Penn. Adopts Garner Privilege Exception for Shareholder Derivative Actions

A common yet often unresolved question in shareholder derivative actions is whether the company may assert the attorney–client privilege against its own plaintiff–shareholders.  Under federal law, the leading case is Garner v. Wolfinbarger, 430 F.2d 1093 (CA5 1970), where the 5th Circuit created a privilege exception if the shareholders could show good cause for not invoking it.

Now, Pennsylvania has adopted the Garner exception, holding that trial courts should evaluate certain criteria to determine whether “good cause” exists to not apply the attorney–client privilege to plaintiffs in derivative actions.  Pittsburgh History & Landmark Found., 2017 WL 1422894 (Pa. Commonw. Ct. Apr. 21, 2017).  You may read the decision here. More…

Parent Corp.’s GC Leads Investigation into Subsidiary’s Incident—Privileged?

A Connecticut trial court held that the attorney–client privilege covers a defendant company’s investigation-related documents created at the direction of an in-house lawyer.  The court rendered the decision even though the in-house lawyer worked for the company’s parent corporation rather than the defendant company itself.  Blake v. Harvest New England, LLC, 2017 WL 1334287 (Conn. Super. Ct. Mar. 17, 2017).  You may read the decision here.

Corporate Structure

Harvest New England, LLC, a Delaware entity with its principal place of business in Connecticut, is a wholly owned subsidiary of Harvest Power, Inc., a Delaware corporation with its principal place of business in Massachusetts.  Matthew Vittiglio, licensed in Massachusetts, was “Vice President, Corporate Counsel,” or General Counsel, for Harvest Power—not the subsidiary.

Post-Accident Investigation

Following an automobile accident in Connecticut involving a driver–employee of the Connecticut LLC, the Massachusetts corporation’s General Counsel, Vittiglio, directed an investigation that led to the creation of two primary documents that would later become the subject of a privilege dispute. More…

No Privilege for CEO Despite Fact Dispute over Upjohn Warning

The New Jersey USDC ruled that a company’s former CEO did not have waiver power over putatively privileged communications with the company’s counsel.  The court issued this ruling even though the former CEO claimed to have never received an Upjohn warning.

Despite a dispute over Upjohn warnings, the court found that the CEO’s conversations pertained to company—not personal—matters and held it was the company’s privilege to waive.  United States v. Blumberg, 2017 WL 1170851 (D.N.J. Mar. 27, 2017).  You may read the decision here.

Criminal Charges 

The U.S. Government filed criminal charges against Anthony Blumberg, former CEO of a global business unit for ConvergEx, alleging that he defrauded institutional investors with hidden investment fees.  You may read about the indictment in this SEC press release.

The government served a third-party subpoena on ConvergEx which covered information, including attorneys’ notes, arising from two pre-indictment meetings Blumberg held with Bracewell LLP—ConvergEx’s counsel.

Blumberg moved for a protective order claiming that (1) Bracewell represented him and ConvergEx, (2) the attorney–client privilege belonged to Blumberg, and (3) he had not waived it. More…