Protecting Confidential Legal Information

Copyright (c) 2007 Jenner & Block LLP. All Rights Reserved.

By Jerold S. Solovy and Robert L. Byman and Michael T. Brody and David M. Greenwald and Blair R. Zanzig and Marek H. Badyna and Kristen L. Mercado and Adam A. Hachikian

Introduction
 
In 2007, we have again updated our reference, Protecting Confidential Legal Information: A Handbook for Analyzing Issues Under the Attorney-Client Privilege and the Work Product Doctrine from the 2005 edition of the handbook. This work began as a modest outline in the early 1980's addressing issues raised by the United States Supreme Court's decision in Upjohn Co. v. United States, 449 U.S. 383 (1981). With each revision, it has grown in both breadth and depth. The 2006 edition is no exception.
 
In preparing the 2007 edition, we continued to strive to make the Handbook relevant to practitioners. This year, we have expanded our coverage of issues related to electronic discovery, particularly with reference to cost shifting and the proposed changes to rules 16, 26, and 34 of the Federal Rules of Civil Procedure. See Section I.E.1.b., Electronic Mail and Other Electronic Data: Cost Shifting. We also continue to monitor the implementation of Internal Revenue Code § 7525, which purports to extend the common-law attorney-client privilege to "federally authorized tax practitioners" providing "tax advice." See Section I.B.2.c., Accountants As Privileged Parties.
 
We also note the continuation of several trends we observed in prior versions of the Handbook. For example, despite the admonition in Upjohn that, for the purposes of the attorney-client privilege, in-house counsel should be treated on an equal footing with outside counsel, courts have generally continued to express skepticism regarding in-house counsel's assertion of the privilege on the basis that in-house counsel has mixed business and legal roles in the corporation. See Section I.B.2.a., In-House vs. Outside Counsel, and Section I.D.2., Cases of Mixed Purpose. Courts have also continued to reject "selective waiver" for "voluntary" disclosures to government agencies, finding that disclosure of otherwise privileged material to the government generally constitutes waiver and may lead to compelled disclosure to private litigation adversaries. However, within the last year, federal district courts in New York and California have breathed some life into the selective waiver doctrine. See Section I.G.6.a., Selective Waiver Doctrine, Disclosure to the Government, and Section IV.E.4., Selective Waiver: Reporting to Government Agencies.
 
We hope that you turn to this handbook as your first reference when confronting privilege issues. For a broader reference on all of the privileges that may confront practitioners, we recommend DAVID M. GREENWALD, EDWARD F. MALONE, & ROBERT R. STAUFFER, TESTIMONIAL PRIVILEGES (Thomson West 3d ed. 2005). We welcome your comments and suggestions for future editions.
 
The Authors
Jenner & Block LLP
January, 2007
 
I. The Attorney-Client Privilege
Historically, the attorney-client privilege developed upon two assumptions: that good legal assistance requires full disclosure of a client's legal problems, and that a client will only reveal the details required for proper representation if her confidences are protected. See Fisher v. United States, 425 U.S. 391, 403 (1976). In response to these assumptions, the attorney-client privilege developed at common law to encourage free and open communication between client and lawyer, thus promoting informed, effective representation. 8 JOHN H. WIGMORE, EVIDENCE § 2291 (J. McNaughton rev. 1961). Because the privilege obstructs the search for truth, however, it is construed narrowly. See, e.g., Fisher, 425 U.S. at 403; Haines v. Liggett Group, Inc., 975 F.2d 81, 84 (3d Cir. 1992) ("[S]ince the privilege has the effect of withholding relevant information from the factfinder, it applies only where necessary to achieve its purpose."); In re Grand Jury Proceedings Under Seal, 947 F.2d 1188 (4th Cir. 1991); JEREMY BENTHAM, RATIONALE OF JUDICIAL EVIDENCE (1827).
Over the years, the courts have provided several definitions of the attorney-client privilege. Judge Wyzanski provided the seminal definition in United States v. United Shoe Machinery Corp., 89 F. Supp. 357, 358-59 (D. Mass. 1950):
 
The [attorney-client] privilege applies only if (1) the asserted holder of the privilege is or sought to be come a client; (2) the person to whom the communication was made (a) is a member of the bar of a court, or his subordinate and (b) in connection with this communication is acting as a lawyer; (3) the communication relates to a fact of which the attorney was informed (a) by his client (b) without the presence of strangers (c) for the purpose of securing primarily either (i) an opinion on law or (ii) legal services or (iii) assistance in some legal proceeding, and not (d) for the purpose of committing a crime or tort; and (4) the privilege has been (a) claimed and (b) not waived by the client.
 
As a general matter, the privilege protects:

(A) a communication,
 
(B) made between privileged persons (i.e., attorney, client or agent),
 
(C) in confidence,
 
(D) for the purpose of obtaining or providing legal assistance for the client.
 
See In re Air Crash Disaster, 133 F.R.D. 515, 518 (N.D. Ill. 1990); RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 68 (hereinafter REST. 3D); 8 JOHN H. WIGMORE, EVIDENCE § 2292 (J. McNaughton rev. 1961); see also Coltec Indus., Inc. v. Am. Motorists Ins. Co., 197 F.R.D. 368, 370-71 (N.D. Ill. 2000) (Noting the elements as outlined by Wigmore: "(1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his instance permanently protected (7) from disclosure by himself or by the legal adviser, (8) except the protection be waived."); SEC v. Beacon Hill Asset Mgmt. LLC, No. 02CIV8855LAKHBP, 2004 WL 1746790, at *3 (S.D.N.Y. Aug. 3, 2004) (quoting United Shoe).
A.	Communications Covered By the Privilege
Virtually all types of communications or exchanges between a client and attorney may be covered by the attorney-client privilege. Privileged communications include essentially any expression undertaken to convey information in confidence for the purpose of seeking or rendering legal advice. Haines v. Liggett Group, Inc., 975 F.2d 81, 90 (3d Cir. 1992) (privilege extends to verbal statements, documents and tangible objects conveyed in confidence for the purpose of legal advice); 8 John H. WIGMORE, EVIDENCE § 2292 (J. McNaughton rev. 1961); REST. 3d § 119.
1. Documents And Recorded Communications
The broad sweep of privileged communications encompasses not only oral communications, but also documents or other records in which communications have been recorded. REST. 3D § 69; JOHN W. STRONG, MCCORMICK ON EVIDENCE § 89 (5th ed. 1999); 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5484 (1986).
However, documents do not become automatically privileged merely because they are communicated to an attorney. The privilege only protects those documents that reflect communications between an attorney and client. In re Grand Jury Subpoenas, 959 F.2d 1158 (2d Cir. 1992); Duttle v. Bandler & Kass, 127 F.R.D. 46, 52 (S.D.N.Y. 1989). Documents or other communications that a client transmits to a lawyer neither gain nor lose privileged status as a result of the transfer. Fisher v. United States, 425 U.S. 391, 404 (1976); JOHN W. STRONG, MCCORMICK ON EVIDENCE § 89 (5th ed. 1999). Unless a preexisting document was itself privileged before it was communicated to an attorney, it does not become privileged merely because of the transfer. Fisher, 425 U.S. at 391; JOHN W. STRONG, MCCORMICK ON EVIDENCE § 89 (5th ed. 1999); 8 JOHN H. WIGMORE, EVIDENCE § 2307 (J. McNaughton rev. 1961). Thus, a court will consider a pre-existing document to be privileged only if the document was kept confidential and was prepared to provide information to the lawyer in order to obtain legal advice. See United States v. DeFonte, 441 F.3d 92, 94 (2d Cir. 2006) (notes prepared by an incarcerated client of issues to be discussed with attorney, and which were in fact later discussed with counsel, were protected by attorney-client privilege).
In addition to written documents, other modes of communication may also be covered under the privilege. Thus, telephone, audio and video records or tapes may qualify as privileged communications. See JOHN W. STRONG, MCCORMICK ON EVIDENCE § 89 (5th ed. 1999). In general, the mode of communication is not relevant to the determination of privilege. However, the method of communication may be relevant to a determination as to whether the communicator could reasonably expect the information would remain confidential. See REST. 3D § 119 cmt. b; Communications Must Be Intended to Be Confidential, § I.C., below.
2. Communicative Acts
The attorney-client privilege includes non-verbal acts within its definition of protected communications. REST. 3D § 69 cmt. e. A communicative act is one in which the privileged person's actions attempt to convey information such as a facial expression or nod of affirmation. See 8 JOHN H. WIGMORE, EVIDENCE § 2306 (J. McNaughton rev. 1961); 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5484 (1986). Such acts are typically protected by the attorney-client privilege. However, not all acts are voluntary attempts at communicating. For example, physical characteristics, demeanor, complexion, sobriety, or dress are not communicative and would not be protected. See JOHN W. STRONG, MCCORMICK ON EVIDENCE § 89 (5th ed. 1999); see also:

In re Grand Jury Proceedings, 13 F.3d 1293, 1296 (9th Cir. 1993). Attorney required to testify regarding client's expenditures, income producing activities and lifestyle during European vacation.
 
In re Grand Jury Proceedings, 791 F.2d 663, 666 (8th Cir. 1986). An attorney could not claim the privilege to avoid testifying about the authenticity of a client's signature or to avoid identifying the client in a photograph.
 
United States v. Weger, 709 F.2d 1151, 1154-55 (7th Cir. 1983). The type style characteristics of a letter typed on a typewriter are not communicative and therefore not privileged.
 
Darrow v. Gunn, 594 F.2d 767, 774 (9th Cir. 1979). An attorney's observations of demeanor are not privileged unless based on a confidential communication.
 
United States v. Kendrick, 331 F.2d 110, 113-14 (4th Cir. 1964). Physical characteristics (e.g., a mustache) are not subject to the privilege.
 
United States v. Kaiser, 308 F. Supp. 2d 946, 954 (E.D. Mo. 2004). Peripheral matters pertaining to the relationships between respondents and their clients, such as client identities and fee information, are simply not protected by the privilege because that type of information was not communicated in confidence to the attorney for the purpose of securing legal advice.
 
Williams v. Chrans, 742 F. Supp. 472, 493 (N.D. Ill. 1990), aff'd, 945 F.2d 926 (7th Cir. 1991). Testimony by a legal clerk that the defendant was calm and articulate while a dead body was hidden in defendant's trunk did not violate the privilege.
 
Frieman v. USAir Group, Inc., Civ. A. No. 93-3142, 1994 WL 719643, at *6-7 (E.D. Pa. Dec. 22, 1994). Lawyer for client claiming permanent disability was compelled to testify regarding observations of client's physical condition and activities.

 But see:

 Gunther v. United States, 230 F.2d 222, 223-24 (D.C.Cir.1956). Attorney could not be called to testify as to client's competency as such an inquiry would require testimony as to facts learned in privileged context.
 
State v. Meeks, 666 N.W.2d 859, 868-71 (Wis. 2003). Rejecting Darrow v. Gunn, 594 F.2d 767 (9th Cir.1979) (cited above) and holding that attorney's observation of client's mental state necessarily involved attorney-client communications.
3. Fees, Identity And The "Last Link"
Some courts have carved out exceptions to the types of communications that are protected by the privilege and have denied protection to items such as the identity of the client, the fact of consultation, the payment of fees, and the details of retainer agreements. See 8 JOHN H. WIGMORE, EVIDENCE § 2313 (J. McNaughton rev. 1961); 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5484 (1986); Diane M. Allen, Attorney's Disclosure, in Federal Proceedings, of Identity of Client as Violating Attorney-Client Privilege, 84 A.L.R. FED. 852 (1987). These courts have reasoned that such routine items are not communicated in order to obtain legal services and that fear of disclosure of such information will not deter clients from providing these facts. See:
 
In re Grand Jury Subpoena Duces Tecum, 94 Fed. Appx. 495, 497 (9th Cir. 2004). Defendant in money-laundering case could not assert the privilege over communications with his attorney related to fee arrangements in defense of an LSD possession charge. Such information, even if it could implicate the defendant in money-laundering, was not a privileged legal communication.
 
In re Grand Jury Subpoena, 204 F.3d 516, 519 (4th Cir. 2000). Client may not veil his identity with attorney-client privilege by voluntarily disclosing confidential communications which necessarily will be exposed by revealing client's identity.
 
Gerald B. Lefcourt P. C. v. United States, 125 F.3d 79, 86 (2d Cir. 1997). Information regarding the payment of fees is not privileged.
 
United States v. Bauer, 132 F.3d 504, 508-09 (9th Cir. 1997). Identity of client, amount of fees paid, identification of payment by case name, general purpose of work performed, and whether client's testimony is the product of attorney coaching are not within attorney-client privilege.
 
In re Grand Jury Proceedings, 841 F.2d 230 (8th Cir. 1988). The identity of a third party paying the legal fees of another is not privileged.
 
In re Grand Jury Subpoenas, 803 F.2d 493 (9th Cir. 1986), corrected, 817 F.2d 64 (9th Cir. 1987). Identity of a non-client fee payer is not privileged.
 
In re Grand Jury Proceedings, 517 F.2d 666, 670-71 n.2 (5th Cir. 1975). Identity of client not privileged (collecting cases)).
 
Porter v. Nationscredit Consumer Discount Co., No. Civ.A. 03-3768, 2004 WL 1753255, at *2 (E.D. Pa. July 8, 2004). Information regarding fee arrangements is not privileged.
 
Bria v. United States, No. Civ.3: 00CV1156 (CFD), 2002 WL 663862, at *5 (D. Conn. Mar. 26, 2002). Identities and fees not protected.
 
Bank Brussels Lambert v. Credit Lyonnais (Suisse), 220 F.Supp. 2d 283, 288 (S.D.N.Y. 2002). Holding that it is "well established" in the Second Circuit that a client's identity is not protected, except in special circumstances.
 
Gonzalez v. Reno, 2001 WL 34083812, at *2 (S.D. Fla. 2001). Client's identity generally falls outside of the privilege.
 
Duttle v. Bandler & Kass, 127 F.R.D. 46, 52 (S.D.N.Y. 1989). Attorney's bills and documents concerning the termination of the attorney-client relationship were not privileged.
 
Condon v. Petacque, 90 F.R.D. 53, 54-55 (N.D. Ill. 1981). Fact of consultation and the dates legal services were performed are not privileged.
 
But see:
 
Ehrich v. Binghamton City Sch. Dist., 210 F.R.D. 17, 20 (N.D.N.Y. 2002). Holding that billing statements that detail attorney services, listing services provided and conversations and conferences between counsel and others, are privileged.
 
United States v. Gonzalez-Mendez, 352 F. Supp. 2d 173, 175-76 (D. P.R. 2005). Holding that, while a client's fee arrangements are not privileged, the government was not entitled to an expedited hearing on the issue of whether otherwise destitute defendants were paying their attorneys from the proceeds of a bank heist.
Other courts and the Restatement have rejected a strictly categorical approach. See JOHN W. STRONG, MCCORMICK ON EVIDENCE § 90 (5th ed. 1999); 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5484 (1986); REST. 3D § 69 cmt. g. Under this alternative approach, the attorney-client privilege applies if revealing the information would directly, or by obvious inference, reveal the content of a confidential communication from a privileged person (client, attorney or agent). See In re Witness before the Special March 1980 Grand Jury, 729 F.2d 489, 495 (7th Cir. 1984); REST. 3D § 69 cmt. g. Courts often refer to this approach as a "last link" exception. Under the "last link" doctrine a routine communication such as a client's identity is not protected unless it links the client to the case. See, e.g., In re Grand Jury Proceedings, 517 F.2d 666, 671 (5th Cir. 1975); NLRB v. Harvey, 349 F.2d 900, 905 (4th Cir. 1965); Baird v. Koerner, 279 F.2d 623 (9th Cir. 1960) (an often-cited case but highly criticized as a misapplication of the doctrine).
It should be remembered that the purpose of the privilege is to encourage free disclosure; it does not act generally to protect clients from incrimination. See, e.g., In re Grand Jury Proceedings, 791 F.2d 663, 665 (8th Cir. 1986); In re Shargel, 742 F.2d 61, 62-63 (2d Cir. 1984). Thus, the privilege does not protect information that is merely invasive or inculpatory, and it is not enough that the communication provides the "last link" to incriminate the client. In re Grand Jury Proceedings, Cherney, 898 F.2d 565 (7th Cir. 1990). Instead, the only "last link" that implicates the privilege is the one that connects the client to a confidential communication or that exposes a confidential communication. See JOHN W. STRONG, MCCORMICK ON EVIDENCE § 90 (5th ed. 1999). See:
 
In re Grand Jury Subpoena Duces Tecum, 94 Fed. Appx. 495, 497 (9th Cir. 2005). Though potentially incriminating in money laundering case, fee arrangements with counsel were not privileged because they would not provide the last link to the criminal charge.
 
In re Grand Jury Matter, No. 91-01386, 969 F.2d 995 (11th Cir. 1992). An attorney was ordered to reveal the identity of a client who paid with a counterfeit $ 100 bill. The court reasoned that the only "last link" provided by the identity information was to incriminate the client and not to reveal any confidences.
 
In re Grand Jury Matter (Special Grand Jury Narcotics) (Under Seal), 926 F.2d 348 (4th Cir. 1991). It is irrelevant that disclosure of a fee arrangement will implicate the client. The privilege only protects fee arrangements if they will reveal confidential communications.
 
In re Grand Jury Subpoena for Attorney Representing Reyes-Requena, 913 F.2d 1118, 1124-25 (5th Cir. 1990). Court indicated that its holding in In re Grand Jury Proceedings, 517 F.2d 666, 671 (5th Cir. 1975) (cited above) applied only where disclosure of fee information would reveal the "ultimate motive "for seeking legal advice.
 
DeGuerin v. United States, 214 F. Supp. 2d 726 (S.D. Tex. 2002). Fee information protected only where revealing the information also would expose a substantive attorney-client communication.
 
Sony Corp of Am. v. Soundview Corp. of Am., No. 3:00 CV 754 (JBA), 2001 WL 1772920, at *3 (D. Conn. Oct. 23, 2001). Fee information protected only if it reveals the motive for representation or substance of advice.
 
But see:
 
Dean v. Dean, 607 So. 2d 494 (Fla. Dist. Ct. App. 1992). Court refused to order an attorney to disclose the identity of a client involved in a hit and run accident.
Sometimes the disclosure of even routine information can serve to expose client confidences instead of merely providing a link to the confidences. The attorney-client privilege also protects against this type of exposure. A common situation involving this aspect of the privilege arises when the motive of a client is revealed by the fact of consultation. See:
 
In re Grand Jury Proceedings, 204 F.3d 516, 520-22 (4th Cir. 2000). Where it "appeared that the client's identity was sufficiently intertwined with the client's confidences such that compelled disclosure of the former essentially disclosed the latter . . . "the attorney-client privilege would preclude an attorney from disclosing the client's identity, but where the client voluntarily discloses otherwise privileged information, such a privilege is lost as to the clients identity, even where the disclosure of his identity will link the client to the statement.
 
United States v. Ellis, 90 F.3d 447, 450-51 (11th Cir. 1996). Identity is protected only if its disclosure would lead to the uncovering of privileged information.
 
Ralls v. United States, 52 F.3d 223, 226 (9th Cir. 1995). Privilege applies when identity of payor or terms of engagement were so "inextricably intertwined" with confidential communications that revealing either the identity or the terms "would be tantamount to revealing privileged communication."
 
In re Grand Jury Proceedings, 946 F.2d 746 (11th Cir. 1991). Revelation of a client's identity would expose his motive for seeking advice (i.e., a drug conspiracy investigation). Court further noted that the government's knowledge of this motive did not obviate the protection of the attorney-client privilege.
 
In re Grand Jury Proceedings, Cherney, 898 F.2d 565 (7th Cir. 1990). Grand jury sought the identity of third party who was paying the attorneys 'fees of the person who was the target of its investigation. Seventh Circuit noted that fee information normally is not privileged, but that in this case revealing the payor's identity might disclose a confidential communication: the payor's motive for paying the fees of the target. Court held payor's identity was privileged.
 
In re Grand Jury Subpoenas, 906 F.2d 1485, 1492 (10th Cir. 1990). Fee information is not privileged unless it will disclose confidential client communications.
 
In re Two Grand Jury Subpoena Duces Tecum Dated Aug. 21, 1985, 793 F.2d 69 (2d Cir. 1986). Privilege does not protect information about fee arrangements except when they involve prejudicial disclosure of confidential communications.
 
United States v. Strahl, 590 F.2d 10, 11 (1st Cir. 1978). Identity of client protected because disclosure would implicate the client "in the very criminal activity for which legal advice was sought" and penalize the seeking of advice.
 
Funke v. Life Fin. Corp., No. 99 Civ. 11877 (CBM), 2003 WL 1787125, at *1 (S.D.N.Y. Apr. 3, 2003). Retainer agreements may contain privileged communications.
 
Riddell Sports, Inc. v. Brooks, 158 F.R.D. 555, 560 (S.D.N.Y. 1994). Although attorney fee arrangements are ordinarily not protected, the privilege would apply to bills, ledgers, statements, time records and correspondence that reveal the client's motive in seeking representation or litigation strategy.
 
Brett v. Berkowitz, 706 A.2d 509, 515 (Del. 1998). Attorney specializing in divorce cases was not required to produce the names of his other clients to a client that sued the attorney for sexual harassment. "[T]he mere revelation of the [other clients' names] would reveal the confidential communication that [the clients] were seeking advice concerning a divorce." Id.
 
But see:
 
Gerald B. Lefcourt, P.C. v. United States, 125 F.3d 79, 87 (2d Cir. 1997). Though acknowledging the adoption of a "legal advice exception" in other circuits, the Second Circuit "all but categorically rejected it" in Vingelli v. United States (see below).
 
Vingelli v. United States, 992 F.2d 449 (2d Cir. 1993). Grand jury subpoenaed attorney to determine who was paying the fees for the defense of a convicted party. Attorney refused to disclose the client and fee information because it would reveal the purpose of the representation. Court found that the client could have consulted the attorney for a variety of reasons and that while the disclosure of the fee payor's identity might suggest the possibility of wrongdoing it would not reveal a confidential communication. Court also found that the fact that money was paid did not reveal any confidential communication and that the financial transfers were not made to obtain legal advice.
4. Knowledge Of Underlying Facts Not Protected
While the privilege protects communications between privileged persons, it does not permit a party to resist disclosure of the facts underlying those communications. Upjohn Co. v. United States, 449 U.S. 383, 395-96 (1981); REST. 3D § 69 cmt. d. The privilege creates a distinction between the contents of a lawyer-client communication and the contents of a client's memory or files. Id.; Swidler & Berlin v. United States, 524 U.S. 399, 412 (1998); see also 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5484 (1986). Thus, the privilege will not protect a client from testifying about her recollections or records, only whether the client related them to her attorney. See:
 
In re Bieter Co., 16 F.3d 929, 62 (8th Cir. Feb 16, 1994). Privilege protects communications with attorney and prevents inquiry at deposition into facts communicated, but does not limit inquiry into the facts themselves.
 
In re Six Grand Jury Witnesses, 979 F.2d 939 (2d Cir. 1992). Privilege protects communications and the fact of communication but not the underlying information contained in the communications.
5. Real Evidence And Chain Of Custody Not Protected
A client's transmission of real evidence to an attorney does not constitute a communication and is not protected under the attorney-client privilege. Revealing such evidence merely serves to implicate the client and does not disclose confidential communications. As a result, a client cannot shield real evidence merely by giving it to his attorney. See In re January 1976 Grand Jury, 534 F.2d 719, 728 (7th Cir. 1976) (bank robbery proceeds not privileged); In re Ryder, 381 F.2d 713 (4th Cir. 1967) (concealing stolen money and sawed off shotgun resulted in suspension of attorney); State v. Bright, 676 So. 2d 189, 194 (La. Ct. App. 1996) (Privilege did not prevent court from ordering lawyer to produce incriminating diary given to him by defendant).
While the privilege cannot shield physical evidence from production, some courts have found that the privilege will protect the identity of the client who produced the incriminating evidence. See Fees, Identity and the Last Link, § I.A.3., above; see also:
 
Clutchette v. Rushen, 770 F.2d 1469, 1472-73 (9th Cir. 1985). Holding that attorney-client privilege does not extend to physical evidence. Though client's disclosure to attorney of location of certain receipts would itself be privileged, attorney could not conceal receipts after locating and physically removing them from their prior location.
 
State v. Green, 493 So. 2d 1178 (La. 1986). Defendant's attorney found the gun used in a shooting among defendant's possessions. Court held that attorney could not rely on the privilege to hide the gun since it was physical evidence and not protected. However, the attorney could not be forced to testify about the source of the gun (i.e., to establish the chain of custody).
 
People v. Nash, 341 N. W.2d 439 (Mich. 1983). Testimony that revealed that incriminating items were obtained from the office of the defendant's attorney violated the privilege.
However, many courts hold that the chain of custody for real evidence cannot be broken by an attorney's privileged silence. In Commonwealth v. Ferri, 599 A.2d 208 (Pa. Super. Ct. 1991), appeal denied, 627 A.2d 730 (Pa. 1993), a client turned soiled clothing over to his attorney, thus placing the attorney in the chain of custody. At trial, the court required the attorney to testify about his custody of the clothing in order to make it admissible into evidence. See also In re Grand Jury Matter No. 91-01386, 969 F.2d 995 (11th Cir. 1992) (source of physical evidence is not protected).
6. Communications From an Attorney To a Client Are Protected
The attorney-client privilege not only protects a client's disclosure to his attorney, it also shields the advice given to the client by the attorney. See, e.g., REV. UNIF. R. EVID. 502 (1986); REST. 3D § 69 cmt. i. However, the courts are in disagreement about the scope of protection given to an attorney's advice. See, e.g., United States v. Amerada Hess Corp., 619 F.2d 980, 986 (3d Cir. 1980) (noting two approaches). Two approaches are discussed in the following sections.
a. The Narrow View: Only Advice Which Reveals Confidences Is Privileged
Some courts have adopted a narrow view that communications from an attorney to a client are privileged only to the extent their disclosure reveals a confidential communication from the client. See:
 
GFL Advantage Fund, Ltd. v. Colkitt, 216 F.R.D. 189 (D.D.C. 2003). Confidential communication from attorney to client is protected when it is based on confidential information supplied by the client.
 
Yankee Atomic Elec. Co. v. United States, 54 Fed. Cl. 306, 314 (Fed. Cl.. 2002). Only communications from attorneys that would reveal client confidences are protected.
 
United States v. Ramirez, 608 F.2d 1261, 1268 n. 12 (9th Cir 1979). Observing that some courts limit application of the privilege to only those communications of counsel that would reveal a client's own confidential communications and indicating that the limitation was consistent with "modern" conceptions of the privilege.
 
Thurmond v. Compaq Computer Corp., 198 F.R.D. 475, 480 (E.D. Tex. 2000). Reviewing cases adopting narrow and broad interpretations, but concluding that only communications from counsel that would reveal client confidences are privileged.
 
Walsh v. Northrop Grumman Corp., 165 F.R.D. 16, 18 (E.D.N.Y. 1996). Second Circuit "remains committed to the narrowest application of the privilege such that it protects only legal advice that discloses confidential information given to the lawyer by the client."
 
Republican Party of N. Carolina v. Martin, 136 F.R.D. 421, 426-27 (E.D.N.C. 1991). Privilege does not apply to legal advice that does not arguably reveal a client's confidences. Thus, attorney memoranda or letters without factual application to a client's case were not protected.
 
Gonzalez Crespo v. Wella Corp., 774 F. Supp. 688 (D.P.R. 1991). Privilege protects communications from client to attorney and those from attorney to client that would tend to reveal client's confidences.
 
N. Carolina Elec. Membership Corp. v. Carolina Power & Light Co., 110 F.R.D. 511, 514 (M.D.N.C. 1986). Communications are protected by the privilege only if they tend to reveal confidential client communications.
 
Ohio-Sealy Mattress Mfg. Co. v. Kaplan, 90 F.R.D. 21, 28 (N.D. Ill. 1980). Noting split of authority and concluding that only communications from an attorney to a client that reveal a client's confidences are privileged.
 
Att'y Gen. of the U.S. v. Covington & Burling, 430 F. Supp. 1117, 1120-21 & n.1 (D.D.C. 1977). Attorney-client privilege protects communications from attorney to client only to the extent they reveal confidential communication from the client or would constitute, by subsequent communication, an admission by adoption.
 
United States v. United Shoe Mach. Corp., 89 F. Supp. 357, 359 (D. Mass. 1950). Attorney communications are privileged to the extent they are based on confidential communications from the client.
 
Rico v. Mitsubishi Motors Corp., 10 Cal. Rptr. 3d 601, 605-06 (Cal. Ct. App.) review granted, 91 P.3d 162 (Cal. 2004). Holding that memo detailing communications between attorneys and experts was not privileged because it did not involve a communication with a client.
 
See also Brinton v. Dep't of State, 636 F.2d 600, 603 (D.C. Cir. 1980) (observing that communications from attorney to client are privileged at least to the extent they are "related to the confidence of the client"); SEC v. Beacon Hill Asset Mgmt. LLC, No. 02CIV8855LAKHBP, 2004 WL 1746790, at *3 (S.D.N.Y. Aug. 3, 2004) (quoting Bank Brussels Lambert v. Credit Lyonnais (Suisse) S.A., 160 F.R.D. 437, 441 (S.D.N.Y 1995) for the proposition that the privilege extends to communications from lawyer to client "at least to the extent that such advice may reflect conditional information conveyed by the client.") (emphasis added).
b. The Broader View: Content Irrelevant To Determination of Whether Communication Is Privileged
Other courts have rejected the narrow interpretation of the privilege and protect virtually all communications from attorney to client. In In re LTV Securities Litigation, 89 F.R.D. 595 (N.D. Tex. 1981), the court recognized that there was a split of authority and rejected the narrow approach because it failed "to deal with the reality that lifting the cover from the advice will seldom leave covered the client's communication to his lawyer." Id. at 602. Instead, the court adopted a broader rule which protects any communication from an attorney to a client when made in the course of giving legal advice. Id.; see also UNIF. R. EVID. 502(b)(1) (1986).
The Restatement also rejects the narrow rule that the privilege only protects communications that reveal client confidences. REST. 3D § 69 cmt. i. Under the Restatement, a lawyer's advice to her client is privileged without regard to the source of the lawyer's information if the information meets the requirements of confidentiality and a legal purpose. For example, if a lawyer writes a letter to a client which gives tax advice, and the letter is based in part on information supplied by the client, in part on information gathered by the lawyer from third persons, and in part on the lawyer's legal research, under the broader approach of the Restatement, the privilege applies to the entire document even if the parts could be separated. REST. 3D § 119 cmt. i, illus. 7. See:
 
United States v. Defazio, 899 F.2d 626 (7th Cir. 1990). Communications from attorney to client are privileged if they constitute legal advice or tend directly or indirectly to reveal the substance of a client confidence.
 
