Judge Brett Kavanaugh, President Trump’s nominee to replace Justice Kennedy on the U.S. Supreme Court, recently authored an important attorney–client privilege opinion for corporate legal counsel.
Judge Kavanaugh held that the privilege covered a General Counsel’s communications involving legal and business issues because “one of the significant purposes of [her] communications was to obtain or provide legal advice,” with an emphasis on “one.” Federal Trade Comm’n v. Boehringer Ingelheim Pharmaceuticals, Inc., 2018 WL 3028972 (CADC June 19, 2018). You may read the decision here.
A GC’s Communications
In 2008, Boehringer, a pharmaceutical company, negotiated a patent-infringement settlement with generic-drug manufacturer Barr Pharmaceuticals. The agreement was a so-called “reverse-payment” settlement because the patent holder (Boehringer) paid the alleged infringer rather than the other way around.
The FTC, which monitors reverse-payment settlements to ensure compliance with antitrust laws, issued a subpoena to Boehringer requesting, in part, communications involving Boehringer’s General Counsel. The requested communications allowed the GC “to analyze and navigate the treacherous antitrust issues surrounding reverse payment settlements,” but also reflected her communications with Boehringer executives regarding a possible settlement. Boehringer argued that the attorney-client privilege protected the entirety of the communications.
Noting that the attorney–client privilege “applies whether the attorney is in-house counsel or outside counsel,” Judge Kavanaugh recognized that “[t]he application of the attorney–client privilege can become more complicated when a communication has multiple purposes—in particular, a legal purpose and a business purpose.”
Judge Kavanaugh found that More…
We see privilege issues discussed in judicial decisions, legal commentary, and mainstream news. Here is my Monthly Privilege Roundup of interesting privilege issues for June 2018.
→ After much outrage and a presidential proclamation that the attorney-client privilege was dead (see my rebuttal here) after the FBI removed thousands of documents from Michael Cohen’s office, the matter is whimpering through June. After reviewing 229,000+ documents, the Special Master designated only 161 as privileged. See Judge Wood’s Order here. Perhaps the Special Master had trouble finding that the privilege applied given the many privilege hurdles discussed here.
→ Michigan State University’s Board of Trustees asked the Michigan AG to investigate the University’s handling of the scandal involving Larry Nassar, the former physician who abused several athletes over a 20-year period. The AG issued a search warrant specifically seeking the University’s privileged communications. Wow. The University filed a motion to nullify the search warrant. This developing story is one to watch. Read the Lansing State Journal story here. More…
Two well-intentioned gentlemen, Stuart and Eric, want to open a restaurant, and need to form a business entity to do so. Eric says that his lawyer, Adam, can set up an LLC and draft the operating agreement. Stuart agrees, perhaps because Adam’s law firm represents him on other matters, and meets Lawyer Adam to sign the operating agreement.
You can guess what happens next. Stuart becomes unhappy with the restaurant’s business operations, and sues Eric and the LLC for breach of contract, breach of fiduciary duty, and an accounting. Stuart wants to depose Lawyer Adam, but Adam, citing the attorney–client privilege, refuses to testify about his communications with Eric regarding preparation of the operating agreement.
Several issues arise. Who is Lawyer Adam’s client—Eric? Stuart? The LLC? All of the above? Does the privilege for Adam’s communications with Eric preclude disclosure to Stuart? What level of proof is necessary to establish the privilege elements? The court’s decision in Hinerman v. The Grill on Twenty-First, LLC, 2018 WL 2230763 (Ohio Ct. App. May 11, 2018), available here, answers these questions. Let’s dissect the opinion, and heed its lessons. More…