Trends in Privilege and Post-Accident Investigations Reply

Republished with permission. This article first appeared in Law360 on December 22, 2015.

By Todd Presnell

Companies that utilize their legal departments to self-investigate Bicycle Accidentincidents involving their products or services often assume that the corporate attorney–client privilege protects the investigation from disclosure in any subsequent litigation.  A recent decision from a Connecticut trial court declaring that the attorney–client privilege did not protect a corporate paralegal’s post-accident investigation highlights an opposite trend and provides lessons for corporate counsel.

Paralegal Investigation Not Privileged?

In Segway, Inc. v. Special Olympics Conn., Inc.,[1] the Special Olympics of Connecticut (SOCT) wanted to host an event for law-enforcement personnel that included an obstacle course featuring Segway Personal Transporters.  Segway agreed to supply SPTs for the event, but became concerned when it learned that one leg of the course included participants navigating SPTs through the course while blindfolded!

Segway therefore observed a dry run in which college-student volunteers rode SPTs through the obstacle course.  One student volunteer, however, crashed during the dry run, suffered injuries, and sued Segway.  Segway settled for $10 million and sued SOCT for indemnification.

Upon learning of the volunteer’s incident, Segway’s in-house legal department directed one its paralegals to investigate the matter.  During discovery of the indemnification case, SOCT sent a notice of deposition seeking to depose Segway corporate designees on a variety of topics, including its investigation.  Segway produced its corporate paralegal for the corporate-representative deposition, largely because more knowledgeable employees had left the company, but, citing the privilege, refused to allow her to answer questions about her investigation.

SOCT asked the court to compel the paralegal to answer questions about her investigation.  The court correctly held that the corporate attorney–client privilege extends to agents or employees of an attorney, which would include as in-house paralegals.  And the court recognized that courts construe the corporate privilege narrowly and apply it only where (1) the attorney is acting in a professional legal capacity; (2) a current employee communicates with the attorney; (3) the communication relates to legal advice that the company seeks from the attorney; and (4) the employee makes the communication in confidence.

Segway, the court ruled, failed to prove these four elements. The court found that Segway failed to prove “by any evidence or affidavit” that the paralegal conducted the investigation “for providing such information in connection with legal advice to be given to the corporate client.”  Somewhat confusingly, the court cautioned SOCT’s lawyer against questioning the paralegal about information “specifically obtained for the purpose of determining trial strategy and/or for settlement,” yet permitted SOCT to depose the paralegal about her post-accident investigation.

A Trend?

The Segway ruling is just the latest example of courts scrutinizing companies’ privilege claims over post-accident investigations.  In Nelson v. Intercontinental Hotels Group Operating Corp.,[2] an Illinois federal court, applying Illinois privilege law, ruled that neither the attorney–client privilege nor the work-product doctrine protected incident reports completed by hotel employees following a guest’s accident.

Following a hotel guest accident, the hotel’s employees—pursuant to company policy—completed incident reports titled “General Liability Claim Report Form,” and sent them to the hotel’s Risk Management Team.  In a subsequent lawsuit, the plaintiff moved to compel production of these incident reports, but the hotel objected on grounds that the attorney–client privilege and work-product doctrine precluded their disclosure.

Although the hotel specifically requested—in accordance with a company policy—that the employees complete the reports, the court found that the hotel failed to establish the requisite elements of the attorney–client privilege.  The hotel did not demonstrate that the employees sent the reports to the risk management team “for purposes of seeking legal advice,” or that the reports were confidential when made and intended to remain confidential.

The court also rejected the hotel’s work-product objection.  Noting that the work-product doctrine protects documents prepared by an attorney or his agent in anticipation of litigation, the court found that the hotel submitted no evidence that its attorneys directed the hotel employees to prepare the incident reports or that the reports reflected attorneys’ thought processes and mental impressions.

Instructively, the court stated that simply making the conclusory statement that the employees prepared the incident reports in anticipation of litigation is insufficient, particularly when employees prepare the reports in the ordinary course of business.  After conducting an in camera review, the court found that found that the hotel completed the incident reports “in the ordinary course of business, per corporate policy, which may have the incidental effect of being helpful in the event of future litigation.”

