Beyond the Client: the Protection of the Corporate Attorney-client Privilege - June 2006 - the Civil Litigator
| Publication year | 2006 |
| Pages | 31 |
| Citation | Vol. 35 No. 6 Pg. 31 |
2006, June, Pg. 31. Beyond the Client: The Protection of the Corporate Attorney-Client Privilege - June 2006 - The Civil Litigator
June 2006
Vol. 35, No. 6 [Page 31]
The Civil Litigator
Beyond the Client: The Protection of the Corporate Attorney-Client Privilege
by John M. Palmeri, Franz Hardy
The Civil Litigator column addresses issues of importance and interest to litigators and trial lawyers practicing in Colorado courts. The Civil Litigator is published six times a year.
Column Editors:
Don Kelso, Denver, of Holme Roberts & Owen LLP - (303) 861-7000, kelsod@ hro.com; Eric Bentley, Colorado Springs, of Holme Roberts & Owen LLP - (719) 381-8400, bentlee@hro.com
This month's article was written by John M. Palmeri and Franz Hardy, officers of White and Steele, P.C., where they specialize in commercial litigation - (303) 296-2828, jpalmeri@wsteele.com and fhardy@wsteele.com.
The attorney-client relationship has developed along with the evolution of modern business relationships. Courts have demonstrated a willingness to modify and extend the attorney-client privilege in business situations that are beyond the traditional usage of this ancient privilege. This article provides an overview of the privilege's development and application in modern corporate settings.
The attorney-client privilege generally is familiar to even those with limited exposure to the legal system. In its most basic form, the privilege protects communications between an attorney and client involving legal advice. Despite the simplicity of this notion, it can be difficult to apply when the "client" is a business entity.
In 1981, the U.S. Supreme Court addressed the attorney-client privilege in Upjohn Company v. United States,(fn1) and determined that the privilege could extend to all employees of a corporate client. Although the Upjohn case now is an accepted part of common law, the decision came at a time when court opinions varied widely as to the application of the privilege to corporate clients.(fn2)
The Colorado Supreme Court recently analyzed the attorney-client privilege as applied to what seemed to be an even more tenuous relationship than addressed in Upjohn. In Alliance Construction Solutions, Inc. v. Department of Corrections,(fn3) the Colorado Supreme Court ruled that the attorney-client privilege protected communications between a client's attorney and an employee of an independent contractor hired by the client. In Genova v. Longs Peak Emergency Physicians, P.C.,(fn4) the Colorado Court of Appeals applied the privilege to the former director of a corporate client.
As new business relationships evolve, courts are required to reassess the application of the attorney-client privilege, keeping in mind the fundamental purpose behind it. This article discusses the background of the attorney-client privilege, the U.S. Supreme Court's application of the privilege in the corporate setting in Upjohn, the Colorado Supreme Court's recent analysis of the privilege in Alliance Construction, and the Colorado Court of Appeals' decision in Genova.
History of the Attorney-Client Privilege
The origin of the attorney-client privilege dates back to Roman law(fn5) and was recognized in early English common law.(fn6) The privilege is codified in Colorado.(fn7)
The attorney-client privilege is "the oldest of the privileges for confidential communications"(fn8) and is "established when it is shown that the client seeks and receives the advice of the lawyer on the legal consequences of the client's past or contemplated actions."(fn9) The Colorado Supreme Court has recognized the important policy issues underlying the privilege:
In order to navigate within our legal system, lay people frequently require the assistance of attorneys. Attorneys are unable to provide clients with effective legal advice unless the clients reveal all pertinent facts, no matter how embarrassing or inculpating these facts may be. Open and honest communication between attorney and client thus furthers the attorney's ability to serve her client's interests. Absent assurances that communications will remain confidential, clients may be reluctant or unwilling to seek legal advice or to confide fully in their attorney. Thus, the right of parties within our justice system to consult professional legal experts is rendered meaningless unless communications between attorney and client are ordinarily protected from later disclosure without client consent.(fn10)
Not all communications between attorney and client are privileged. The privilege applies only "to statements made in circumstances giving rise to a reasonable expectation that the statements will be treated as confidential."(fn11) Thus, it is not enough that a communication is made by a client to an attorney. As stated by the Colorado Supreme Court, "the circumstances indicating the intention of secrecy must appear."(fn12) Generally, if a client communication is made to an attorney in the presence of a third party, the communication is not considered confidential.(fn13)
Although the privilege generally is limited to communications between an attorney and a client, Colorado courts have recognized some exceptions. For example, Colorado recognizes a common-interest exception, wherein "communications shared with third persons who have a common legal interest with respect to the subject matter thereof will be deemed neither a breach nor a waiver of the confidentiality surrounding the attorney-client relationship."(fn14) Colorado also recognizes the "co-defense" or "joint clients" exception, wherein "the attorney-client privilege extends . . . to communications made between co-defendants and the attorney who represents them both, for the sake of discussing their common interests in a joint defense in civil or criminal litigation."(fn15) Moreover, statements made in the presence of certain employees or agents of the attorney do not defeat the privilege.(fn16)
In the corporate setting, the Colorado Supreme Court applied the attorney-client privilege to communications made by employees of a corporate client to the corporation's attorney.(fn17) Following the U.S. Supreme...
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