United States v. Amerada Hess Corp., 619 F.2d 980, 986 (3d Cir. 1980). Attorney-client privilege applies to communications from attorney.
 
Vardon Golf Co., Inc. v. Karsten Mfg. Corp., 213 F.R.D. 528, 531(N.D. Ill. 2003). Communications from an attorney are privileged if they contain legal advice or would reveal a client communication.
 
United States v. Mobil Corp., 149 F.R.D. 533, 536 (N.D. Tex. 1993). Communications from attorney to client are protected.
 
Spectrum Sys. Int'l Corp. v. Chem. Bank, 581 N.E.2d 1055 (N.Y. 1991). Under New York law an attorney's communication to a client is protected without regard to whether it implicates information that originally came from the client. Lawyer's factual report which contained material gathered from third party-interviews was held privileged.
 
Burlington Indus. v. Exxon Corp., 65 F.R.D. 26, 37 (D. Md. 1974). Self-initiated attorney communications are protected.
 
Jack Winter, Inc. v. Koratron Co., 54 F.R.D. 44, 46 (N.D. Cal. 1971). Communications from attorney to client are protected.
c. Cases Where Lawyer Acts As a Conduit Are Not Protected
Although many communications from a lawyer to a client are protected by the privilege, there is an exception in instances where the lawyer acts merely as conduit for a third party's message to the client. Instances where the lawyer is acting only as a communicative link are not privileged, and either the lawyer or client can be required to disclose the communication. See Dawson v. New York Life Ins. Co., 901 F. Supp. 1362, 1366-7 (N.D. Ill. 1995) (cases where attorney is acting as a conduit for factual data do not implicate the privilege); In re 3 Com Corp. Sec. Litig., No. C-89-20480, 1992 WL 456813 (N.D. Cal. Dec. 10, 1992) (same); Reliance Ins. Co. v. Keybank U.S.A., No. 1:01 CV 62, 2006 WL 543129, at *2-3 (N.D. Ohio Mar. 3, 2006) (attorneys' notes on expert's opinions taken during meetings with expert, which were later typed up for expert to use in preparation of his reports were not privileged because attorneys were merely acting as "conduits" between the expert and secretary); REST. 3D § 69 cmt. i; 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5478 (1986). In these cases, the purpose of the communication is not to obtain legal assistance and therefore the exchanges are not privileged. See Privilege Applies Only to Communications Made for the Purpose of Securing Legal Advice, § I.D., below.
B.	Only Communications Between Privileged persons Are Protected
There are three categories of people who are considered privileged persons:
 
(1) the client or prospective client,
 
(2) the lawyer, and
 
(3) the agents of the client and lawyer.
 
JOHN W. STRONG, MCCORMICK ON EVIDENCE § 91 (5th ed. 1999); REST. 3D § 70. To be privileged, both the person sending and the person receiving the communication must fit within one of these three categories. JOHN W. STRONG, MCCORMICK ON EVIDENCE § 91 (5th ed. 1999); 8 JOHN H. WIGMORE, EVIDENCE § 2327 (J. McNaughton rev. 1961). If either the communicating or receiving party is not a privileged person then the communication is not protected. See, e.g., United States v. Bernard, 877 F.2d 1463 (10th Cir. 1989). Thus, comments addressed to third parties do not come within the privilege. Similarly, the privilege does not apply to communications from third parties to a client, even if they are later communicated to the attorney by the client (however, these communications could become work product -- see § IV.A.2., Work Product Must be Prepared by or for a Party or by or for its Representative, below). In those cases where the client relates a communication to the attorney and it is impossible to separate the client's addition from the non-privileged person's comment then the entire communication would probably come within the privilege. See REST. 3D § 70 cmt. b.
1. Defining the Client
a. In general
The client is generally defined as the intended and immediate beneficiary of the lawyer's services. To be considered a client for the purposes of invoking the attorney-client privilege two conditions must be met:
 
(1) the client must communicate with the attorney to obtain legal advice,
 
and
 
(2) the client must interact with the attorney to advance the client's own interests.
 
See Wylie v. Marley Co., 891 F.2d 1463 (10th Cir. 1989); EEOC v. Johnson & Higgins, Inc., No. 93 Civ. 5481, 1998 WL 778369 at *5 (S.D.N.Y. Nov. 6, 1998) (EEOC attorneys could not assert that a group of retirees were their clients during a period of time in the case when the retirees opposed the claim filed by the EEOC).
Generally, a prospective client is considered to be a client for the purposes of establishing the attorney-client privilege. See Barton v. U.S. Dist. Court, 410 F.3d 1104, 1111 (9th Cir. 2005) ("Prospective clients' communications with a view to obtaining legal services are plainly covered by the attorney-client privilege under California law, regardless of whether they have retained the lawyer, and regardless of whether they ever retain the lawyer."); In re Auclair, 961 F.2d 65 (5th Cir. 1992) (communications with group of prospective clients with a common interest can be covered by the privilege); In re Grand Jury Proceedings Under Seal, 947 F.2d 1188 (4th Cir. 1991); Matter of Bevill, Bresler & Schulman Asset Mgmt. Corp., 805 F.2d 120, 124 (3rd Cir. 1986) (privilege applies to conversations with both retained and prospective counsel); Vodak v. City of Chicago, No. 03 C 2463, 2004 WL 1381043, at *2-3 (N.D. Ill. May 10, 2004) (holding that communications with prospective class members were privileged and noting that "the existence of an attorney-client relationship is not dependent upon the payment of fees or upon the execution of a formal contract"); Lawyer Disciplinary Bd. v. Allen, 479 S.E.2d 317, 328 (W. Va. 1996) (rejecting proposed rule requiring attorneys to record calls with potential clients because such a role would raise "concerns regarding the attorney-client privilege."); REST. 3D § 70; REV. UNIF. R. EVID. 502(b); JOHN W. STRONG, MCCORMICK ON EVIDENCE § 88 (5th ed. 1999); 3 JACK W. WEINSTEIN ET AL., WEINSTEIN'S FEDERAL EVIDENCE § 503 (2d ed. 2004). The privilege would thus attach to communications made during an initial consultation with a prospective client even if no representation resulted.
In class actions, class representatives are generally considered to be clients of the class counsel. Some courts have held that unnamed class members are not considered clients because they do not directly contact the lawyers for legal assistance. In that case, communications between class members who are not class representatives and class counsel may not be privileged. See Penk v. Oregon State Bd. of Higher Educ., 99 F.R.D. 506, 517 (D. Or. 1982) (information collected confidentially by lawyer for class representatives from non-representative class members was not privileged). But see Barton v. Dist. Court, 410 F.3d 1104, 1111 (9th Cir. 2005) (privilege attached to communications made by potential class members through a law firm website, notwithstanding disclaimer that potential clients were not "forming an attorney client relationship" with the firm); Vodak v. City of Chicago, No. 03 C 2463, 2004 WL 1381043, at *2-3 (N.D. Ill. May 10, 2004) (holding that privilege attached to questionnaires filled out by potential class plaintiffs in a civil right claim growing out of the police response to protests of the 2003 invasion of Iraq where potential class members "reasonably believed that they were consulting counsel in their capacity as lawyers and they completed the questionnaire for the purpose of requesting legal representation"); E.E.O.C. v. Int'l Profit Assoc., 206 F.R.D. 215, 219 (N.D. Ill. 2002) (communications between prospective class members and EEOC counsel and their agents are protected from disclosure by the attorney-client privilege); Bauman v. Jacobs Suchard, Inc., 136 F.R.D. 460, 461 (N.D. Ill. 1990) (same); Connelly v. Dun & Bradstreet, Inc., 96 F.R.D. 339, 342 (D. Mass. 1982) (privilege applies to unnamed class member communications). The privilege may not attach between class counsel and putative class members until the class has been certified. Hammond v. City of Junction City, Kan., 167 F. Supp. 2d 1271, 1286 (D. Kan. 1991) ("It is fairly well-settled that prior to class certification, no attorney-client relationship exists between class counsel and the putative class members.") (citations omitted, emphasis in original).
The fact that a fee is paid for legal services is irrelevant to the determination of privilege. REST. 3D § 70 cmt. d; JOHN W. STRONG, MCCORMICK ON EVIDENCE § 88 (5th ed. 1999); see also United Nat'l Records, Inc. v. MCA, Inc., 106 F.R.D. 39 (N.D. Ill. 1985); In re Grand Jury Proceedings, 663 F.2d 1057, 1060 (5th Cir. 1981), vacated on other grounds, 680 F.2d 1026 (5th Cir. 1982); People v. O'Connor, 447 N.Y.S.2d 553, 556 (App. Div. 1982). Thus, a person paying the legal fees for a third person is not a client unless the payor also sought legal advice from the lawyer. See, e.g., In re Grand Jury Proceedings, Cherney, 898 F.2d 565 (7th Cir. 1990); Priest v. Hennessy, 409 N.E.2d 983 (N.Y. 1980); Ex parte Smith, 942 So. 2d 356, 360-61 (Ala. Sup. Ct. 2006) (directors had a personal attorney-client relationship with outside counsel even where corporation paid directors' legal bills). But see In re Grand Jury Proceedings, 841 F.2d 230, 231 n.2 (8th Cir. 1988) (privilege protects substance of confidential communications between a third party fee payer and a law firm).
b. Organizational Clients
Although the definition of a client is relatively straightforward for individuals, defining a "client" in an organizational setting is considerably more difficult. Because corporations may only communicate through their employees, it becomes important to determine who speaks for the corporation and is thus protected by the corporation's privilege as a client. See Interfaith Hous. Del., Inc. v. Town of Georgetown, 841 F. Supp. 1393, 1397 (D. Del. 1994) (noting tension between corporation as an entity and its ability to act solely through natural persons); 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5484, at 376 (1986). The analysis is further complicated because the group that is defined as the client for the purposes of creating the privilege is often more expansive than the group that is entitled to assert or waive the privilege. See Assertion of the Attorney-Client Privilege and Depositions of Counsel, § I.E.2., below.
(1) Defining the Organizational Client - Upjohn
Historically, courts applying the attorney-client privilege to corporations struggled to determine which corporate employees most closely resembled the traditional "client" in an attorney-client relationship. In doing so, courts often found that the interaction between high-level officers and directors and corporate counsel approximated a traditional attorney-client relationship and was thus deserving of protection. Radiant Burners, Inc. v. Am. Gas Ass'n, 320 F.2d 314, 323-24 (7th Cir. 1963) (in determining which employees constituted the client for privilege purposes the court applied a test called the "control group" test which designated only upper-level management as the client of corporate counsel and thus protected only the communications of upper-echelon management); Harper & Row Publishers, Inc. v. Decker, 423 F.2d 487, 791-92 (7th Cir. 1970). Courts reasoned that these managers not only sought legal advice for the organization but also caused the corporation to act on the advice that it received. However, for employees lower down on the corporation's organization chart, the relationship with organizational counsel tended to much less resemble a traditional client relationship. Moreover, conflicts between the interest of the employee and the organization frequently appeared.
The United States Supreme Court eventually rejected the "control group" test in federal cases in Upjohn Co. v. United States, 449 U.S. 383 (1981). Upjohn thrust privilege analysis in a new direction, and created a less structured definition of the corporate client. In that case, Upjohn disclosed to the SEC and IRS the results of an internal investigation conducted by both inside and outside counsel which uncovered some questionable payments by Upjohn to foreign officials. Based on this report, the IRS began an investigation and subpoenaed the questionnaires underlying the disclosed report. When Upjohn claimed privilege, the IRS initiated suit to enforce the subpoena. The Supreme Court found that the notes of the internal investigators' interviews with Upjohn's middle and lower management employees, who were clearly outside of Upjohn's "control group," were privileged. Id.
The Upjohn Court "decline[d] to lay down a broad rule" to govern the extent of the privilege's reach, and in so doing rejected the control group test for determining the scope of the corporate attorney-client privilege. Id. at 386. In its place, the court set down five factors to guide courts in determining the validity of attorney-client privilege claims for communications between legal counsel and lower-echelon corporate employees:
 
(1) the information is necessary to supply the basis for legal advice to the corporation or was ordered to be communicated by superior officers;
 
(2) the information was not available from "control group" management;
 
(3) the communications concerned matters within the scope of the employees' duties. But see Baxter Travenol Labs., Inc. v. Lemay, 89 F.R.D. 410, 412-14 (S.D. Ohio 1981) (communications with a former employee hired solely for the purposes of assisting in litigation as a litigation consultant were protected even though the communications did not concern matters within the scope of the employee's duties);
 
(4) the employees were aware that they were being questioned in order for the corporation to secure legal advice; and
 
(5) the communications were considered confidential when made and kept confidential. But see Leucadia, Inc. v. Reliance Ins. Co., 101 F.R.D. 674, 678 (S.D.N.Y. 1983) (privilege upheld without showing that the communications were made in reliance on an expectation of confidentiality).
 
Id. at 394-95. When each of these elements is met, a lower-echelon employee is considered a client under the attorney-client privilege, and the employee's communications with corporate counsel are privileged. Id.; Bruce v. Christian, 113 F.R.D. 554, 560 (S.D.N.Y. 1986) (privilege extends to employee communications on matters within the scope of their employment and when the employee is being questioned in confidence in order for employer to obtain legal advice); see also:
 
Tucker v. Fischbein, 237 F.3d 275, 288 (3rd Cir. 2001). Citing Upjohn and holding that conversations between in-house counsel and employee-journalists were privileged where conversation was undertaken to provide legal advice regarding employer's potential libel exposure.
 
PaineWebber Group, Inc. v. Zinsmeyer Trusts P'ship, 187 F.3d 988, 991-92 (8th Cir. 1999). Following Upjohn and holding that attorney's conversations with employees during internal investigation were privileged.
 
Carter v. Cornell Univ., 159 F.3d 1345, 1345 (2nd Cir. 1998). Citing Upjohn and holding that because employees were interviewed in order to provide advice to employer, conversations were privileged.
 
In re Bieter Co., 16 F.3d 929, 935-36, (8th Cir. 1994). Noting that Upjohn rejected the control group test but did not mandate a specific rule and applying a five-prong test in determining that communication with employees remained privileged.
 
Amco Ins. Co. v. Madera Quality Nut LLC, No. 1:04-cv-06456-SMS, 2006 WL 931437, at *8-9 (E.D. Cal. April 11, 2006). Communications between company employees to in-house counsel and counsel's agents were privileged communications as a part of an internal investigation; the dominant purpose of which was to obtain factual information in order to give legal advice.
 
Sanchez v. Matta, No. CIV03-0297JB/LFG, 2004 WL 3426117, at *10-11 (D.N.M. June 24, 2004). Holding that, under Upjohn, privilege applied to communications made between employees and attorney investigating retaliatory discharge claim.
 
Lugosch v. Congel, 218 F.R.D. 41, 47 (N.D.N.Y. 2003). Following Upjohn and holding that "statements made by employees, of any station or level within a corporation or a sophisticated business structure, to an attorney or the attorney's agent which were done in confidence and outside the purview of others are protected."
Some jurisdictions place extra emphasis on the first element of the Upjohn test by requiring that a senior authority direct the lower-level employee to make the confidential communication. See Indep. Petrochemical Corp. v. Aetna Cas. & Sur. Co., 654 F. Supp. 1334, 1364-65 (D.D.C. 1986), aff'd in part, rev'd in part, 944 F.2d 940 (D.C. Cir. 1991) (no privilege for volunteered communications of a district manager who was not in the control group and who was not directed by his superiors to communicate with company attorneys). Other courts, and the Restatement, reject this approach and consider disclosures to be impliedly authorized if made in the interests of the corporation. See REST. 3D § 73 cmt. h.
The test developed in Upjohn makes no distinction with regard to an agent's position or degree of decision-making responsibility. Instead, the privilege turns on whether the employee imparted information to the lawyer or received assistance from the lawyer on behalf of the organization. Upjohn, 449 U.S. at 394-95.
While much of the case law involves the application of Upjohn to corporations, the same standards apply to other organizations such as unincorporated associations, partnerships, and other for-profit or not-for-profit organizations. See Kneeland v. Nat'l Collegiate Athletic Ass'n, 650 F. Supp. 1076, 1087 (W.D. Tex. 1986), rev'd on other grounds, 850 F.2d 224 (5th Cir. 1988) (privilege assumed to apply to unincorporated associations); REST. 3D § 123; see also:
 
In re Bieter Co., 16 F.3d 929, 935-40 (8th Cir. 1994). Following Upjohn and concluding that communications between partnership and consultant to partnership were privileged.
 
Meoli v. Am. Med. Servs, 287 B.R. 808, 815-16 (S.D. Cal. 2003). Attorney-client privilege applied to communications between lawyer and limited partnership but privilege was waived.
 
Nesse v. Shaw Pittman, 206 F.R.D. 325, 329-30 (D.D.C. 2002). Internal communications among lawyers of a law firm were deemed privileged pursuant to Upjohn where internal investigation was conducted regarding manner in which the firm withdrew from a matter.
 
United States v. Am. Soc. of Composers, Authors and Publishers, 129 F. Supp. 2d 327, 337-38 (S.D.N.Y. 2001). Noting traditional rule that attorney represents individual members of unincorporated association, but further observing that evolving ethical rules now recognize that the association as the client.
State courts and federal courts sitting in exercise of diversity jurisdiction are not bound by the Upjohn decision and have adopted various tests for defining the organizational client. See State Court Definitions of the Organizational Client, § I.B.1.b.(4), below.
Although Upjohn is controlling in federal courts applying federal law, the current Restatement espouses a slightly different articulation of the privilege, adopting a pre-Upjohn test known as the "subject matter" test, which was first developed in Harper & Row Publishers, Inc. v. Decker, 423 F.2d 487, 491-92 (7th Cir. 1970), and modified in Diversified Indus., Inc. v. Meredith, 572 F.2d 596, 608-09 (8th Cir. 1977). Under this "subject matter" test, the privilege extends to communications of any agent or employee of the corporation so long as the communication relates to a subject matter for which the organization is seeking legal representation. Upjohn deems the subject matter of the communication to be merely one factor to consider.
(2) Representation Of Individual Employees By Organizational Counsel
When an employee is deemed a part of the organizational client, the organization enjoys the protection of the privilege for that employee's communications. Likewise, if the corporation believes that it is in its best interest to waive its attorney-client privilege for the employee's communications, the communications are subject to discovery, unless the employee possesses an individual claim of attorney-client privilege.
To assert an individual claim of privilege over a communication between an employee and organizational counsel, the employee must independently prove the existence of each of the four traditional elements of a privilege claim (a communication, between privileged persons, in confidentiality, for the purpose of legal assistance). See United States v. Keplinger, 776 F.2d 678 (7th Cir. 1985); see also REST. § 73 cmt. j; Gregory I. Massing, Note, The Fifth Amendment, the Attorney-Client Privilege, and the Prosecution of White-Collar Crime, 75 VA. L. REV. 1179, 1196 (1989). In cases where the employee alleges that a personal attorney-client relationship exists with the organizational lawyer, the employee bears the burden of proving that the statements were made in the employee's individual capacity, and not in the employee's capacity as an employee of the organizational client. See Odmark v. Westside Bancorporation, Inc., 636 F. Supp. 552, 555-56 (W.D. Wash. 1986); In re Grand Jury Proceedings, 434 F. Supp. 648, 650 (E.D. Mich. 1977), aff'd, 570 F.2d 562 (6th Cir. 1978).
If counsel represents only the corporation and has informed the employee of that fact, the employee is not deemed to be a client of the corporate attorney and no individual privilege arises to protect the employee. See United States v. Demauro, 581 F.2d 50, 55 (2d Cir. 1978) (employee unable to raise privilege when he could not prove that he believed counsel was representing him); United States v. Dose, No. CR04-4082-MWB (N.D. Iowa Jan. 12, 2005) (same); REST. 3D § 73 cmt. j. Moreover, counsel representing a corporation may not be under an affirmative obligation to advise a corporate employee of his right to retain personal counsel, even where the corporation's counsel plans to elicit statements that may criminally inculpate the employee. See United States v. Calhoon, 859 F. Supp. 1496, 1498 (M.D. Ga. 1994). As a result, the organization may be able to invoke the privilege for some communications while the employee cannot. For example, in United States v. Keplinger, 776 F.2d 678, 700 (7th Cir. 1985), several employees were questioned by their employer's counsel about laboratory safety studies. When the employees were later charged with making fraudulent statements and the employer sought to use their statements against them, the court found that the employees never sought nor inquired about individual representation, and that their employer's attorneys had neither believed nor represented to the employees that they were acting as counsel to the employees. As a result, no personal attorney-client relationship existed between the employees and counsel, and the court held that the employees could not assert the attorney-client privilege to suppress their own statements. Id.; see also Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343, 348-49 (1985); In re Bevill, Bresler & Schulman Asset Mgmt. Corp., 805 F.2d 120, 124-25 (3d Cir. 1986).
If the organization has a conflict of interest with the employee, the organization's lawyer may not purport to represent both. See REST. 3D § 73 cmt. j; Dual Representation, § X.C.1., below. If the corporate attorney fails to make clear to an employee that the attorney is representing the corporation and not the employee, then the attorney may be disqualified from representing the corporation in later litigation against the employee. See e.g., Chase Manhattan Bank v. Higgerson, No. 17864/84, 1984 N.Y. Misc. LEXIS 3411 (N.Y. Sup. Ct. Oct. 11, 1984) (disqualifying counsel). However, an employee has the heavy burden of establishing that corporate counsel was providing dual representation to both the corporation and the individual. See United States v. Int'l Bhd. of Teamsters, 119 F.3d 210, 217 (2d Cir. 1997) (employee failed to prove dual representation even though entity's attorneys "did not do all that they could have done to clarify the conflicts of interest that . . . develop between organizations and their employees"). A subjective belief that the attorney was representing the individual employee is not enough to establish an attorney-client relationship. Cole v. Ruidosa Mun. Sch., 43 F.3d 1373, 1384-85 (10th Cir. 1994).
In Bevill Bresler & Schulman Asset Mgmt. Corp., 805 F.2d 120, 123 (3rd Cir. 1986), the court held that an employee seeking to prove that she was being represented individually by corporate counsel must show:
 
(1) the employee approached corporate counsel for the purpose of seeking legal advice;
 
(2) the employee made it clear that she was seeking advice in an individual capacity;
 
(3) counsel sought to communicate with the employee in an individual capacity, mindful of possible conflicts;
 
(4) the communications were confidential; and
 
(5) the communications did not concern the employee's official duties or general affairs of the company.
 
See also In re Grand Jury Subpoena, 274 F.3d 563, 571-72 (1st Cir. 2001) (citing Bevill standard with approval); In re Grand Jury Subpoenas, 144 F.3d 653, 659 (10th Cir. 1998) (hospital officers sufficiently established that the Hospital's attorneys represented them individually by testifying that each officer sought the advice of the attorneys in his individual capacity and confidential communications occurred between them regarding personal matters); United States v. Int'l Bhd. of Teamsters, 119 F.3d 210, 217 (2d Cir. 1997) (employee failed sufficiently to establish that he was being represented individually by his employer's counsel because he neither sought nor received legal advice from his employer's counsel on personal matters); In re Standard Fin. Mgmt. Corp., 79 B.R. 97 (Bankr. D. Mass. 1987) (recognizing factors (1) and (2) listed above).
Some courts have lessened the showing an employee must make to prove that organizational counsel is personally representing the employee. In these jurisdictions, if a lawyer fails to clarify that she is solely representing the organization, then the employee can assert the privilege if the employee reasonably believed that the lawyer represented the employee. United States v. Hart, No. Crim. A. 92-219, 1992 WL 348425, at *1-2 (E.D. La. Nov. 16, 1992) (employees reasonably believed that corporate counsel was representing them individually and therefore could invoke privilege); see also REST. 3D § 14 cmt. f. But see United States v. Int'l Bhd. of Teamsters, 119 F.3d 210, 216 (2d Cir. 1997) (rejecting employee's assertion that the privilege should apply because he reasonably believed that employer's attorney was representing him in his individual capacity). Compare:
 
In re Grand Jury Subpoena, 274 F.3d 563, 571 (1st Cir. 2001). Following In re Bevill, Bresler & Schulman Asset Mgmt. Corp., 805 F.2d 120, 124-25 (3d Cir. 1986) and concluding that privilege can potentially attach between corporate counsel and employees, but that privilege is limited to employees' personal rights.
 
In re Subpoena Issued to Friedman, 286 B.R. 505, 508 (S.D.N.Y. Dec 10, 2002). Officers of debtor corporation can only assert privilege over communications with debtor's counsel where counsel represented officers in an individual capacity.
 
with:
 
United States v. Munoz, 233 F.3d 1117, 1128 (9th Cir.2000). Attorney-client relationship did not exist because Munoz offered no evidence that he consulted with attorney for personal legal advice.
The ethical implications of organizational counsel representing individual employees are further discussed in Ethical Considerations: Dual Representation, § X.C.1., below.
(3) Former Employees of Organizational Clients
A problem often arises when a former employee has communicated with an organization's attorney after his employment has ended, and the organization attempts to invoke the privilege to protect these exchanges. The courts disagree over whether communications between former employees and organizational counsel are privileged in these cases. Compare:
 
Upjohn Co. v. United States, 449 U.S. 383, 402-3 (1981) (J. Burger, conc.). A communication is privileged when a former employee speaks at the direction of management with a corporate attorney about conduct or proposed conduct within the scope of her employment.
 
In re Allen, 106 F.3d 582, 606 (4th Cir. 1997). Privilege precluded inquiry into interview conducted by investigating attorney with former employee.
 
Favala v. Cumberland Eng'g Co., 17 F.3d 987, 990 (7th Cir. 1994). The court held that a former employee could not be prevented from testifying but could not testify about communications with the company's attorney.
 
Admiral Ins. Co. v. U.S. Dist. Court for Dist. of Ariz., 881 F.2d 1486, 1992-93 (9th Cir. 1989). Counsel interviewed two high-level managerial employees about pending securities litigation. After the interviews the two employees quit. The court found that the privilege extended to the former employees. Court noted that the employees knew at the time of the interviews that the communications were to secure legal advice for the corporation.
 
Stabilus Div. of Fichtel & Sachs Indus. v. Haynsworth, Baldwin, Johnson & Greaves, Civ. A. No. 91-6184, 1992 WL 68563, at *2 (E.D. Pa. Mar. 31, 1992). "The attorney-client privilege in the corporate context extends to former employees where the purpose of a conversation between those employees and corporate counsel is to secure legal advice for the company."
 
In re Coordinated Pretrial Proceedings in Petroleum Prods. Antitrust Litig., 658 F.2d 1355, 1361 n.7 (9th Cir. 1981). Privilege can apply to former employees.
 
Bank of New York v. Meridian BIAO Bank Tanz., Ltd., No. 95 Civ. 4856, 1996 WL 490710, at *3 (S.D.N.Y. Aug. 27, 1996). Privilege applies to former employees.
 
Command Transp., Inc. v. Y.S. Line (USA) Corp., 116 F.R.D. 94, 96-97 (D. Mass. 1987). Applying Massachusetts law, the court found that former employees could come within the privilege.
 
With:
 
In re Grand Jury Subpoena, 415 F.3d 333, 339-40, (4th Cir. 2005). Holding that privilege did not apply to conversations between corporation's outside counsel and former employees. Counsel to the former employer told employees that they represented the employer and that, absent a conflict, they could also represent the employee. Former employees did not in fact enter into an attorney-client relationship with attorneys, however, and privilege therefore did not apply.
 
Freeport-McMoran Sulphur, LLC v. Mike Mullen Energy Equip. Res. Co., No. Civ.A. 03-1496, 2004 WL 1237450 (E.D. La. June 2, 2004). Holding that communications with a former employee, retained as a consultant, were not subject to the privilege.
 
United States v. Merck-Medco Managed Care, LLC, 340 F. Supp. 2d 554, 557-58 (E.D. Pa. 2004). Holding that former employee's communications with counsel during the term of her employment were privileged but that subsequent conversations were not privileged.
 
Wade Williams Distrib., Inc. v. Am. Broad. Cos., No. 00 Civ. 5002(LMM), 2004 WL 1487702, at *1-2 (S.D.N.Y. June 30, 2004). Following Peralta v. Cendant Corp., 190 F.R.D. 38, 41-42 (D. Conn. 1999), below, and holding that employee could be deposed regarding communications with corporate counsel notwithstanding understanding of employee and counsel that counsel also represented employee.
 
Infosystems, Inc. v. Ceridian Corp, 197 F.R.D. 303, 306 (E.D. Mich. 2000). Except in very limited circumstances, "counsel's communications with a former employee of the client corporation generally should be treated no differently from communications with any other third-party fact witness." Those limited circumstances include situations in which a privileged communication occurred during the course of employment or "where the present day communication concerns a confidential matter that was uniquely within the knowledge of the former employee when he worked for the client corporation, such that counsel's communication with this former employee must be cloaked with the privilege in order for meaningful fact-gathering to occur."
 
City of New York v. Coastal Oil New York, Inc., No. 96 Civ. 8667, 2000 U.S. Dist. LEXIS 1010 (S.D.N.Y. Feb. 7, 2000). The privilege did not apply to communications between in-house counsel and a former employee during deposition preparation where in-house counsel was not conducting an investigation.
 
Peralta v. Cendant Corp., 190 F.R.D. 38, 41-42 (D. Conn. 1999). Where former employee is unrepresented by former employer's counsel, privilege applies only to matters that former employee was aware of as a result of her employment. Information conveyed by counsel that goes beyond that is not protected by the attorney-client privilege, although the opinions and conclusions of counsel would be protected by the work product doctrine.
 
Barrett Indus. Trucks, Inc. v. Old Republic Ins. Co., 129 F.R.D. 515, 517 (N.D. Ill. 1990). Privilege did not apply because former employee's interest differed from ex-employer's interest. Analysis based in part on the more stringent control group test followed in Illinois.
 