The court distinguished its situation with the incident-report situation in Fojtasek v. NCL (Bahamas) Ltd.[3]  In Fojtasek, legal counsel requested that an employee prepare an incident report and then send that report to the company’s legal department.  The company supported the privilege and work-product assertions with a detailed affidavit explaining the request, reasons for the report, and how the company used the report.  In contrast, employees in Nelson prepared the incident reports pursuant to existing corporate policy—in the ordinary course of business—and sent the reports to the risk department.

Other cases provide similar discomfort to in-house legal departments.  In Mega Manufacturing, Inc. v. Eighth Judicial District Court,[4]  the Nevada Supreme Court ruled that the attorney–client privilege did not protect from disclosure a post-accident investigative report by a manufacturer’s engineer, even though the investigator sent the report to the manufacturer’s outside counsel.  And in Hooke v. Foss Maritime Co.,[5] the Northern District of California ruled that the work-product doctrine did not protect the company’s Internal Incident Investigation Report from discovery in large part because the company failed to show that it prepared the report “at the specific direction of counsel in anticipation of litigation rather than pursuant to a general protocol or course of business established by the defendant.”

Model Approach

Corporate lawyers appropriately frightened by this trend can take some comfort—and lessons—from a Washington appellate court’s ruling that the attorney–client privilege protected a post-accident investigation report from discovery in a personal-injury case.  In Doehne v. Empres Healthcare Mgt., LLC,[6] the plaintiff left a healthcare facility managed by the defendant, Empres, and tripped and fell on a wheel stop in the parking lot.  Empres has an in-house legal department as well as a risk-management department, and the risk manager “acts as a conduit between the legal department and insurers regarding liability issues.”

After the accident, Empres’s legal department directed the risk manager to conduct an investigation into the wheel-stop fall.  The risk manager then instructed an Empres operations manager’s administrative assistant to do the investigation and prepare a report.  And she did so “consistent with how [she] generally performed these tasks for [her] employer.”

Using language that corporate legal departments may in the future cite with some frequency, the appellate court stated that the “attorney–client privilege applies to any information generated by a request for legal advice, including documents created by clients with the intention of communicating with their attorneys.” (emphasis added).  By contrast, the privilege “does not protect documents that are prepared for some purpose other than communicating with an attorney.”  (emphasis added).

While a report from an operations manager’s administrative assistant seems far removed from the legal department—particularly when compared to the corporate paralegal in Segway—Empres submitted the assistant’s declaration stating that she prepared the report for and provided it to Empres’s “risk management and legal departments.”  And this declaration sealed the privilege, with the court noting that the privilege applies “to communications between in-house counsel and multiple lower-level employees in an organization when those communications are made in order to secure legal advice.”

The plaintiff argued, with support, that the assistant prepared the report consistent with her regular duties and did not provide the report to any specific attorney.  While true, the court rejected this theory, noting that “the purpose rather than the manner of preparation guides [its] analysis.”  And because Empres proved that the assistant prepared the report to assist in-house counsel in addressing liability issues, the privilege protected it from discovery.

Analysis and Practice Tips

The Segway decision highlights an increasing trend of courts engaging in a strict privilege analysis when corporate legal departments—and particularly corporate risk-management departments—conduct post-accident investigations.  One can question how the court can find that a corporate paralegal’s investigation into an injury accident—at the direction of an in-house lawyer—is not for the purpose of providing legal advice to the company.  But it appears the ruling arises from Segway’s failure to produce actual evidence that the paralegal’s investigation was legal-advice related.

And therein lies the major distinction—is the post-accident investigation and report conducted for legal reasons or business reasons?  Many companies conduct post-accident investigations as a matter of corporate policy, and much like the decisions in Nelson, Mega, and Hooke, courts often view the investigation as business-related rather than legal related.

