Does DOJ's privilege waiver policy threaten the rationales underlying the attorney-client privilege and work product doctrine? A preliminary "no".

• Author: O'Sullivan, Julie R.

1. INTRODUCTION II. UPJOHN CO. V. UNITED STATES III. INTERNAL CORPORATE INVESTIGATIONS A. The Investigation B. "Selective Waiver" IV. CONSIDERATION OF DOJ's WAIVER POLICY A. Rationale Behind DOJ Waiver Policy B. Scope of DOJ Waiver Policy in Practice 1. The McNulty Memo 2. "Attorney Client Protection Act" and the Filip Memo V. UPJOHN REVISITED A. Will the Corporation Cease Seeking Legal Advice Absent Privilege Protections? B. Will Counsel Stop Investigating? C. Will the Quality of Corporate Investigations Suffer Because of DOJ Policy? D. Will Employees Stop Talking to Counsel if Their Communications May be Revealed? VI. ATTORNEY-CLIENT PRIVILEGE AND WORK PRODUCT PROTECTION AS FIFTH AMENDMENT SURROGATE VII. CONCLUSION I. INTRODUCTION

   According to white-collar defense practitioners, the demise of the corporate attorney-client privilege and work product doctrine is imminent. (1) While a variety of assaults have been identified, (2) by far the most oft-cited culprit is the U.S. Department of Justice (DO J), whose prosecutors, it is charged, have routinely insisted that corporations waive these protections to secure cooperation credit and declination of criminal action against the corporate actor and/or consideration at sentencing. (3) DOJ has, by and large, vigorously defended its policies in this regard. Congress now threatens to inject itself into the debate: legislation entitled the "Attorney-Client Privilege Protection Act" has been introduced that would bar federal prosecutors from asking organizations to disclose information protected by the attorney-client privilege or the work product doctrine or conditioning cooperation credit or civil or criminal charging decisions on whether an entity has waived these protections (the Act does not, however, affect organizations' ability to volunteer to waive). (4) The principal aim of this article is to explain why the proposed Act is responsive to a problem that does not exist, and non-responsive to the actual source of the defense bar's unhappiness. (5)

   The first iteration of DOJ waiver policy was set forth in a 1999 Memorandum issued by then-Deputy Attorney General Eric Holder (the "Holder Memo"), which sets forth the factors that prosecutors ought to consider in evaluating whether to charge a corporation with a criminal offense. One of the ten factors prosecutors were instructed to examine in making these decisions was identified as the corporation's "cooperation and voluntary disclosure." (6) Prosecutors were instructed that they could consider, in "assessing the adequacy of a corporation's cooperation," "the completeness of its disclosure including, if necessary, a waiver of the attorney-client and work product protections, both with respect to its internal investigation and with respect to communications between specific officers, directors, and employees and counsel." (7) The Memo explained that such waivers "permit the government to obtain statements of possible witnesses, subjects, and targets, without having to negotiate individual cooperation or immunity agreements" and "are often critical in enabling the government to evaluate the completeness of a corporation's voluntary disclosure and cooperation." (8) The Holder Memo concluded, however, that such waivers were only one consideration and were not "an absolute requirement." (9) Finally, in a footnote, the Memo cautioned that any waivers "should ordinarily be limited to the factual internal investigation and any contemporaneous advice given to the corporation concerning the conduct at issue." (10)

   Mr. Holder's memo was updated in 2003 by then-Deputy Attorney General Larry Thompson, in major part to emphasize that prosecutors ought to scrutinize carefully the authenticity of a corporation's cooperation, but with no change to the substance of the above-stated policy. Fairly read, the Holder/Thompson policy on its face does not "require" or even encourage corporate privilege waivers. The defense bar's objection, then, was not so much to the language of the policy as to what they viewed as the policy's implicit invitation to prosecutors to "request" privilege waivers in virtually every case--an invitation the bar contends prosecutors accepted with uniform alacrity. It is important to note that there is a serious contest over the issue of the frequency of waiver requests. In this regard, the government and the defense appear to be practicing in different worlds, and both sides present surveys attesting to their particular reality. (11) According to defense practitioners, "[w]aiver of the privilege is now a routine part of discussing a corporate resolution" of a criminal investigation. (12) Indeed, even Mr. Holder, now in private practice, has complained that "[t]oday, it's maddening.... You'll go into a prosecutor's office ... and fifteen minutes into our first meeting they say, 'Are you going to waive?'" (13) Predictably, DOJ responds, just as emphatically, that its prosecutors have been judicious in requesting privilege waivers, (14) doing so only where necessary to determine the underlying facts and to test the completeness of corporate efforts to cooperate.