Clark Equip. Co. v. Lift Parts Mfg. Co., Inc., No. 82 C 4585, 1985 U.S. Dist. LEXIS 15457 (N.D. Ill. Sept. 30, 1985). The reasoning of Upjohn does not support extension of the attorney-client privilege to cover post-employment communications with former employees of a corporate client. Former employees do not share an identity of interest in the outcome of the litigation. Their willingness to provide information is unrelated to direction from former corporate superiors, and they have no duty to their former employers to provide information. "It is virtually impossible to distinguish the position of a former employee from any other third party who might have pertinent information about one or more corporate parties to a lawsuit."
Generally, a former employee must have an agency obligation at the time he communicates with the organizational attorney for the communication to be privileged. See REST. 3D § 73 cmt. e. Several courts have held the post-employment communications of senior officers concerning a matter within the scope of the former officers' duties to be privileged. See, e.g., Admiral Ins. Co., v. U.S. Dist. Court for Dist. of Ariz., 881 F.2d 1486 (9th Cir. 1989); In re Coordinated Pretrial Proceedings in Petroleum Prods. Antitrust Litig., 658 F.2d 1355, 1361 n.7 (9th Cir. 1981); Amarin Plastics, Inc. v. Md. Cup Corp., 116 F.R.D. 36, 41 (D. Mass. 1987); Porter v. Arco Metals Co., 642 F. Supp. 1116, 1118 (D. Mont. 1986) (court allowed opposing counsel to interview former employees unless they had managerial responsibilities for the matter in question). Although it will generally be the case, many courts do not require the privileged information to have been acquired during employment. See Chancellor v. Boeing Co., 678 F. Supp. 250, 253-54 (D. Kan. 1988) (ex-employee who had personal involvement in the actions involved in the suit cannot be interviewed).
Because former employees are no longer agents of the corporate entity, corporate documents in their possession are not held in a representational capacity. Such employees, in response to discovery requests for production of the documents, may assert their Fifth Amendment rights and refuse to produce such documents where "the act of production is, itself, (1) compelled, (2) testimonial, and (3) incriminating." See In re Three Grand Jury Subpoenas Duces Tecum, 191 F.3d 173, 178 (2d Cir. 1999).
The issue of whether an attorney can ethically interview an opposing corporation's former employees is discussed in Ethical Considerations: Former Employees, § X.C.2., below.
(4) State Court Definitions Of The Organizational Client
Although many states have followed the United States Supreme Court's definition of the corporate client in Upjohn, the Upjohn opinion applies solely to federal courts applying federal law. See:
 
Tabas v. Bowden, No. Civ. A. 6619, 1982 WL 17820, at *4 (Del. Ch. Feb. 16, 1982). Upjohn cited favorably.
 
Macey v. Rollins Envt'l. Servs. (N.J.), Inc., 432 A.2d 960, 963-64 (N.J. Super. Ct. App. Div. 1981). Citing Upjohn favorably, the court interpreted the state codification of the attorney-client privilege broadly and held that it protected communications between corporate counsel and the corporation's officers and employees.
State courts which have declined to follow Upjohn have established their own rules governing the application of the attorney-client privilege to corporations. Some states still follow the "control group" test. Under this test, only upper level management is considered a client for purposes of the attorney-client privilege. Thus, comments by lower-echelon employees to corporate counsel are unprotected. This test has been criticized because it fails to recognize that the division of functions in corporations often separates decision-makers from those knowing relevant facts. See Upjohn v. United States, 449 U.S. 383, 390-91 (1981); see also:
 
Dawson v. New York Life Ins. Co., 901 F. Supp. 1362, 1367 (N.D. Ill. 1995). Applying control group analysis under Illinois law.
 
Southern Bell Tel. & Tel. Co. v. Deason, 632 So. 2d 1377, 1383 (Fla. 1994). Adopting rule similar to Upjohn, but holding that privilege did not apply where communications were not directed to lawyers, but to agents acting at the direction of lawyers.
 
Alpha Beta Co. v. Superior Court, 203 Cal. Rptr. 752, 756 (Cal. Ct. App. 1984). Attorney-client privilege will attach to communications with a corporate employee only where the employee is the natural person to be speaking for corporation with respect to the subject matter of the communications.
 
Consolidation Coal Co. v. Bucyrus-Erie Co., 432 N.E.2d 250, 256-58 (Ill. 1982). The court rejected the Upjohn approach and adopted the "control group" test, which protects communications between counsel and corporate decisionmakers or those "who substantially influence corporate decisions." Id. at 257. As a practical matter, the only communications which will ordinarily be protected are those made by top management who have the ability to make a final decision. Id.
 
Midwesco-Paschen Joint Venture v. Imo Indus. Inc., 638 N.E.2d 322, 325-26 (Ill. App. Ct. 1994). The court expanded the control group test of Consolidated Coal to include two tiers of corporate employees whose communications with corporate counsel are protected: (1) the decision makers (i.e., top management), and (2) employees who directly advise top management. The court also found that more than a nominal fine should be considered if the party has refused to comply with a discovery order without at least a colorable claim of privilege.
 
Hyams v. Evanston Hosp., 587 N.E.2d 1127, 1129 (Ill. App. Ct. 1992). Nurses were not part of control group in medical malpractice case.

 Other courts have adopted different tests. Compare:
 
In re Avantel, S.A., 343 F.3d 311, 318 (5th Cir. 2003). Noting that, by statutory adoption, Texas rejected the "control group" test in favor of the "subject matter" test in 1998.
 
In re Ford Motor Co., 110 F.3d 954, 965 (3d Cir. 1997). Applying Pennsylvania law, the court held that a corporation may claim the privilege only for communications between its counsel and employees who have authority to act on its behalf.
 
E. I. DuPont de Nemours & Co. v. Forma-Pack, Inc., 718 A.2d 1129, 1139-41 (Md. 1998). Court discussed the Upjohn test, the "subject matter" test, and a test recently articulated by the Florida Supreme Court, but declined to adopt "a particular set of criteria for the application of the privilege in the corporate context until we are required to do so."
 
Shew v. Freedom of Info. Comm'n, 714 A.2d 664, 670-71 (Conn. 1998). Four factor test applied. The second factor requires that a communication be made to the attorney by a current employee.
 
Leer v. Chicago, M., St. P. & P. Ry., 308 N. W.2d 305, 308-09 (Minn. 1981). Court noted various tests for determining the identity of a corporate client, but failed to adopt any of them. Court held that the statements of an employee regarding an accident witnessed by the employee were not protected under any of the tests.
 
D.I. Chadbourne, Inc. v. Superior Court, 388 P.2d 700, 709-10 (Cal. 1964). Eleven point test for determining when the privilege applies to a corporate client.
 
Hubka v. Pennfield Twp., 494 N.W.2d 800, 802-03 (Mich. Ct. App. 1992), rev'd in part on other grounds, 504 N. W.2d 183 (Mich. 1993). Court applied modified subject matter test.
 
Marriott Corp. v. Am. Acad. of Psychotherapists, Inc., 277 S.E.2d 785, 791-92 (Ga. Ct. App. 1981) The court adopted the "subject matter" test of Diversified Indus., Inc. v. Meredith, 572 F.2d 596 (8th Cir. 1977). Under that test, communications are privileged so long as the communication relates to a subject matter for which the organization is seeking legal representation.
One authority reports that as of 1997 eight states had explicitly adopted Upjohn (Alabama, Arizona, Arkansas, Colorado, Nevada, Oregon, Texas, and Vermont), eight states continued to apply the control group test (Alaska, Hawaii, Illinois, Maine, New Hampshire, North Dakota, Oklahoma, and South Dakota), and six follow a subject matter test (California, Florida, Kentucky, Louisiana, Mississippi, and Utah), while the highest courts of twenty-eight states had not definitively addressed the issue (Connecticut, Delaware, Idaho, Indiana, Iowa, Kansas, Maryland, Missouri, Montana, Nebraska, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia, West Virginia, Wyoming, Georgia, Massachusetts, Michigan, Minnesota, Washington, and Wisconsin). See Brian E. Hamilton, Conflict, Disparity, and Indecision: The Unsettled Corporate Attorney-Client Privilege, 1997 Ann. Surv. Am. L. 629, 633-640 (1997).
(5) Privilege within the Corporation
There is some conflict among courts as to whether the attorney-client privilege can be asserted on behalf of the corporation against its own directors. In Moore Business Forms, Inc. v. Cordant Holdings Corp., Nos. 13911, 14595, 1996 WL 307444, at *4-6 (Del. Ch. June 4, 1996), Cordant attempted to assert the attorney-client privilege to block access of director installed on the Cordant board by Moore from information provided to other Cordant directors. The Court rejected Cordant's attempt to assert the privilege, holding that it would be "perverse" to allow a client (the Cordant board) to assert the privilege against itself (one of Cordant's own directors). In contrast, in Hoiles v. Superior Court, 157 Cal. App. 3d 1192, 1201, 204 Cal. Rptr. 111, 116-17 (1984), the court held that the plaintiff-director was not entitled to pierce the defendant-corporation's attorney-client privilege because the plaintiff was suing in his capacity as a shareholder and not as a director. See also Dexia Credit Local v. Rogan, No. 02 C 8288, 2004 WL 3119026, at *9-11 (N.D. Ill. Dec. 21, 2004) (holding that corporation could assert privilege against former member of control group, notwithstanding member's authorship of documents at issue, because member had left the control group); Milroy v. Hanson, 875 F. Supp. 646, 648-49 (D. Neb. 1995) (no right of dissident director to pierce privilege asserted on behalf of corporation by majority of the board).
c. Government Agencies As Clients
Unlike private attorneys, attorneys for government agencies owe a duty to the public to ensure that laws are obeyed by governmental entities. Therefore, when the attorney-client privilege is asserted to prevent the production of communications between a government agency and the agency's attorney, special policy considerations may be taken into account by courts determining whether the privilege should apply. See In re Lindsey (Grand Jury Testimony), 158 F.3d 1263, 1272 (D.C. Cir. 1998); see also In re Witness Before Special Grand Jury 2000-2, 288 F.3d 289, 293-94 (7th Cir. 2002) (officeholders may not invoke the attorney-client privilege with regard to communications with government attorneys in the context of criminal grand jury proceedings).
For example, in Reed v. Baxter, 134 F.3d 351, 356-57 (6th Cir. 1998) the Sixth Circuit found that "[t]he recognition of a governmental attorney-client privilege imposes the same costs as are imposed in the application of the corporate privilege, but with an added disadvantage. The governmental privilege stands squarely in conflict with the strong public interest in open and honest government." In Reed, the court held that communications that took place in a meeting between city council members and the city's attorney regarding the fire department's employee promotion practice were not protected by the attorney-client privilege because, in that context, the council members "were not clients at a meeting with their lawyer. Rather, they were elected officials investigating the reasons for executive behavior." Id. at 357.
The interest against a government attorney-client privilege is particularly prevalent in cases that involve allegations of criminal wrongdoing by public officials. In In re Lindsey (Grand Jury Testimony), 158 F.3d 1263, 1272 (D.C. Cir. 1998), while defining "the particular contours of the government attorney-client privilege", the D.C. Circuit found that "[w]ith respect to investigations of federal criminal offenses, and especially offenses committed by those in government, government attorneys stand in a far different position from members of the private bar." In this case, the court considered whether a White House attorney may refuse to appear before a federal grand jury to answer questions about possible criminal conduct of government officials within The Office of The President. Id. at 1274. The court rejected the White House attorney's attempt to assert the attorney-client privilege, concluding that the duty of government attorneys to ensure that laws be faithfully executed and the duty to report possible criminal violations pursuant to the Freedom of Information Act, weighed against recognition of a governmental attorney-client privilege in a Federal grand jury proceeding. Id.; see also In re Grand Jury Subpoena Duces Tecum, 112 F.3d 910, 921 (8th Cir. 1997) ("We believe the strong public interest in honest government and in exposing wrongdoing by public officials would be ill-served by recognition of a governmental attorney-client privilege applicable in criminal proceedings inquiring into the actions of public officials.").
2. Defining the Lawyer
The second category of privileged persons is comprised of lawyers. See generally 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5480 (1986); REST. 3D § 72 cmt. e. Generally, courts have defined a "lawyer" for purposes of the attorney-client privilege as "a member of the bar of a court." See Allen v. W. Point-Pepperell, Inc., 848 F. Supp. 423, 427 (S.D.N.Y. 1994). However, most courts hold that the attorney need not be a member of the local bar in order to claim the privilege; so long as the attorney is admitted to practice in some state or county. See Paper Converting Mach. Co. v. FMC Corp., 215 F. Supp. 249, 251 (E.D. Wis. 1963); Ga.-Pac. Plywood Co. v. U.S. Plywood Corp., 18 F.R.D. 463, 465 (S.D.N.Y. 1956).
a. In-House vs. Outside Counsel
Theoretically, for the purpose of asserting the attorney-client privilege, the determination of who is the attorney is straightforward, and the privilege treats in-house counsel and outside counsel equally. See:

 Shelton v. Am. Motors Corp., 805 F.2d 1323, 1326 (8th Cir. 1986). In-house counsel is treated no differently than outside counsel.
 
In re Sealed Case, 737 F.2d 94, 99 (D.C. Cir. 1984). Status as in-house counsel does not dilute privilege, but does require a clear showing that communications with in-house counsel were in a professional legal capacity.
 
Hartz Mountain Indus., Inc. v. Comm'r of Internal Rev., 93 T.C. 521, 525 (T.C.. 1989). In-house counsel is treated the same as private counsel.
 
Deel v. Bank of Am., N.A., 227 F.R.D. 456, 458, 460 (W.D. Va. 2005). Observing that the privilege "applies to individuals and corporations, and to in-house and outside counsel" and refusing to order production of documents where party "clearly sent these documents to its in-house and outside counsel to facilitate legal services."
 
Premiere Digital Access, Inc. v. Cent. Tel. Co., 360 F. Supp. 2d 1168, 1174 (D. Nev. 2005). Rejecting plaintiffs contention that the attorney-client privilege does not apply to in-house counsel.
 
Leibel v. Gen. Motors Corp., 250 Mich. App. 229, 239, 646 N.W.2d 179, 185 (2002). Lifting applicability of privilege to work of in-house counsel "would seriously undermine the privilege in the corporate setting."
 
U.S. ex rel. Robinson v. Northrop Grumman Corp., No. 89 C 6111, 2002 WL 31478259, at *4 (N.D. Ill. Nov. 5, 2002). Documents produced by outside auditor retained by in-house counsel for purposes of establishing potential liability remained privileged.
 
In re LTV Sec. Litig., 89 F.R.D. 595, 601 (N.D. Tex. 1981). Upjohn laid to rest suggestions that in-house counsel are to be treated differently from outside counsel with respect to activities in which they are engaged as attorneys.
 
Rossi v. Blue Cross & Blue Shield, 540 N.E.2d 703, 705 (N.Y. 1989). In-house counsel is treated the same as outside counsel.
However, several courts in the last fifteen years have made it clear that they do treat in-house counsel differently when assessing the assertion of privilege. See, e.g., TVT Records v. Island Def Jam Music Group, 214 F.R.D. 143, 144 (S.D.N.Y. Mar. 04, 2003) (noting that privilege issues related to in-house counsel may be more difficult to determine given counsel's involvement in business, rather than legal, matters); see also Am. Nat. Bank and Trust Co. v. Equitable Life Assur. Soc., 406 F.3d 867, 873 (7th Cir. 2005) (noting that applying the privilege to in-house counsel is a "difficult area" and concluding that sanctions were not appropriate where party asserting privilege did so overbroadly but in good faith). The fact that in-house counsel often plays multiple roles in the corporation has caused many courts to apply heightened scrutiny in determining whether the elements necessary for the privilege have been established. See also Privilege Applies Only To Communications Made For The Purpose Of Securing Legal Advice, § I.D., below.
 
Minebea Co. v. Papst, 228 F.R.D. 13, 21 (D.D.C. 2005). Ordering production of documents that party resisting production asserted had been provided to in-house counsel to secure his advice and concluding that the documents had been circulated to counsel, along with other members of senior management for business purposes and that there was no indication that any of these memoranda were prepared for a predominately legal purpose"
 
Cellco P'ship v. Nextel Commc'n, Inc., No. M8-85 (RO), 2004 U.S. Dist. LEXIS 12717, at *3 (S.D.N.Y. 2004). Holding that communications between in-house attorney and marketing employees, which were further forwarded to client's advertising firm, were not privileged where in-house counsel was not acting as an attorney.
 
Breneisen v. Motorola, Inc., No. 02 C 50509, 2003 WL 21530440, at *3 (N.D. Ill. July 3, 2003). Communications made by and to corporate in-house counsel with respect to business matters, management decisions, or business advice are not protected by the attorney-client privilege. "Generally, there is a presumption that a lawyer in a legal department of the corporation is giving legal advice, and an opposite presumption for a lawyer who works on the business or management side. However, the lawyer's position in the corporation is not necessarily dispositive." See also Privilege Applies Only To Communications Made For The Purpose Of Securing Legal Advice § I.D., below.
 
Ames v. Black Entm't Television, No. 9 Civ. 0226, 1998 U.S. Dist. LEXIS 18053, at *22 (S.D.N.Y. Nov. 18, 1998). "We are mindful. . . That [the witness who was VP and general counsel] was a Company vice president, and had certain responsibilities outside the lawyer's sphere. The Company can shelter [the witness's] advice only upon a clear showing that [the witness] gave it in a professional legal capacity." (citation omitted)
 
United States v. Chevron Corp., No. C-94-1885, 1996 U.S. Dist. LEXIS 4154, at *8-9 (N.D. Cal. Mar. 13, 1996). "Some courts have applied a presumption that all communications to outside counsel are primarily related to legal advice. (citing Diversified Indus., Inc. v. Meredith, 572 F.2d 596, 610 (8th Cir. 1977).) In this context, the presumption is logical since outside counsel would not ordinarily be involved in the business decisions of a corporation. However, the Diversified presumption cannot be applied to in-house counsel because in-house counsel are frequently involved in the business decisions of a company. While an attorney's status as in-house counsel does not dilute the attorney-client privilege (citing Upjohn) a corporation must make a clear showing that in-house counsel's advice was given in a professional legal capacity.",
 
Kramer v. Raymond Corp, No. 90-5026, 1992 U.S. Dist. LEXIS 7418, at *3-4 (E.D. Pa. May 29, 1992). "The attorney-client privilege is construed narrowly. This is especially so when a corporate entity seeks to invoke the privilege to protect communications to in-house counsel. Because in-house counsel may play a dual role of legal advisor and business advisor, the privilege will apply only if the communication's primary purpose is to gain or provide legal assistance. . . . [T]he corporation 'must clearly demonstrate that the communication in question was made for the express purpose of securing legal not business advice." (citations omitted)
 
Teltron, Inc. v. Alexander, 132 F.R.D. 394, 396 (E.D. Pa. 1990). "As a general rule, an attorney who serves a client in a business capacity may not assert the attorney-client privilege because of the lack of a confidential relationship."
In-house counsel can also be treated differently when determining whether the privilege has been waived. Generally, since the privilege belongs to the client, courts are unwilling to allow counsel to waive the privilege without implied, actual or apparent authority from the client. See Authority to Waive Privilege, § I.G.4., below. However, since in-house counsel are agents of the organization itself, some courts have found that in-house counsel is capable of waiving the privilege for the organization. See Velsicol Chem. Corp. v. Parsons, 561 F.2d 671, 674 (7th Cir. 1977); In re Grand Jury Subpoenas Dated Dec. 18, 1981, 561 F. Supp. 1247, 1254 n.3 (E.D.N.Y. 1982).
b. Specially Appointed Counsel
The definition of a lawyer generally includes specially-appointed counsel. However, only communications to and from specially-appointed counsel acting in a legal capacity are entitled to protection. In re Grand Jury Subpoena Duces Tecum Dated Sept. 15, 1983, 731 F.2d 1032, 1036-37 (2d Cir. 1984); In re Grand Jury Proceedings, 658 F.2d 782, 784 (10th Cir. 1981). Where an attorney serves solely as an investigator and not as a legal advisor, the communications are not privileged. For example, in SEC v. Canadian Javelin Ltd., 451 F. Supp. 594 (D.D.C. 1978), vacated, No. 76-2070, 1978, the court held that no attorney-client relationship existed between the corporation and its special counsel. Id. at 596. Canadian Javelin was subject to an injunction which named an attorney as special independent counsel to the corporation's compliance committee. The injunction gave the special counsel the obligation to review all information disseminated by the corporation, to take all reasonable steps to ensure compliance with the decree, and to notify the SEC and the corporation's board of directors in the event of non-compliance. Id. at 596. The injunction was silent as to the attorney-client privilege. Id. In its suit, the SEC moved for an order to compel deposition testimony from this specially appointed attorney. Id. at 595. The Canadian Javelin court concluded that no attorney-client relationship existed between the corporation and the special independent counsel. The court noted that special counsel was not appointed to render advice, but to monitor compliance. The court also observed that the corporation did not have any legitimate expectation of confidentiality because special counsel was obligated to disclose the corporation's activities to the SEC. Id.
A similar result was reached in a slightly different factual setting in Osterneck v. E.T. Barwick Indus., Inc., 82 F.R.D. 81 (N.D. Ga. 1979). In Osterneck, private party plaintiffs subpoenaed attorneys who had acted as special counsel to Barwick pursuant to an SEC consent decree. Id. at 82-83. The decree provided that the disclosure of any information or materials to the special counsel did not constitute a waiver of the attorney-client privilege. It further provided that any privileged material would be released to the SEC only upon a judicial determination that such disclosure would not constitute a waiver. Id. at 83. The attorneys who had acted as special counsel to Barwick refused to comply with the plaintiffs' subpoenas on the ground that the material requested was privileged. Id. However, the court granted plaintiffs' motion to compel the depositions when it concluded that special counsel was not retained to render legal advice but to investigate and report the facts. Id. at 85. In support of its holding, the court noted that only a very minute portion of the final report of special counsel consisted of legal advice. Id. at 85-86. See:
 
Henderson v. Nat'l R.R. Passenger Corp., 113 F.R.D. 502 (N.D. Ill. 1986). Communications between employees and an attorney acting as an EEOC representative, who investigated claims and reported solely to the Amtrak legal department, were not privileged because the attorney did not work for Amtrak's benefit, and its employees "had no expectation of privacy." Id. at 509.
 
Cf.
 
SEC v. Brady, 238 F.R.D. 429, 439 (N.D. Tex. 2006). Employee interviews conducted by law firm hired by corporation's audit committee were protected by attorney-client privilege as "confidential communications between the corporate client and its counsel."
 
Lawrence E. Jaffe Pension Plan v. Household Int'l, Inc., No. 02 C 5893, 2006 WL 3524016, at *13-15 (N.D. Ill. Dec. 6, 2006). All communications and documents related to law firm's internal investigation were privileged where corporation's audit committee retained law firm to investigate the quantitative and qualitative aspects of restructuring policies and to provide legal advice as to whether corporation should take correction action.
Some courts have taken a more expansive policy-based approach, and protect even non-legal investigative communications. One court has extended the privilege to an officer serving a hybrid role as privately retained counsel and government investigator. In In re LTV Sec. Litigation, 89 F.R.D. 595 (N.D. Tex. 1981), the court refused to allow discovery of the contents of communications with a "special officer" who was appointed pursuant to a consent decree with the SEC. Id. at 614-22. The consent decree required the corporation to cooperate in the officer's duty to furnish the SEC with all materials or information in his possession. Id. at 614-15. The corporation did not control the officer's activities. The court concluded that the bulk of the officer's work would be protected from disclosure under either role as counsel or investigator. Id. at 615-18. Although recognizing that the material was not privileged under traditional theories, the court emphasized the utility of special officers in SEC investigations and the benefits of having such officers. The court recognized that denying a claim of privilege in these cases would have discouraged corporations from self-investigation and would force the SEC to commit significantly greater resources to its investigations. Id. at 618-622.
For suggestions on maximizing the protection of the attorney-client privilege in this context see Recommendations for Preserving the Attorney-Client Privilege, § III., below.
c. Accountants as Privileged Parties
At common law, there was no accountant-client privilege. United States v. Bisant, 414 F.3d 168, 170 (1st Cir. 2005); see also Couch v. United States, 409 U.S. 322, 335 (1973) (noting the lack of such a privilege under federal law). However, both the federal government and many states have enacted statutory accountant-client privileges of varying breadth.
In 1998, Congress adopted legislation giving rise to a limited accountant-client privilege. The IRS Restructuring and Reform Act of 1998 purports with some limitations to extend the common-law attorney-client privilege to "federally authorized tax practitioner[s]" providing "tax advice" by amending the Internal Revenue Code § 7525. Few courts have addressed this new provision, though several accounting firms have attempted to avail themselves of its protection in order to circumvent disclosure requirements related to clients involved in tax shelters. For example, in United States v. BDO Seidman, 337 F.3d 802, 811 (7th Cir. 2003), cert. denied sub nom., Roes v. United States, 540 U.S. 1178 (2004), the Seventh Circuit held that Section 7525 does not protect the identities of accountancy clients that have purchased tax shelters. The court reasoned that because client identifies are not generally protected by the attorney-client privilege at common law, and because Section 7525 does not provide any broader protection, the client identities were not protected. Further, because federal law requires reporting of tax shelter clients, no expectation of privacy could attach, further limiting applicability of the privilege. Other courts addressing Section 7525 have found its application similarly limited:
 
Scotty's Contracting and Stone, Inc. v. United States, 326 F.3d 785 (6th Cir. 2003). Section 7525 does not purport to federalize state-established accountant-client privileges, and state-created privileges do not limit the IRS's authority to issue summons.
 
United States v. Frederick, 182 F. 3d 496, 502 (7th Cir. 1999). "Dual-use" documents created during preparation of tax returns are not subject to attorney-client privilege and therefore not subject to Section 7525.
 
United States v. KPMG LLP, 316 F. Supp. 2d 30, 35-38 (D.D.C. 2004). Following BDO Seidman and holding that purchasers of tax shelters have no expectation that their identities will remain private, particularly in light of the obligation, pursuant to IRC § 6112, to maintain a list of such identities.
 
Doe v. KPMG, L.L.P., 325 F. Supp. 2d 746, 752-59 (N.D. Tex. 2004). Following BDO Seidman and rejecting proposition that IRC § 7525 privilege protects the identities of purchasers of tax shelters.
 
United States v. Sidley Austin Brown & Wood LLP, No. 03 C 9355, 2004 U.S. Dist. LEXIS 6452 (N.D. Ill. April 20, 2004). Following BDO Seidman, but allowing purchasers to intervene permissively in order to assert objections, based other than on privilege, to request for production.
 
United States v. Arthur Andersen, L.L.P., v. Andersen, No. 02 Civ. 6790, 2003 WL 21956404 (N.D. Ill. Aug. 15, 2003). Amending   2003 WL 21518562 (N.D. Ill. July 2, 2003) on reconsideration in light of BDO Seidman, and holding that identifies of tax shelter clients were not privileged.
 
Doe v. Wachovia Corp., 268 F. Supp. 2d 627, 636-37 (W.D.N.C. 2003). Holding that Section 7525 did not apply to summons issued to bank requesting identification of client identifies because "the issuance of an administrative summons to a bank, as opposed to a taxpayer, does not appear to be a 'tax proceeding' before the IRS" and noting further that communications made in furtherance of creating a tax shelter and that involve a corporation are specifically excluded from the privilege under Section 7525(b).
 
United States v. KPMG LLP, 237 F. Supp. 2d 35, 39-40 (D.D.C. 2002). Statutory privilege created by Section 7525 does not apply to mere preparation of tax return.
 
Long-Term Capital Holdings v. United States, 2002 WL 31934139, at *7-8 (D. Conn. Oct. 30, 2002), reconsidered in part on other grounds, 2003 WL 1548770 (D. Conn. Feb 14, 2003). Observing that 7525 does not apply to work product and does not protect communications made in furtherance of the preparation of a tax return.
The effect of I.R.C. § 7525 may not be substantial because it only attaches where an accountant, authorized to practice before the Internal Revenue Service, is involved in a civil matter before the Service or a federal court where the United States is a party, and then only applies to the same extent the common-law privilege would apply. Thus, it is only when an accountant is performing an attorney's work that the attorney-client privilege would apply. See Frederick, 182 F.3d at 502 ("Nothing in the new statute suggests that these non-lawyer practitioners are entitled to privilege when they are doing other than lawyers' work; and so the statute would not change our analysis even if it were applicable to this case, which it is not, because it is applicable only to communications made on or after July 22, 1998, the date the statute was enacted."); see also Accountants as Privileged Agents, I.B.3.b., below. Further, as enacted, I.R.C. § 7525 excluded communications related to corporate tax shelters from its protection. In 2004, Congress amended the provision to exclude communications related to tax shelters generally from its effect.
Several states have enacted statutes creating an accountant-client privilege. For a detailed list of such statutes, see DAVID M. GREENWALD, EDWARD F. MALONE, & ROBERT R. STAUFFER, TESTIMONIAL PRIVILEGES, § 3:6 & App. 3-1 (Thomson West 3d ed. 2005). The courts have strictly construed these statutes as enacted in derogation of common law. See, e.g., In re A Special Investigation # 202, 452 A.2d 458, 462 (Md. Ct. Spec. 1982) (observing that the legislature granted the privilege in derogation of the common law knowing about the judicial canon of strict construction of such statutes). In matters involving federal question and in federal administrative proceedings, courts routinely refuse to follow state statutes creating an accountant-client privilege, and follow the common law view that there is no accountant-client privilege. However, in diversity cases the courts usually have applied state law of privilege. See Lego v. Stratos Lightwave, Inc., 224 F.R.D. 576, 580-81 (S.D.N.Y. 2004); see generally C.T. Drechsler, Federal Courts as Following Law of Forum State with Respect to Privileged Communications, 95 A.L.R.2d 320, at *3b (1964 & Supp. 2001) (listing cases). Only in a few cases have the courts refused to follow the state law with regard to privileged communications. See Drechsler, 95 A.L.R.2d 320, *3b; Bruce I. McDaniel, Situations in Which Federal Courts Are Governed by State Law of Privilege Under Rule 501 of Federal Rules of Evidence, 48 A.L.R. Fed. 259 (1980 & Supp. 2003) (collecting cases).
3. Defining Privileged Agents
a. Privileged Agents In General
In addition to clients and lawyers, the definition of privileged persons includes agents of the client and the lawyer who assist in the representation. United States v. United Shoe Mach. Corp., 89 F. Supp. 357, 358 (D. Mass. 1950); Claxton v. Thackston, 559 N.E.2d 82 (Ill. App. Ct. 1990) (communications between insured and insurer, and insured and agents of insurer are protected by privilege). Privileged agents include non-employees such as paralegals and investigators. The presence of these third party agents does not waive the privilege if their presence was to permit the client and lawyer to communicate effectively or to further the representation in some way. In re Grand Jury Investigation, 918 F.2d 374, 386 n.20 (3d Cir. 1990) (presence of agent does not abrogate privilege); FED. R. EVID. 503(b)(4). Privileged agents are sometimes grouped into two categories: communicating and representing agents. See REST. 3D § 70 cmts. f, s, 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5483 (1986) (discussing communicating and source agents).
Both the lawyer and client typically will have communicating agents. These agents enable the lawyer and client to communicate effectively. 8 JOHN H. WIGMORE, EVIDENCE § 2317 (J. McNaughton rev. 1961). The most common examples of communicating agents are employees such as couriers and secretaries. The presence of the communicating agent must be reasonably necessary or the privilege is waived. JOHN W. STRONG, MCCORMICK ON EVIDENCE § 91 (5th ed. 1999); 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE §§ 5485-86 (1986); see also Kevlik v. Goldstein, 724 F.2d 844, 849 (1st Cir. 1984). Note, however, that while the presence of a non-professional agent does not destroy the privilege, and while those agents may communicate the advice of an attorney, the non-professional's own advice may not itself by privileged. See HPD Labs., Inc. v. Clorox Co., 202 F.R.D. 410, 416 (D.N.J. 2001) (observing that, while communications with paralegal are privileged to the extent they pass on an attorney's advice or were made under an attorney's supervision, communications originating with the paralegal are not themselves privileged).
Representing agents include confidential assistants of the lawyer such as a file clerk or paralegal assistant. These agents are necessary for the operation of the lawyer's business. See United States v. Kovel, 296 F.2d 918, 921-22 (2d Cir. 1961) (secretaries, paralegals, legal assistants, stenographers or clerks are privileged agents); JOHN W. STRONG, MCCORMICK ON EVIDENCE § 91 (5th ed. 1999); 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5482 (1986). Representing agents can also include any subordinate or agent of the attorney if the attorney uses the agent to facilitate legal advice and supervises the agent's actions. See REST. § 70 cmt. g. In general, an expert adviser retained by the attorney to aid the client would also fit within the group of privileged agents if consulted for the purpose of improving the client's comprehension of legal advice rendered by the attorney. Kovel, 296 F.2d at 921-22 (accountant hired by tax law firm to assist in interpreting client conversations was considered privileged agent); United States v. United Shoe Mach. Corp., 89 F. Supp. 357, 358 (D. Mass. 1950); REST. § 70 cmt. f Illus. 5. However, communications between an attorney and an expert advisor that are not intended to improve a client's comprehension of the legal advice but, instead, are used by the attorney to render legal advice, may not be protected by the attorney-client privilege. United States v. Ackert, 169 F.3d 136, 140 (2d Cir. 1999) (privilege did not attach to communications between counsel and advisor because advisor was not acting as an interpreter or translator to improve client's comprehension of legal advice). The person asserting the privilege has the burden of demonstrating that the agent was consulted for a professional reason and that the presence of the agent was reasonably necessary to further the client's interests on the particular matter. See von Bulow v. von Bulow, 811 F.2d 136, 146-47 (2d Cir. 1987). Compare:
 
In re Bieter Co., 16 F.3d 929 (8th Cir. 1994). Independent contractor cooperated with plaintiff's attorneys at plaintiff's direction for the purpose of securing legal advice. Court found the independent contractor acted as a representative of plaintiff and could invoke plaintiff's privilege for these communications.
 
