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How many in-house lawyers have non-lawyer titles such as “Chief Legal Officer” and “Vice President and General Counsel”?  The multi-titled in-house counsel is prevalent in today’s corporate world but, as one federal court bluntly held, an in-house lawyer with legal and non-legal roles receives a narrow view of her putatively privileged communications.

Mundane Chatter

In Kleen Products, LLC v. International Paper, 2014 WL 6475558 (N.D. Ill. Nov. 12, 2014), which you may access here, a defendant sought to cloak with privilege virtually all communications that he sent or on which he was the primary recipient or was carbon-copied.  Finding this position “troubling,” the court determined that “numerous allegedly privileged emails … contain nothing more than mundane chatter about routine business matters.”

Business Titles

Noting that copying an in-house lawyer “on a given communication does not automatically transform the contents of that message into a privileged request for legal advice,” the court found significant that the company’s in-house lawyer held the title of General Counsel, Chief Administrative Officer, and Senior Vice-President and Secretary.

The court agreed that “drawing a distinction between business and legal advice is not always easy,” but took a decidedly narrow view of the in-house attorney–client privilege where communications involve legal and business aspects.  Regarding the position-title issue, the court stated that, “[w]hen in-house counsel occupies both a legal and operational role, the test for determining if a document is privileged is whether the predominant purpose of the communication was to render or solicit legal advice.” And if legal advice is incidental to business advice, the privilege does not apply.

Importantly, the court held that when an employee prepares a document for simultaneous review by lawyers and non-lawyers seeking business and legal advice, the document is “not primarily legal in nature and is therefore not privileged.”  In other words, “[i]t is improper to infer as a blanket matter that any email asking for ‘comments’ that copies in-house counsel along with several other high level managers automatically is a request for legal review.”

POP Analysis

The court here took a strict and narrow view of the in-house attorney–client privilege, particularly in its application of the primary purpose standard.  As discussed in this prior post, courts generally apply two standards in assessing whether a corporate communication is more business or more legal related—the “because of” standard and the “primary purpose” standard.

In the end, a significant lesson here is that not only do in-house lawyers receive heightened scrutiny of their communications, but even more scrutiny when the in-house lawyer carries business-related position titles.  And at the risk of stating the obvious, those in-house lawyers with additional titles should heed this case and take even greater precautions to establish and maintain the privilege over their communications.

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Trade associations’ in-house lawyers often consult with the associations’ members and members’ counsel on legal issues.  The question arises whether the attorney–client privilege protects these communications from discovery.  A Texas appellate court recently said “no” and ordered a trade association’s lawyer to answer deposition questions about her conversations with a member’s lawyer.  In re Baytown Nissan, Inc., 2014 WL 6388414 (Tex. Ct. App. Nov. 7, 2014).  You may review the decision here.

Background

A Nissan dealer sought to sell its assets to the plaintiff, BSAG, Inc., but Nissan North America exercised its right-of-first-refusal to purchase the assets.  During the negotiations, the dealer’s lawyer communicated with the Texas Automobile Dealer Association’s General Counsel.  BSAG deposed the dealer’s lawyer and TADA’s in-house counsel during subsequent litigation, and inquired about those communications.

The dealer argued that the attorney–client privilege protected these communications from discovery, but the trial court disagreed forcing the dealer to seek a writ of mandamus.

No Blanket Privilege

Despite recognizing that a trade association’s counsel regularly consults with the association’s members, the appellate court declined to adopt a “blanket rule of privilege” between the two. Instead, the court preferred a case-by-case analysis to determine whether an attorney–client relationship actually existed between the member (or its counsel) and the association’s counsel.

No Attorney–Client Relationship

The court of appeals found that Texas’s attorney–client privilege statute, Tex. R. Evid. 503, requires an actual attorney–client relationship between TADA’s attorney and its member. Because TADA’s general counsel was not the dealer’s lawyer, the court refused the dealer’s argument that the TADA lawyer’s status as an attorney—even if not the member’s attorney—met the statutory requirement.

Implied Relationship?

A court may imply an attorney–client relationship, based on the parties’ conduct, even without an express agreement.  Here, the dealer argued that an implied attorney–client relationship existed because TADA’s general counsel provides legal services to TADA’s membership.