Companies and their counsel should take instruction from the Doehne and Fojtasek cases where the defendant–companies proved that their legal departments directed their respective investigations.  Even if a corporate policy mandates post-accident investigations, the legal department’s directing the investigation and receiving the resulting report will greatly increase the chances that a court applies the privilege.

In sum, in order to establish the privilege, companies should endeavor to have its counsel, in-house or outside counsel, direct the investigation, even if delegated, and ensure that the investigation findings are for the purpose of the attorney rendering legal advice to the company.  Otherwise, post-accident reports conducted by business employees for business employees will likely receive no privilege protection.  The bottom line is that courts increasingly scrutinize any privilege claim emanating from corporate legal departments, and companies that simply presume that the privilege covers all post-accident investigations and reports do so at their own peril.

[1] 2015 WL 7421719 (Conn. Sup. Ct. Oct. 29, 2015).

[2] 2013 WL 5890612 (N.D. Ill. Nov. 1, 2013).

[3] 262 F.R.D. 650 (S.D. Fla. 2009).

[4] 2014 WL 2527226 (Nev. May 30, 2014).

[5] 2014 WL 1457582 (N.D. Cal. Apr. 10, 2014).

[6] 2015 WL 4756393 (Wash. Ct. App. Aug. 11, 2015).

Informer’s Privilege Prevents Disclosure of Confidential Informant in Islamic State-Related Prosecution Reply

Thompson Reuters’ Westlaw Journal White-Collar Crime recently published my article, Informer’s Privilege Prevents Disclosure of Confidential Informant in Islamic State-Related Prosecution, Policein its April 2016 issue.

In an ISIS-related criminal case, a federal court in Minneapolis applied the government–informant privilege to preclude pre-indictment disclosure of a FBI confidential informant.  The court’s ruling means that, at least for now, the government can maintain its informant’s secrecy.  United States v. Abdulkadir, 2015 WL 9581871 (D. Minn. Dec. 31, 2015).

In this article, I discuss the government-informant privilege, including the distinction between an informant who participated in the criminal act and an informant who simply provides a tip regarding upcoming or past criminal conduct, and the court’s ruling.  You may read the article here.

Privilege Protections for Insurance Coverage Counsel in Bad-Faith Litigation Reply

In a thorough article published in DRI’s In-House Defense Quarterly, lawyers Dan Kohane and Sean Griffin, along with soon-to-be lawyer John Ewell, discuss recent court decisions eroding the Insurance Claim Deniedattorney–client privilege and work-product protections for claims files and other communications in bad-faith litigation.

From these decisions, the authors conclude that “[t]oday, insurance companies cannot assume that their communications with their attorneys will remain confidential.”  The authors do not simply identify the issue; rather, they advocate for a “better rule” modeled after the West Virginia Supreme Court’s decision in Montpelier U.S. Ins. Co. v. Bloom, 757 S.E.2d 788 (W. Va. 2014), a decision that PoP profiled in this post.

The article also contains a host of practice pointers for insurers and their counsel to “help them protect their coverage file from discovery.” I commend this well-researched article for your consideration.   And for additional information see the following posts: Court Rejects Privilege for Insurer’s Claims File and Attorney Communications and Court Rejects Privilege for Emails of Attorney Claims Specialist.

Dan D. Kohane, Sean Griffin, & John R. Ewell, Practical Solutions to Fend Off the Attack on the Confidentiality of Insurer-Coverage Counsel Communications, In-House Defense Quarterly, at p. 42 (Spring 2016).  My thanks to DRI for allowing republication of this article.

6th Circuit Upholds Privilege for In-House Lawyer’s Advice on Media Strategy Reply

In a matter of first impression, the Sixth Circuit ruled that the attorney–client privilege protected an employee–in-house lawyer discussion for the purpose of the lawyer advising her client on media strategyresponding to media inquiries.  Alomari v. Ohio Dep’t of Public Safety, 626 Fed. App’x 558 (2015).  You may read the decision here. The Supreme Court denied certiorari on February 29, 2016.  136 S.Ct. 1228 (2016).


