Touch Base–Court Applies U.S. Privilege Law to German Internal Investigation

Foreign corporations with a significant U.S. presence increasingly face this question—which country’s privilege law applies when their U.S. lawyers communicate with the companies’ foreign employees?  The SDNY confronted this choice-of-privilege-law issue where a “principally” U.S. law firm conducted an internal investigation for a German company. In re: Ex Parte Application of financialright GmbH, 2017 WL 2879696 (SDNY June 22, 2017).  You may read the decision here.  Let’s discuss. More…

NY Client. SC Atty. Which State’s Privilege Law Covers Their Calls & Emails?

Let’s discuss conflicts-of-laws—privilege style.  I know you want to.

Here is the scenario—NY client emails her SC-based attorney—which state’s privilege law applies?  In Wellin v. Wellin, 211 F. Supp. 3d 793 (D.S.C. 2016), the USDC SC provided an informative analysis of the often-ignored conflict-of-privilege-law issue, and applied the Second Restatement’s paradigm in holding that SC privilege law applied.  You may read the opinion here.  Now, let’s break it down.

The Wellin case involves multiple lawsuits over the distribution of the substantial assets of Keith Wellin, a former Wall Street executive who died in 2014.  Read his obituary here.  Wellin’s eight grandchildren, non-parties to the litigation but contingent beneficiaries of one of Wellin’s Irrevocable Trusts, lawyered up with South Carolina counsel.

One of the grandchildren, Ann Plum, a New York-based otolaryngologist, sought a protective order to prevent deposition questions about communications she had with her South Carolina-based attorneys, her brother, cousins, and mother, and her mother’s attorney.

To determine the privilege issues, the court had to decide whether NY or SC law applied to the putatively privileged communications.  In this diversity action, the court looked to FRE 501, which provides that “state law governs privilege regarding a claim or defense for which state law supplies the rule of decision.”  FRE 501, however, does not answer which state’s privilege law applies—the forum state or some other state. More…

Despite Privilege, GC May Pursue Whistleblower Retaliation Suit under SOX and Dodd–Frank

California’s USDC–ND ruled that Bio-Rad Laboratories’ former General Counsel may use privileged communications to prove his retaliatory-discharge case prosecuted under Sarbanes–Oxley and Dodd–Frank’s whistleblower provisions.  The privilege belongs to Bio-Rad, of course, but no matter in this case.

This important ruling departs from state-court decisions and involves in-house lawyers’ ethical duties, SOX preemption, a SEC amicus brief, and privilege-waiver issues.  Wadler v. Bio-Rad Laboratories, Inc., 2016 WL 7369246 (N.D. Cal. Dec. 20, 216).  It is well worth the read, which you can do here.

Background

Bio-Rad manufactures and sells medical-related products and must comply with the Foreign Corrupt Practices Act.  Sanford Wadler served as Bio-Rad’s General Counsel from 1989 until Bio-Rad fired him in June 2013.

Bio-Rad claims that it terminated Wadler due to poor performance, but Wadler claims his termination occurred because he reported alleged FCPA violations to the company’s Audit Committee.  Wadler filed suit asserting retaliatory-discharge claims under SOX and Dodd–Frank. (Read the Complaint here). More…