In re Grand Jury Proceedings Under Seal, 947 F.2d 1188 (4th Cir. 1991). Client took his accountant with him to a meeting with a prospective attorney. The court held that the accountant was a privileged agent since his function was to assist the client in obtaining effective legal services.
 
United States v. Schwimmer, 892 F.2d 237, 243 (2d Cir. 1989). Communications made to an accountant hired to assist the lawyer in a joint-defense are privileged if confidentiality is maintained.
 
United States v. McPartlin, 595 F.2d 1321, 1335-37 (7th Cir. 1979). Statement made to investigator employed by co-defendant's counsel is privileged.
 
Lawrence E. Jaffe Pension Plan v. Household Int'l, Inc., 2006 WL 3524016, at *5 (N.D. Ill. Dec. 6, 2006). Company's retention of Ernst & Young accounting firm was necessary and indispensable to counsel's ability to render legal advice given the "complex quantitative analyses and extensive information-gathering that was beyond [counsel's] resources and abilities, but was uniquely within E & Y's qualifications."
 
Farahmand v. Jamshidi, No. Civ.A.04-542(JDB), 2005 WL 331601, at *3 (D.D.C. Feb. 11, 2005). Holding that provision of privileged document to plaintiff's son-in-law did not constitute a waiver of privilege where son-in-law added value by translating the document.
 
In re Grand Jury Subpoenas, 265 F. Supp. 2d 321, 326-332 (S.D.N.Y. 2003). Distinguishing Calvin Klein Trademark Trust v. Wachner, below, and holding that PR firm, retained by defense counsel, was a privileged agent under United States v. Kovel, above.
 
Safeguard Lighting Sys., Inc. v. N. Am. Specialty Ins. Co., No. Civ.A.03-4145, 2004 WL 3037947, at *1-2 (E.D. Pa. Dec. 30, 2004). Holding that outside insurance adjuster, hired to review claims and report to insurer's outside counsel, was a privileged agent and communications with counsel were protected by the privilege, even as to communications made prior to the institution of legal proceedings.
 
Ross v. UKI Ltd., No. 02 Civ. 9297 WHPJCF, 2003 WL 22319573 (S.D.N.Y. Oct. 9, 2003). Under New York law, disclosure of attorney-client communications to certain types of third party agents does not waive the privilege where a client had a "reasonable" expectation of privacy under the circumstances," and disclosure to the agent was necessary for the client to obtain informed legal advice. This requires that "the involvement of the third party be nearly indispensable or serve some specialized purpose in facilitating the attorney-client communications."
 
In re Grand Jury Subpoenas Dated March 24, 2003, 265 F. Supp. 2d 321 (S.D.N.Y 2003). Communications between a criminal target of a grand jury proceeding, his counsel and a public relations firm held protected by the attorney-client privilege. The court found that one cannot effectively counsel a client, seek to avoid or narrow charges brought against a client, or zealously seek acquittal or vindication without the assistance of a public relations consultant. Therefore, communications between the client, counsel and the public relations firm are privileged if the communications were directed at giving or obtaining legal advice.
 
Viacom, Inc. v. Sumitomo Corp. (In re Copper Market Antitrust Litig.), 200 F.R.D. 213, 219 (S.D.N.Y. 2001). Communications with third-party public relations consultant were privileged. The consultant acted as an integral part of the litigation team and was treated as if it were a company employee for the purposes of applying the attorney-client privilege.
 
Apex Mun. Fund v. N-Group Sec., 841 F. Supp. 1423 (S.D. Tex. 1993). Communications between a bond underwriter and its attorneys to assist the attorneys in preparing public offering statements were protected by the attorney-client privilege.
 
Clark v. City of Munster, 115 F.R.D. 609, 613 (N.D. Ind. 1987). Statement by client to an investigator hired by his attorney is privileged.
 
With:
 
In re Grand Jury Proceedings, Involving Thullen and Dvorak, 220 F.3d 568 (7th Cir. 2000). Court remanded case for further proceedings to determine whether accountants were hired by defense counsel to prepare tax returns or to assist counsel in providing legal advice. Material transmitted to an attorney or the attorney's agent for the purpose of using that information on a tax return is not privileged. On the other hand, information transmitted to an attorney or the attorney's agent is privileged if it was not intended for subsequent appearance on a tax return and was transmitted for the sole purpose of seeking legal advice. Documents used in both preparing tax returns and litigation are not privileged.
 
United States v. Adlman, 68 F.3d 1495, 1500 (2d Cir. 1995). Communications between in-house counsel and accountant held not privileged where purpose was to seek tax advice rather than legal advice.
 
Cellco P'ship v. Certain Underwriters at Lloyd's London, Civil Action No. 05-3158(SRC), 2006 WL 1320067, at *2 (D.N.J. May, 12, 2006). Holding that "when the third party is a professional, such as an accountant, capable of rendering advice independent of the lawyer's advice to the client, the claimant must show that the third party served some specialized purpose facilitating the attorney-client communications and was essentially indispensable in that regard."
 
Stayinfront, Inc. v. Tobin, Civil Action No. 05-4563 (SRC), 2006 WL 3228033, at *3-4 (D.N.J. Nov. 3, 2006). Communications between "lay advisor" who appeared on behalf of client in New Zealand Employment Relations Authority, client and counsel regarding action pending in New Jersey district court were not privileged because advisor did not play a "vital role in facilitating communications," nor was he "necessary to the [pending] action."
 
Cellco P'ship v. Nextel Commc'n, Inc., No. M8-85 (RO), 2004 U.S. Dist. LEXIS 12717, at *3 (S.D.N.Y. July 9, 2004). Holding that communications between in-house attorney and marketing employees, which were further forwarded to client's advertising firm, were not privileged where in-house counsel was not acting as an attorney.
 
VISA U.S.A., Inc. v. First Data Corp., No. C-02-1786SJW(EMC) 2004 WL 1878209, at *4, 7 (N.D. Cal. Aug. 23, 2004). Holding that draft documents created by consulting firm for "attorney to review" for "legal purposes" were not privileged because they would have been created in substantially the same way solely for business purposes and because engagement of consulting firm was for a business purpose.
 
Haugh v. Schroder Inv. Mgmt., N.A., Inc., No. 02 Civ. 7955 DLC, 2003 WL 21998674 (S.D.N.Y. Aug. 25, 2003). Distinguishing In re Grand Jury Subpoenas Dated March 24, 2003, the court held that communications between a public relations consultant and plaintiff's counsel, who had engaged the consultant to work on the case, were not protected by the attorney-client privilege, but were protected by the work product doctrine.
 
Ross v. UKI Ltd., No. 02-Civ. 9297 WHPJCF, 2003 WL 22319573, at *1-2 (S.D.N.Y. Oct. 9 2003). Holding that privilege did not apply because defendant failed to carry burden that accountants and other individuals to whom documents were distributed were "necessary for the client to obtain informed legal advice."
 
SR Int'l Bus. Ins. Co. Ltd. v. World Trade Ctr. Props. LLC, No. 01 Civ. 9291, 2002 WL 1334821 (S.D.N.Y. June 19, 2002). A limited number of cases have held that the corporate attorney-client privilege can extend to communications between the corporation's attorney and outside agents or consultants to the corporation whose role is the functional equivalent to that of a corporate employee. However, that principle does not apply to conversations between an insurance broker, which had its own counsel, and counsel for the broker's client.
 
Calvin Klein Trademark Trust v. Wachner, 198 F.R.D. 53 (S.D.N.Y. 2000). Communications between client, counsel and public relations consultant not privileged.
 
Claude P. Bamberger Int'l, Inc. v. Rohm and Haas Co., Civ. No. 96-1041, 1997 U.S. Dist. LEXIS 22770 at *6 (D.N.J. Aug. 12, 1997). Memorandum summarizing communications between investigator and client's employees was not privileged because the purpose of the investigation was to search for business improprieties within the corporation rather than securing legal advice.
 
Samuels v. Mitchell, 155 F.R.D. 195 (N.D. Cal. 1994). Court held that privilege was waived where attorneys shared documents with accountants for purpose of keeping them abreast of developments in arbitration rather than for purposes of facilitating provision of legal advice.
 
Dabney v. Inv. Corp. of Am., 82 F.R.D. 464, 465-66 (E.D. Pa. 1979). Privilege not available for communications with a law student who was not acting under the direct supervision of a member of the bar.
b. Accountants as Privileged Agents
Though generally not considered to be privileged parties, accountants are considered to be privileged agents where the accountant's role is to facilitate communication between the attorney and the client. This role is analogous to that of an interpreter; where the attorney and client "speak different languages," and the aid of an accountant will help the lawyer to understand the client's situation, the accountant is a privileged agent. See United States v. Kovel, 296 F.2d 918 (2d Cir. 1961). Where a conversation with an agent is merely helpful to the client's defense, and does not help the attorney to understand the client's communication itself, the third-party's role is not that of a privileged agent. See United States v. Ackert, 169 F.3d 136, 139 (2d Cir. 1999); In re G-I Holdings, Inc., No. 02-03082(WGB), 218 F.R.D. 428, 436-37 (D.N.J. 2003); United States v. ChevronTexaco Corp., 241 F. Supp. 2d 1065, 1072 (N.D. Cal. 2002) (privilege does not apply where accountant is hired not as a "translator" but instead to give additional legal advice about complying with the tax code even when the accountant thereby assists the attorney in advising the client). When a party hires an accountant to provide accounting advice, and only later hires an attorney to provide legal advice, it is particularly important for the party to show that the accountant later acted as an agent necessary to the lawyer in providing legal advice. Cavallaro v. United States, 284 F.3d 236, 249 (1st Cir. 2002) (privilege did not apply where accountants were providing accounting services rather than facilitating communication of legal advice between counsel and client). Preparation of tax returns, for example, is an accounting function not meant to facilitate attorney-client communications. Communications with accountants for the purpose of filing out tax forms are not, therefore, privileged. See In re Grand Jury Proceedings, Involving Thullen and Dvorak, 220 F.3d 568, 571 (7th Cir. 2000) (holding that documents used both in preparation of tax returns and in litigation are not privileged); see also United States v. Frederick, 182 F.3d 496 (7th Cir. 1999); Accountants as Privileged Parties, I.B.2.c., above.
Often, companies may wish to disclose otherwise privileged information to their outside auditors as part of the auditing process. Accountants performing such audits are not acting as agents of counsel, and disclosures made in the court of annual audits create serious risks of waiver. See Section Disclosures to Auditors, I.G.3.a., below; see also United States v. Arthur Young & Co., 465 U.S. 805, (1984); United States v. El Paso Co., 682 F.2d 530, 540 (5th Cir. 1982) (disclosure of tax pool analysis and underlying documentation to outside accountants for tax audit purposes waives attorney-client privilege); In re Raytheon Sec. Litig., 218 F.R.D. 354, 360-61 (D. Mass. 2003); DAVID M. GREENWALD, EDWARD F. MALONE, ROBERT R. STAUFFER, TESTIMONIAL PRIVILEGES, § 3:5 (3d ed. 2005).
C. Communications Must Be Intended To Be Confidential
1. Confidentiality In General
To remain privileged a communication must be made in confidence and kept confidential. The test is (1) whether the communicator, at the time the communication was made, intended for the information to remain secret from non-privileged persons, and (2) whether the parties involved maintained the secrecy of the communication. See Bogle v. McClure, 332 F.3d 1347, 1358 (11th Cir. 2003); Haines v. Liggett Group, Inc., 975 F.2d 81 (3d Cir. 1992) (privilege protects verbal and written communications conveyed in confidence for purpose of legal advice); In re Sealed Case, 877 F.2d 976 (D.C. Cir. 1989) (party must not be careless with confidentiality or the privilege will be waived); In re Grand Jury Proceedings, 727 F.2d 1352, 1356 (4th Cir. 1984) (party must intend to keep communication secret or privilege is waived). The client must not only have a subjective expectation of confidentiality, but that expectation must also be objectively reasonable. In re Asia Global Crossing, Ltd., 322 B.R. 247, 257 (Bankr. S.D.N.Y. 2005).
Confidentiality is not destroyed because a non-privileged person knows a communication was made or independently knows the contents of the communication. See In re Grand Jury Subpoena Duces Tecum, 731 F.2d 1032, 1037 (2d Cir. 1984) (disclosure of information contained in privileged communication is treated differently than disclosure of the communications themselves and may not waive the privilege); NCK Org., Ltd. v. Bregman, 542 F.2d 128, 133 (2d Cir. 1976) (noting in dictum that the privilege is not destroyed because the information in the privileged communication is known by an adversary). In fact, the contents of the communications need not themselves be secrets. In re Ampicillin Antitrust Litig., 81 F.R.D. 377, 388-90 (D.D.C. 1978). Similarly, the protection of the privilege is not lost even if the receiving person knew the information before the communication was made.
Instead the key is whether the communicating person intended only the receiving attorney or privileged agent to learn of the contents as a result of the communication. See:
 
In re Grand Jury Subpoena, 204 F.3d 516, 522 (4th Cir. 2000). If a client authorizes an attorney to disclose the client's motives or purposes in retaining the attorney, those motives are no longer confidential, and the information is not protected.
 
United States v. (Under Seal), 748 F.2d 871, 875 (4th Cir. 1984). If client communicated information to attorney with the understanding it would be revealed to others, no confidentiality exists and the information is not protected by the privilege. In addition, the details underlying the communicated data will also not be privileged.
 
In re Grand Jury Subpoena Duces Tecum, 731 F.2d 1032, 1036 n.3 (2d Cir. 1984). Privilege will extend to draft memoranda containing confidential communications even though when put into a final version the information may be sent to third parties.
 
In re Grand Jury Proceedings, 727 F.2d 1352, 1356 (4th Cir. 1984). Privilege never attached to material because client gave information to the attorney intending that it be distributed to the public in a prospectus.
 
In re EXDS, Inc., No. C05-0787 PVT, 2005 WL 2043020, at *7 (N.D. Cal., Aug. 24, 2005). Holding that "because the privilege only applies to communications that are intended to be kept confidential, it does not apply to communications the client intends for its lawyer to pass on to a third party."
 
S.E.C. v. Bilzerian, No. Civ. A 89-1854, 2001 WL 1801157, at *1 (D.D.C. June 15, 2001). Proper standard is whether the client reasonably intended that the attorney would keep the communication confidential.
 
Frieman v. USAir Group, Inc., Civ. A. No. 93-3142, 1994 WL 719643 (E.D. Pa. Dec. 22, 1994). Only statements actually disclosed to non-privileged parties lose protected status.
 
Apex Mun. Fund v. N-Group Sec., 841 F. Supp. 1423, 1428 (S.D. Tex. 1993). Privilege as to statements made to an attorney for the purpose of preparing a public offering document is waived only to the extent that information in them actually appears in public documents.
 
Smith v. Armour Pharm. Co., 838 F. Supp. 1573 (S.D. Fla. 1993). Applying Florida law, court found that the fact that a memorandum from in-house counsel discussing the inevitability of litigation was widely circulated did not by itself provide sufficient grounds to negate the privilege.
 
United States v. Rivera, 837 F. Supp. 565 (S.D.N.Y. 1993). Information provided by aliens to law firm in order to prepare amnesty application was not privileged.
 
Gottlieb v. Wiles, 143 F.R.D. 241 (D. Colo. 1992). Interviews of corporate officers conducted by counsel were not privileged when the interviews were intended to be used in as part of an investigative report and the interviewees were notified of this fact. Neither the interviewers or interviewees had expectation that the interview information would remain confidential.
 
Schenet v. Anderson, 678 F. Supp. 1280, 1283 (E.D. Mich. 1988). Client provided information to his attorney so it could be included in a document to be disclosed. Court found that the information which was not actually disclosed in the final document remained protected.
 
Kobluk v. Univ. of Minnesota, 574 N.W.2d 436, 444 (Minn. 1998). Draft of letter was protected because the draft was sent to attorney for the purpose of obtaining legal advice and the surrounding circumstances indicated that the draft was intended to be confidential.
 
Jedwab v. MGM Grand Hotels, Inc., 509 A.2d 584 (Del. Ch. 1986). Draft of publicly filed document can be privileged since confidential communications might be determined from the differences between the draft and final versions.
 
But see:
 
United States v. Lawless, 709 F.2d 485 (7th Cir. 1983). Information communicated to an attorney in order to prepare a document to file with a government agency is not privileged even if information not made part of the filing.
 
United States v. KPMP, LLP, 237 F. Supp. 2d 35, 39 (D.D.C. 2002). Privilege does not protect communications between a tax practitioner and a client conveyed for the preparation of a tax return.
 
Disclosure in the presence of non-privileged persons destroys confidentiality and prevents the privilege from attaching. See United States v. Evans, 113 F.3d 1457, 1462-63 (7th Cir. 1997) (holding conversation between client and lawyer in front of client's friend present for emotional support not privileged); United States v. Bernard, 877 F.2d 1463, 1465 (10th Cir. 1989) (voluntary disclosure to third parties waives privilege); Sylgab Steel & Wire Corp. v. Imoco--Gateway Corp., 62 F.R.D. 454, 457-58 (N.D. Ill. 1974), aff'd, 534 F.2d 330 (7th Cir. 1976); JOHN W. STRONG, McCORMICK ON EVIDENCE § 91 (5th ed. 1999); Atwood v. Burlington Indus. Equity, Inc., 908 F. Supp. 319, 323 (M.D.N.C. 1995) (communications between attorney and client in the presence of a union representative held not privileged); cf. Charles Woods Television Corp. v. Capital Cities/ABC, Inc., 869 F.2d 1155 (8th Cir. 1989) (privileged communications between a client and lawyer do not become admissible at trial merely because the client's witnesses testify generally about the same subject area).
2. Confidentiality within Organizations
For organizational clients, the courts have permitted "need-to-know" agents to have access to privileged documents without destroying confidentiality and relinquishing the privilege. See FTC v. Glaxo Smith Kline, 294 F.3d 141, 147 (D.C. Cir. 2002); Coastal States Gas Corp. v. Dep't of Energy, 617 F.2d 854, 863 (D.C. Cir. 1980); Diversified Indus., Inc. v. Meredith, 572 F.2d 596, 602 (8th Cir. 1977); REST. 3D § 73 cmt. g. The group of "need-to-know" agents is comprised of employees of the organization who reasonably need to know of the communication in order to act in the interest of the corporation. Coastal States Gas Corp. v. Dep't of Energy, 617 F.2d 854, 863 (D.C. Cir. 1980) (applying a "need-to-know" test to find that indiscriminate circulation of a memorandum constituted disclosure); Exxon Corp. v. Dep't of Conserv. and Nat. Res., 859 So.2d 1096, 1106 (Ala. 2002) (no waiver where in-house counsel sent copy of privileged letter to several corporate employees who had a need to know counsel's interpretation of certain lease provisions). 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5484, at 380 (1986). In practice, "need-to-know" agents will consist primarily of persons with responsibility for accepting or rejecting the lawyer's advice or acting on the recommendations of the lawyer. All those employees who would be held personally liable either financially or criminally, or who would benefit from the information (such as partners), will also generally be considered "need-to-know" agents. REST. 3D § 73 cmt. g.
Under the "need to know" doctrine, sharing documents with lower-echelon employees who need to know the information does not show an indifference to confidentiality and does not waive the protection of the privilege. See Upjohn Co. v. United States, 449 U.S. 383 (1981); 3 JACK W. WEINSTEIN ET AL., WEINSTEIN'S FEDERAL EVIDENCE P 503(b)[04] (2d ed. 2004); see also:
 
Wrench LLC v. Taco Bell Corp., 212 F.R.D. 514, 517-18 (W.D. Mich. 2002). Disclosure of legal advice to lower-level employee did not waive privilege where employee was responsible for specific subject matter of the communication.
 
Verschoth v. Time Warner, Inc., No. 00 Civ. 1339AGSJCF, 2001 WL 286763, at *2 (S.D.N.Y. Mar. 22, 2001), adhered to as amended by, 2001 WL 546630 (S.D.N.Y. May 22, 2001). While corporate executives may share legal advice with lower-level corporate employees without waiving the privilege, the privilege extends only to those employees with a "need to know," including those employees with general policymaking authority and those with specific authority for the subject matter of the legal advice.
 
Gallo v. Eaton Corp., 122 F. Supp. 2d 293, 308 (D. Conn. 2000). For purposes of the employee's defamation claim under Connecticut law, former employer had a qualified privilege when it drafted and circulated employee's disciplinary letter only among those in the company who had a business need to know of reasons for employee's discipline.
 
In re Grand Jury Subpoenas Dated Dec. 18, 1981, 561 F. Supp. 1247, 1258-59 (E.D.N.Y. 1982). Disclosure allowed to low-level employee who had direct responsibility over the subject matter.
 
Marriott Corp. v. Am. Acad. of Psychotherapists, Inc., 277 S.E.2d 785, 790-92 (Ga. Ct. App. 1981). Decided less than one month after Upjohn and without citing it, the court set forth rules concerning the corporate client. In its test, the court set limits on the privilege which required that the communication not be disseminated "beyond those persons who, because of the corporate structure, need to know its contents." Id. 791-92.
 
Archer Daniels Midland Co. v. Koppers Co., 485 N.E.2d 1301, 1303-04 (Ill. App. Ct. 1985). Court upheld "need to know" sharing under the control group test.
3. E-Mail and Confidentiality
The intent of the communicating party to maintain confidentiality may be inferred from the facts surrounding each communication. In general, indifference to confidentiality will be shown by the use of a medium in which the communicator knows it is impossible to exclude other listeners (such as radio). See REST. 3D § 71 cmt. c. Similarly, a person who fails to take feasible precautions demonstrates an indifference to confidentiality. Mendenhall v. Barber-Greene Co., 531 F. Supp. 951, 955 n. 8 (N.D. Ill. 1982) (reasonable precautions must be taken to guard confidentiality); Blackmon v. State, 653 P.2d 669, 671-72 (Alaska Ct. App. 1982) (attorney-client conversation overheard by a state trooper remained privileged where the circumstances showed that all reasonable precautions had been taken); Waste Mgmt., Inc. v. Int'l Surplus Lines Ins. Co., 596 N.E.2d 726, 730 (Ill. App. Ct. 1992) (client did not intend letter to remain confidential as evidenced by the fact that it was distributed without any warnings of confidentiality and had been placed in the public record in a prior case); REST. 3D § 71 cmt. d.
E-mail presents two challenges to the confidentiality of communications and the attorney-client privilege. Like other forms of communication, internet e-mail is susceptible to breaches of security in transmission. In addition, the ease with which e-mail is copied, transmitted to large numbers of people, and sometimes incorrectly transmitted due to operator error, presents unique challenges to the confidentiality of e-mail communications. See, e.g., United States v. Chevron Texaco Corp., 241 F. Supp. 2d 1065, 1075 n.6 (N.D. Cal. 2002) ("If an e-mail with otherwise privileged attachments is sent to a third party, Chevron loses the privilege with respect to that e-mail and all of the attached e-mails.") (emphasis in original).
Perhaps in response to these concerns, some early state bar decisions took the position that the use of e-mail violated the attorney's duty of confidentiality. Later opinions have generally expressed more comfort with the use of e-mail as the technology has become better understood. See ABA Formal Ethics Opinion 99-413, Protecting the Confidentiality of Unencrypted E-mail, n. 40 (1999) (noting such opinions). Compare Pa. Bar Ass'n Comm. on the Legal Ethics Op. 97-130 (1997) (rejecting the use of unencrypted e-mail absent client's consent); Iowa Bar Ass'n Op. 1997-1 (1997) (sensitive material should not be transmitted over non-secure networks); N.C. State Bar Op. 215 (1995) (cautioning against the use of e-mail); with D.C. Bar Op. 281 (1998) (finding the use of unencrypted e-mail to be consistent with confidentiality); New York State Bar Ass'n Comm. on Prof'l Ethics Op. 709 (1998) (same); D.C. Bar Op. 281 (1998); Ill. State Bar Ass'n Advisory Op. on Prof'l Conduct No. 96-10 (1997) (absent "extraordinary" sensitivity, use of e-mail is consistent with the duty of confidentiality).
Though technologically susceptible to interception, e-mail is generally considered to be no less secure than other forms of communication, such as facsimile, telephone, and mail transmission, which are already utilized with an expectation of privacy. See ABA Formal Ethics Opinion 99-413 (1999); see also United States v. Maxwell, 45 M.J. 406, 417-19 (C.A.A.F. 1996) ("The fact that an unauthorized 'hacker' might intercept an e-mail message does not diminish the legitimate expectation of privacy in any way."). In reviewing various communications technologies, the ABA ethics committee compared e-mail favorably to facsimile technology, noting the security each offers in transmission, but the ease with which documents could be misdirected due to operator error. The ABA observed that "[a]uthority specifically stating that the use of fax machines is consistent with the duty of confidentiality is absent, perhaps because... courts assume the conclusion to be self-evident." ABA Formal Ethics Opinion 99-413 (1999). The same is likely true of e-mail, to which courts have extended privileged status without differentiation from other "documents." See, e.g., In re Grand Jury Proceeding, 43 F.3d 966, 968 (5th Cir. 1994) (considering e-mail messages along with other documents); McCook Metals L.L.C. v. Alcoa, Inc., 192 F.R.D. 242, 255 (N.D. Ill. 2000) (holding e-mail correspondence between attorneys to be protected under the attorney-client privilege); Nat'l Econ. Research Assocs., Inc. v. Evans, No. 04-2618-BLS2, 2006 WL 2440008, at *3-4 (Mass. Super. Ct. Aug. 3, 2006) (attorney-client privilege attached to e-mails sent by employee to his personal attorney from a private e-mail account while using his work computer because employee did not know that employer monitored personal internet-based e-mail communications, stored them on hard drives and retained "screen shots" of messages).
In the fourth amendment context, courts have held that the transmission of e-mail occurs with a reasonable expectation of privacy, but once received by the intended party, such an expectation disappears. Thus, an e-mail may be sent without an expectation of interception, but no such expectation as to the recipient's actions is appropriate. See United States v. Charbonneau, 979 F. Supp. 1177, 1184-85 (S.D. Ohio 1997); United States v. Maxwell, 45 M.J. 406, 417-19 (C.A.A.F. 1996).
The prudent attorney should therefore feel comfortable in taking advantage of the relative security and ease of use of e-mail technology, but bear in mind the risks associated both with accidental transmission to an unintended party and the ease with which the intended party may forward the e-mail to unprivileged persons. This concern may be particularly acute for in-house counsel, who may regularly send e-mail messages to large user or distribution groups that may include non-privileged employees.
Many attorneys have adopted the practice of placing a boiler-plate confidentiality notice on fax and e-mail transmissions. Such notices may prove valuable in the case of documents erroneously transmitted where another attorney becomes the unintended recipient. Several courts have held that an attorney's inspection of obviously privileged documents may lead to varying degrees of exclusion at trial, and potentially to sanctions as well. See Resolution Trust Corp. v. First Am. Bank, 868 F. Supp. 217, 221 (W.D. Mich. 1994) (lawyer receiving materials on their face subject to attorney-client privilege has a duty to return them without examining further; ordering destruction of document and all copies, but noting that Michigan state rules would allow their introduction for impeachment); Am. Express v. Accu-Weather, Inc., Case No. 6485, 92 Civ. 705 1996 WL 346388, at *3 (S.D.N.Y. June 25, 1996) (where attorney received call indicating that soon to be delivered Federal Express package contained privileged information, and that the package should be returned, subsequent review of package and failure to return were subject to sanction). Thus, to the extent that such boilerplate does put a receiving attorney on notice that he is in possession of privileged material, he may have an ethical obligation to cease review of the material and return it to the transmitting party.
Where a party does not have a reasonable expectation of privacy in the use of electronic mail, however, transmission of otherwise protected material may result in a waiver. This problem may arise, for example, where an employee uses a corporate email system to communicate with his personal attorney. In In re Asia Global Crossing, Ltd., 322 B.R. 247, 257 (Bankr. S.D.N.Y. 2005), the court adopted a four-part test to determine if an employee had a legitimate expectation of privacy in using his employer's electronic mail system, and consequently whether the communications were at issue. The court observed:
 
The same considerations have been adapted to measure the employee's expectation of privacy in his computer files and e-mail. In general, a court should consider four factors: (1) does the corporation maintain a policy banning personal or other objectionable use, (2) does the company monitor the use of the employee's computer or e-mail, (3) do third parties have a right of access to the computer or e-mails and (4) did the corporation notify the employee, or was the employee aware, of the use and monitoring policies?
 