The plaintiff in this employment-discrimination case formerly worked for the Ohio Department of Public Safety (ODPS).  He became the subject of an article in The Jawa Report, an anonymous internet blog, regarding his prior employment with Columbus State Community College.

The report stated that Columbus State fired the plaintiff for engaging in a sexual relationship with a student.  The plaintiff had not listed Columbus State as a former employer on his ODPS employment application.

Media-Strategy Meeting

As media inquiries began to hit ODPS, its in-house lawyer attended a meeting with the plaintiff and his boss to prepare a media response.  The plaintiff moved to compel communications from this meeting, but ODPS claimed that the attorney–client privilege protected these discussions.

The plaintiff claimed that the meeting’s purpose was to prepare a media response and not so the ODPS in-house lawyer could render legal advice, and cited several district-court cases holding that “an attorney’s advice about media relations [is] non-legal.”  See In re Chevron Corp., 749 F. Supp. 2d 141, 167 (SDNY 2010); City of Springfield v. Rexnord Corp., 196 F.R.D. 7, 9 (D. Mass. 2000).


In a case of first impression, the 6th Circuit confirmed the district court’s ruling that the privilege covered the media-related discussions.  The court distinguished plaintiff’s district-court cases because ODPS proved that the meeting’s purpose was for the in-house lawyer to advise on how to respond to the media inquiries.

The discussions were not to simply craft a media-relations strategy, as the court noted that “[a]dvising a client on how to respond to media inquiries has important legal implications when that client will issue a public statement about an employee.”

Importantly, the court found that the in-house lawyer’s “input on how to draft a media response was essential” given ODPS’s “potential for legal liability.”

PoP Analysis

This case presents an interesting contrast with the Bloomingburg decision, discussed in this post, where the court rejected the privilege for a lawyer’s discussions with a public-relations firm.  In Bloomingburg, the court found that the lawyer sought “ordinary public relations advice” rather than asking the public-relations firm to assist him in providing legal advice to his client.

In Alomari, the communications were between an employee and in-house lawyer, and the lawyer was able to prove that assisting her client in responding to media inquiries had important legal implications given the potential for legal liability.

Lawyers assisting clients in media-related matters should understand these distinctions.  The pertinent question is whether the lawyer is playing a legal role in media-relations issues, or merely assisting the client to manage general public relations.

Court Rejects Privilege for Lawyer’s Discussions with Public-Relations Firm Reply

The SDNY rejected a party’s claim that the attorney–client privilege and work-product doctrine protect its counsel’s communications with a public-relations firm retained to provide general Public Relationspublic-relations advice.  Bloomingburg Jewish Educ. Ctr. v. Village of Bloomingburg, 2016 WL 1069956 (SDNY Mar. 18, 2016).  The well-written opinion, which you may read here, provides lawyers with a good summary of privilege law in this niche area.

Communications with Public-Relations Firm

The plaintiffs sued the Village of Bloomingburg and Town of Mamakating claiming violation of various constitutional rights.  The Town Defendants’ counsel had retained West End Strategy, a public-relations firm, to facilitate “communications about the about the facts and nature of the case, and formulating the message by which municipal officials could accurately explain it to the public.”

When the plaintiffs moved to compel communications between Town Defendants’ counsel and West End, the Town Defendants claimed that the attorney–client privilege and work-product doctrine protect lawyers’ communications with public-relations firms.  The court found that the Town Defendants failed to meet their burden of proving the privilege elements, rejecting counsel’s “vague and highly generalized declaration” filed in support.  You may review this declaration here.

Attorney–Client Privilege

While the Town Defendants wholly failed to meet their burden, with the court labeling their position as “sweeping and rather brazen,” the court provided a nice summary of privilege law as it relates to public-relations firms.

Citing the Kovel doctrine, where the reputable Judge Friendly extended the privilege to cover discussions between a client’s lawyer and an accountant, the court found that the privilege may extend to non-lawyer service providers “when the purpose of the communication is to assist the attorney in rendering advice to the client.”

