Commentary on The Yates Memorandum Reply

In 2015, then Deputy Attorney General Sally Yates issued a DOJ memorandum on the subject of Individual Accountability for Corporate Wrongdoing, available in full here.  Known as the Yates Memorandum, the DOJ issued this directive to focus on holding individuals responsible for the illegal acts of the corporations for which they worked.

The memorandum, along with DAG Yates’ subsequent remarks, has generated much debate about whether the DOJ was, at least implicitly, returning to a culture of pressuring companies to waive the attorney-client privilege and work-product doctrine.  Now almost three years old and subject to modification under the Trump Administration, Professor Gideon Mark published an excellent article tracing the DOJ memoranda preceding the Yates Memo, and expressing concern over privilege waiver:

[T]he Yates Memorandum is likely to result in continued waivers of the attorney-client privilege and attorney work product protection, even if the DOJ does not make express requests. Waivers no doubt aid the DOJ in criminal and civil investigations, but they also undermine and weaken the attorney-client relationship and the ability of corporations to effectively negotiate with the DOJ during enforcement actions.

Professor Mark proposes tweaks to the memo, including making explicit that DOJ will not implicitly require privilege waiver for cooperation credit.

Still, the Yates Memorandum could benefit from some tweaking. If the DOJ is serious that it does not seek waivers of the attorney-client privilege or attorney work product doctrine, then it probably should make that explicit. Currently, the Memorandum merely states that the DOJ does not require waivers. This is a very different situation from one in which companies nevertheless feel compelled to waive in order to obtain cooperation credit. Similarly, the DOJ should make clear that participation in a joint defense agreement will have no negative impact on whether, or to what extent, a company receives cooperation credit.

The article is a good read, and not just because it cites my article, co-authored with Ty Howard, titled In-House Counsel: Protecting the Privilege in a Post-Yates Memorandum World, 31 Corporate Counsel, No. 3, June 2016 (available here).  You may access Professor Mark’s article, The Yates Memorandum, 51 U.C. Davis L. Rev. 1589 (2018), here.

Non-Waiver Contract Saves GC from Disclosing Privileged Info to Grand Jury

Though the Fourth Circuit has not decided the issue, most federal courts reject a selective-waiver doctrine, meaning that waiver to one is waiver to all.  But one company under a federal criminal investigation permitted an in-house lawyer to disclose privileged information to U.S. Attorneys after the DOJ agreed to a non-waiver contract.

Did the contract prevent privilege waiver? The Fourth Circuit said yes, and precluded the DOJ from calling the in-house counsel to repeat the previously disclosed privileged information before a federal grand jury.  In re: Grand Jury 16-3817 (16-4) United States of America, 2018 WL 3156935 (CA4 June 27, 2018) (available here). Let’s discuss the nuances of this interesting opinion. More…

Sex, Privilege, and Audiotapes (Updated)

Privilege, sex, criminal investigations, and hyperbole.  Of course, I am referring to another eventful 48 hours in the continuing Trump–Cohen privilege-review saga.  The latest installment is lawyer Michael Cohen’s secret 2016 recording of his conversation with President Trump regarding Karen McDougal, the former Playboy model who alleges a year-long affair with Trump in 2006.

Let’s break down this latest twist, for it offers many lessons.

What We Know—The Special Master’s Review

SDNY’s Judge Kimba Wood appointed Barbara Jones as Special Master to conduct a privilege review of materials the federal government obtained in a raid on Cohen’s Trump Tower office.  SM Jones filed her latest review report, available here, on July 13, 2018, and her Second Report and Recommendations, available here, on Thursday, July 19, 2018.

The SM released 883,634 non-privileged items to the U.S. Attorney’s Office.  Was the Trump–Cohen audiotape part of that release? We do not know.

Cohen and/or Trump claimed privilege over 4,085 items, and the SM agreed that the privilege covered 2,633 of them.  Was the audiotape among the 2,633? We do not know.

Of the remaining 1,452 that the SM found non-privileged, Cohen (not Trump) objected to the non-privilege designation on 22 of them, but advised the SM that he “will not raise these objections with the Court.”  Was the audiotape one of these 22? We do not know—the SM’s report is silent on these privileged and non-privileged items’ substance.

Leaked Recording

On Friday, July 20, 2018, the New York Times reported the tape’s existence, stating that the FBI seized the recording during the April 9, 2018 raid.  With no mention of the audiotape in public court filings, who leaked the recording’s existence to the Times?

Unless the tape was part of the 880,000+ non-privileged items released to the government, it is doubtful that government lawyers even have the tape to leak it.  If the tape truly contains a confidential, privileged conversation (see below), then why would Cohen and his attorneys risk an ethical violation by leaking confidential information?

The New Yorker and other media outlets suggest that Trump’s lawyers informed the Times, a reasonable conclusion.

Is the Recording Privileged?

Recall that the privilege applies to (1) communications between (2) a lawyer and her client that are (3) confidential when made, (4) kept confidential thereafter, and (5) pertain to legal advice.  We knew that any Trump–Cohen communications would face scrutiny in SM Jones’ privilege review, as I chronicled in Privilege Issues Confronting the Trump–Cohen Special Master.

Let’s analyze. More…