Silence! Article Discusses Prohibition of (Privilege) Objections at Nonparty Witness Depositions 1

In February 2010, a New York appellate court issued an alarming ruling that “counsel for a nonparty witness does not have a right to object during or otherwise participate in a pretrial deposition.” Thompson v. Mather, 894 N.Y.S.2d 671 (App. Div. 2010).  In this medical malpractice case, the court prevented counsel for nonparty physicians from asserting objections during their pretrial depositions.

In a recent article, noted evidence and civil procedure author David Paul Horowitz explains that, while recent New York decisions somewhat erode the Thompson decision, caution is in order.  See Not Sure if I can Say Something, 85 N.Y. St. Bar J. at 22 (Jan. 2013).Be Quiet  The article, available here, reviews recent decisions that, despite Thompson, (1) permit attorneys representing a party and the nonparty deponent to interpose objections; (2) allow attorneys to interpose objections, including privilege objections, where the nonparty deponent is a party’s agent; (3) prohibit nonparty reporter’s deposition because Thompson prevents her counsel from asserting the journalist privilege; and (4) authorize the nonparty deponent’s counsel to object to disclosure of confidential, trade-secret information.

Mr. Horowitz advises that “practitioners representing non-party witnesses should check for new decisions before representing their clients at depositions.”  And while Thompson interprets a New York civil procedure rule on pretrial depositions, attorneys in other states should take notice.  Several states permit pretrial evidentiary depositions for some individuals, such as doctors and accountants, in lieu of personal trial attendance.  And when these nonparty deponents bring counsel with them, a court’s adoption of the Thompson decision could prove fatal to privilege objections before they are ever asserted.  Lawyers should certainly “check for new decisions” before representing nonparty witnesses at depositions, but they should first check out Mr. Horowitz’s article.

Thanks to Mr. Horowitz and the New York State Bar Association Journal for permission to republish the article in this post.

Privileges Protect OLC Memos Supporting Obama’s Recess Appointment of CFPB Director Richard Cordray 1

Citing the deliberative process privilege, SDNY Judge Rakoff thwarted the New  York Times’ attempt to obtain a copy of Department of Justice Office of Legal Counsel’s

President Obama appoints Richard Cordray as the first CFPB Director

President Obama appoints Richard Cordray as the first CFPB Director

legal memoranda allegedly supporting President Obama’s January 2012 recess appointment of Richard Cordray as Director of the Consumer Financial Protection Bureau (CFPB).  In its opinion, available at this link, Judge Rakoff ruled that the Times failed to prove that White House Press Secretary Jay Carney’s remarks or the temporal connection of the Cordray appointment (January 4) and the OLC memo (January 6) constituted presidential approval sufficient to warrant waiver of the deliberative process privilege.  New York Times Co. v. U.S. Dep’t of Justice, 2013 WL 174222 (S.D.N.Y. Jan. 7, 2013).

Recess Appointment

On January 4, 2012, while the U.S. Senate was in recess, President Obama appointed Richard Cordray as CFPB Director.  The Constitution permits recess appointments, but presidents traditionally do not make appointments during a recess lasting less than 10 days.  During the Senate’s December-January winter break, it held so-called “pro forma” sessions to prevent the recess from officially lasting more than three days.  The Cordray appointment created legal and political controversy because it came during a period when the Senate was not formally in recess.

The OLC sought to quell the controversy by publishing a legal memorandum authored by Virginia Seitz, OLC Ass’t Attorney General.  In the memo, available here, Seitz argued that the Senate’s pro forma sessions could not prevent the President’s constitutional authority to make appointments during a Senate recess.  The memo cited two prior OLC memos, authored by Jack L. Goldsmith and John P. Elwood, as precedent.

NYT FOIA Request

The Times filed suit to enforce its FOIA request for access to the Goldsmith and Elwood memoranda.  The DoJ countered that Exemption 5 protected the memoranda from disclosure because the deliberative process privilege, attorney-client privilege, and presidential communications privilege covered their contents.  The Times conceded that deliberative process privilege covered the memoranda but argued that the DoJ had waived the privilege.

Privilege Issues

The Court correctly stated that the government may waive the deliberative process privilege in two situations.  First, the so-called “working law” waiver applies when the governmental document is more properly categorized as stating or interpreting the agency’s law and policies rather than as a document containing predecisional agency deliberations.  Second, the adoption or incorporation waiver provides that a document containing predecisional deliberations loses its privileged status when the governmental agency adopts its contents as policy.

The Times argued that President Obama adopted the OLC memo–thus waiving the privilege–when he made the January 4, 2012 Cordray recess appointment.  For proof, the Times argued that the chronology between the OLC memo and the appointment proved the president’s adoption.  President Obama made the January 4 recess appointment following meetings with OLC attorneys.  Then, on January 6, 2012, the OLC sent the White House the Seitz memorandum memorializing its verbal recommendations.