The privilege does not apply if the advice sought is that of the non-lawyer service provider; rather, the privilege applies only if the non-lawyer service provider is present to facilitate the lawyer’s legal advice.  The “touchstone inquiry,” therefore, is whether communications with public-relations firms were “made in confidence for the purpose of obtaining legal advice from the lawyer.”

The privilege will not apply if the public-relations firm provides “ordinary public relations advice.”  In other words, “a media campaign is not a litigation strategy.”

Work-Product Doctrine

The court also noted that public-relations advice generally falls outside of the work-product doctrine, “even if it bears on anticipated litigation.”  However, an attorney does not waive the doctrine’s protection by disclosing his work-product materials to a public-relations firm whom she hires and that maintains the material’s confidentiality.


The Town Defendants in Bloomingburg simply failed to meet even the minimal standard to show that the attorney–client privilege and work-product doctrine covered their lawyers’ communications with West End Strategy.  It would have been a difficult hurdle in any event, as the Bloomingburg court highlighted how narrow the privilege and work-product doctrine are when lawyers communicate with public-relations firms.

Federal Circuit Adopts Patent–Agent Privilege Reply

In a case of first impression, the Federal Circuit, in a 2–1 decision, adopted an evidentiary privilege protecting from discovery communications between non-attorney patent agents and their clients. The privilege extends only to communications the agents make “while acting within the agent’s authorized practice of law before the Patent Office.”  In re Queen’s University at Kingston, 2016 WL 860311 (Fed. Cir. Mar. 7, 2016).

My thanks to Sriranga Veeraraghavan for bringing this opinion to my attention.


Ontario-based Queen’s University filed a patent-infringement lawsuit against Samsung alleging that Samsung’s SmartPause feature infringed on the university’s patent directed to Attentive User patentInterfaces.  Samsung moved to compel production of communications between Queen’s University employees and non-attorney patent agents discussing the patent prosecution.

The USDC for the Eastern District of Texas, where the case was pending, ordered production because the attorney–client privilege was inapplicable and a separate patent–agent privilege did not exist.  The Federal Circuit subsequently granted the university’s petition for mandamus.

No Attorney–Client Privilege

The court and parties acknowledged that the attorney–client privilege does not protect communications between individuals and non-attorneys, whether the non-lawyers are jailhouse lawyers, patent agents, or any other non-lawyer.

Choice of Law

The court first addressed the threshold choice-of-law question—did Federal Circuit or Fifth Circuit law apply?  Noting that regional-circuit law applies to non-patent issues and Federal-Circuit law applies to “questions impacting substantive patent questions,” the court held that Federal-Circuit law applied to the patent–agent privilege question because the subject communications “are potentially relevant to numerous substantive issues of patent law.”

Reasons for Adoption

Federal courts considering adopting a new evidentiary must start with FRE 501, which permits courts to develop privilege common law “in light of reason and experience.”  And the Supreme Court’s decision in Jaffee v. Redmond, 518 U.S. 1 (1996), directed that courts consider whether the putative privilege (1) is rooted in the imperative need for confidence and trust; (2) serves the public interest; (3) promotes sufficiently important interests to outweigh the need for probative evidence; and (4) has any consensus among the states.

No federal appellate court has adopted a patent–agent privilege; nor, unsurprisingly, has any state court adopted the privilege.  The district courts that have addressed the issue are split.  See footnote 1 in the court’s opinion for a list of these cases.

Nonetheless, the court held that “reason and experience” compelled adoption of a new patent–agent privilege.  The court effectively cast Jaffee aside because the circumstances there were “vastly different,” and was more persuaded by the Supreme Court’s decision in Sperry v. State of Florida, 373 U.S. 379 (1963), where the Court found that patent agents engage in the practice of law.

The court also found persuasive Congress’s authorization of non-attorney patent agents to practice before the Patent Office, and held that the patent–agent privilege “is coextensive with the rights granted to patent agents by Congress.”  The court expressly stated that, as to the practice before the Patent Office, patent agents are “legally equivalent” to lawyers.

In short, given that clients can choose between patent agents and attorneys when coming before the Patent Office, “the patent–agent privilege furthers the same important public interests as that of the attorney–client privilege.”

