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…

Adequate Upjohn Warning? 10th Circuit Issues Instructive Decision

In a case that reminds us of the importance of sufficient Upjohn warnings, the 10th Circuit rejected an executive director’s privilege assertion over his statements to corporate counsel and affirmed his criminal conviction.  The case raises the question whether counsel adequately advised the director about the privilege’s scope.  United States v. Merida, 2016 WL 3741867 (CTA10 July 12, 2016).  You may read the decision here.

Background

Jason Brett Merida was the executive director of construction for the Choctaw Nation of Oklahoma.  After issues arose over the Nation’s payment for steel products, the Nation retained an attorney to investigate the issues and file suit against the steel provider.

The Nation’s executives ordered Merida to meet with its counsel, and he appeared to find the lawyer, a court reporter, and a request to take his sworn statement.  The lawyer told Merida that, “for purposes of the record,” his statement is “covered by the attorney-client privilege because [he does] work for the Choctaw Nation.” More…

Upjohn Warnings and External Consultants: What You Need to Know

Corporate counsel’s internal investigations often reveal that a third-party consultant maintains relevant information.  Yet, in-house and outside counsel have relatively little instruction on whether to interview these consultants and, if so, whether an Upjohn warning is necessary.  Courts have recently addressed two related concepts, however, that provide excellent guidance on this front.

Courts, notably the 9th Circuit, have reiterated the importance of providing Upjohn warnings to corporate employees prior to conducting an interview.  In United States v. Ruehle, 583 F.3d 600 (9th Cir. Cal. 2009), consultantfor example, the Ninth Circuit noted the “treacherous path” that counsel take when conducting internal investigations and called counsel’s lack of Upjohn warnings “troubling.”  And relatedly, courts have increasingly held that the corporate attorney-client privilege covers consultants considered the “functional equivalent” of corporate employees.  Together, these concepts provide corporate counsel informed guidance when interviewing consultants as part of an internal investigation.

In my recent article, Upjohn Warnings and External Consultants, published by InsideCounsel, I explore these concepts in greater detail. The article, accessible here, discusses the importance and preferred content of Upjohn warnings.  It also discusses the “functional equivalent of employee” test, including how Model Rule 1.3 and its official comments dictate that corporate counsel provide Upjohn warnings to consultants meeting the test.

For further elaboration on the functional equivalent employee test, see my post discussing a recent ruling that a Google consultant was a “functional equivalent of an employee” for purposes of the attorney-client privilege coverage.  You may also find helpful my recent post regarding the discoverability of witness statements, as these issues will apply to external consultants.

My thanks to InsideCounsel for permission to reprint my article in this post.