(footnote omitted). The Court was unable to determine whether the employees had such an expectation on the record presented. See also Long v. Marubeni America Corp., No. 05Civ.639 (GEL)(KNF), 2006 WL 2998671, at *3-4 (S.D.N.Y. Oct. 19, 2006) (Plaintiffs' voluntary, intentional and repeated use of work computers, with knowledge of company's electronic communications policy, to exchange protected communications with their attorney constituted waiver of the attorney-client privilege and work product doctrine).
D. Privilege Applies Only to Communications Made for the Purpose of Securing Legal Advice
1. Legal Purpose
The final requirement to establish the privilege is that the protected communication was made for the purpose of securing legal advice or assistance. See In re Six Grand Jury Witnesses, 979 F.2d 939 (2d Cir. 1992) (privilege protects communications made in confidence to lawyer to obtain legal counsel). But see In re Lindsey (Grand Jury Testimony), 158 F.3d 1263, 1272 (D.C. Cir. 1998) (advice given by White House counsel to Office of the President "on political, strategic, or policy issues . . . would not be shielded from disclosure by the attorney-client privilege.") A lawyer's initial consultation with a prospective client seeking legal assistance generally satisfies this requirement. United States v. Dennis, 843 F.2d 652, 656 (2d Cir. 1988).
Courts rely on a variety of factors in determining whether a legal purpose underlies a communication, including:
 
(1) the extent to which the attorney performs legal and non-legal work for the organization,
 
(2) the nature of the communication, and
 
(3) whether or not the attorney had previously provided legal assistance relating to the same matter.
 
See, e.g., 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5478 (1986); REST. 3D § 72 cmt. c. Communications motivated by business or financial purposes are not privileged. To establish the requisite legal purpose, the communication must be to or from a lawyer acting in her professional capacity as a lawyer. Moreover, the privilege protects only communications that relate to the specific matter on which the attorney's services have been sought, not unrelated communications. See:
 
Haines v. Liggett Group, Inc., 975 F.2d 81 (3d Cir. 1992). Privilege protects confidential communications made to an attorney in a professional capacity.
 
United States v. Tedder, 801 F.2d 1437, 1442-43 (4th Cir. 1986). Although lawyer was a member of the firm representing the client, communications were made in the role of a friend rather than as an attorney and were unprotected.
 
United States v. Wilson, 798 F.2d 509, 513 (1st Cir. 1986). Lawyer functioned as a negotiator for a business deal rather than as a lawyer, and therefore the communications were unprivileged.
 
In re Grand Jury Subpoenas Dated March 9, 2001, 179 F. Supp. 2d 270, 285 (S.D.N.Y. 2001). Attorney-client privilege did not apply to communications among attorneys who were working to obtain Presidential pardon for Marc Rich. The attorneys were acting as lobbyists rather than as attorneys.
 
Georgia-Pac. Corp. v. GAF Roofing Mfg. Corp., No. 93 Civ. 5125, 1996 WL 29392, at *4 (S.D.N.Y. Jan. 25, 1996). The attorney-client privilege did not apply to communications made between an in-house attorney and his corporate client while the attorney was acting as a contract negotiator because the attorney was acting in a business capacity rather than executing a traditional function of an attorney.
 
In re Air Crash Disaster, 133 F.R.D. 515, 519 (N.D. Ill. 1990). No privilege applies if the role of the lawyer is minor or was intended merely to immunize documents from production.
 
E.I. DuPont de Nemours & Co. v. Forma-Pack, Inc., 718 A.2d 1129, 1141-42 (Md. 1998). Communications between corporation's in-house counsel and debt collection agency that were conducted for the purpose of collecting on a debt owed to the corporation were not privileged. The debt collection was a business function and a corporation cannot obtain protection for such business communications by "routing" those communications through its legal department.
2. Cases of Mixed Purpose
Often a problem of mixed purposes arises. For the privilege to apply in such cases, the communication between client and lawyer must be primarily for the purpose of providing legal assistance and not for another purpose. As long as the client's purpose was to gain some advantage from the lawyer's legal skills and training, the services will be considered legal in nature, despite the fact the client may also get other benefits such as business advice or friendship. See:
 
United States v. Bornstein, 977 F.2d 112, 116-17 (4th Cir. 1992). Preparation of tax returns does not ordinarily constitute legal advice within the privilege. However, accounting services that are ancillary to legal advice may be privileged, and preparation of tax returns can fall within this area. Court remanded case to determine whether the defendant benefited more from the attorney's services as an attorney or as an accountant-tax preparer. For other tax return cases see In re Grand Jury Subpoena Duces Tecum, 697 F.2d 277, 280 (10th Cir. 1983), and the cases cited therein.
 
Simon v. G.D. Searle & Co., 816 F.2d 397, 402-04 (8th Cir. 1987). Business documents were not privileged because they were provided to lawyer solely to keep her apprised of business matters.
 
In re Sealed Case, 737 F.2d 94, 99 (D.C. Cir. 1984). To invoke the privilege there must be a clear showing that the communications with in-house counsel were in a legal rather than business capacity.
 
Argo Sys. FZE v. Liberty Ins. PTE Ltd., No. Civ. A. 04-00321-CGB, 2005 WL 1355060, at *3-4 (S.D. Ala. Jun. 7, 2005) Holding that where attorney acted as a claims-investigator and not as an attorney, the privilege did not apply to facts uncovered as part of the investigation.
 
Gen. Elec. Capital Corp. v. DirectTV, Inc., No. 3:97 CV 1901, 1998 U.S. Dist. LEXIS 18940 (D. Conn. July 30, 1998). "When he acts as an advisor, the attorney must give predominantly legal advice to retain his client's privilege of non-disclosure, not solely, or even largely, business advice. . . . in the case where a lawyer responds to a request not made primarily for the purpose of securing legal advice, no privilege attaches to any part of the document."
 
United States v. Chevron Corp., No. C-94-1885, 1996 U.S. Dist. LEXIS 4154 at *6-7 (N.D. Cal. Mar. 13, 1996). A party seeking to withhold discovery based on the attorney-client privilege must prove that all communications it seeks to protect were made "primarily for the purpose of generating legal advice." "No privilege can attach to any communication as to which a business purpose would have served as a sufficient cause, i.e., any communication that would have been made because of a business purpose, even if there had been no perceived additional interest in securing legal advice. If the document was prepared for purposes of simultaneous review by legal and non-legal personnel, it cannot be said that the primary purpose of the document is to secure legal advice."
 
Stender v. Lucky Stores, Inc., 803 F. Supp. 259, 321 (N.D. Cal. 1992). Privilege may be asserted for a meeting which was scheduled for a purpose other than facilitating the provision of professional legal services to the client.
 
Dunn v. State Farm Fire & Cas. Co., 122 F.R.D. 507, 509-10 (N.D. Miss. 1988), aff'd, 927 F.2d 869 (5th Cir. 1991). Merely assigning an attorney investigative tasks does not destroy his ability to make privileged communications.
 
In re Air Crash Disaster, 133 F.R.D. 515, 523 (N.D. Ill. 1990). Documents that do not seek legal advice and documents that seek both legal and non-legal advice are not privileged.
 
J.P. Foley & Co. v. Vanderbilt, 65 F.R.D. 523, 526-27 (S.D.N.Y. 1974). When an attorney acts as a negotiator or business agent for the client, confidential communications are not privileged.
 
Lee v. Engle, No. Civ. A. 13323, 1995 WL 761222, at *6 (Del. Ch. Dec. 15, 1995). Drafts of board meeting minutes and publicly filed documents protected because changes between the draft and final product may reflect confidential communication.
While the communication must have a legal purpose, the attorney-client privilege is not lost merely because the communication contains some non-legal information. See:
 
Dunn v. State Farm Fire & Cas. Co., 927 F.2d 869, 875 (5th Cir. 1991). Insurer's attorneys conducted an investigation into the cause of a fire. Court found investigative tasks were related to the rendering of legal services and thus any communications involving the investigation were privileged.
 
In re OM Group Sec. Litig., 226 F.R.D. 579, 587 (N.D. Ohio 2005). Concluding that, in cases of dual purpose, the attorney-client privilege is broader than the work product doctrine and that "documents prepared for the purpose of obtaining or rendering legal advice are protected even though the documents also reflect or include business issues."
 
Status Time Corp. v. Sharp Elec. Corp., 95 F.R.D. 27, 31 (S.D.N.Y. 1982). Communications of exclusively technical information to patent attorneys not privileged. Documents containing considerable amounts of technical information will be privileged if they are concerned primarily with a request for a provision of legal advice.
 
Crane Co. v. Goodyear Tire & Rubber Co., 27 Fed. R. Serv. 2d (Callaghan) 1058, 1059-60 (N.D. Ohio 1979). Inclusion of technical information in a communication to an attorney does not foreclose the privilege.
 
United States v. United Shoe Mach. Corp., 89 F. Supp. 357, 359 (Mass. 1950). The privilege is not lost simply because some non-legal communications are included.
But the existence of the privilege and its protection of legal communications will not bring the non-legal communications within the privilege. See Thurmond v. Compaq Computer Corp., 198 F.R.D. 475, 483 (E.D. Tex. 2000). The attorney-client privilege does not reach facts within the client's knowledge, even if the client learned of those facts through communications with counsel.
When an attorney acts solely as a business advisor, negotiator, or scrivener, communications are not privileged since they do not have a legal purpose. In re Grand Jury Subpoena Duces Tecum, 731 F.2d 1032, 1037 (2d Cir. 1984); United States v. Davis, 636 F.2d 1028, 1042-43 (5th Cir. 1981) (business adviser role is not privileged); Navigant Consulting, Inc. v. Wilkinson, 220 F.R.D. 467, 474-75 (N.D. Tex. 2004) ("Where an attorney is functioning in some other capacity--such as an accountant, investigator, or business advisor--there is no privilege."); Pfizer Inc. v. Ranbaxy Labs. Ltd., No. 03-209-JJF, 2004 WL 2323135, at *2 (D. Del. Oct. 7, 2004); N.C. Elec. Membership Corp. v. Carolina Power & Light Co., 110 F.R.D. 511, 517 (M.D.N.C. 1986); In re Diasonics Sec. Litig., 110 F.R.D. 570, 573 (D. Colo. 1986); SEC v. Gulf & Western Indus., Inc., 518 F. Supp. 675, 683 (D.D.C. 1981). Similarly, when a lawyer is merely providing factual information rather than legal advice, communications will not be protected. See Dawson v. New York Life Ins. Co., 901 F. Supp. 1362, 1366 (N.D. Ill. 1995).
Further, both the lawyer and the client must understand that the purpose is legal advice before the privilege will apply. See Pine Top Ins. Co. v. Alexander & Alexander Serv., Inc., No. 85 Civ. 9860, 1991 WL 221061 (S.D.N.Y. 1991) (party asserting privilege must prove that both parties understood the conversation was for legal advice).
If a document is prepared for simultaneous review by legal and non-legal personnel, it is possible that the document will not be considered privileged. Courts have typically held that such documents were not prepared primarily for the purpose of providing legal advice. See:
 
VISA U.S.A., Inc. v. First Data Corp., No. C-02-1786SJW(EMC) 2004 WL, at *4, 7 (N.D. Cal. Aug. 23, 2004). Rejecting proposition that primary purpose of communication must be legal and adopting a broader standard (used for work product purposes by the Ninth Circuit) that provides that where a communication was made "because of" a legal purpose, the privilege applied. Nonetheless, the court held that the documents at issue were not privileged because they would have been created in substantially the same way solely for business purposes.
 
United States v. Chevron Corp., No. C-94-1885, 1996 U.S. Dist. LEXIS 4154 at *6-7 (N.D. Cal. Mar. 13, 1996). If a document was prepared for purposes of simultaneous review by legal and non-legal personnel, it cannot be said that the primary purpose of the document is to secure legal advice.
 
In re 3 Com Corp. Sec. Litig, No. C-89-20480, 1992 WL 456813 (N.D. Cal. Dec. 10, 1992). Draft press release documents that were sent to counsel for review were not privileged since attorney's comments related to factual information and not legal advice.
 
N. Carolina Elec. Membership Corp. v. Carolina Power & Light Co., 110 F.R.D. 511 (M.D.N.C. 1986). Court ordered production of documents drafted by non-legal management and sent to in-house counsel because, among other things, the documents were simultaneously sent to both legal and non-legal personnel.
 
FTC v. TRW, Inc., 479 F. Supp. 160, 163 (D.D.C. 1979), aff'd, 628 F.2d 207 (D.C. Cir. 1980). Document that was prepared for legal and non-legal review was not considered to have been prepared primarily for purposes of obtaining legal advice.
Similarly, summary documents based on attorney-client communications, but which do not reveal any individual communications, may not be privileged if they were prepared for purposes other than securing legal advice. See:
 
Simon v. G.D. Searle & Co., 816 F.2d 397 (8th Cir. 1987). The "risk management" documents prepared from privileged case reserve information for general business purposes were not privileged, at least to the extent that they revealed aggregate claims information and not individual privileged communications.
 
In re Hillsborough Holdings Corp., 132 B.R. 478 (Bankr. M.D. Fla. 1991). Privilege does not protect compilations of litigation data made by an attorney for business rather than legal purposes. Where counsel collected information on judgments against the company and insurance coverage, court held data were for the business purposes of accounting and insurance planning, and not for the purpose of seeking or providing legal advice.
The issue of mixed legal and business purposes arises frequently in the context of communications with in-house counsel. The fact that in-house counsel often plays multiple roles in the corporation has caused many courts to apply heightened scrutiny in determining whether the elements of the attorney-client privilege have been established. While courts do not want to weaken the privilege, they are mindful that corporate clients could attempt to hide mountains of otherwise discoverable information behind a veil of secrecy by using in-house legal departments as conduits of otherwise unprivileged information. As a result, many courts impose a higher burden on in-house counsel to "clearly demonstrate" that advice was given in a legal capacity. See:
 
United States v. Adlman, 68 F.3d 1495, 1500 (2d Cir. 1995). In-house counsel who was also the company's Vice President for Taxes, resisted a summons served by the IRS for the production of a preliminary and final draft of a memorandum prepared by the company's auditors. The court rejected counsel's assertion of the attorney-client privilege because counsel failed to demonstrate that the auditor's work in this instance was to provide legal rather than business advice. The court found that there was no contemporaneous documentation, such as a separate retainer agreement, supporting the position that the auditor, in this task alone, was working under a different arrangement from that which governed the rest of its work with the company.
 
Deel v. Bank of Am., N.A., 227 F.R.D. 456, 458, 460 (W.D. Va. 2005). Observing that the privilege "applies to individuals and corporations, and to in-house and outside counsel" and refusing to order production of documents where party "clearly sent these documents to its in-house and outside counsel to facilitate legal services."
 
United States v. Philip Morris Inc., 209 F.R.D. 13, 17 (D.D.C. 2002). Court allowed government to depose corporation's in-house attorneys regarding non-privileged information relating to "public relations," "corporate conduct and positions," marketing strategies, and tobacco research and development. The court noted that "deponents are employees to whom Defendants have knowingly assigned substantial non-legal, non-litigation responsibilities, including corporate business, managerial, public relations, advertising, scientific, and research and development responsibilities. Testimony on these subjects. . . is not subject to attorney-client or work-product privilege protections."
 
United States v. ChevronTexaco, 241 F. Supp. 2d 1065, 1076 (N.D. Cal. 2002). "Because in-house counsel may operate in a purely or primarily business capacity in connection with many corporate endeavors, the presumption that attaches to communications with outside counsel does not extend to communications with in-house counsel." However, tax advice provided by in-house counsel who had both legal and business role was privileged. "Determining the tax consequences of a particular transaction is rooted virtually entirely in the law. The advisor must analyze the tax code; IRS rulings, decisions of the Tax Court, etc. Communications offering tax advice or discussing tax planning or the tax consequences of alternate business strategies are 'legal' communications."
 
Ames v. Black Entm't Television, No. 98 Civ. 0226, 1998 U.S. Dist. LEXIS 18053 (S.D.N.Y. Nov. 18, 1998). In order to protect communications with in-house counsel, a company must meet the burden of "clearly showing" that in-house counsel "gave advice in her legal capacity, not in her capacity as a business advisor."
 
United States v. Chevron Corp., No. C-94-1885, 1996 U.S. Dist. LEXIS 4154 at *8-9 (N.D. Cal. Mar. 13, 1996). No presumption of privilege can be made with respect to documents generated by in-house counsel. "Some courts have applied a presumption that all communications to outside counsel are primarily related to legal advice." See Diversified Indus., Inc. v. Meredith, 572 F.2d 596, 610 (8th Cir. 1977). In this context, the presumption is logical since outside counsel would not ordinarily be involved in the business decisions of a corporation. However, the Diversified presumption cannot be applied to in-house counsel because in-house counsel are frequently involved in the business decisions of a company. While an attorney's status as in-house counsel does not dilute the attorney-client privilege (citing Upjohn), "a corporation must make a clear showing that in-house counsel's advice was given in a professional legal capacity."
 
Kramer v. Raymond Corp., No. 90-5026, 1992 U.S. Dist. LEXIS 7418 at *3-4 (E.D. Pa. May 29, 1992). "The attorney-client privilege is construed narrowly. This is especially so when a corporate entity seeks to invoke the privilege to protect communications to in-house counsel. Because in-house counsel may play a dual role of legal advisor and business advisor, the privilege will apply only if the communication in question was made for the express purpose of securing legal not business advice."
 
Teltron, Inc. v. Alexander, 132 F.R.D. 394, 396 (E.D. Pa. 1990). Teltron asserted the attorney-client privilege during the deposition of Siegel, who had been at various times Teltron's outside counsel, Executive VP and in-house counsel, and President. The court overruled assertions of privilege on the ground that Teltron had failed to meet its burden of proving that deposition questions sought legal advice rather than business advice on the ordinary business activities of the company. "As a general rule, an attorney who serves a client in a business capacity may not assert the attorney-client privilege because of the lack of a confidential relationship." When a corporation seeks to protect communications made by an attorney who serves the corporation in a legal and business capacity, the corporation "must clearly demonstrate" that advice was given in a professional legal capacity. This is to prevent a corporation from shielding business transactions "simply by funneling their communications through a licensed attorney."
E. Asserting the Privilege
1. Procedure for Asserting the Privilege
The proponent of the privilege must make a timely objection to the disclosure of a privileged communication before the communication is actually disclosed. Failure to object may have disastrous consequences for litigants because it may constitute a waiver of the privilege. See 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5507 (1986). See also:
 
Litton Sys., Inc. v. AT&T, 91 F.R.D. 574 (S.D.N.Y. 1981), aff'd, 700 F.2d 785 (2d Cir. 1983). Failure to assert the privilege constitutes waiver.
 
Evenflo Company, Inc. v. Hantec Agents Ltd., No. 3-:05-CV-346, 2006 WL 2945440, at *7 (S.D. Ohio Oct. 13, 2006). Defendant's failure to produce privilege log at the time of disclosure of privileged documents constituted waiver of privilege.
 
Moloney v. United States, 204 F.R.D. 16, 18-19 (D. Mass. 2001). Though objections were made at deposition based on attorney-client privilege and work product protection, failure to object on basis of self-critical analysis and state law privileges waived objection on those grounds.
 
Large v. Our Lady Of Mercy Med. Ctr., No. 94 Civ. 5986, 1998 WL 65995, at *4 (S.D.N.Y. Feb. 17, 1998). Producing privileged communications to opponent without noting objection to the production in a privilege log or in correspondence with the judge constituted waiver.
 
FDIC v. Ernst & Whinney, 137 F.R.D. 14, 19 (E.D. Tenn. 1991). Failure to object to the use of an inadvertently produced document constituted waiver.
 
Baxter Travenol Labs., Inc. v. Abbott Labs., 117 F.R.D. 119, 120 (N.D. Ill. 1987). Failure to assert the privilege for several months when the party knew that inadvertently produced documents were in the hands of an opponent constituted waiver.
It is generally recognized that the privilege belongs to the client and that the client has the sole power to waive it. See Douglas v. DynMcDermott Petroleum Operations, Co., 144 F.3d 364, 372 (5th Cir. 1998) (in-house counsel breached ethical duties by revealing client confidences during the course of an investigation into alleged Title VII violations). However, an attorney may assert the privilege on the client's behalf. Haines v. Liggett Group, Inc., 975 F.2d 81, 90 (3d Cir. 1992).
A client will be prevented from invoking the privilege during discovery if (1) the client intends to waive the privilege later by using protected information at trial and (2) the opponent needs the information to defend against the revelations. See Int'l Tel. and Tel. Corp. v. United Tel. Co., 60 F.R.D. 177, 186 (M. D. Fla. 1973).
A party asserting the privilege should provide an explanation of why the items are privileged and must prove the elements necessary to establish the privilege. United States v. Zolin, 491 U.S. 554 (1989); Hawkins v. Stables, 148 F.3d 379, 383 (4th Cir. 1998) (proponent of the privilege must prove all elements of the privilege are met); von Bulow v. von Bulow, 811 F.2d 136, 144 (2d Cir. 1987) (proponent must prove all essential elements of the privilege); In re Unisys Corp. Retiree Med. Benefits ERISA Litig., No. MDL 969, 1994 WL 6883 (E.D. Pa. Jan. 6, 1994) (party invoking the privilege must establish that the elements of the privilege have been met); In re Perrier Bottled Water Litig., 138 F.R.D. 348, 351 (D. Conn. 1991) (same). Inadmissible evidence may be considered by the court while determining whether the preliminary facts of the privilege have been demonstrated by the proponent of the privilege. Fed. R. Evid. 104(a).
Blanket objections will not effectively assert the privilege. See Holifield v. United States, 909 F.2d 201, 203 (7th Cir. 1990) (blanket objection that the documents requested by the government in a subpoena were protected by the attorney-client privilege did not invoke the privilege); Navigant Consulting, Inc. v. Wilkinson, 220 F.R.D. 467, 473 (N.D. Tex. 2004) (same); 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5507 (1986). For example, in Eureka Financial Corp. v. Hartford Accident and Indemnity Co., 136 F.R.D. 179, 186 (E.D. Cal. 1991), the District Court for the Eastern District of California found that the defendant's blanket objection to the discovery of privileged communications warranted sanctions against the defendant's counsel. Similarly, in In re Air Crash at Taipei, Taiwan on October 31, 2000, 211 F.R.D. 374, 376 n.2 (C.D. Cal. 2002), the court determined that, notwithstanding its blanket assertion of privilege, defendant airline waived its ability to assert the privilege by failing to produce a privilege log.
Mere conclusory assertions or vague representations of facts that are the basis for the privilege claim are also insufficient to meet the burden of establishing the attorney-client privilege. See United States v. Constr. Prods. Research, Inc., 73 F.3d 464 (2d Cir. 1996) (if a party invoking a privilege does not provide sufficient detail -- through privilege log, affidavit or deposition testimony -- to demonstrate fulfillment of all of the legal requirements for application of the privilege, the claim will be rejected); Rosario v. Copacabana Night Club, Inc., No. 97 Civ. 2052, 1998 WL 273110, at *11 (S.D.N.Y. May 28, 1998) (plaintiff did not effectively assert the privilege by vaguely representing to the court that an attorney-client relationship may have existed at the time the communications in question were made); CSC Recovery Corp. v. Daido Steel Co., No. 94 Civ. 921-4, 1997 WL 661122, at *2 (S.D.N.Y. Oct. 22, 1997) (conclusory allegations that elements of privilege are met is insufficient to invoke the privilege). But see United States v. British Am. Tobacco (Invs.) Ltd., 387 F.3d 884, 891-92 (Cir. D.C. 2004) (holding that a general objection as to the scope of a document request preserved the producing party's ability to subsequently assert an objection based on privilege where the party asserting the privilege failed to initially log a document as privileged but believed it to be within the objection to the scope of the request).
As an initial matter, the burden is on the party asserting the privilege to establish its existence. See In re Grand Jury Subpoena, 415 F.3d 333, 338-39 (4th Cir. 2005) ("The burden is on the proponent of the attorney-client privilege to demonstrate its applicability."); United States v. Bisanti, 414 F.3d 168, 170 (1st Cir. 2005) (same); United States v. BDO Seidman, 337 F.3d 802 (7th Cir. 2003) ("The mere assertion of a privilege is not enough; instead, a party that seeks to invoke the attorney-client privilege has the burden of establishing all of its essential elements"); SEC v. Beacon Hill Asset Mgmt. LLC, No. 02CIV8855LAKHBP, 2004 WL 1746790, at *3 (S.D.N.Y. Aug. 3, 2004). Once the party asserting the existence of the privilege establishes a prima facia case that the privilege applies, the party seeking the production or other disclosure of the protected information bears the burden of establishing that an exception to the privilege applies. See Mass. Eye and Ear Infirmary v. QLT Phototherapeutics, Inc., 412 F.3d 215, 225 (1st Cir. 2005).
a. Privilege Logs
The use of privilege logs and affidavits of the authors and recipients of the documents containing privileged communications are common ways in which the privilege is invoked. See CSC Recovery Corp. v. Daido Steel Co., No. 94 Civ. 9214, 1997 WL 661122 at *11 (S.D.N.Y. Oct. 27, 1997) (privilege logs and affidavits were sufficient to assert the privilege). A privilege log should contain basic information about each separate document over which a party asserts a privilege. See Jack Winter, Inc. v. Koratron Co., 54 F.R.D. 44 (N.D. Cal. 1971) (providing an example of a privilege log).
The case law reflects differing views about the detail to be included on a privilege log. In general, to be sufficient, a privilege log must set out: attorney and client, nature of the document, all receiving or sending persons or entities shown on the document, and the date the document was prepared or dated. See, e.g., Jack Winter, Inc. v. Koratron Co., 54 F.R.D. 44 (N.D. Cal. 1971). Other courts have required more detailed descriptions. See:
 
St. Joe Co. v. Liberty Mutual Ins. Co., No. 3:05-cv-1266-J-25MCR, 2006 WL 3391208, at *5 (M.D. Fla. Nov. 22, 2006). Defendant's privilege log of withheld communications between counsel and defendant's employees inadequate to protect privilege where log failed to specify or allege the communications have not been disclosed to those beyond corporate control group, to provide adequate subject matter descriptions, and failed to identify positions or authors and recipients of some of the documents, but allowing defendants to amend log with affidavits, deposition testimony, or other evidence necessary to establish elements of attorney-client privilege over documents.
 
Koehler v. Bank of Bermuda, Ltd., No. M18-302, 931745, 2003 WL 289640, at *10 (S.D.N.Y. Feb. 11, 2003). Sanctioning defendant in part based on deficient privilege log that did not reveal circumstances in which purportedly privileged documents were created.
 
Am. Sav. Bank, FSB v. UBS Painewebber, Inc., No. M8-85, 2002 WL 31833223, at *1-2 (S.D.N.Y. 2002). Noting that local rules require identification of documents on privilege log by type of document, date of creation, and identification of subject matter and that assertion of privilege requires production of privilege log notwithstanding burden of detailing each privileged document.
 
In re Diet Drugs (Phentermine, Fenfluramine, Dexfenfluramine) Products Liab. Litig., No. 1203, 2000 WL 1545028, at *3 (E.D. Pa. Oct. 12, 2000). Privilege log listing date, author, and "skeletal" subject matter description was insufficient to establish deliberative process privilege in response to FOIA request.
 
In re Gen. Instrument Corp. Secs. Litig, 190 F.R.D. 527, 532 (N.D. Ill. 2000). "Case law, and Fed.R.Civ.P. 26(b)(5) should have made it clear to defendant, at some point over the last three years, that its privilege log was woefully deficient. When the plaintiff pointed out obvious flaws in the log, however, the defendant stridently refused to provide required information. It is apparent from review of the privilege log that defendants are under the mistaken impression either that plaintiffs must prove documents are not privileged, or that it is the court's burden to establish the applicability of the privilege as to defendant's documents. This is all the more clear now that defendant, in the eleventh hour, asks for an in camera inspection of the documents. Defendants have had all the opportunity afforded by the last three years to support their claims of attorney-client privilege. Even if we were to reject the application of the fiduciary exception to the attorney-client privilege, upon a close and studied review of the materials submitted by defendant, which includes defendant's privileged log, we would not grant an in camera inspection in this case. Defendant has had ample opportunity to carry its burden as to establishing the privilege and has failed."
 
Bristol-Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc., No. 95 Civ. 8833, 1998 WL 474206, at *2 (S.D.N.Y. Aug. 12, 1998). "The Court . . . deplores the presentation of a privilege log arranged neither chronologically nor by subject matter, suggesting that the discovery documents, or the log, may have been arranged as a litigation tactic to inconvenience opposing counsel, which, in this case, has the added result of making the Court's review more difficult and more time-consuming."
 
Torres v. Kuzniasz, 936 F. Supp. 1201, 1208 (D.N.J. 1996). Party claiming privilege must specify the date of the documents, the author, the intended recipient, the names of all people given copies of the document, the subject of the document and the privilege or privileges asserted.
 
Bowne Inc. v. AmBase Corp., 150 F.R.D. 465, 474 (S.D.N.Y. 1993). Typically a log will identify the parties to the withheld communication and "sufficient detail to permit a judgment as to whether the document is at least potentially protected from disclosure." The Bowne court recognized that additional required information will typically be supplied by affidavit or deposition (such as the relationship of the listed parties to the litigation, the preservation of confidentiality, and the reason for disclosure to a party). The court concluded that a log which listed for each document the date, author, address, other recipients, the type of document (i.e., memo or letter), the type of protection claimed, and a very skeletal description of the subjects was insufficient.
 