Scope of the Privilege

Relying on USPTO regulations, the court defined the privilege’s scope by a indefinite demarcation line.  The privilege covers communications between non-attorney patent agents and their clients that are “reasonably necessary and incident” to the preparation and prosecution of patent applications.  Communications that are not “reasonably necessary and incident” to patent prosecutions “fall outside the privilege.”

The court did not define “reasonably necessary and incident,” leaving that interpretation to future disputes and future courts.


The dissent challenged virtually all of the majority’s findings and rulings.  The dissent found no requisite public interest, no federal-appellate or state-court support, and that “the scope of this new privilege is more complicated than the Majority perceives.”

The dissent had a simple alternative to a patent–agent privilege: “A company desiring to use a patent agent but maintain a privilege may have its counsel, be it in-house or outside counsel, supervise the agent or hire an agent already working for a law firm.”

We shall see whether the Supreme Court ultimately weighs in on this first-impression privilege issue.

Privilege Protects Ford’s Internal Investigation into “Sudden-Acceleration” Claims Reply

In an instructive ruling for in-house lawyers and outside corporate counsel, the USDC for West Virginia’s Southern District held that the attorney–client privilege protected from discovery Ford Motor Company’s internal investigation into so-called “sudden acceleration” claims.  Through a descriptive privilege log and a well-crafted affidavit, Ford persuaded the court that the privilege Investigationapplied even though a non-legal department conducted a large portion of the investigation.  Johnson v. Ford Motor Co., 2016 WL 1241538 (S.D. W. Va. Mar. 28, 2016).  You may read the opinion here.

Internal Investigation

The subject of at least one lawsuit and a Wall Street Journal story, Ford’s Office of General Counsel (OGC) began an internal investigation into “sudden unintended acceleration” claims in its vehicles, which included an analysis of NHTSA questionnaires and TREAD Act submissions. The OGC initiated the investigation, and “engaged” Ford’s Automotive Safety Office (ASO) to assist its review and analysis.

The plaintiff sought the ASO reports, related government investigations, and other documents, arguing that the ASO completed its “review and analysis” in the ordinary course of business and not for any legal purpose.  Ford claimed the attorney–client privilege protected the documents because the ASO prepared them for the OGC’s use in providing legal advice to the company.

Pertinent Privilege Law

The court struggled with the choice-of-law question (see pp. 6–7 of this ruling for an explanation), but ultimately analyzed the privilege issues under federal law and West Virginia law.  The court required Ford to prove that (1) the communicating parties contemplated an attorney–client relationship; (2) the client sought advice from the lawyer in his legal capacity; and (3) the communication was confidential.

The court correctly noted that “the attorney–client privilege applies to ‘in-house’ counsel just as it would to any other attorney,” and, importantly, that the privilege applies to “communications between an attorney and client during attorney-conducted investigations.”

Ford’s Evidence

Ford’s second privilege log, which followed an insufficient one, did a nice job of describing the privileged documents.  But Ford crossed the privilege finish line by submitting a supporting affidavit from a lawyer in its OGC department.  This affidavit, available for review here, methodically noted that the OGC “undertook a review and analysis” in order to “provide legal advice to Ford.”

The in-house lawyer stated that the OGC “engaged” and “directed” Ford’s ASO—a non-legal department—to “assist Ford in the review and analysis.”  Significantly, the lawyer declared that the resulting documents “were used solely by Ford’s attorneys in rendering legal advice to Ford” and were not “disseminated beyond those Ford employees and consultants working directly with Ford’s counsel.”


Based on this evidence, the court held that the attorney–client privilege protected the documents from discovery under West Virginia law and federal law.  Ford satisfied its burden to show that its lawyers requested and directed the investigation, the investigation for was legal-advice purposes, and that it kept the resulting documents confidential by limiting dissemination on a need-to-know basis.

