Appendix 22. Identifying Privileged Material And Maintaining Privilege When Complying With Second Requests

• Pages: 640-655

APPENDIX 22 22-1

Identifying Privileged Material And

Maintaining Privilege When Complying

With Second Requests1

Identifying privileged material and maintaining the privilege can be

like walking a tightrope when responding to Department of Justice and

Federal Trade Commission requests for additional information or

documentary material (Second Requests). Both the DOJ and FTC have

become increasingly inflexible in the last few years in their review of the

privilege index routinely required by every Second Request.

Occasionally, they have not allowed the second waiting period to begin

until the index is completed according to the Second Request's

instructions and each and every assertion of privilege in the index is

deemed correct by staff. Indices listing hundreds, if not thousands, of

privileged documents have become the rule rather than the exception.

Lengthy meetings or telephone conferences with the staff to review

privilege claims questioned by staff are commonplace.

Problems relating to the treatment of privileged documents in Second

Request productions have become more prevalent for two reasons. First,

both agencies routinely define the recipient of the Second Request to

include all of that entity's agents and representatives. This can include all

outside counsel retained during the relevant time period and drastically

expands the scope of the search and the likelihood that privileged

materials will surface during the search for responsive documents.

Second, the FTC has publicly signaled and both agencies have reinforced

in practice their intention to hold accountable “some respondents [doing]

only a superficial job of preparing a privilege index, perhaps believing

that the staff does not scrutinize such documents.”2

The result is that a deficient privilege index gives the agencies a

perfect excuse to "buy time" and reject or "bounce" a Second Request

submission, thereby delaying the start of the second HSR Act waiting

1. Reprinted from Brian C. Mohr, Identifying Privileged Material and

Maintaining the Privilege when Complying with Second Requests, Antitrust

(Spring 1994).

2. Mary Lou Steptoe, then Deputy Director (now acting Director), FTC Bureau

of Competition, Remarks Before the ABA Section of Antitrust Law Clayton

Act Committee at 6, Washington, D.C. (March 22, 1990) [Steptoe Speech].

22-2 APPENDIX 22

period until the index is deemed in full compliance.3 This extends the

time within which staff can conduct its investigation and delays the

closing of the entire transaction.

The problems of balancing compliance with the need to identify and

shield privileged documents are further complicated by the fact that

staffing for these matters (particularly at the document review and

privilege index stages) typically involves legal assistants and fairly junior

associates. These team members may not be as conversant with privilege

principles, or the agencies' current treatment of privilege issues, as other

more senior personnel. Add to this the numerous procedural questions

regarding the identification of privileged documents and the creation of

indices reflecting privileged material and it becomes apparent that

strategies and procedures useful in reviewing privileged materials for

production are needed.

This article will provide general guidelines for situations or

documents that commonly arise when determining privilege in producing

a Second Request response.4 It will also propose and illustrate

appropriate procedures to identify, organize, and protect privileged

materials. The focus will be on the production of such materials in

response to a Second Request, but many of the techniques discussed

should prove equally helpful in responding to a Civil Investigative

Demand or a subpoena duces tecum.

Defining the Privilege

Attorney-Client Privilege. The attorney-client privilege allows

management and other employees to reveal comfortably to counsel the

highly sensitive and often proprietary business information that is so

critical in analyzing the antitrust consequences of mergers and other

3 In the context of a Second Request with its inherent time constraints, it is

very unlikely that the government would ever apply to a court to rule on the

validity of a privilege claim. As FTC Deputy Director Steptoe stated:

Remember also that in the [S]econd [R]equest context there is no simple

mechanism for getting a court to rule on the validity of a privilege. If the

parties fail to provide a satisfactory privilege index, the Commission's only

recourse is to bring a 7A action to enjoin the transaction on the theory that

the parties have failed to comply with the Hart-Scott-Rodino Act.

Id. at 6-7.

4. The examples used are drawn for the most part from past transactions and

are illustrative only. The resolution of privilege questions is often fact-

intensive and must be decided on an ad hoc basis.