Allendale Mut. Ins. Co. v. Bull Data Sys., Inc., 145 F.R.D. 84 (N.D. Ill. 1992). "For each document, the log should identify the date, the author and all recipients, along with their capacities. The log should also describe the document's subject matter, purpose for its production, and a specific explanation of why the document is privileged or immune from discovery. These categories, especially this last category, must be sufficiently detailed to allow the court to determine whether the discovery opponent has discharged its burden. . . . Accordingly, descriptions such as 'letter re claim,' 'analysis of claim' or 'report in anticipation of litigation' -- with which we have grown all too familiar -- will be insufficient. This may be burdensome, but it will provide a more accurate evaluation of a discovery opponent's claims and takes into consideration the fact that there are no presumptions operating in the discovery opponent's favor."

 But see:

A.I.A. Holdings, S.A. v. Lehman Bros., Inc., No. 97 Civ. 4978, 2002 WL 31385824, at *4 (S.D.N.Y. Oct. 21, 2002) (No. 97 Civ. 4978(LMM)(HB). Criticizing view that Bowne, cited above, requires party asserting the privilege to offer evidence sufficient to establish privilege as to each item listed on log. Rather, assertion of privilege can be supplemented as to challenged documents only.
 
In re Papst Licensing, GmbH Patent Litig., No. CIV. A. MDL 1298, 2001 WL 1135268, at *2 (E.D. La. Sept. 19, 2001). Observing that ordinarily privilege logs require detailed disclosure but noting that courts may allow departures from that requirement and concluding that because listed communications between attorney and client were within core of the privilege, detailed descriptions would be unnecessary.
The Federal Rules of Civil Procedure now specifically provide guidance on the contents of a privilege log:
 
[A party] shall describe the nature of the documents, communications, or things not produced or disclosed in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the applicability of the privilege or protection.
 
FED. R. CIV. P. 26(b)(5) (1993 Amendments); see also Nevada Power Co. v. Monsanto Power Co., 151 F.R.D. 118, 121 (D. Nev. 1993). The Advisory Committee's Notes recognize that the amount and type of information required on a privilege log could be scaled back if voluminous materials are involved. FED. R. CIV. P. 26(b)(5) advisory committee's note. See also In re Papst Licensing, GmbH Patent Litig., NO. CIV. A. MDL 1298, 2001 WL 1135268, at *2 (E.D. La. Sep 19, 2001). In general, the description should be sufficient "to permit the adversary to make an intelligent assessment as to the applicability of a privilege." SEC v. Beacon Hill Asset Mgmt. LLC, No. 02CIV8855LAKHBP, 2004 WL 1746790, at *11 (S.D.N.Y. Aug. 3, 2004).
When listing electronic mail on privilege logs, it is important that the relevant privilege log description note the basis for asserting the privilege over both the email itself and its attachment (or other forwarded communication). For example, in Beacon Hill, Beacon Hill failed to describe the privileged content of many of the attachments to electronic mail documents that it otherwise described as privileged. As a result, the court held that Beacon Hill waived the privilege with respect to these documents. 2004 WL 1746790, at *11-12.
Some courts have provided specific requirements for privilege logs in local rules. See, e.g., Ruran v. Beth El Temple, 226 F.R.D. 165, 168-69 (D. Conn. 2005); Beacon Hill, 2004 WL 1746790, at *3. Failure to meet the requirements of such local rules may result in a waiver of the privilege. See GFI, Inc. v. Franklin Corp., 265 F.3d 1268, 1273 (Fed. Cir. 2001); 105 Street Assocs., LLC v. Greenwich Ins. Co., No. 05 Civ. 9938(VM)(DF), 2006 WL 3230292, at *3-4 (S.D.N.Y. Nov. 7, 2006) (noting that judges in that district hold that an "unjustified failure to list privileged documents on the required log of withheld documents in a timely and proper manner" in accordance with Local Rule 26.2 "operates as a waiver of any applicable privilege."). But see Dorf & Stanton Communications, Inc. v. Molson Breweries, 100 F.3d 919, 928 (Fed. Cir. 1996) ("Even if there were inadequate initial compliance with the local rule, if the inadequacy was remedied and absent prejudice the consequence is not automatic loss of the privilege."); Rambus, Inc. v. Infineon Techs. AG, 220 F.R.D. 264, 274 (E.D. Va. 2004) (holding that, where party seeking production failed to meet and confer with counsel asserting privilege, there was no waiver even where initial privilege log failed to meet requirements of local rule).
Failure to provide sufficient detail in privilege logs may have severe consequences, including waiver of the privilege. For example, in In re General Instrument Corp. Sec. Litig., 190 F.R.D. 527, 532 (N.D. Ill. 2000), the District Court for the Northern District of Illinois ordered the defendant to produce 396 documents which the defendant claimed were privileged. The court's decision to compel the production of those documents was based on the fact that the defendant's privilege log contained "sketchy, cryptic, often mysterious descriptions of subject matter" which were insufficient to fulfill the defendant's burden of establishing the elements of the privilege for each document. Id. at 532; see also Felham Enters. (Cayman) Ltd. v. Certain Underwriters at Lloyds, No. Civ.A. 02-3588 C/W 0, 2004 WL 2360159, at *3 (E.D. La. Oct. 19, 2004) (finding a waiver where defendant failed to produce a timely privilege log and the log it ultimately produced failed to sufficiently describe withheld documents); B.F.G. v. Ameritech Corp., No. 99 C 4604, 2001 WL 1414468 (N.D. Ill. Nov. 13, 2001) (court ordered hundreds of documents produced and imposed sanctions where party failed to provide adequate privilege log and, based on in camera review, improperly asserted privilege); ConAgra, Inc. v. Arkwright Mut. Ins. Co., 32 F. Supp. 2d 1015, 1018 (N.D. Ill. 1999) (directing the defendant to produce 54 documents withheld and 10 additional documents initially produced in redacted form because the defendant failed to include sufficient descriptions of the documents in its privilege log to establish the privilege).
Because documents included on a privilege log may often be the most significant documents in a case, it is important to attend to issues regarding privilege logs early in a litigation to ensure that a party has all important discoverable documents by the time depositions begin. A party is required to claim privilege for documents produced in a timely manner. See Marx v. Kelly, Hart & Hallman, P.C., 929 F.2d 8, 12 (1st Cir. 1991); In re DG Acquisition Corp., 151 F.3d 75, 84 (2d Cir. 1998) (party responding subpoena must assert privilege with 14 days.). While some courts will permit parties to submit privilege logs sometimes months after documents are produced leaving it to the parties to work out the when the logs should be exchanged, other courts may demand that the logs be disclosed at the time of the initial production or shortly thereafter. See First Savs. Bank, F.S.B. v. First Bank System, Inc., 902 F. Supp. 1356, 1360 (D. Kan. 1995) rev'd on other grounds, 101 F.3d 645 (10th Cir. 1996) (Rule 26 "contemplates that the required notice and information is due upon a party withholding the claimed privileged material. Consequently . . . the producing party must provided the [privilege log] at the time it is otherwise required to produce the documents."). Importantly, a party is responsible for logging all documents in its possession, custody, or control, which may include documents held by its current and former counsel. See Hobley v. Burge, 226 F.R.D. 312, 320-23 (N.D. Ill. 2005) (finding a waiver of work product protection where the City of Chicago failed to log documents in the possession of counsel providing services in prior litigation).
Though failure to list documents on a privilege log may result in waiver of the privilege, such waiver is not necessarily automatic, at least where the document at issue is subject to another objection. In United States v. Philip Morris Inc., 347 F.3d 612, 621 (D.C. Cir. 2003) the government moved to compel production of a document not listed on the defendant's privilege log. The lower court held that, notwithstanding any other applicable objections made by the defendant the defendant waived the privilege. The D.C. Circuit reversed, holding that it was error not to consider the defendant's objections to production (other than those based on the attorney-client privilege) prior to finding a waiver. Id. at 954. The appellate court held that "if a broad discovery request includes an allegedly privileged document, and if there is an objection to the scope of the request, the court should first decide whether the objection covers the document." Id. Thus, the court held that only after an objection (other than one based on privilege) is resolved must a party list documents falling within the objection (assuming the objection is allowed). In a subsequent proceeding, United States v. British Am. Tobacco (Invs.) Ltd., 387 F.3d 884, 891-92 (Cir. D.C. 2004), the D.C. Circuit again reviewed the defendant's objections and failure to log the responsive document. Though the court concluded that none of the defendant's objections applied, it nonetheless again reversed the lower court and held that, because the defendant had a reasonable expectation that its objection applied, waiver of the attorney-client privilege was an excessive sanction. It therefore again reversed and directed the lower court to allow the defendant to log the document at issue and further allow the government to challenge the defendant's assertion of privilege.
b. Electronic Mail and Other Electronic Data: Cost Shifting
The advent of electronic mail has created particularly vexing problems for parties seeking to assert the attorney-client privilege. Because of the enormous volume of electronic mail and other electronic data produced by the modern office, and because of the practice of archiving such documents in (often in compressed or otherwise inaccessible back-up form), the production of documents can be extremely expensive. See., e.g., Rowe Entm't, Inc. v. William Morris Agency, Inc., 205 F.R.D. 421, 429 (S.D.N.Y.2002); Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 317-20 (S.D.N.Y. 2003); see also Manual for Complex Litigation (4th ed. 2004) § 11.446.
The federal rules generally place the burden of paying for compliance with a discovery request on the respondent, and early courts were not sympathetic to the beleaguered keeper of electronic records. See In re Brand Name Prescription Drugs Antitrust Litig., Nos. 94 C 897, MDL 997, 1995 WL 360526, at *2 (N.D. Ill. June 15, 1995); Daewoo Elecs. Co., Ltd. v. United States, 10 C.I.T. 754, 757, 650 F. Supp. 1003, 1006 (Ct. Int'l Trade 1986) ("The normal and reasonable translation of electronic data into a form usable by the discovering party should be the ordinary and foreseeable burden of a respondent in the absence of a showing of extraordinary hardship.").
More recent decisions have shown more openness to spreading this substantial burden to the party seeking electronic discovery on a showing of undue burden. For example, Rowe set forth a seven factor test in determining when cost shifting is appropriate:
 
(1) the specificity of the discovery requests; (2) the likelihood of discovering critical information; (3) the availability of such information from other sources; (4) the purposes for which the responding party maintains the requested data (5) the relative benefit to the parties of obtaining the information; (6) the total cost associated with production; (7) the relative ability of each party to control costs and its incentive to do so; and (8) the resources available to each party.
 
Rowe, 205 F.R.D. at 429.
Subsequently, in Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 321-22 (S.D.N.Y. 2003), the court set forth a similar test that has been broadly accepted by other courts employing a cost-shifting analysis. This test includes an analysis of: (1) the extent to which the request is specifically tailored to discover relevant information; (2) the availability of such information from other sources; (3) the total cost of production, compared to the amount in controversy; (4) the total cost of production, compared to the resources available to each party; (5) the relative ability of each party to control costs and its incentive to do so; (6) the importance of the issues at stake in the litigation; and (7) the relative benefits to the parties of obtaining the information. The Zubulake court modified the Rowe test to account for the requirement in Rule 26 that courts look to the "amount in controversy or the importance of the issues at stake in the litigation" in requiring production. See also Hagemeyer N. Am., Inc. v. Gateway Data Scis. Corp., 222 F.R.D. 594, 599-601 (E.D. Wis. 2004) (adopting the Zubulake test).
Other arrangements can be made between parties reducing the expense associated with reviewing and producing voluminous electronic documents for privilege and relevance, including requiring "attorneys' eyes only" review and agreement that production of privileged documents will not constitute a waiver. Id. at 432.; see also Manual for Complex Litigation (4th ed. 2004) § 11.433.
 
See also:
 
In re Commercial Fin. Servs., Inc., 247 B.R. 828, 838, 847-856 (Bankr. N.D. Okla. 2000). Entering a protective order in which debtor could allow inspection of documents subject to confidentiality agreements and holding that such an arrangement would not affect a waiver of the attorney-client privilege or work product doctrine. Debtor had over 8,000 bankers' boxes of documents and 8,500 magnetic tapes of information which it could not review for privilege. The court observed that "[i]n the absence of a protective order, CFS is justifiably unwilling to determine whether to waive privileges in any particular documents until all have been reviewed. Such a review would result in a significant delay in the administration of the estate and would be extremely costly to the estate." The Court concluded that CFS would not be disclosing documents for tactical advantage, but concluded that if, in the future, it did, such action would create a waiver.
 
Wiginton v. CB Richard Ellis, Inc., No. 02 C 6832, 2004 WL 1895122, (N.D. Ill. Aug. 10, 2004). Following Rowe and Zubulake and allocating 75% of the cost of restoring backup tapes, searching data, and transferring it to electronic data viewer to the plaintiff seeking production where expense of production was enormous and only limited numbers of emails would be responsive.
 
Convolve, Inc. v. Compaq Computer Corp., 223 F.R.D. 162, 169-70 (S.D.N.Y. 2004). Denying Convolve's request for access to Compaq's hard drives where Compaq's production of documents had "for the most part conformed" to the court's orders.
 
Medtronic Sofamor Danek, Inc. v. Michelson, No. 01-2373-MIV, 2003 WL 21468573 (W.D. Tenn. May 13, 2003). Ordering the production of a sample of 993 back-up tapes with a 61 terabyte data volume where the parties agreed the tapes probably contained relevant data and requiring the requesting party to assume 40% of the cost of producing the sample data and the entire cost of additional requested data.
 
Murphy Oil USA, Inc. v. Fluor Daniel, Inc., 2002 WL 246439, at *3-9 (E.D. La. Feb. 19, 2002). Following Rowe and shifting cost of reconstituting backup data to the requesting party, but refusing to shift the responding parties' cost of conducting a privilege review of these documents.
Recognizing the difficulties associated with electronic discovery, the federal Civil Rules Advisory Committee proposed changes in May 2004 to Rules 16, 26 and 34 that specifically address electronic discovery. The Committee revised its proposal in August 2004, and the proposed changes are awaiting final action by the Committee. (The proposed rules, as revised, are available at the federal courts website at http://www.uscourts.gov/rules/comment2005/CVAug04.pdf#page=24.). Proposed Rule 16 would expressly provide for parties to include electronic discovery and privilege waiver agreements as part of their scheduling orders. Proposed Rule 26 would establish a two-tier structure for discovery under which a party would be obligated to provide relevant "reasonably accessible" electronically stored data. A party would not be obligated to provide discovery of electronic data that it identifies as not reasonably accessible, such as legacy data from backup tapes. Material that is not reasonably accessible would only be subject to production on a showing of good cause by the requesting party. Recognizing the enormous problem of reviewing electronically stored data for privilege issues, Proposed Rule 26(b)(5) would allow a party to produce documents without conducting a privilege review and instead would allow a party to assert the privilege subsequent to production. Proposed Rule 34 would distinguish "documents" from electronically stored information, and allow the requesting party to seek discovery of either or both forms of information.
c. In Camera Review.
Preliminary questions pertaining to the existence of the privilege are to be decided by the court. Fed. R. Evid. 104(a). At common law, a judge could not require disclosure of communications in order to make a determination of their privileged status. See 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5507 (1986); see also CALIF. EVID. CODE § 915. However, in almost every case, federal courts have supported the power of the judge to order disclosure of documents to establish a claim of privilege. See:
 
United States v. Zolin, 491 U.S. 554, 568-69 (1989). "This Court has approved the practice of requiring parties who seek to avoid disclosure of documents to make the documents available for in camera inspection." (citing Kerr v. United States Dist. Court for the N. Dist. of Cal., 426 U.S. 394, 404-405 (1976)).
 
Am. Nat'l Bank and Trust Co. v. Equitable Life Assurance Soc., 406 F.3d 867, 878-80 (7th Cir. 2005). Detailing an extensive discovery fight that ended in a magistrate's review of a sample of disputed documents listed on a privilege log. After the magistrate concluded that the number of unprivileged documents in the sample implied bad faith, he ordered production of all documents on the log. The Circuit Court reversed, holding that there was no finding of bad faith and indicating that in camera inspection of all documents on the log would have been more appropriate.
 
Holifield v. United States, 909 F.2d 201, 204 (7th Cir. 1990). Holding that "[o]nly when the district court has been exposed to the contested documents and the specific facts which support a finding of privilege under the attorney-client relationship for each document can it make a principled determination as to whether the attorney-client privilege in fact applies."
 
In re Bevill, Bresler & Schulman Asset Mgmt. Corp., 805 F.2d 120, 125 n.2 (3d Cir. 1986). Upholding use of in camera inspection to prove privileged nature of documents.
 
In re Berkley & Co, 629 F.2d 548, 555 n.9 (8th Cir. 1980). Utilizing in camera inspection to determine if documents were privileged.
 
Bland v. Fiat Allis N. Am., Inc., No. 02 C 69, 2002 WL 31409578, at *1 (N.D. Ill. Oct. 23, 2002). In camera review necessary to verify claims of privilege in face of challenge.
 
Bowne Inc. v. AmBase Corp., 150 F.R.D. 465, 475 (S.D.N.Y. 1993). In camera review is not to become a routine undertaking in lieu of an adequate privilege log, particularly when there are voluminous documents.
 
Nedlog Co. v. ARA Servs., Inc., 131 F.R.D. 116, 117 (N.D. Ill. 1989). The court found that Zolin legitimizes the practice of requiring the submission of documents for in camera inspection.
In fact, some courts have held that it is within a district court's power to order the production of documents for in camera review, sua sponte. See, e.g., Fed. Election Comm'n v. The Christian Coal., 178 F.R.D. 456 (E.D. Va. 1998) (party's due process rights were not violated by district court's in camera review of purportedly privileged documents). Courts also have the discretion to reject a party's request for in camera review particularly where it finds that review is unnecessary and a waste of judicial resources. See Guy v. United Healthcare Corp., 154 F.R.D. 172, 176 (S.D. Ohio 1993); but see Subpoena Duces Tecum Served Upon Attorney Potts, 796 N.E.2d 915 (Ohio 2003) (when a criminal defendant asserts that a subpoena seeks materials protected by the attorney-client privilege, a court must first review the disputed materials in camera before ruling on the assertion of privilege).
While in camera inspection may be used by a federal court to determine whether the privilege applies to certain documents, submitting documents to the court for in camera inspection may not be sufficient in and of itself to establish the attorney-client privilege. See Claude P. Bamberger Int'l, Inc. v. Rhom and Haas Co., Civ. No. 96-1041, 1997 U.S. Dist. LEXIS 22770 at *3 (D.N.J. Aug. 12, 1997) (holding that "submission of the memorandum for an in camera review is not a substitute for the proper privilege log"); Navigant Consulting, Inc. v. Wilkinson, 220 F.R.D. 467, 473-74 (N.D. Tex. 2004). Because in camera inspection consumes the Court's time, parties should exercise care to ensure that in camera inspection is necessary to establish the privilege without revealing privileged information to an adversary. Unnecessary requests for in camera inspection will likely frustrate the court and have negative results. See, e.g., B.F.G. of Ill., Inc. v. Ameritech Corp., No. 99 C 4604, 2001 WL 1414468, at *7 (N.D. Ill. Nov. 8, 2001) ("Unless in-house counsel and litigation counsel are scrupulous in their assertion of privilege, the courts will be asked to review all documents in which an in-house attorney's involvement is the basis for assertion of privilege or work product. That would impose an unbearable burden ... Thus, where the court finds that a party used in-house counsel to apply a veneer of privilege to non-privileged business communications, the court should impose costs on that party."); In re Uranium Antitrust Litig., 552 F. Supp. 517, 518 (N.D. Ill. 1982) (directing parties to produce approximately 40,000 documents and denying request for in camera inspection of those documents where parties made only blanket assertions of privilege and noted in their briefs to the court that individual inspection of the documents by their senior attorneys for purposes of determining whether they were privileged would be too time consuming).
d. Maintaining the Privilege after Government Seizure of Documents or Other Monitoring of Communications
In certain circumstances, the government may seize files that are potentially subject to the attorney-client privilege, whether from a law office or otherwise. Where such a seizure is made pursuant to a valid warrant, courts have generally approved the government's practice of conducting an initial review of the documents with a "privilege team" of attorneys not involved in the investigation. See United States v. Derman, 211 F.3d 175, 176, 181-82 (1st Cir. 2000); United States v. Grant, No. 04 CR 207BSJ, 2004 WL 1171258, at *2 (S.D.N.Y. May 25, 2004); United States v. Derman, 23 F. Supp. 2d 95, 100-02 (D. Mass. 1998); see also In re Guantanamo Detainee Cases, 344 F. Supp. 2d 174, 186-87 (D.D.C. 2004) (approving the use of government privilege teams to review legal mail between counsel and government detainees at the Guantanamo detention facility); United States v. Esawi, No. 02 CR 038, 2003 WL 260678, at *4 (N.D. Ill. Feb. 3, 2003).
In using a privilege team to review documents, the government must be careful to assure that the party asserting a privilege has an opportunity to fairly assert the claim before members of a trial team have access to potentially privileged documents. See United States v. Kaplan, No. 02 CR. 883(DAB), 2003 WL 22880914, at *4-12 (S.D.N.Y. Dec. 5, 2003). The use of such teams is subject to abuse and may be particularly inappropriate where the seized documents involve an attorney's representation of a client in a criminal proceeding. See United States v. Stewart, No. 02 CR 396 JGK, 2002 WL 1300059, at *6-7 (S.D.N.Y. June 11, 2002) (appointing a special master to review files, rather than a privilege team as requested by the government, and reviewing cases in which ethical firewalls of privilege teams became problematic).
In In re Grand Jury Subpoenas 04-124-03 and 04-124-05, 454 F.3d 511, 522-23 (6th Cir. 2006), the Sixth Circuit held that where the government subpoenas documents from a third party in connection with a grand jury proceeding, the target of the investigation may screen the documents for privilege prior to their production to the government. In that case, the government subpoenaed Venture Holdings for documents related to the now bankrupt entity's former controlling partner, Larry Winget. Winget intervened and petitioned the court for permission to review the documents for privilege before they were produced to the government. In rejecting the government's argument that a "taint team" be allowed to conduct the review, the Sixth Circuit found that the need for secrecy surrounding grand jury proceedings and investigation of criminal conduct did not outweigh an individual's privilege protections.
Because of the dangers associated with government abuse, and the appearance of impropriety, see, e.g., Kaplan, 2003 WL 22880914, at *10-12; Stewart, No. 02 CR 396 JGK, 2002 WL 1300059, at *6-7, the better practice in such cases may be for the party asserting the privilege to submit a privilege log of documents subject to the privilege prior to the government's review. See United States v. Segal, 313 F. Supp. 2d 774, 779-80 (N.D. Ill. 2004).
e. Imposition of Sanctions For Failure To Comply With Discovery Rules
Courts have wide discretion in forming discovery sanctions, which can very from the imposition of costs associated with bringing a motion to compel to a waiver of the privilege, the reversal of evidentiary presumptions, or the barring of testimony or resolution of issues against the party improperly asserting the privilege. Residential Funding Corp. v. Degeorge Fin. Corp., 306 F.3d 99, 107 (2d Cir. 2002) (noting wide discretion vested in district court to impose discovery sanctions). In extreme cases, a court may order dismissal of an entire case or enter a directed verdict in favor of a plaintiff where the defendants fails to comply with discovery obligations. See Maynard v. Nygren, 332 F.3d 462, 468 (7th Cir. 2003) (holding that on finding based on clear and convincing evidence of willfulness, bad faith or fault in refusing to comply with discovery obligations, court may order dismissal of claim); Metro. Opera Ass'n, Inc. v. Local 100, 212 F.R.D. 178 (S.D.N.Y. 2003) (directing a verdict in favor of the plaintiff where the defendant engaged in extensive and willful discovery abuse). Compare:
 
Am. Nat'l Bank and Trust Co. v. Equitable Life Assurance Soc., 406 F.3d 867, 878-80 (7th Cir. 2005). Reversing magistrate's order requiring production of all documents on privilege log after identifying various non-privileged but logged documents, and holding that there was no finding of bad faith justifying such a sanction.
 
Heartland Bank v. Heartland Home Fin., Inc., 335 F.3d 810, 816-17 (8th Cir. 2003). Reversing district court order barring witness and suggesting less draconian sanctions such as fees or exclusion of evidence on certain topics.
 
Heath v. F/V Zolotoi, 221 F.R.D. 545, 552-53 (W.D. Wash. 2004). Entering a directed verdict against plaintiff that failed to produced various witness statements and willfully failed to list those statements on any privilege log.
 
Koehler v. Bank of Bermuda, Ltd., No. M18-302, 931745, 2003 WL 289640, at *10-14 (S.D.N.Y. Feb. 11, 2003). Where bank repeatedly failed to meet discovery requirements and produced an inadequate privilege log, court declined to grant dispositive relief on personal jurisdiction issue to Koehler, but recognizing prejudice caused by delay, reversed burden of proof and required bank to demonstrate that it was not subject to court's jurisdiction.
 
E.E.O.C. v. Safeway Store, Inc., NO. C-00-3155 TEH(EMC), 2002 WL 31947153, at *2-3 (N.D. Cal. Sept. 16, 2002). Observing that party's delay in producing privilege log could result in waiver as to privilege, but declining to find waiver where opposing party was not taken off guard by delay and did not suffer litigation prejudice, but granting fees as sanction.
 
B.F.G. Inc. v. Ameritech Corp., 2001 WL 1414468, N.D. Ill., Nov 13, 2001). Observing that Ameritech's failure to produce an adequate privilege log could justify waiver of privilege as to all documents logged, but reviewing the 600 listed documents individually and ordering production only of non-privileged documents.
 
Amway Corp. v. Proctor & Gamble Co., 2001 U.S. Dist. LEXIS 4561 (W.D. Mich. April 3, 2001). Court ordered critical fact "admitted" as sanction against Proctor & Gamble for "erect[ing] an unjustified shield of privilege to obscure its ulterior motive" in filing its action.
 
With:
 
In re Marshall, 253 B.R. 550, 558 (Bankr. C.D. Cal. 2000), vac'd on other grounds, 392 F.3d 1118 (9th Cir. 2004). Striking witness's testimony after repeated failure to produce documents, even after imposition of monetary fines, and after production of "grossly" deficient privilege log.
 
Weber v. Paduano, No. 02 CIV. 3392 (GEL), 2003 WL 161340, at *13 (S.D.N.Y. Jan 22, 2003). Declining to undertake in camera review of voluminous documents and ordering production of all documents listed on log for lack of sufficient information to demonstrate privilege.
 
Carfagno v. Jackson Nat'l Life Ins., No. 5:99CV118, 2001 WL 34059032, at *2 (W.D. Mich. Feb 13, 2001). Holding that "egregious" delay in responding to discovery and deficient privilege log justified finding of waiver of privilege.
Discovery sanctions can also be imposed where the recipient of discovery responses fails to meet its ethical and procedural responsibilities. Ethical rules in many jurisdictions place attorneys under a professional obligation, upon identifying the privileged nature of documents, to cease review of the documents and inform the privilege holder. For example, ABA Opinion 94-382 provides, in part:
 
When an attorney receives, unauthorized, an adverse party's materials, once the attorney becomes aware of the privileged or confidential nature of the materials, the attorney must refrain from viewing such materials. The attorney can, however, review the materials to the extent necessary to determine the manner in which to proceed. The attorney should either notify opposing counsel, and follow such counsel's instructions regarding the disposition of the material, or should completely refrain from using the materials until a court makes a determination as to their proper disposition.
 