The court specifically held that the OGC’s delegation of the investigation to Ford’s ASO did not destroy the privilege.  Noting that the privilege protects “communications during fact-finding investigations conducted by an attorney in his or her legal capacity,” the court provided this mic-dropping pronouncement:

It would be an unreasonable interpretation of the privilege to hold that a proactive, fastidious in-house attorney who seeks information from his client for the purpose of rendering legal advice cannot claim privilege over the information that he receives in response to his request simply because he was the first to act.

Pop Analysis

I commend Ford’s approach, explained in its lawyer’s affidavit, to in-house lawyers and outside corporate counsel initiating an internal investigation.  Delegating investigations to non-lawyers is fraught with peril, but, as Ford proved, recognizing and handling the privilege issues up-front greatly increases your privilege-winning chances.

This ruling brings to mind the D.C. Circuit’s significant 2014 privilege decision in corporate internal investigations.  You may read my post on that decision here.

Does Regulatory Advice Equal Legal Advice for Privilege Purposes? Reply

Black’s Law Dictionary defines “regulation” as a “rule or order having force of law issued by executive authority of government.”  The corporate attorney–client privilege protects communications regulationseeking legal advice, so the question arises whether the privilege covers an employee’s communication seeking “regulatory advice” from its in-house lawyers.  One would think “yes”; after all, a regulation has the “force of law,” which sounds quite legal.

The USDC for Pennsylvania’s Eastern District recently provided an instructive opinion on this issue, rejecting an in-house lawyer’s privilege argument and ruling that the privilege covers communications seeking legal advice but not “regulatory advice for business purposes.”  FTC v. Abbvie, Inc., 2015 WL 8623076 (E.D. Pa. Dec. 14, 2015).  You may read the decision here.


The FTC sued Abbvie, Inc. and Besins Healthcare, Inc. alleging that the two companies filed sham patent-infringement lawsuits against two other companies to delay the latter’s approval of generic drugs.  The FTC sought in discovery an August 9, 2011 email chain that contained an Abbvie employee’s request to Abbvie’s in-house counsel for consideration of a “regulatory strategy.”

Email to In-House Counsel

Abbvie asserted that the attorney–client privilege protected the email from discovery and submitted the in-house lawyer’s declaration in support.  The declaration, which you may access here, made this statement—

The redacted portion of the August 9, 2011 email (the topmost message in the chain) is an attorney–client privilege communication from [employee] to me in which [employee] requested my legal advice.  The redacted portions of this document are not, as the FTC contends, a “business discussion” containing “business advice.”

Regulatory Advice or Legal Advice?

The court held that Abbvie failed to meet its privilege burden and found the email unprotected and discoverable.  Noting that the privilege does not cover every communication between in-house counsel and corporate employees, the court specified that the privilege “does not apply if the client seeks regulatory advice for a business purpose.”

Emphasizing the privilege’s “legal advice” requirement, the court distinguished a lawyer’s provision of regulatory advice when it is more business than legal related.  The court noted that, in the corporate environment, virtually every corporate act has the potential of violating a regulation, but “the fact of extensive or pervasive regulation does not make the everyday business activities legally privileged from discovery.”

The regulatory–business–privilege phenomenon is particularly troublesome for companies in highly regulated industries.  The court found persuasive—and privilege dooming—that Abbvie, a highly regulated pharmaceutical company, “must consider regulatory matters in making nearly all of its business decisions.”

Declaration Insufficient

Abbvie attempted to prove, through its in-house lawyer’s sworn declaration, that its employee sent the email to the in-house lawyer for legal-advice purposes.  But the court found the conclusory declaration insufficient, noting that Abbvie provided no “supporting information that would allow the court to reach the same conclusion.”

And without any (unidentified) supporting information, the court found that the employee’s email seeking “regulatory strategy” from the in-house lawyer was business related, and held that Abbvie failed to demonstrate that the employee sent the email “for the purpose of securing legal advice rather than business advice.”

Settlement Agreement Not Privileged, Court Rules Reply

The USDC for the Eastern District of Tennessee recently ruled that the Sixth Circuit’s settlement privilege does not prevent a non-settling defendant from obtaining the settlement agreement settlementbetween a plaintiff and a settling defendant.  Kelley v. Apria Healthcare, Inc., 2016 WL 737919 (E.D. Tenn. Feb. 23, 2016).  You may access the decision here.