The Times also argued that White House Press Secretary Jay Carney’s comments in his January 12, 2012 press briefing proved the President’s adoption.   A reporter questioned whether the President made the recess appointment without OLC approval because the appointment was made on January 4, 2012 and the Seitz memo was finalized on January 6, 2012.  In response, Mr. Carney stated that the President made the decision following receipt of a verbal opinion and that it was common for OLC memos memorializing verbal opinions to take some time to prepare.  This video clip from the January 12, 2012 White House Press Briefing shows Mr. Carney’s remarks regarding the OLC memo.

Ruling

The Court ruled that chronology alone did not prove that the president adopted the reasoning of the Seitz memo–and certainly not the reasoning set forth in the Goldsmith and Elwood memoranda. Moreover, the Court noted that Mr. Carney’s remarks did not show that the President adopted the reasoning of the Goldsmith and Elwood memoranda.  To show adoption waiver of the deliberative process privilege, the party seeking the information must show that the decisionmaker–here the President–relied on the document’s analysis and conclusions.  A decisionmaker can rely on a document’s conclusions without agreeing with the underlying reasoning.  If a decisionmaker reviews an agency recommendation and makes a “yes or no” determination without providing reasoning for the decision, then a court may not infer that she adopted the agency’s reasoning.

Here, Judge Rakoff ruled that the Times produced no evidence that President Obama expressly adopted the reasoning of the Goldsmith and Elwood memoranda in making the Cordray recess appointment. And without this evidence, the deliberative process privilege remained intact to protect the memoranda from public disclosure.

Another Victory for Obama Administration

The New York Times decision, issued on January 7, 2013, marks the second deliberative process privilege victory for the Obama Administration in the span of five days.  On January 2, 2013, the Southern District of New York, in an opinion authored by Judge Colleen McMahon, ruled that the deliberative process privilege protected from FOIA disclosure legal memoranda allegedly supporting the administration’s use of drones to unilaterally kill suspected terrorists, including American citizens.  The decision, explained in an earlier PoP post, similarly held that the administration had not waived the deliberative process privilege through comments made by President Obama and Attorney General Holder.   Consequently, the Obama Administration, in a matter of days, successfully protected from public disclosure the legal bases for its drone program decision and recess appointment decision.

Crime-Fraud Exception: Former General Counsel Ordered to Submit to In Camera Interview in FCPA Grand Jury Investigation 1

A Philadelphia federal Judge, law book and gavelcourt, asked to enforce a grand jury subpoena of a target company’s former General Counsel, ordered the GC to submit to an in camera interview.  The court ordered the interview to determine whether the crime-fraud exception to the attorney-client privilege applied so that the attorney could testify without violating the attorney-client privilege.  In re Grand Jury Subpoena, 2012 WL 5587438 (E.D. Pa. Nov. 13, 2012).  And in doing so, the court became one of the few to order an in camera attorney interview before deciding whether to enforce a grand jury subpoena.

The Investigation and Subpoena

The Philadelphia U.S. Attorney’s Office subpoenaed the former General Counsel of a company to testify before a grand jury investigating whether the company violated the Foreign Corrupt Practices Act.  The Government conceded that much of the General Counsel’s testimony would include matters protected by the attorney-client privilege, but argued that the crime-fraud exception applied to overcome the privilege.  The Court deferred ruling on the Government’s motion to compel until it could conduct an in camera interview with the General Counsel.

Elements of Crime-Fraud Exception

This case reiterates the elements a party must prove to invoke the crime-fraud exception to the attorney-client privilege. The crime-fraud exception applies (1) when the client was committing or intending to commit a fraud or crime and (2) the attorney-client communications were in furtherance of that alleged crime or fraud.  The exception applies regardless whether the attorney was actually aware that her advice was being used for “nefarious purposes.”  And while courts have not clarified the evidentiary standard for invoking the exception, it is clear that the burden is “not a particularly heavy one.”

Requirements for In Camera Interview

But a different, and even easier, burden exists to obtain an in camera review of putatively privileged documents or, in this case, putatively privileged testimony.  Relying on United States v. Zolin, 491 U.S. 554 (1989), the court held that, to obtain an in camera interview of an attorney to aid in a crime-fraud exception determination, the Government must show “a factual basis adequate to support a good faith belief by a reasonable person that in camera review of the materials may reveal evidence to establish a claim that the crime-fraud exception applies.” This burden, which is “not a stringent one,” is all that is required because the decision thereafter lies entirely within the court’s discretion.

The Zolin standard applies to an in camera review of documents.  The district court, while acknowledging the lack of Supreme Court or significant appellate court authority, saw no difference between conducting an in camera document review and an in camera examination.

Interview with Parameters

Although the court held that the Government hurdled the low threshold to obtain an in camera interview of the General Counsel, it implemented protective measures due to concerns of (1) attorney-client confidentiality and (2) grand jury secrecy.  The court allowed counsel for the Government and the target company (the GC’s former employer) to submit questions for the court to ask the General Counsel, but precluded their attendance at the examination.