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…

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…