Sixth Circuit’s Settlement Privilege

In Goodyear Tire & Rubber Co. v. Chiles Power Supply, Inc., 332 F.3d 976 (CTA6 2003), the Sixth Circuit adopted a federal common-law “settlement privilege” that prevents compelled disclosure of settlement communications and negotiations.  Critics of Goodyear correctly point out that the court was exercising diversity jurisdiction and should have applied state law—not federal law—in determining whether a settlement privilege exists under common law.

Courts outside the Sixth Circuit reject Goodyear’s analysis, but the decision remains good law.  For an explanation of Goodyear and practice tips for outside and in-house counsel, see my post Important Lessons about the Settlement Privilege.


In Kelley, the plaintiff sued multiple defendants following a fire that erupted in a traveling camper and killed the camper’s occupant.  All defendants except Apria Healthcare settled, and Apria filed a motion to compel the settlement agreements.

The plaintiff and the settling defendants opposed the motion on grounds of relevancy, but also that the Sixth Circuit’s settlement privilege protected the settlement agreements from compelled disclosure.


Noting that “a number of district courts have recognized that settlement agreements are not privileged,” the Kelley court ruled that, “[a]lthough the Sixth Circuit recognizes that the settlement privilege protects settlement negotiations from discovery, ‘this privilege does not extend to the terms of the final agreement.’” (emphasis added).

What about Confidentiality Provisions?

The plaintiff and settling defendants argued for non-disclosure because the settlement agreements contained confidentiality provisions, but the court ruled that was of no consequence, stating that the no-privilege rule “is true even where the agreement is designated as ‘confidential.’”

Protective Order

The plaintiff and settling defendants received a consolation prize as the court ruled that it would approve entry of a protective order limiting use and disclosure of the settlement agreement.  So, while the settlement privilege does not protect settlement agreements from discovery, counsel likely can limit disclosure through a court-approved protective order.

Court Rejects Privilege for Fact-Based Email Between Company’s Two Lawyers Reply

Many lawyers assume that the corporate attorney–client privilege protects communications between two lawyers representing the same company.  But a recent decision from the USDC for email computerPennsylvania’s Eastern District reminds us that the privilege does not protect communications that (1) convey facts obtained from an outside source and (2) do not contain client confidences.  FTC v. Abbvie, Inc., 2015 WL 8623076 (E.D. Pa. Dec. 14, 2015).  You may read the decision here.

In Abbvie, the FTC sued Abbvie, Inc. and Besins Healthcare, Inc. alleging that the two companies filed sham patent-infringement lawsuits against two other companies to delay the latter’s approval of generic drugs.  The FTC and the defendants engaged in multi-faceted discovery dispute covering several privilege subtopics, but the dispute over one email is of particular interest.

Besins’ outside counsel, Mahoney, met with a USPTO examiner and sent an email to Besins’ European outside counsel discussing the meeting and the examiner’s decision to allow the patent at issue.  The FTC sought this email in discovery, but Besins claimed the attorney–client privilege precluded its disclosure.

The court rejected Besins’ privilege argument.  The court stated that, “[w]hile the privilege protects facts provided in confidence by the client to the attorney, ‘an important limitation of the privilege is that it does not extend to facts provided by an attorney that do not reflect client confidences.’”  Importantly, the court noted that the privilege specifically does not cover an attorney’s communication to her client of facts acquired from non-client sources.

After an in camera review of Mahoney’s email, the court noted that it simply relayed the patent examiner’s statement to Mahoney regarding a patent application, and had no “accompanying legal conclusions or perceptions.”  The email was, the court noted, simply “an unprivileged fact provided by an attorney that does not reflect client confidences.”

In short, the court ruled that “Besins cannot refuse to disclose facts simply because that information came from a lawyer.”  This ruling, buried in a lengthy opinion discussing several privilege issues, is a stark reminder that corporate lawyers should not assume that the privilege automatically covers their lawyer-to-lawyer emails.