Antitrust Compliance Policy Not Privileged

In a matter of first impression in the Third Circuit, amidst a dearth of cases elsewhere, a court ruled that the attorney-client privilege did not protect from disclosure a company’scompliance training antitrust compliance
policy.  This ruling came even though in-house and outside counsel drafted the policy, the policy discussed legal compliance, the company did not distribute the policy outside of corporate employees.  In re Domestic Drywall Antitrust Litigation, 2014 WL 5090032 (E.D. Pa. Oct. 9, 2014). You may access the ruling here.

In this antitrust MDL case, the plaintiff sought production of CertainTeed Gypsum, Inc.’s antitrust compliance policy.  CertainTeed refused, arguing with some confidence that the policy represented communications between lawyer (outside/in-house counsel) and client (employees), and that the company kept the policy confidential by distributing it only to company employees.

Business Policy or Legal Policy?

But the court construed the privilege narrowly, limiting it to legal advice that resulted in a company decision.  The court noted that CertainTeed’s antitrust compliance policy did not contain any specific legal advice (just general legal compliance) and was “primarily a business policy” “more akin to a reference or instructional guide.”

Confidential?

CertainTeed argued that it maintained the policy’s confidentiality because it did not distribute the policy outside the company, but only to 120 of its employees.  The court, however, found this “wide distribution” antonymous to confidentiality.  And, importantly, the court noted that CertainTeed did not label the policy confidential or privileged, and did not instruct its employees of these edicts.

In short, the court found that the antitrust compliance policy was a business document that CertainTeed failed to keep confidential.  The privilege, therefore, did not cover the document.

Critical Distinction

Without much elaboration, the court recognized that the attorney-client privilege covers communications between “CertainTeed’s lawyers and its executives leading up to the adoption of its compliance policy.”  So, according to the court, the privilege covers lawyer-client interactions regarding the drafting and creation of the policy, but not the final product.

And not to stray from the central case point, but the federal common-law attorney-client privilege covers communications between corporate lawyers and corporate employees, and is not limited to lawyer-executive communications as the court’s language suggests.  As the court did not further discuss this point, which is dicta in any event, courts and practitioners should not consider the reference to “lawyers and executives” as limiting the privilege’s scope.