“Corporate Communications and Attorney-Client Privilege: What You Need to Know”
Wednesday, October 19, 2016 CLE Presentation
Speakers:Edward Boyle, Partner, Venable LLP
Lawrence Cooke, Partner, Venable LLP
Michael Martinez, Senior Vice President and Associate General Counsel for Dispute
Resolution, Marriott International
Joelle Quilla, SVP-Legal & General Counsel – Client and Corporate Services,
Cognizant Technology Solutions
Jonathan Robbins, Executive Director, Morgan Stanley
- The Standard for Attorney-Client Privilege and Work Product Protection
A.Choice of Law: There is no uniform standard for attorney-client privilege and work product doctrine law in the U.S., and theyoftendifferbetween state and federal courts. Therefore, an initial question courts must consider is: whose law applies?
1.Attorney-client privilege:
(a)In federal court, the choice of law for attorney-client privilege depends on the basis for the court’s jurisdiction. Federal common law governs the privilege in cases raising questions of federal law, but in federal court diversity proceedings, state law generally applies.[1]
(b)In state court, state law generally applies.
2.Work product:
(a)The work product doctrine is procedural in nature, so the rules of the forum court apply.[2] Thus, in federal court, federal common law applies, while in state court, state law governs.
B.Standard for Attorney-Client Privilege:
1.Although there is no uniform attorney-client privilege law, as a general matter a party asserting attorney-client privilege must show the information sought was:
(a)A communication between client and counsel, which;
(b)Was intended to be and was in fact kept confidential, and;
(c)Was made for the purpose of obtaining or providing legal advice.[3]
C.Standard for Work Product Doctrine:
1.The work product doctrine protects from discovery:[4]
(a)A document or tangible thing;
(b)That was prepared in anticipation of litigation (i.e., prepared or obtained because of the prospect of litigation);[5]
(c)And was prepared by or for a party, or by or for his representative.
2.Work product falls into two categories:
(a)“Opinion work product,” which includes an attorney’s “interviews, statements, memoranda, correspondence, briefs, [and] mental impressions”[6]that “tend[]to reveal the attorney’s mental process[,]” receives heightened protection.[7]
(b)Work product containing “factual material” may still be considered protectable work product but does not receive the heightened, special protection accorded to opinion work product.[8]
II.Attorney-Client Privilege and Third-Party Communications with Public Relations Consultants
A.Communications with counsel that are also conveyed to third parties usually waive the attorney-client privilege. However, “[t]he privilege may be expanded to those assisting a lawyer in representing a client, such as public relations consultants and agents.”[9]
1.The purpose of the communication is key – was it related to legal advice and was it intended to be kept confidential?
(a)A communication with public relations agents is protected if it is “made in confidence for the purpose of obtaining legal advice from the lawyer.”[10]
(b)However, if the information is intended to be passed on to a third party (e.g., in a publication or press release), the communication is not considered “confidential” and is not privileged.[11]
(i)Many people (attorneys included) mistakenly believe that communications between an attorney and client made in private are automatically privileged. To the contrary, just because a conversation is private between the client and the attorney does not make it confidential.
III.Real-World Application ofthe Privilegein the Public RelationsContext – The McNamee Case
A.McNamee v. Clemens, No. 09 CV 1647, 2013 WL 6572899 (E.D.N.Y. Sept. 18, 2013): In 2007, U.S. Senator George Mitchell released the “Mitchell Report” which included statements from professional baseball playerRoger Clemens’s former trainer, Brian McNamee, that he had injected Clemens with performance enhancing drugs. Five days after the Mitchell Report was released, Clemens’s lawyer hired public relations strategist Joe Householder and his firm to allegedly launch a public relations campaign to brand McNamee a liar. Clemens also filed a defamation suit against McNamee in Texas state court. McNamee, in turn,filed a defamation suitagainst Clemens in New York federal court. As part of the New York suit, McNamee sought communications between Clemens, Householder, and Householder’s firm, as well as communications between Clemens and his sports agents, Randy and Alan Hendricks. Clemens argued that these communications should be withheld as privileged because were essentially members of his legal defense team.