ABA Comm'n on Ethics and Prof. Resp., Formal Opinion 94-382 (1994). Numerous courts have held attorneys to the provisions of this rule and state equivalents. See, e.g., Maldonado v. New Jersey ex rel. Admin. Office of Courts, 225 F.R.D. 120, 138 (D.N.J. 2004); Arnold v. Cargill Inc., No. 01-2086 (DWF/AJB), 2004 WL 2203410, at *10 (D. Minn. Sept. 24, 2004); George v. Indus. Maint. Corp., 305 F. Supp. 2d 537, 539 (D.V.I. 2002); Richards v. Jain, 168 F. Supp. 2d 1195, 1200-01 (W.D. Wa. 2001); Weeks v. Samsung Heavy Indus., Ltd., No. 93 C 4899, 1996 WL 288511, at *3 (N.D. Ill. May 30, 1996). But see Aerojet-Gen. Corp. v. Trans. Indem. Ins., 18 Cal. App. 4th 996, 1006 (Cal. App. Ct. 1993) (holding that, where attorney inadvertently reviewed privileged materials, he "had acquired the information in a manner that was not due to his own fault or wrongdoing, he cannot purge it from his mind. Indeed, his professional obligation demands that he utilize his knowledge about the case on his client's behalf."). Failure to comply with Rule 94-382 can carry severe sanctions, including dismissal or disqualification. See Maldonado v. New Jersey, 225 F.R.D. 120, 132-141 (D.N.J. 2004) (declining to dismiss claim but disqualifying counsel) Richards, 168 F. Supp. 2d at 1204 (disqualifying counsel); Arnold v. Cargill Inc., No. 01-2086, 2004 WL 2203410, at *13 (D. Minn. Sept. 24, 2004) (same); Rico v. Mitsubishi Motors Corp., 10 Cal. Rptr. 3d 601, 615 (Cal. Ct. App.) (same), review granted, 91 P.3d 162 (Cal. 2004); Slesinger, Inc. v. The Walt Disney Co., No. BC 022365, 2004 WL 612818 (Cal. Super. Ct. March 29, 2004) (dismissing claims).
While ABA Rule 94-382 provides that and attorney may "review the materials to the extent necessary to determine the manner in which to proceed," the rule should not be interpreted to allow an attorney to independently review potentially privileged documents to determine which are, and which are not, subject to the privilege. See Arnold, 2004 WL 2203410, at *10 (holding that an attorney conducting such a review "blatantly risked creating the appearance of impropriety, which is only exacerbated by the fact that [he] actually made a copy and stored the documents for almost 18 months.").
f. Obtaining Appellate Review of a Court's Decision Rejecting a Claim of Privilege in Federal Courts
Discovery orders directing a party to the litigation to disclose communications protected by the attorney-client privilege are not final orders immediately appealable pursuant to 28 U.S.C. § 1291. However, in some instances, particularly where a discovery order is directed at someone other than the holder of the privilege, discovery orders directing non-parties to disclose privileged communications may be appealed immediately. See Perlman v. United States, 247 U.S. 7, 12-15 (1918). The justification for this exception lies in the lack of incentive of the directed party to risk contempt in protecting another's claim to the privilege. See In re Flat Glass Antitrust Litig., 288 F.3d 83, 90 n.9 (3rd Cir. 2002) (distinguishing Perlman); FDIC v. Ogden Corp., 202 F.3d 454, 460 (1st Cir. 2000) ("a substantial privilege claim that cannot effectively be tested by the privilege-holder through a contemptuous refusal ordinarily will qualify for immediate review if the claim otherwise would be lost").
When a court rejects a party's assertion of the attorney-client privilege, the party has several options. The first option is to wait for a final adjudication of the merits of the case and then appeal the decision. This option, however, provides no relief to parties who wish to maintain the confidentiality of a privileged communication. In addition, there are several avenues by which a party may obtain immediate appellate review of an interlocutory order directing the disclosure of privileged communications:
(1) Appeal from Contempt Citation
The most common means of securing review of a discovery order directing the disclosure of privileged communication is to disobey the order, be held in contempt, and then appeal the contempt order. See, e.g., Burden-Meeks v. Welch, 319 F.3d 897, 899-90 (7th Cir. 2003) (holding that when documents are in possession of entity asserting privilege, proper method to appeal order of production is to appeal contempt order and noting that, "by raising the stakes," the court winnows the number of such appeals); In re Richard Roe, Inc., 168 F.3d 69, 72 (2d Cir. 1999) (reversing district court order holding officers of two corporations in contempt for refusing to produce certain documents to a grand jury); In re Horn, 976 F.2d 1314, 1316 (9th Cir. 1992) (reversing contempt citation issued against attorney for failing to respond to subpoena duces tecum which sought material covered by the attorney-client privilege); 15B CHARLES ALAN WRIGHT, ET AL., FEDERAL PRACTICE & PROCEDURE § 3914.23 (2d ed. 1991). But see United States v. Philip Morris Inc., 314 F.3d 612, 620 (D.C. Cir. 2003) (noting that because civil contempt citation is not an appealable order in the circuit, contemptuous refusal to produce would not give rise to right to appeal discovery order).
(2) Mandamus
Immediate appellate review may be obtained by filing a petition for a writ of mandamus in the appellate court. "Mandamus provides the most direct route around the rule that generally bars final judgment appeals form discovery orders." 15B CHARLES ALAN WRIGHT, ET AL., FEDERAL PRACTICE & PROCEDURE § 3914.23 (2d ed. 1991). While a writ of mandamus is an extraordinary remedy, some circuit courts have found that the potential irreversible harm that a party may incur if it is directed in error to turn over a privileged communication justifies the issuance of the writ. See, e.g., In re Avantel, S.A., 343 F.3d 311 (5th Cir. 2003) (mandamus appropriate where district court errs in discovery order that would not be reviewable on appeal); In re Spalding Sports Worldwide, Inc., 203 F.3d 800, 804 (Fed. Cir. 2000) (issuing writ of mandamus vacating district court order directing the disclosure of patent invention record that was protected by the attorney-client privilege); Rhone-Poulenc Rorer Inc. v. Home Indem. Co., 32 F.3d 851, 866 (3d Cir. 1994) (issuing writ of mandamus to vacate district court's order finding that plaintiff waived the attorney-client privilege); Chase Manhattan Bank, N.A. v. Turner & Newall, P.L.C., 964 F.2d 159, 163 (2d Cir. 1992) (issuing mandamus to vacate order directing defendant to disclose privileged communications without the district court first determining the merits of the defendant's claim of privilege); In re Bieter Co., 16 F.3d 929, 931 (8th Cir. 1994) (issuing writ to vacate order compelling disclosure of privileged communications); In re Burlington Northern, Inc., 822 F.2d 518, 534 (5th Cir. 1987) (granting mandamus because district court compelled production of privileged documents without making proper factual determination).
In Chase Manhattan Bank, 964 F.2d at 166, the Court enumerated three factors as prerequisites for mandamus review of discovery orders directing the disclosure of privileged communications: "(i) an issue of importance and of first impression is raised; (ii) the privilege will be lost in the particular case if review must await a final judgment; and (iii) immediate resolution will avoid the development of discovery practices or doctrine undermining the privilege." Id. at 163; see also, In re Bieter Co., 16 F.3d 929, 931 (8th Cir. 1994) (adopting same three criteria); In re Burlington Northern, Inc., 822 F.2d at 534 (mandamus review appropriate where documents at issue went to heart of controversy, erroneous disclosure of documents could have been irreparable, and district court's order turned on legal questions appropriate for appellate review). But see In re Dow Corning Corp., 261 F.3d 280, 285 (2d. Cir. 2001) (noting that mandamus was rarely granted in Second Circuit and declining to grant relief from erroneous District Court order compelling disclosure of privileged communication where exceptions to the privilege might apply but were not addressed below); In re Occidental Petroleum Corp., 217 F.3d 293, 295-96 (5th Cir. 2000) (distinguishing Burlington Northern, cited above, on the basis that that decision involved a clear error of law, called for an important and far-reaching solution, and the order at issue applied to an extraordinary number of documents).
(3) Collateral Order Doctrine
The collateral order doctrine provides a narrow exception to the general rule permitting appellate review of final orders only. Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546-47 (1949). Pursuant to the collateral order doctrine, an appeal of a non-final order will lie if (1) the order from which the appellant appeals conclusively determines the disputed question; (2) the order resolves an important issue that is completely separate from the merits of the dispute; and (3) the order is effectively unreviewable on appeal from a final judgment. In re Ford Motor Co., 110 F.3d 954, 957 (3d Cir. 1997). Several circuits have held that orders requiring the disclosure of privileged communications may be appealed pursuant to the collateral order doctrine. See United States v. Philip Morris Inc., 314 F.3d 612, 620-21 (D.C. Cir. 2003) (because civil contempt citation is not appealable, order to disclose privileged material was subject to collateral order doctrine); Powell v. Ridge, 247 F.3d 520, 524 (3d. Cir. 2001) (noting that collateral order doctrine applied to discovery issues addressed concern that courts cannot "unscramble the egg" but also noting that other circuits do not follow the rule); In re Grand Jury Subpoena, 274 F.3d 563, 570 (1st Cir. 2001); In re Ford Motor Co., 110 F.3d at 957 (3d Cir. 1997) (order directing vehicle manufacturer to disclose documents related to development, marketing and safety of Bronco II was appealable under the collateral order doctrine). However, most courts maintain that pretrial discovery orders may not be immediately appealed pursuant to the collateral order doctrine. See Texaco Inc. v. La. Land and Exploration Co., 995 F.2d 43, 44 (5th Cir. 1993) (order directing plaintiff to produce documents plaintiff claimed were protected by the privilege could not be appealed pursuant to the collateral order doctrine); Chase Manhattan Bank, 964 F.2d at 163 (denying appeal of order directing disclosure of privileged communication but issuing a writ of mandamus vacating the order); see also United States v. Pogue, 444 F.3d 462, 473-74 (6th Cir. 2006) (party must first incur appealable contempt citation and cannot resort to collateral order doctrine or writ of mandamus where alternative path of appeal exists). Review under the collateral order doctrine may be particularly appropriate where the discovery sought is against a third party and the documents at issue are not within the control of a party seeking to assert the privilege. Gill v. Gulfstream Park Racing Ass'n, 399 F.3d 391, 398-99 (1st Cir. 2005).
(4) Permissive Interlocutory Appeal
28 U.S.C. § 1292(b) provides that a Federal Court of Appeals has discretion to consider an immediate appeal from an interlocutory order if the district court certifies in writing that the "order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation." There are few published opinions in which Section 1292(b) was used successfully by a party seeking appellate review of an order rejection an assertion of the privilege. See, e.g., In re Boileau, 736 F.2d 503, 504 (9th Cir. 1984) (accepting jurisdiction pursuant to Section 1292 (b) to review order issued by bankruptcy court compelling debtor to produce privileged documents); Tennenbaum v. Deloitte & Touche, 77 F.3d 337, 339 (9th Cir. 1996) (accepting jurisdiction pursuant to Section 1292(b)).
(5) Standard of Review
The circuits are split as to the appropriate standard of review for determining whether district courts properly analyze discovery issues. See Winbond Elecs. Corp. v. Int'l Trade Comm'n, 262 F.3d 1363, 1370 (Fed. Cir. 2001) (noting division). The Fourth, Sixth and Ninth circuits have reviewed discovery decisions de novo. See, e.g., Chaudhry v. Gallerizzo, 174 F.3d 394, 402 (4th Cir. 1999) (discovery disputes reviewed de novo as mixed questions of fact and law); United States v. Dakota, 197 F.3d 821, 825 (6th Cir. 1999) (de novo review of determination regarding waiver of privilege); United States v. Mendelsohn, 896 F.2d 1183, 1188 (9th Cir.1990) (same). The Federal, Second, Third, Fifth and Tenth circuits have applied an abuse of discretion standard in similar cases. See, e.g., In re Grand Jury Proceedings, 219 F.3d 175, 182 (2d Cir. 2000) (abuse of discretion standard applied to reviewing waiver determination); In re Grand Jury (Impounded), 138 F.3d 978, 980-81 (3d Cir. 1998) (same); United States v. Neal, 27 F.3d 1035, 1048 (5th Cir. 1994) ("[t]he application of the attorney-client privilege is a question of fact, to be determined in the light of the purpose of the privilege and guided by judicial precedents.") Frontier Ref. Inc. v. Gorman-Rupp Co., 136 F.3d 695, 699 (10th Cir. 1998) (abuse of discretion standard applied to discovery orders generally). Where, however, the application of the privilege turns on an issue of law (for example, the application of the "control group" versus "subject matter" tests for corporate application of the privilege), courts in the second category may also review lower court determinations on a de novo basis. See In re Avantel, S.A., 343 F.3d 311, 318 (5th Cir. 2003).
2. Assertion of the Attorney-Client Privilege and Depositions of Counsel
Protecting litigation or in-house counsel from depositions implicates both the attorney-client privilege and (possibly to a greater extent) the work product doctrine. Notwithstanding that the practice of compelling counsel to testify has long been discouraged, at least one court has noted that deposing opposing counsel is an increasingly common litigation tactic and a negative development in the expansion of what is regarded as acceptable discovery practice. See Shelton v. Am. Motors Corp., 805 F.2d 1323, 1327 (8th Cir. 1987). Recognizing that depositions of counsel, whether in-house counsel or trial counsel, constitute potentially dilatory tactics that may chill legal representation, courts have imposed special rules restricting this practice, which are dealt with in Section VIII.B., Special Circumstances -- Rule 30(B)(6) Depositions and Depositions of Counsel, below.
3. Assertion of the Privilege by Organizations: Employees and Successor Corporations.
Generally, courts consider the power to assert an organization's privilege to rest in the controlling management of the organization. See JOHN W. STRONG, McCORMICK ON EVIDENCE § 93 (5th ed. 1999). Management can only assert the privilege on behalf of the organization, and may not assert the organization's privilege to protect the interests of individual officers or managers. See Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343 (1985); In re Grand Jury Proceedings, 434 F. Supp. 648 (E.D. Mich. 1977), aff'd, 570 F.2d 562 (6th Cir. 1978); United States v. Chen, 99 F.3d 1495, 1502 (9th Cir. 1996); Chronicle Publ'g Co. v. Hantzis, 732 F. Supp. 270, 272-73 (D. Mass. 1990).
However, where the employees have established an independent attorney-client relationship with the corporation's counsel, they may assert or waive the privilege as to conversations made in the course of that relationship. Typically, an individual asserting the privilege must meet a five-prong test:
 
First, they must show they approached [counsel] for the purpose of seeking legal advice. Second, they must demonstrate that when they approached [counsel] they made it clear that they were seeking legal advice in their individual rather than in their representative capacities. Third, they must demonstrate that the [counsel] saw fit to communicate with them in their individual capacities, knowing that a possible conflict could arise. Fourth, they must prove that their conversations with [counsel] were confidential. And, fifth, they must show that the substance of their conversations with [counsel] did not concern matters within the company or the general affairs of the company.
 
In re Bevill, Bresler & Schulman Asset Mgmt. Corp., 805 F.2d 120, 124-25 (3d Cir. 1986); see also In re Grand Jury Subpoena, 274 F.3d 563, 571 (1st Cir. 2001) (following Bevill); Grassmueck v. Ogden Murphy Wallace, P.L.C., 213 F.R.D. 567, 571 (W.D. Wash. 2003) (same).
An employee or officer cannot assert the corporation's privilege if the corporation waives it. See In re Bevill, Bresler & Schulman Asset Mgmt. Corp., 805 F.2d 120, 124-25 (3d Cir. 1986); In re Hechinger Inv. Co., 285 B.R. 601, 606 (D. Del. 2002) (former officers and employees could not assert corporation's privilege). Likewise, an officer or employee cannot waive the corporation's privilege if the corporation asserts it. See In re Grand Jury Proceedings, 219 F.3d 175, 184 (2d Cir. 2000) (waiver of corporate attorney-client privilege by corporate officer's testimony does not necessarily waive corporate privilege where officer was not communicating corporation's intent to waive); United States v. Segal, 313 F. Supp. 2d 774, 782 (N.D. Ill. 2004) (holding that communications disclosed by former employee pursuant to an immunity agreement remained privileged as to employer); Alexander v. F.B.I., 198 F.R.D. 306, 315-16 (D.D.C. 2000); State ex rel. Lause v. Adolf, 710 S.W.2d 362 (Mo. Ct. App. 1986) (fact that officer asserted advice of counsel defense did not waive corporation's privilege); In re Grand Jury Proceedings, 219 F.3d 175, 184 (2d Cir. 2000) (waiver of corporate attorney-client privilege by corporate officer's testimony does not necessarily waive corporate privilege where officer was not communicating corporation's intent to waive). Only employees with authority to waive the privilege may waive it on behalf of the corporation. See Wrench LLC v. Taco Bell Corp., 212 F.R.D. 514, 517 (W.D. Mich. 2002) (lower-level employee lacked authority to waive privilege).
When legal control of an organization passes to new management, the authority to assert or waive the attorney-client privilege flows with corporate control to the new management. See Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343 (1985) (bankruptcy trustee had the power to waive the corporation's privilege for pre-bankruptcy communications).
Thus, when a corporation enters bankruptcy, the trustee in bankruptcy is empowered to assert or waive the attorney-client privilege. See id. Following a bankruptcy, the authority to assert the attorney-client privilege resides in the entity holding all or substantially all of the debtor's assets. See In re Am. Metrocomm Corp., 274 B.R. 641, 654-55 (Bankr. D. Del. 2002) (privilege controlled by debtor-in-possession); In re Maxim Group, Inc. Secs. Litig., No. 1:99CV1280, 2002 WL 987660, at *1 (N.D. Ga. Apr. 23, 2002); In re Crescent Beach Inn, 37 B.R 894, 896 (Bankr. D. Me. 1984). Similarly, a receiver inherits the position of the client and can decide whether to waive or assert the privilege. See S.E.C. v. Elfindepan, S.A., 169 F. Supp. 2d 420, 430-31 (M.D.N.C. 2001). Bankruptcy trustees also control the privilege in reorganizations of partnerships. See United States v. Campbell, 73 F.3d 44, 47-48 (5th Cir. 1996). But see Suntrust Bank v. Blue Water Fiber, L.P., 210 F.R.D. 196, 198-99 & n.3 (E.D. Mich. Aug 31, 2002) (noting but not deciding the "interesting and novel question" of whether successor to limited partnership could waive privilege with respect to conversations with former partners, where successor was adverse to partners in litigation).
Following a merger, the surviving corporation succeeds to the privileges of the successor corporations. See Rayman v. Am. Charter Fed. Sav. & Loan Ass'n, 148 F.R.D. 647, 652 (D. Neb. 1993); Chronicle Pub. Co. v. Hantzis, 732 F. Supp. 270 (D. Mass. 1990); O'Leary v. Purcell Co., 108 F.R.D. 641, 644 (M.D.N.C. 1985). Similarly, where a corporation purchases another corporation's subsidiary, the purchasing parent controls the privilege of the subsidiary. See Bass Pub. Ltd. Co. v. Promus Cos., 868 F. Supp. 615, 620 (S.D.N.Y. 1994); Bass Public Ltd. Co. v. Promus Companies Inc., 868 F. Supp. 615, 619-20 (S.D.N.Y. 1994); Medcom Holding Co. v. Baxter Travenol Labs., Inc., 689 F. Supp. 841, 844 (N.D. Ill. 1988). Where the former parent and the subsidiary are adversaries in litigation, neither party can invoke the attorney-client privilege against the other. See Glidden Co. v. Jandernoa, 173 F.R.D. 459, 475-76 (W.D. Mich. 1997). One court has held that the privilege may not be waived over a former parent's objection, at least where the parent and subsidiary have a joint defense agreement related to the subject matter over which the privilege is asserted. See In re Grand Jury Proceedings, 902 F.2d 244, 248-49 (4th Cir. 1990).
Determining who controls the attorney-client privilege when a company transfers less than all of its assets can be difficult. The transfer of limited assets may not carry with it a transfer of the privilege. See Zenith Elecs. Corp. v. WH-TV Broad. Corp., No. 01 C 4366, 2003 WL 21911066 (N.D. Ill. Aug. 7, 2003) (Zenith's sale of assets to General Instrument ("GI"), including documents that were privileged while in Zenith's possession, did not transfer the attorney-client privilege to GI. "[T]he mere transfer of some assets from one corporation to another. . . does not transfer the attorney-client privilege."). The transfer of a substantial portion of a companies assets, particularly where it carries with it practical control of a business line, will result in a transfer of authority over the privilege, however. See Soverain Software LLC v. Gap, Inc., 340 F. Supp. 2d 760, 763 (E.D. Tex. 2004) ("If the practical consequences of the transaction result in the transfer of control of the business and the continuation of the business under new management, the authority to assert or waive the attorney-client privilege will follow as well.").
In one interesting case involving the intersection of privilege and probate law, a limited partnership obtained the various recording and other business interests of Bing Crosby following his death. At the time of this death, Crosby held these assets individually. The limited partnership subsequently brought suit against various recording companies, which sought the production of various documents previously belonging to Crosby. In HLC Props. Ltd. v. Superior Court, 4 Cal. Rptr. 3d 898, 900 (Cal. App. Ct. 2003), the court held that the limited partnership could assert the privilege as the "entity that is the legal successor of a deceased individual's ongoing business organization." The California Supreme Court subsequently reversed, however, holding that, under California law, the privilege terminates after a person's estate is "finally distributed and his personal representative is discharged," notwithstanding HLC's purchase of Crosby's business interests. HLC Props., Ltd. v. Superior Court, 35 Cal. 4th 54, 66-67 (Cal. 2005).
At least one court has upheld the validity of a confidentiality agreement, contractually limiting the purchasing corporation's rights to access certain privileged materials relating to the merger transaction itself. See Tekni-Plex, Inc. v. Meyner & Landis, 89 N.Y.2d 123, 137-38, 674 N.E.2d 663, 671 (N.Y. 1996).
The United States District Court for the Western District of Pennsylvania recently addressed the issue of what happens to the corporation's privilege where the corporation ceases to function. In Gilliland v. Geramita, No. 2:05-CV-01059, 2006 WL 2642525 (W.D. Pa. Sept. 14, 2006), counsel for the defendant corporation in a securities suit attempted to assert the attorney-client privilege on behalf of the corporation, which although technically still a valid, legal entity, was no longer in operation and had no current directors or officers. Id. at *1. Reasoning that because there were no current officers or directors to assert the privilege on behalf of the corporation, and the former management team was not authorized to assert the privilege, there was no person with authority to "properly invoke the privilege" and thus the documents at issue could not be considered privileged. Id. at *3-4. ("The better rule, in the Court's view, is that there should be a presumption that the attorney-client privilege is no longer viable after the corporate entity ceases to function, unless a party seeking to establish the privilege demonstrates authority and good cause."); see also Lewis v. U.S., 2004 WL 3203121 (W.D. Tenn. Dec. 7, 2004) (attorney-client privilege does not extend beyond the death of a corporation).
4. Inferences Drawn From Assertion
At common law, no inference could be drawn against a client asserting the attorney-client privilege. See 26A CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE AND PROCEDURE § 5753 (1992) (noting "no comment" rule). Recognizing that allowing an opponent to comment on a claim of privilege would seriously undermine the value of the privilege, the Court in Griffin v. California, 380 U.S. 609, 614 (1965) precluded prosecutors from commenting on an accused assertion of the fifth amendment privilege against self incrimination. Other courts have applied a similar rule to assertions of the attorney-client privilege. See In re Tudor Assocs., Ltd., II, 20 F.3d 115, 120 (4th Cir. 1994), Parker v. Prudential Ins. Co. of Am., 900 F.2d 772, 775 (4th Cir. 1990).
F. Duration of the Privilege
In general, once the attorney-client privilege is created it can be invoked at any time unless it has been waived or is subject to an exception. See United States v. United Shoe Mach. Corp., 89 F. Supp. 357, 358 (D. Mass. 1950). Recently, the Supreme Court reaffirmed the general rule that the privilege continues even after the termination of the attorney-client relationship and the death of the client. Swidler & Berlin v. United States, 524 U.S. 399, 118 S. Ct. 2081 (1998) (holding that the privilege continued after the death of a client even where the privileged communications were relevant to a criminal proceeding); see also 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5498 (1986); But see People v. Vespucci, 745 N.Y.S.2d 391, 395-97 (N.Y. Co. Ct. 2002) (recognizing that Swidler & Berlin controls in federal court but that some diversity of opinion exists in state law); HLC Props., Ltd. v. Superior Court, 35 Cal.4th 54, 66-67 (Cal. 2005) (holding that, under California law, privilege terminates after natural person's estate is "finally distributed and his personal representative is discharged"). After the client's death, the administrator or representative of the estate gains the power to assert or waive the deceased's privilege against third parties. See State v. Doe, 803 N.E.2d 777, 780 (Ohio 2004) (holding that decedent's former wife was statutorily empowered to waive the privilege and holding decedent's attorney in contempt for failure to do so following her waiver); see also 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5498 (1986). But see Burkert v. Equitable Life Assur. Soc. of Am., 287 F.3d 293, 295-96 (3d Cir. 2002) (beneficiaries of insurance policy could not assert attorney-client privilege on behalf of deceased and against insurer). However, many courts refuse to enforce the privilege in will contests. See Remien v. Remien, No. 94 C 2407, 1996 WL 411387 at *3 (N.D. Ill. July 19, 1996); Stevens v. Thurston, 289 A.2d 398 (N.H. 1972); JOHN W. STRONG, McCORMICK ON EVIDENCE § 94 (5th ed. 1999).
For organizations, the general rule is that when the organization ceases to have legal existence such that no one can act in its behalf, the privilege terminates. See UNIF. R. EVID. 26(1); REST. 3D § 123 cmt. k; 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5499 (1986).
G. Waiving the Attorney-Client Privilege
Even if all the prerequisites for establishing a claim of attorney-client privilege are met, a party can be found to have waived the protection afforded by the privilege. Whenever a client discloses confidential communications to third parties, including government agencies, the disclosure may constitute a waiver both as to the communication that has been disclosed, and other communications relating to the same subject. See The Extent of Waiver, § I.G.5., below. In addition, a corporation may be found to have waived the privilege if it has used privileged communications in a manner inconsistent with maintaining their confidentiality.
1. The Terminology Of Waiver
Once it has been determined that there has been a waiver, it is necessary to determine the scope of the protection that has been lost. The various types of waiver have been described (and will be referred to in this outline) as follows:

	Waiver for All Documents	Waiver Only For Documents	
	on Same Subject Matter	That Are Disclosed	
Waiver for	Full Waiver	Partial Waiver	
All Persons	 	 	
	 	 	
Waiver Only for	Selective Waiver	Partial Selective Waiver	
Some Persons	 	 	

The terms full and partial waiver refer to the scope of the materials which are left unprotected when a waiver has occurred. Full waiver normally results from the disclosure of privileged materials to a non-privileged person. A finding of full waiver typically allows the party seeking discovery of an otherwise privileged document to discover any unrevealed portions of the communication and any related communications on the same subject matter that the court considers to be necessary for the party seeking discovery to obtain a complete understanding of the disclosed communication. A partial waiver removes privilege protection only for the disclosed communication itself and not for all related communications. Full and partial waiver are discussed in The Extent of Waiver, § I.G.5., below.
Selective waiver refers to the decision by the holder of the privilege to waive the privilege for some persons while preserving it toward the rest of the world. Selective waiver is discussed below in §§ I.G.6.a., Disclosure to the Government, and II., Extensions of the Attorney-Client Privilege Based on Common Interest.
The intersection of the two types of waiver, herein called partial selective waiver, and the extent of waiver when information is disclosed to government agencies is discussed in § I.G.6.a., below.
It should be noted that courts have not been consistent in their terminology. Many courts have used the term "limited waiver" to refer to selective waiver. However, other courts have used "limited waiver" to denote partial waiver. In this summary, the term limited waiver is not used, and instead the terms partial and selective waiver are utilized throughout. See Westinghouse Elec. Corp. v. Republic of Philippines, 951 F.2d 1414, 1423 n.7 (3d Cir. 1991) (noting the "limited waiver" mix-up and adopting the terms partial and selective waiver); see also Note, Developments -- Privileged Communications, 98 HARV. L. REV. 1450 (1985).
2. Consent, Disclaimer and Defective Assertion
A client can relinquish the protection of the privilege in several ways. The easiest way to abandon the privilege is through consent. Consent acts as a waiver of the privilege and leaves the underlying communications unprotected. See generally In re von Bulow, 828 F.2d 94, 10091 (2d Cir. 1987) (client's consent to publish privileged information in book about case resulted in waiver); Long-Term Capital Holdings v. United States, No. 3:01 CV 1290 (JBA), 2002 WL 31934139, at *2 (D. Conn. Oct. 30, 2002); JOHN W. STRONG, McCORMICK ON EVIDENCE § 93 (5th ed. 1999); 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5507 (1986). However, a party must possess the authority to waive the privilege for such a waiver to be effective. See United States v. Chen, 99 F.3d 1495, 1502 (9th Cir. 1996) (former employees lack ability to waive corporation's attorney-client privilege); see also Assertion of the Privilege by Organizations: Employees and Successor Corporations, § I.E.3., above.
Occasionally, a client waives the privilege voluntarily and later attempts to reassert it. In such cases, the client will generally be estopped from relying on the privilege if an adversary has detrimentally relied on the disclaimer or the interests of justice and fairness otherwise require waiver. See generally United States v. Blackburn, 446 F.2d 1089, 1091 (5th Cir. 1971) (defendant not permitted to reassert a privilege which he had already waived); 8 JOHN H. WIGMORE, EVIDENCE § 2327 (J. McNaughton rev. 1961); 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5507 (1986).
Waiver can also occur when the client fails to assert the privilege effectively. For example, a client's failure to object during the presentation of evidence at a hearing or deposition may waive the privilege. See REST. 3D § 78 cmt. e; JOHN W. STRONG, McCORMICK ON EVIDENCE § 93, at 343 (5th ed. 1999); Asserting the Privilege, § I.E., above. Any failure of the client to guard the privilege jealously generally constitutes a waiver. See Intentional Disregard of Confidentiality, § I.G.3.a., below.
In the corporate context, a question may arise regarding who has the authority to waive the privilege when the corporation's management, through counsel, makes it clear that the corporation does not intend to waive its privileges. In In re Grand Jury Proceedings, 219 F.3d 175 (2d Cir. 2000), the Second Circuit considered as a matter of first impression two issues: (1) whether a corporate officer can impliedly waive the corporation's attorney-client and work product privileges in his grand jury testimony, even though the corporation has explicitly refused such a waiver; and if the answer is yes, (2) what factors a district court should consider in deciding whether a waiver has occurred. The case arose out of an ongoing grand jury investigation into allegedly illegal sales of firearms and other contraband by Doe Corp. In response to the grand jury's subpoena in which it formally requested Doe Corp. to waive its attorney-client and work product privileges, Doe Corp. decided not to waive its privileges and so notified the government. 219 Id. at 180. The grand jury subsequently subpoenaed four Doe Corp. employees, including its CEO and its chief in-house counsel. Id. Although the CEO invoked the attorney-client privilege on several occasions during his testimony, he made eight references to counsel's advice, including a number of specific statements about counsel's recommendations. The government contended that Doe Corp. lost its privileges primarily as a result of the grand jury testimony of the CEO and counsel. Id. The trial court agreed and granted the government's motion to compel. Id. at 181-82.
The Second Circuit vacated the trial court's order and remanded for further review based on the detailed discussion in its opinion. Citing In re von Bulow, 828 F.2d 94, 103 (2d Cir. 1987), and United States v. Bilzerian, 926 F.2d 1285, 1292 (2d Cir. 1991), the court acknowledged that implied waiver may be found where a privilege holder "asserts a claim that in fairness requires examination of protected communications." In re Grand Jury Proceedings, 219 F.3d at 182. Fairness considerations arise when a party attempts to use the privilege both as "a shield and a sword." Id. Ordinarily, the authority to assert and waive the corporation's privileges rests with the corporation's management and is normally exercised by its officers and directors. Id. at 183-84, citation omitted. Unlike prior cases, however, in the case before the court the corporation clearly asserted its privilege, and did not deliberately disclose any privileged material, but its CEO, in contravention of the corporation's instructions, arguably waived that privilege in his grand jury testimony. Id. at 184.
The court rejected the parties' competing requests for a per se rule that a corporate officer cannot waive a privilege asserted by the corporation. In re Grand Jury Proceedings, 219 F.3d at 185. Instead, it held that an implied waiver should be analyzed case-by-case based on "fairness principles." Id. Skeptical on the facts before it that the CEO's testimony had waived Doe Corp.'s privileges, the court instructed the trial court to consider on remand, among other things, the following issues: (1) the CEO was subpoenaed on his individual capacity and not as a corporate representative; (2) the CEO's interest in exculpating his own conduct may have overridden his fidelity to the corporation; (3) the CEO was not counseled and had no legal training; (4) Doe Corp. did not disclose privileged material to the government and did not take any affirmative steps to inject privileged materials into the litigation; and (5) the apparent lack of prejudice to the government. Id. at 189-90. "These circumstances viewed in isolation suggest to us it would be unfair to find, on the basis of witness's testimony, that Doe Corp. had waived its entitlement to preserve the confidentiality of its communications with its attorneys." Id. at 190.
In the event that the trial court found waiver on remand, the court indicated that only partial waiver may be appropriate: "as the animating principle behind waiver is fairness to the parties, if the court finds that the privilege was waived, then the waiver should be tailored to remedy the prejudice to the government." In re Grand Jury Proceedings, 219 F.3d at 188. Because the testimony was given before a grand jury, an "extrajudicial" context, limited waiver may be appropriate. Id. at 189. Limited waiver may also be appropriate because the testimony was given early in the grand jury proceedings, at a time when the government may have had other witnesses and evidence, thus limiting the prejudice to the government. Id.; see also United States v. Agnello, 135 F. Supp. 2d 380, 384-85 (E.D.N.Y. 2001) (distinguishing In re Grand Jury Proceedings on the basis that the corporation at issue was the alter ego of the party waiving the privilege and the waiver had not been compelled).
3. Disclosure to Third Parties
a. Intentional Disregard of Confidentiality
To become privileged a communication must be made in confidence. See Communications Must Be Intended to be Confidential, § I.C., above. To stay privileged, the communication must remain confidential. As a general rule, disclosure of privileged communications to a person outside the attorney-client relationship manifests indifference to confidentiality and waives the protection of the privilege. See In re Omeprazole Patent Litig., 227 F.R.D. 227, 230-31 (S.D.N.Y. 2005) (holding that testifying expert was outside the privileged zone and disclosure to expert waived the privilege); In re Air Crash Disaster, 133 F.R.D. 515, 518 (N.D. Ill. 1990); First Wis. Mortgage Trust v. First Wis. Corp., 86 F.R.D. 160, 171 (E.D. Wis. 1980) (disclosures to other persons in the privileged relationship such as a privileged agent do not cause waiver); Dalen v. Ozite Corp., 594 N.E.2d 1365, 1370 (Ill. App. Ct. 1992) (disclosure inconsistent with confidentiality waives privilege). Disclosure to an attorney, where the attorney is not acting in a legal capacity, also causes a waiver. See United States v. Frederick, 182 F.3d 496, 500-01 (7th Cir. 1999), cert. denied, 528 U.S. 1154, 120 S. Ct. 1197 (2000); see also:
 
GFI, Inc. v. Franklin Corp., 265 F.3d 1268, 1273 (Fed. Cir. 2001). Attorney's testimony as to client's state of mind put attorney communications at issue and waived privilege as to the issues covered.
 
