneficiary– A-Brequiredtoproduce

– Emailsrelatingto"substantivemerits" ofCarr'sclaims– A-Bnotrequiredtoproduce• Emailswerenotrelatedtoplanadministration• EmailsweresentafterCarrhadbecomeadversetotheplan

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ABAOpinion 473

• Providenotice andconsultwithclient– Mayobtaininformedconsenttorespond

• Ifnoconsent,challengesubpoena– Non-frivolousarguments

• Appeal– Cooperate ifclientrequests– Notrequiredifnoclientcommunication

• Payforwork?

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MichaelDowneyDowneyLawGroupLLC

(314)961-6644(844)961-6644tollfree

[email protected]

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