Privilege, Joint Clients, and Corporate-Formation Lawyer’s Deposition

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…

Parent Corp. Successfully Invokes Privilege for Dissolved Subsidiary—Here’s How

In our complex corporate world of parents, direct and indirect subsidiaries, affiliates, mergers, acquisitions, and dissolutions, an increasingly litigated issue is whether a parent’s in-house counsel may have privileged communications with the subsidiary’s employees.  The USDC for E.D. Missouri sustained a parent company’s privilege assertion over its in-house lawyers’ communications with a defunct subsidiary.

How? By invoking the joint–client doctrine.  Robinson Mech. Contractors Inc. v. PTC Group Holding Corp., 2017 WL 2021070 (E.D. Mo. May 12, 2017).  You may read the decision here.  Let’s discuss.

Bankrupt Subsidiary

When PTC Seamless Tube failed to pay Robinson Mechanical for construction work, Robinson sued Seamless and its parent, PTC Group Holding.  Seamless filed for bankruptcy and, before its ultimate dissolution, transferred its documents, including privileged documents, to Holding.  The Bankruptcy Court’s transfer order, available here, expressly stated that Holding’s review of Seamless’ privileged documents would not result in privilege waiver.

Privilege Assertion

Robinson nevertheless moved to compel the documents, arguing that Seamless, now a dissolved entity which defaulted in the lawsuit and had no management, cannot assert the privilege.  The Bankruptcy Court’s order, it argued, was simply a non-waiver provision and did not grant Holding—its parent—independent power to assert Seamless’ privilege.

Holding initially relied on the Bankruptcy Court’s order for its privilege claim, but then asserted the joint–client doctrine in supplemental briefing.  Holding argued that it and Seamless were joint clients that shared in-house counsel.  In support, Holding’s General Counsel filed a More…

A Non-Political, Legal Analysis of Trump Jr.’s Privilege Claim 3

Donald Trump, Jr.’s attorney–client privilege assertion over discussions with President Trump—in the presence of lawyers—has generated significant commentary on television news shows, and in news articles and opinion columns.  Some claim the privilege assertion was “brazen” and “unequivocally” wrong, while others see merit in the privilege argument or take a wait-and-see approach.

This is political—not legal—theater.

Many have expressed an interest in my analysis. So, here it is—my objective, non-political, legal analysis of the Trump Jr.’s privilege claim based on what we know. Those seeking blind support of the privilege assertion or a conclusory, hyperbolic denouncement should look elsewhere. More…