1.The New York federal court applied New York attorney-client privilege law because it was a diversity case. Id. at *4.
2.Under New York law, the court held that the communications were not privileged because Clemens“has not shown that Householder or Hendricks performed anything other than standard public relations or agent services for Clemens, nor has he shown that his communications with either were necessary so that Rusty Hardin could provide Clemens with legal advice.” Id. at *6. Instead, the communications had the purpose of developing a public relations campaign and media strategy to protect Clemens’s public image and reputation. Id.
3.Likewise, the court held that the work product doctrine did not apply because thedocuments “rarely mentioned” litigation strategy. Id. at *8. When litigation was brought up, “it [was] often contained within communications predominantly focused on public relations and media strategy.” Id.
4.In addition to the above determinations, the court also held that Clemens waived his privilege claims by failing to submit a timely privilege log. Id. at *3. Clemens only submitted a privilege log after the court ordered he provide documents for in camera review, and even then, the privilege log’s vague descriptions lacked sufficient information for the court to determine whether the documents were privileged. Id. The court noted that there were some documents that could potentially be privileged, but given the lack of information in the privilege log, the court could not make such a determination. The court admonished that Clemens “has failed to fuilfil [sic] his burden to show that these communications were made for the purpose of obtaining legal advice or because of litigation” and that “it was counsel’s responsibility to identify the potentially privileged documents scattered throughout a large number of unprivileged documents, rather than to submit a blank privilege claim over broad categories of communications, many of which are clearly not privileged.” Id. at *6.
5.The takeaway: McNamee appears to be in line with recent cases, set forth below, in which courts refused to find attorney-client privilege or work product protection for public relations-related communications.
B.Bloomingburg Jewish Educ. Ctr. v. Village of Bloomingburg, No. 14-cv-7250, 2016 WL 10699556 (S.D.N.Y. Mar. 18, 2016): In Bloomingburg, the plaintiffs brought various constitutional, statutory, and common law claims against the defendants in New York. They served a subpoena on a public relations firm that had been hired by defendants’ counsel in a related RICO action. The public relations firm argued the subpoena imposed an undue burden, while the defendants argued that the documents requested were privileged because the firm was hired by their counsel to assist in litigation strategy. In a response the court described as “sweeping and rather brazen,” the defendants asserted that all of the requested communications were privileged, and so they should not be required to collect, review, or log the communications.Id.at *1. They did not provide a privilege log to the court, and they only submitted a two-page declaration from counsel in the related action to describe the public relations firm’s role.
1.The court was outraged by the defendants’ failure to collect, review, and log the communications alleged to be privileged, and it granted the plaintiffs’ motion to compel.Id.at *4. The court stated it was the defendants’ “burden to make a compelling case that the privilege is applicable here,” and yet they had “failed to conduct the basic work that is a prerequisite” for the court to find in their favor.Id. at *5. Further, the court found the “vague and highly generalized affidavit” from the defendants’ counsel was insufficient to establish either attorney-client privilege or work product protection, and it had no other competent evidence to assess their claims.Id.
2.After sharply criticizing the defendants’ sweeping privilege claim, the court then substantively analyzed the defendants’ claim under federal common law and held that the defendants had failed to show the public relations firm performed anything beyond ordinary public relations functions or that it was essential to defendants’ litigation strategy.Id. at *7.
3.Significantly, the court ordered all of the subject communications be produced immediately.Id. at *5, *8. It acknowledged that the Calvin Klein court held that attorney work product given to the public relations firm was still privileged, but here the Bloomingburg court found the defendants waived the right to make that argument by failing to perform even the basic work to allow the court to determine which documents might be attorney work product.Id.