With no per se privilege between an association’s counsel and its members, the court reviewed “objective evidence” to determine whether an implied attorney–client relationship existed.  The court found no relationship, largely due to the absence of several factors:

(1) the dealer’s counsel did not ask TADA’s counsel to provide legal services to the dealer; (2) no engagement letter existed; (3) the dealer’s attorney did not express belief that TADA’s counsel was also acting as counsel to the dealer; (4) neither lawyer provided assurances that the conversation was confidential and privileged; and (5) TADA’s counsel did not run a conflicts check.

For these reasons, the court rejected the implied attorney–client relationship argument and, correspondingly, the existence of a privilege protecting the lawyers’ communications.

Work-Product Doctrine?

Despite the lack of a privilege, the dealer’s counsel successfully invoked the work-product doctrine.  The court found that the dealer’s counsel engaged in the conversation with TADA’s general counsel as part of his investigation into Nissan’s right-of-first-refusal and the overall asset sale.  And because the deposition questions called for counsel’s thoughts and mental impressions, the work-product doctrine precluded any further deposition questioning.

But the work-product doctrine did not prevent TADA’s counsel from testifying about the conversation.  The court ruled that the doctrine was inapplicable due to the lack of any type of relationship beyond the association–member context.  The deposition of TADA’s counsel, therefore, moved forward.

POP Analysis

It appears that the dealer’s counsel and TADA’s counsel were not on the same page.  Dealer’s counsel believed the privilege covered the conversation, but TADA’s counsel contradicted that belief, stating that dealer’s counsel never asked her to enter into an attorney–client relationship or for assurance that the conversation was confidential and privileged.  You may read the TADA lawyer’s affidavit here.

Trade associations and their members should take heed of this case, particularly the “no blanket privilege” ruling.  Lawyers for trade associations and their members must take certain steps to improve the chances of successfully invoking the privilege.

These steps include formalizing an attorney–client relationship in writing, if appropriate.  Even if the engagement is an uncompensated one, formalizing the relationship will show a reviewing court of the parties’ intent.

And the lawyers should conduct their interactions in a way that shows intent to establish and maintain the privilege.  Written communications should include “confidential & privileged” designations, contain legal-related comments, and be kept confidential.  For more tips, see my article, A Higher Standard–Claiming Attorney-Client Privilege is Tougher for In-House Counsel.

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The marital communications privilege protects from disclosure information privately disclosed between a married couple in confidence of the marital Wedding-Prison-Jail-1-300x199relationship.  A key phrase in this definition is “married couple” or a state-law equivalent. One criminal’s attempt to silence his girlfriend through a jailhouse marriage proposal backfired in a major way.

The Girlfriend

The FBI arrested Donald J. Peel after he took a disabled female minor on a five-state sojourn that included illegal drugs and sex.  The government recorded Peel’s conversations with Nicole Gorski, his so-called girlfriend, conducted while Peel was in jail awaiting trial for transporting a minor with intent to engage in sexual activity.

They Ain’t Got Nothin’

In these conversations, Peel told Gorski that “you might have the right to marital privilege” and urged her to seek a lawyer about securing a Domestic Partnership Declaration under California Family Code § 297-297.5.  Peel needed Gorski to fall within the martial communications privilege so that she could refuse to provide trial testimony, because, as Peel said, “without you they ain’t got nothin’.”

Peel’s counsel moved under FRE 403 to exclude Peel’s conversations with Gorski about invoking the marital communications privilege.  The court rejected this preclusion attempt, ruling that Peel’s effort to orchestrate the suppression of Gorski’s testimony was relevant to the government’s “consciousness of guilt” proposition.

Yes, They Do

While courts may exclude evidence of one spouse urging the other spouse to invoke the marital communications privilege, in this case Peel was asking his girlfriend “to marry him to create a privilege that did not already exist.”  The court rejected Peel’s arguments and admitted into evidence all of Peel’s conversations.

And without the marital communications privilege, Gorski’s testimony helped lead to a guilty verdict.   You may read the court’s opinion here.  United States v. Peel, 2014 WL 5817259 (E.D. Cal. Nov. 7, 2014).

No word whether Gorski would have accepted the proposal, but she will now have 10+ years to think about it.