   Reacting to what its members viewed as an inappropriate and counterproductive assault on the attorney-client privilege and work product doctrine, a self-described "Coalition to Preserve the Attorney-Client Privilege" commenced an aggressive campaign for a legislative "fix": the proposed "Attorney-Client Protection Act." The Coalition includes in its membership an impressive array of political muscle: the American Bar Association, the U.S. Chamber of Commerce, the Business Roundtable, the Financial Services Roundtable, the National Association of Criminal Defense Lawyers, the National Association of Manufacturers, and the Association of Corporate Counsel. This Coalition has worked hard for its bill, and has enlisted such "A" list lawyers as former U.S. Attorneys General Richard Thornburg and Edwin Meese to support it. The success of the Coalition in gaining the attention of lawmakers pressured DOJ to adopt a revised policy, reflected in the so-called "McNulty Memo," in December 2006. (15) This Memo--authored by then-Deputy Attorney General Paul McNulty--continued to contemplate requests for corporate privilege waivers, but required prosecutors to weigh identified factors before requesting waivers, was more detailed regarding the types of materials that could be requested, and mandated that requests be considered (and in some cases) approved at the highest levels of Main Justice. (16)

   The ink was barely dry on the McNulty Memo before American Bar Association President Karen J. Mathis issued a press release stating that these guidelines "fall far short of what is needed to prevent further erosion of fundamental attorney-client privilege, work product, and employee protections during government investigations." (17) A few practitioners issued faint praise, (18) while others expressed significant reservations (19) or flat-out rejected DOJ's olive branch. (20) The Coalition continued its lobbying and, as a consequence, the Attorney-Client Privilege Protection Act of 2007 sailed through House committee consideration a month after its introduction and was passed with virtually no objection three months later, on November 12, 2007. (21)

   Because DOJ promised to again revise its policy, potentially obviating a legislative solution, the Senate held off on a similar bill. When DOJ was perceived to be dragging its feet, Senator Arlen Specter, and twelve co-sponsors, introduced on June 26, 2008 a bill similar to that passed by the House, entitled "Attorney-Client Protection Act of 2008." With this not-so-subtle reminder of congressional concern, DOJ, in the person of Deputy Attorney General Mark Filip, finally issued another revision of its policy in August 2008. (22) This third iteration of DOJ policy on the substance and effect of corporate "cooperation" in criminal charging decisions in five years is now referred to as the "Filip Memo." (23) The Filip Memo seems to simplify matters considerably, at least measured against the detailed--and now apparently obsolete--guidelines and approval requirements embedded in the McNulty policy. Its bottom line is clear: (1) privilege waivers are not (and assertedly have never been) a prerequisite for cooperation credit or for declination of criminal charges; (2) a corporation may freely waive its privileges if it wishes; (3) but that waiver may not be considered when a prosecutor decides whether to give a corporation credit for its cooperation in charging; (4) rather, the critical determinant is whether the entity has provided prosecutors with the facts necessary for them to investigate the matter fairly and responsibly (24) Some in practice have correctly summarized the ultimate DOJ message as: "we don't care if you waive, just provide the relevant facts," leaving it to practitioners to sort out if and how that can be achieved while maintaining the privilege protections. (25) Although the above appears to respond to the proposed legislation, the revised policy does not institute Congress's proposed bar on prosecutorial requests for waivers. The policy seemingly permits prosecutors to ask for waivers of "fact" work product and privileged communications, but it does provide that corporations "need not produce, and prosecutors may not request," such "core" work product and attorney-client privileged materials as attorneys' notes of witness interviews and advice given to the client concerning the legal implications of the putative misconduct at issue "as a condition for the corporation's eligibility to receive cooperation credit." (26)

   Such is the status of the debate regarding DOJ waiver policy to date. As of this writing, it is too soon to judge whether DOJ's latest efforts will foreclose Senate action on the proposed "Attorney-Client Privilege Protection Act of 2008." (27) Due to the vagaries of publishing...