4.The takeaway: Read together with McNamee, the Bloomingburg case makes clear that the burden of proof rests with the party seeking to withhold privileged documents, and courts will punish parties who fail to meet their discovery obligations. Sweeping privilege claims, unsupported by specific claims for each document, will not suffice. Thus, parties should take the privilege review and preparation of the privilege log seriously.
IV.Other Instances of Non-Privileged Public Relations Communications
A.Gucci Am., Inc. v. Guess?, Inc., 271 F.R.D. 58 (S.D.N.Y. 2010): As part of its ongoing trademark protection and enforcement strategy, the luxury brand Gucci occasionally issued press releases in the ordinary course of business. In subsequent trademark litigation against the Guess? brand, Gucci sought to withhold, among other things, draft press releases by Gucci’s in-house public relations department related to the litigation and Gucci’s trademarks generally.
1.Applying federal law, the court held that the communications were not protected by attorney-client privilege or the work product doctrine:
(a)The court determined that the draft press releases related to the litigation, even if reviewed by Gucci’s counsel, were made for business purposes and were not drafted or reviewed by counsel for the purpose of rendering legal advice. Id. at 78-79.
(b)Similarly, the court held that the draft statements by Gucci’s in-house corporate communications department “regarding the protection of Gucci trademarks and the threat of counterfeit products generally” were made in the ordinary course of Gucci’s business and therefore were not privileged nor work product.Id. at 79.
2.The takeaway: Press-related communications not made for the purpose of rendering legal advice are probably not protected, and statements made in the ordinary course of business will likewise not be protected.
B.Reino de Espana v. Am. Bureau of Shipping, No. 03 Civ. 3573, 2005 WL 3455782 (S.D.N.Y. Dec. 14, 2005): Here, the defendant American Bureau of Shipping (“ABS”) sought the return of inadvertently produced email communications with in-house counsel regarding a general industry news report. ABS argued that the emails were privileged because they sought legal advice from counsel regarding concerns about potential liability.
1.Seemingly applying federal law, the court held that the communications were not privileged. It determined that the communications were “non-legal discussions of business-related issues” about ABS’s position vis-à-vis its competitors based on different safety standards. Id. at *2. Moreover, the court found that the inclusion of an in-house communications member outside the legal department supported a finding that the communications were business-related. Id.
2.The court also held that the in-house communications member’s handwritten notes from a meeting with counsel were not privileged because they primarily related to business concerns. Id. at *3. Nor were they work product because they would have been made anyway in the ordinary course of business. Id.
3.The takeaway: Communications with counsel, even if internal and kept confidential, are not necessarily privileged. They will probably not be protected if they primarily relate to business concerns.
C.In re Seroquel Prods. Liability Litig., No. 06-md-1769, 2009 WL 3739347 (M.D. Fla. Nov. 6, 2009): In this multi-district litigation involving AstraZeneca, the plaintiffs sought to compel production of documents, including draft press releases, that were sent to counsel for review.
1.Applying federal common law, the court held that communications sent to counsel for review that she looked at with a “legal eye” and “not a business eye or editorial eye” would be protected. Id. at *4 (internal quotations omitted).
2.The takeaway: Targeted in-house communications with counsel are more likely to be protected than widely distributed in-house communications that happen to copy an attorney.
D.Robbins & Myers, Inc. v. J.M. Huber Corp., 274 F.R.D. 63 (W.D.N.Y. 2011): In this case, Robbins & Myers, Inc. (“R&M”) sued defendants for fraud in connection with its acquisition of defendant J.M. Huber Corporation’s subsidiary. According to R&M, the defendants discovered a year before the acquisition that certain products failed to meet quality standards, and it spun off the division as a subsidiary and sold it to R&M without informing R&M of the problems. Although there were no reported accidents related to the faulty products, R&M elected to issue a “Public Service Announcement” (“PSA”) to inform customers of the issue following a two-hour in-house meeting with executives an in-house counsel. After a VP drafted the PSA and it was reviewed by counsel and distributed to customers, R&M held several “lunch and learn” seminars with customers to discuss the situation. Subsequently, the defendants sought communications and documents related to the meeting and the draft PSA.
1.The court held that communications and drafts related to the PSA were not protected by attorney-client privilege under federal common law because they contained information intended to be conveyed to third parties, i.e. the customers. Id. at 85.
(a)However, the court did note that “[d]raft documents prepared by a client and submitted to counsel to facilitate rendering legal advice on proposed transactions may remain privileged although the final version was intended for distribution to third-parties provided the draft documents demonstrated an intent to seek confidential legal advice on their content.” Id. at 85.
2.Even if the communications were not intended to be conveyed to third parties, the court stated they would not have been privileged because the thought process among R&M’s executives and attorneys was directed “not to the legal advisability of the proposed content of the PSA and its publication, but to how most effectively inform [R&M’s] customers of the potential risk of” the products at issue. Id. at 85.
(a)Even an outline drafted by counsel for the meeting was deemed not privileged because the meeting concerned business. Id. at 87-88.
3.The takeaway: If a communication is intended to be provided to a third-party, it is not confidential for purposes of the attorney-client privilege, even if drafted by a lawyer.
V.Public Relations Communications May Be Privileged if TheyRelate to a Specific Litigation or Government Investigation
A.In re Grand Jury Subpoenas Dated March 24, 2003 Directed to (A) Grand Jury Witness Firm (B) Grand Jury Witness, 265 F. Supp. 2d 321 (S.D.N.Y. 2003): Here, the U.S. Attorney’s office began a high profile investigation of a former employee of a company. As part of her litigation strategy, the employee’s attorneys hired a public relations firm to advise the litigation team on media strategy to try to influence prosecutors not to charge the employee. The firm claimed it was hired because of a concern that intense media scrutiny would pressure prosecutors and regulators to charge the employee, and the firm’s responsibility was to reduce the risk of litigation. The government issued a grand jury subpoena for documents and testimony to the public relations firm, which the firm argued were privileged.
1.Unlike in the previous cases discussed so far, here the court found that communications with the public relations firm were privileged under federal common law: “[T]his Court holds that (1) confidential communications (2) between lawyers and public relations consultants (3) hired by the lawyers to assist them in dealing with the media in cases such as this (4) that are made for the purpose of giving or receiving advice (5) directed at handling the client’s legal problems are protected by the attorney-client privilege.” Id. at 330 (emphasis added).
(a)The court reasoned that “in some circumstances, the advocacy of a client’s case in the public forum will be important to the client’s ability to achieve a fair and just result in pending or threatened litigation.” Id.
(b)The court was “persuaded that the ability of lawyers to perform some of their most fundamental functions – such as (a) advising the client of the legal risks of speaking publicly and of the likely legal impact of possible alternative expressions, (b) seeking to avoid or narrow charges brought against the client, and (c) zealously seeking acquittal or vindication – would be undermined seriously if lawyers were not able to engage in frank discussions of facts and strategies with the lawyers’ public relations consultants.” Id.
2.The court also held that certain draft documents withheld by the public relations firm were protected work product because they were prepared in anticipation of litigation. Id. at 333.
3.The takeaway: This unusual situation, which was very fact-dependent, demonstrates that communications about public relations strategy may be privileged if they are actually in service of litigation. However, it is a difficult showing to make.
B.Calvin Klein Trademark Tr. v. Wachner, 198 F.R.D. 53 (S.D.N.Y. 2000): In this case, plaintiff Calvin Klein, Inc.’s attorneys retained a public relations firm that Calvin Klein was already working with to consult with onthe litigation. Defendants sought documents from the public relations firm and its employee, but Calvin Klein argued the communications were privileged because the public relations firm was retained to help attorneys to understand the reaction of Calvin Klein’s constituencies to the litigation, to provide legal advice, and to respond to media inquiries.