Nguyen v. Excel Corp., 197 F.3d 200, 207 (5th Cir. 1999). Selective disclosure of privileged information to third party not rendering legal services waives attorney-client privilege.
 
Reed v. Baxter, 134 F.3d 351, 357-58 (6th Cir. 1998). Disclosure to attorney in the presence of a third party negates confidentiality and constitutes waiver.
 
United States v. Evans, 113 F.3d 1457, 1462 (7th Cir. 1997). The attorney-client privilege does not apply to statements made between a client and his attorney in the presence of a third party who is not an agent of either the client or attorney.
 
United States v. Melvin, 650 F.2d 641, 645 (5th Cir. 1981). Disclosures made in the presence of third parties removes confidentiality and results in waiver.
 
Consol. Health Plans, Inc. v. Principal Performance Group, Inc., No. CIV.A. 02-1230, 2003 WL 1193663, at *3-4 (E.D. La. Mar. 14, 2003). Disclosure of attorney-client communications during deposition effected waiver of the privilege as to the issues covered by testimony.
 
Ratliff v. UKI Ltd, No. 02 Civ. 9297 WHPJCF, 2003 WL 22319573, at *1 (S.D.N.Y. Oct. 9, 2003. Disclosure to client's agent may not waive the privilege if client has a subjectively reasonably expectation of confidentiality and disclosure was necessary to obtain informed legal advice.
 
Piedmont Resolution L.L.C. v. Johnston, Rivlin & Foley, No. Civ. A. 96-1605, 1997 WL 16071, at *2 (D.D.C. Jan. 13, 1997). Any voluntary disclosure of confidential communication to a third party is inconsistent with confidentiality and thus waives the privilege.
 
Stirum v. Whalen, 811 F. Supp. 78, 82 (N.D.N.Y. 1993). Privilege cannot be used to prevent disclosure of communications that were conveyed between client and attorney in the presence of third parties or later released to third parties.
 
Jonathan Corp. v. Prime Computer, Inc., 114 F.R.D. 693, 697 (E.D. Va. 1987). The recipient of a memo from in-house counsel waives the privilege by disclosing it to an adversary.
 
Byrnes v. Jetnet Corp., 111 F.R.D. 68, 72 (M.D.N.C. 1986). A corporate client waives the privilege when it restates the substance of the privileged communications in an unprivileged internal communication.
 
Chubb Integrated Sys., Ltd. v. Nat'l Bank, 103 F.R.D. 52, 63 (D.D.C. 1984). Disclosure of attorney-client communications to an adversary waived the privilege when the adversary learned the gist of the privileged communication. In this case, the privilege was waived even though the adversary was involved in litigation unrelated to the communication.
 
But see:
 
Collaboration Properties, Inc. v. Polycom, Inc., 224 F.R.D. 473, 479 (N.D. Cal. 2004). Exchange of privileged documents as part of a meet-and-confer discovery conference did not affect a waiver of the attorney-client privilege.
 
Akamai Techs., Inc. v. Digital Island, Inc., No. C-00-3508 CW(JCS), 2002 WL 1285126, at *9 (N.D. Cal. May 30, 2002). Provision of attorney's memo summarizing legal issues related to claim as part of settlement discussions, and pursuant to agreement that its use would be limited to such discussions, did not waive privilege.
In these cases, the determinative factor is not the client's subjective intention to waive the privilege. 8 JOHN H. WIGMORE, EVIDENCE § 2327 (J. McNaughton rev. 1961) ("A privileged person would seldom be found to waive, if his intention not to abandon could alone control the situation. There is always also the objective consideration that when his conduct touches a certain point of disclosure, fairness requires that his privilege shall cease whether he intended that result or not. He cannot be allowed, after disclosing as much as he pleases, to withhold the remainder."); see also REST. 3D § 79 cmt. f; JOHN W. STRONG, McCORMICK ON EVIDENCE § 93 (5th ed. 1999); 3 JACK W. WEINSTEIN ET AL., WEINSTEIN'S FEDERAL EVIDENCE P511[02] (2d ed. 2004); accord Weil v. Inv./Indicators, Research & Mgmt., Inc., 647 F.2d 18, 24 (9th Cir. 1981) (subjective intent is but one factor to consider). Instead, the court will inquire whether the client's acts were: (1) voluntary, and (2) substantially in disregard of confidentiality. Only voluntary acts can effectuate waiver. Thus, if the court finds that the client acted under duress or deception then the privilege will not be waived. Shields v. Sturm, Ruger & Co., 864 F.2d 379, 382 (5th Cir. 1989) (disclosure compelled by court does not waive privilege with respect to third parties); Cobell v. Norton, 213 F.R.D. 69, 76 (D.D.C. 2003) (no waiver where Department of the Interior turned privileged documents over to court-appointed monitor pursuant to court order); S.E.C. v. Forma, 117 F.R.D. 516, 523 (S.D.N.Y. 1987) (deception by government makes disclosure involuntary and prevents waiver); REST. 3D § 79 cmt. e. The primary determination is whether the party has safeguarded the confidential nature of the communications. To make this finding, the court determines whether the client's acts and the circumstances of the case objectively demonstrate the proper respect for confidentiality. See:
 
Bowles v. Nat'l Ass'n of Home Builders, 224 F.R.D. 246, 254-55 (D.D.C. 2004). Disclosure of documents in settlement negotiations established subject matter waiver of privilege when the defendant waited fifteen months to claim the privilege and attempt to recover the documents. Such lax treatment of the allegedly privileged material does not reflect the "zealous" protection required under the law.
 
In re Copper Market Antitrust Litig, 200 F.R.D. 213, 219 (S.D.N.Y. 2001). Disclosure of confidential information to third-party PR firm did not waive privilege where PR firm was effectively operating as part of client's staff. Firm regularly consulted with client's counsel regarding public statements on client's behalf.
 
Prudential Ins. Co. v. Turner & Newall, PLC, 137 F.R.D. 178, 181-82 (D. Mass. 1991). The plaintiff waived privilege and work product protection for documents in a third party's possession when the plaintiff reviewed its files and determined they contained privileged documents, but did not take steps to insure against the third party's disclosure of the document.
 
Waste Mgmt., Inc. v. Int'l Surplus Lines Ins. Co., 596 N.E.2d 726, 730 (Ill. App. Ct. 1992). The fact that an internal letter had no indications that it should be kept confidential and had been accessible to the community in a public court file demonstrated waiver of privilege.
The extent to which privileged contents are revealed will also affect the waiver determination. To cause waiver, the non-privileged listener or receiver must learn a significant portion of the privileged communication. Chubb Integrated Sys., Ltd. v. Nat'l Bank, 103 F.R.D. 52, 63 (D.D.C. 1984) (disclosure of attorney-client communications waives the privilege when the listener learns the gist of the privileged communication); In re M&L Business Mach. Co., 161 B.R. 689, 693 (Bankr. D. Colo. 1993) (privilege is lost if the substance of the confidential communication is disclosed to a third party). Thus, referring in general terms to a prior conversation with an attorney does not usually abrogate the privilege. See REST. 3D § 79 cmt. e; see also:
 
United States v. O'Malley, 786 F.2d 786, 793-94 (7th Cir. 1986). Privilege attaches to communication of information rather than the information itself "[A] client does not waive his attorney-client privilege merely by disclosing a subject which he had discussed with his attorney. . . . In order to waive the privilege, the client must disclose the communication with the attorney itself."
 
E.E.O.C. v. Johnson & Higgins, Inc., No. 93 CIV. 5481 (LBS), 1998 WL 778369, 10 (S.D.N.Y. Nov 06, 1998). Disclosure of existence of draft affidavit during deposition waived privilege as to particular draft but, because substance of attorney-client communications were not disclosed, did not effect subject matter waiver of related conversations between attorney and client.
 
Arkwright Mut. Ins. Co. v. Nat'l Union Fire Ins. Co., No. 90 Civ. 7811, 1994 WL 392280 (S.D.N.Y. July 28, 1994), reargued, 1994 WL 510048 (Sept. 16, 1994). A party does not waive the privilege merely by disclosing the substance of an attorney's advice. The party must make a more detailed revelation of the advice or attempt to use the partial disclosure to the prejudice of the opposing side.
 
Rauh v. Coyne, 744 F. Supp. 1181 (D.D.C. 1990). Disclosure of a brief description of an internal investigation report does not waive the privilege for the report itself.
b. Disclosure within a Corporation
As a result of the United States Supreme Court's ruling in Upjohn, federal common law protects communications between counsel and lower level employees when the communication may assist counsel to provide legal advice to the corporation. But once the corporation has obtained legal advice from its attorney, can it disclose that privileged communication to lower level employees without waiving the privilege? Some courts allow disclosure to lower level employees, but only on a "need to know" basis. See, e.g. Verschoth v. Time Warner, Inc., No. 00 Civ. 1339AGSJCF, 2001 WL 286763 (S.D.N.Y. Mar. 22, 2001), adhered to as amended, 2001 WL 546630 (S.D.N.Y. May 22, 2001) (while corporate executives may share legal advice with lower-level corporate employees without waiving the privilege, the privilege extends only to those employees with a "need to know," including those employees with general policymaking authority and those with specific authority for the subject matter of the legal advice); Wrench LLC v. Taco Bell Corp., 212 F.R.D. 514, 517 (W.D. Mich. 2002) (finding disclosure of legal advice to lower level employee did not waive privilege where employee was responsible for the specific subject matter of the communication); Williams v. Sprint/United Management Co., No. 03-2200-JWL-DJW, 2006 WL 1867478, at *6-7 (D. Kan. July 1, 2006) (spreadsheets prepared by non-attorney employees at the direction of counsel were privileged even if shared with other non-attorney employees and even if not ultimately transmitted to counsel).
c. Disclosure to Auditors
In general, an auditor is considered a non-privileged party. Thus, disclosure of privileged information to auditors will waive the attorney-client privilege. See:
 
First Fed. Savs. Bank v. United States, 55 Fed. Cl. 263, 269-70 (Fed. Cl. 2003). Although disclosure of unredacted corporate board minutes which contained privileged documents to accounting firm during its performance of special accounting procedures did not waive the attorney-client privilege, because those procedures were to assist law firm in providing savings and loan with legal advice regarding defalcation by corporate officer, subsequent to disclosure of those same unredacted board minutes during annual audits waived the privilege as to those board minutes, because the disclosure did not have a legal purpose.
 
Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 1162 (9th Cir. 1992). Disclosure of tax counsel's privileged memoranda to auditors waived privilege with respect to documents actually disclosed.
 
United States v. El Paso Co., 682 F.2d 530, 540 (5th Cir. 1982). Disclosure of tax pool analysis and underlying documentation to outside accountants for tax audit purposes waives attorney-client privilege.
 
In re John Doe Corp., 675 F.2d 482, 488-89 (2d Cir. 1982). Conversations between attorney and the corporation's accountant for the purpose of a financial statement audit waived the privilege with respect to the contents of the conversation.
 
U.S. ex rel. Robinson v. Northrop Grumman Corp., No. 89 C 6111, 2003 WL 21439871 (N.D. Ill. June 20, 2003). Where company had engaged an independent auditor to conduct two reviews, one that was privileged and one that was not, the company failed to satisfy its burden of demonstrating that the attorney-client privilege protected certain interview memoranda that were generated during the privileged review, because the company had not offered proof that those memoranda were not subsequently used for the purposes of the non-privileged review.
 
In re Honeywell Int'l, Inc. Sec. Litig., No. M8-85 (WHP), 2003 WL 22722961 (S.D.N.Y. Nov. 18, 2003). Attorney-client privilege does not extend to communications between a company and its accountants or auditors. Disclosure to company's auditor waives [check] the attorney-client privilege.
 
Medinol, Ltd. v. Boston Scientific Corp., 214 F.R.D. 113 (S.D.N.Y. 2002). Disclosure to outside auditors waives work product protection because interests of independent auditors are not aligned with corporation.
 
Eglin Fed. Credit Union v. Cantor Fitzgerald Sec. Corp., 91 F.R.D. 414, 418-19 (N.D. Ga. 1981). Attorney-client privilege waived with respect to board minutes that had been made available to accountants for audit purposes.
 
But see
 
In re JDS Uniphase Corp. Sec. Litig., No. C-02-1486 CW (EDL), 2006 WL 2850049, at *1-2 (N.D. Cal. Oct. 5, 2006). Disclosure of unredacted Board minutes to company's auditors did not waive the work product protection, because the company kept all communications with the auditor confidential and took steps to guarantee that the documents would not be given to the adversaries.
Where, however, counsel retains an auditor to assist in providing legal advice, the auditor acts as a privileged agent. See U.S. ex rel. Robinson v. Northrop Grumman Corp., No. 89 C 6111, 2002 WL 31478259 (N.D. Ill. Nov. 5, 2002); see also Defining Privileged Agents, § I.B.3., above.
4. Authority to Waive Privilege
The attorney-client privilege belongs to the client and it is the client's right to waive. In re Asia Global Crossing, Ltd., 322 B.R. 247, 255 (Bankr. S.D.N.Y. 2005). In addition to the client, an attorney or other authorized agent also has the power to waive the privilege for the client. Interfaith Hous. Del., Inc. v. Town of Georgetown, 841 F. Supp. 1393 (D. Del. 1994) (an agent can only waive a corporation's privilege if the agent is acting within the scope of her authority). A lawyer is generally considered to possess the implied authority to disclose confidential client communications in the course of representing the client. 8 JOHN H. WIGMORE, EVIDENCE § 2325, at 632 (J. McNaughton rev. 1961); REST. 3D § 79 cmt. c; see also United States v. Martin, 773 F.2d 579, 583-84 (4th Cir. 1985); Velsicol Chem. Corp. v. Parsons, 561 F.2d 671, 674-75 (7th Cir. 1977). As a result, a lawyer's disclosure of a communication in the course of conducting the case generally waives the privilege if the lawyer has the apparent or actual authority to disclose such information. See Kevlik v. Goldstein, 724 F.2d 844, 850 (1st Cir. 1984); JOHN W. STRONG, McCORMICK ON EVIDENCE § 93 (5th ed. 1999); 8 JOHN H. WIGMORE, EVIDENCE § 2325 (J. McNaughton rev. 1961). A lawyer, however, cannot maintain the privilege after it has been waived by the client. However, if an attorney discloses documents in discovery because she failed to recognize the privileged nature of the documents, the privilege may not be waived. Since the attorney does not hold the privilege and the client did not direct the disclosure, the attorney's error may not result in waiver. Harold Sampson Children's Trust v. The Linda Gale Sampson 1979 Trust, 271 Wis. 2d 610, 623-24, 679 N.W.2d 794, 800 (Wis. 2004). See Hobley v. Burge, 226 F.R.D. 312, 314 (N.D. Ill. 2005). But see In re Sealed Case, 877 F.2d 976, 980 (D.C. Cir. 1989) (inadvertent production by attorney waived privilege).
For organizational clients, the authority to waive the attorney-client privilege rests with the corporation's management and is normally exercised by its officers and directors. Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343, 348 (1985); United States v. Chen, 99 F.3d 1495, 1502 (9th Cir. 1996) (communication between former employee and government did not waive privilege because former employee never had authority to waive). The managers must exercise the privilege in a manner which is consistent with their fiduciary duties to act in the best interests of the corporation and not for themselves as individuals. Weintraub, 471 U.S. at 348-49. In-house counsel has also been found to possess the implied authority to waive the organization's privilege. See Velsicol Chem. Corp. v. Parsons, 561 F.2d 671, 674 (7th Cir. 1977); In re Grand Jury Subpoenas Dated Dec. 18, 1981, 561 F. Supp. 1247, 1254 n.3 (E.D.N.Y. 1982). At least one court has held that a corporation may unilaterally waive the attorney-client privilege and work product protection with respect to any communications made by a corporate officer in his corporate capacity, notwithstanding the existence of an individual attorney-client relationship between him and the corporation's counsel. In re Grand Jury Subpoena, 274 F.3d 563, 573 (1st Cir. 2001). When control of a corporation passes to new management, the authority to assert and waive the corporation's attorney-client privilege passes as well. Weintraub, 471 U.S. at 349; In re Grand Jury Subpoenas 89-3 & 89-4, 902 F.2d 244 (4th Cir. 1990); United States v. Schwimmer, 892 F.2d 237, 243 (2d Cir. 1989); Meoli v. Am. Med. Serv., 287 B.R. 808, 815-17 (S.D. Cal. 2003). Thus, a manager's power to waive the corporation's attorney-client privilege terminates when the manager loses his job. Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343, 349 (1985) (displaced personnel have no further control over the privilege); In re Hechinger Inv. Co., 285 B.R. 601, 610 (D. Del. 2002) (same); Allen v. Burns Fry, Ltd., No. 83 C 2915, 1987 WL 12199 (N.D. Ill. June 4, 1987). Similarly, former officers cannot assert protection over communications for which the corporation has waived the privilege. In re Grand Jury Subpoena, 274 F.3d 563, 573-74 (1st Cir. 2001); see also Assertion of the Privilege by Organizations: Employees and Successor Corporations, § I.E.3., above.
5. The Extent of Waiver
Where a party has revealed a privileged communication the general rule is that the revealed communication and all materials related to the same subject matter are left unprotected (i.e., a full waiver results). See, e.g., In re Consol. Litig. Concerning Int'l Harvester's Disposition of Wis. Steel, 666 F. Supp. 1148 (N.D. Ill. 1987); see also:
 
GFI, Inc. v. Franklin Corp., 265 F.3d 1268, 1272-73 (Fed. Cir. 2001). Under Sixth Circuit law, voluntary waiver of attorney-client privilege extends to all communications pertaining to the same subject matter.
 
In re Grand Jury Proceedings, 219 F.3d 175, 182-83 (2d Cir. 2000). A party may not selectively disclose privileged communications in support of a claim and then rely on the privilege to shield the remaining communication from the opposing party.
 
In re Grand Jury Proceedings, 78 F.3d 251, 254-256 (6th Cir. 1996). Selective disclosure to government investigators of attorney's advice related to several elements of a marketing plan waived privilege as to all information related to those elements, but not to the entire marketing plan.
 
In re Sealed Case, 877 F.2d 976, 981 (D.C. Cir. 1989). Inadvertent disclosure constituted a waiver not just for the document disclosed but also to all communications relating to the same subject matter.
 
United States v. Jones, 696 F.2d 1069 (4th Cir. 1982). Voluntary disclosures to a third party waive the privilege not only for the specific communication disclosed but also for all communications relating to the same subject.
 
In re Omnicron Group Sec. Lit., 226 F.R.D. 579, 590-93 (N.D. Ohio 2005). Scope of waiver is based on individual facts; court is guided by fairness concerns. Where disclosure was substantial, intentional and deliberate, fairness favored disclosure of all documents on the subject matter discussed in the partial disclosure.
 
Murray v. Gemplus Int'l, S.A., 217 F.R.D. 362 (E.D. Pa. 2003). Disclosure during discovery of six internal in-house counsel communications waived the privilege not just to those specific communications, but also to the subject-matter addressed in the communications. As a result, defendant was ordered to disclose all otherwise privileged documents relating to contract negotiations spanning an eleven month period.
 
Verizon Cal. Inc. v. Ronald A. Katz Tech. Licensing, L.P., 266 F. Supp. 2d 1144, 1148-49 (C.D. Cal. 2003). In infringement action, attorney's waiver of attorney-client privilege waives privilege as to all communications involving that subject matter.
 
Motorola, Inc. v. Vosi Techs, Inc., No. 01 C 4182, 2002 WL 1917256, at *1-2 (N.D. Ill. Aug. 19, 2002). Waiver of privilege as to communications related to patent validity waived privilege as to all communications related to the patent in general.
 
In re Commercial Fin. Servs., Inc., 247 B.R. 828, 845-56 (Bankr. N.D. Okla. 2000). Subject matter waiver requires disclosure of all documents or information relating to the same subject matter as the material disclosed.
 
Fujisawa Pharm. Co. v. Kapoor, 162 F.R.D. 539 (N.D. Ill. 1995). Identification of attorney as a potential witness by his client waived attorney-client privilege as to the subject matter of the attorney's expected testimony. Court, interpreting "subject matter" broadly, held that the privilege had been waived with respect to any information that may have influenced attorney's knowledge regarding his expected testimony, including information gathered by his law firm.
 
Union Pac. Res. Co. v. Natural Gas Pipeline Co. of Am., No. 90 C 5378, 1993 WL 278526 (N.D. Ill. July 20, 1993). Full waiver results in loss of protection for communications revealed and past communications on the same matter. However, prospective communications remain protected.
 
Helman v. Murry's Steaks, Inc., 728 F. Supp. 1099, 1103 (D. Del. 1990). Contested communications were not privileged since they related to the same subject previously disclosed by the client's other attorney.
 
Nye v. Sage Prods., Inc., 98 F.R.D. 452, 453 (N.D. Ill. 1982). Production of a party's communications with a previous attorney waived the privilege for communications with a current attorney on the same subject.
In many cases the party has not blatantly repeated a confidential conversation, but has merely revealed a portion of the communicated information. The courts have struggled to determine when a disclosure has revealed so much detail that the privilege is effectively waived. See, e.g., In re Int'l Harvester's Disposition of Wis. Steel, Nos. 81 C 7076, 82 C 6895, & 85 C 3521, 1987 WL 20408 (N.D. Ill. Nov. 20, 1987) (explaining that after a certain point of disclosure the opponent is entitled to see essentially the full file on the subject so that a full and fair evaluation of the disclosed information can be made). When the evidence shows that the client abandoned the protection of confidentiality, even a partial disclosure of a privileged communication will constitute full waiver. (See § I.G.1., above, for a discussion of the terminology of waiver including full and partial waiver.) However, where a client has revealed only a factually isolated portion of a communication, then a partial waiver may result and related communications remain privileged. See:
 
In re Keeper of the Records, 348 F.3d 16, 23-24 (1st Cir. 2003). Waivers by implication can extend beyond the matter actually revealed. If one party puts information at issue for its own benefit, it would be unfair not to disclose related information. However, the extrajudicial disclosure of attorney-client communications, not later used for an adversarial advantage, does not waive the privilege on all related communications.
 
In re Grand Jury Proceedings John Doe Co., 350 F.3d 299, 306 (2d Cir. 2003). Disclosure to opposing counsel did not waive privilege because the disclosure did not put the matter "at issue" in the judicial proceedings. Moreover, defendant did not disclose the information publicly, therefore he did not have any prospect of gaining an advantage in the "court of public opinion."
 
In re von Bulow, 828 F.2d 94 (2d Cir. 1987). Where a client acquiesced in his attorney's publication of a book containing privileged information, the court held that only a partial waiver occurred. A client can impliedly waive the privilege and must take affirmative action to prevent disclosure once the disclosure is known to be imminent. However, extrajudicial disclosures that are not used to an adversary's disadvantage result in only partial disclosure and do not waive the privilege as to undisclosed portions.
 
S.E.C. v. Beacon Hill Asset Mgmt. LLC, No. 02 CIV 8855LAKHBP, 2004 WL 1746790, at *7-8 (S.D.N.Y. 2004). Disclosure in a book waived the privilege as to the matters therein, but not to matters which were unpublished. The unpublished matters were not at issue in the litigation and thus fairness did not require disclosure.
 
Aspex Eyewear, Inc. v. E'Lite Optik, Inc., No. CIV.A.3:98-CV-2996-D, 2002 WL 1592606, at *2 (N.D. Tex. Jul 17, 2002). Distribution of letter from litigation counsel to customers concluding that patent held by defendant-client did not infringe plaintiff's patent did not effect waiver of attorney-client privilege.
 
Metzger v. City of Leawood, No. 00-2015-KHV, 2000 WL 1909637, at *2 (D. Kan. Dec. 20, 2000). Observing that modern rule requires waiver of privilege only as to particular documents disclosed during document production and does not effect subject-matter waiver of associated attorney-client communications.
 
Vicinanzo v. Brunschwig & Fils, Inc., 739 F. Supp. 891 (S.D.N.Y. 1990). An insurance company did not fully waive the privilege for its insurance premium structure when it revealed documents that summarized counsel's opinion of the structure in conclusory and unrevealing terms. Use of such terms indicated an intention by the company to maintain confidentiality.
The extent of waiver is determined by analyzing whether the unrevealed portion of the communication is so related to the part that has been revealed that further disclosure would not significantly impinge on the client's interest in confidentiality (i.e., the client has revealed so much that he has no further reasonable expectation of confidentiality). In making this determination, the court will consider, among other factors, the temporal proximity of the portions, the presence or absence of other persons at disclosure, and the subjects covered in each portion. See:
 
Yankee Atomic Elec. Co. v. United States, 54 Fed. Cl. 306 (Fed. Cl. 2002). "Extrajudicial" disclosure of privileged communications did not effect subject matter waiver where no litigation prejudice would occur.
 
In re von Bulow, 828 F.2d 94 (2d Cir. 1987). Disclosure of privileged material did not waive privilege beyond matters actually revealed.
 
Weil v. Inv./Indicators, Research & Mgmt., Inc., 647 F.2d 18, 24 (9th Cir. 1981). Disclosure of documents provided to an outside auditor results in waiver only to communications about that matter, not to related matters within the same general topic.
 
In re Target Technologies Co. LLC, Misc. No. 827, 2006 WL 3006708, at *2 (Fed. Cir. Oct. 12, 2006). Extrajudicial disclosure of sales letter that revealed attorney's conclusions concerning patentability and infringement, but not details of the privileged communication, constituted waiver of attorney-client privilege, but was limited to subject matter of the sales letter only.
 
Long-Term Capital Holdings v. United States, No. 3:01 CV 1290 (JBA), 2002 WL 31934139, at *2 (D. Conn. Oct. 30, 2002). Extrajudicial disclosure of attorney-client communication held not to constitute a subject matter waiver where advice was not put at issue by privilege holder in litigation.
 
Dale v. Frankel, 206 F. Supp. 2d 315, 317-19 (D. Conn. 2001). Finding waiver where production of privileged documents was both "deliberate and selective."
 
Harding v. Dana Transp., Inc., 914 F. Supp. 1084, 1092 (D.N.J. 1996). Partial waiver applied where party gave third party "only a superficial glance at certain information, attempting to maintain the secrecy of the remainder."
 
Rauh v. Coyne, 744 F. Supp. 1181 (D.D.C. 1990). Disclosure of a brief description of an internal investigation report does not waive the privilege for the report itself.
 
AMCA Int'l Corp. v. Phipard, 107 F.R.D. 39 (D. Mass. 1985). Disclosing a memo about the interpretation of some contracts waived the privilege for all communications concerning the letter, but not to all communications concerning the interpretation of the contract.
 
Compare:
 
In re Martin Marietta Corp., 856 F.2d 619 (4th Cir. 1988). A client made an inside investigation into alleged fraudulent accounting procedures and disclosed the results to the government to avoid indictment. The court found that the resulting waiver extended to non-disclosed materials, and even to undisclosed details underlying the published data. However, the court noted that there was only a partial waiver for opinion work product.
 
Washington Post Co. v. U.S. Dep't of Air Force, 617 F. Supp. 602 (D.D.C. 1985). Disclosure that summarizes the evidence underlying an internal investigation waives the privilege.
Nevertheless, in some cases, fairness requires that even a partial waiver result in disclosure beyond the materials actually revealed. See, e.g., Westinghouse Elec. Corp. v. Republic of Philippines, 951 F.2d 1414, 1426 n.12 (3d Cir. 1991). In the interest of fairness, full subject matter waiver will result from a partial disclosure in two instances: testimonial revelation and self-serving disclosure.
Testimonial Revelation: When a person testifies before a fact finder (e.g. a jury), partial disclosure of privileged communications almost always results in full disclosure. This is necessary to prevent the fact finder from being confused, misled, or being presented with an incomplete evidentiary picture. See, e.g., Hollins v. Powell, 773 F.2d 191 (8th Cir. 1985) (waiver is implied when a client testifies about a portion of a privileged communication); REST. 3D § 79 cmt. f.
Self-Serving Disclosure: Disclosures which are self-serving will result in full disclosure. In these cases, fairness requires disclosure of the remainder of the communication to present a balanced account. See:
 
In re Sealed Case, 676 F.2d 793, 808-09 (D.C. Cir. 1982). When party reveals part of a privileged communication to gain an advantage in litigation, the party waives the privilege for all other communications on the same subject matter.
 
Kirschner v. Klemons, No. 99CIV4828RCCDFE, 2001 WL 1346008, at *2-4 (S.D.N.Y. Oct. 31, 2001). Intentional and self-serving disclosure effected a subject-matter waiver.
 
Golden Valley Microwave Foods, Inc. v. Weaver Popcorn Co., 132 F.R.D. 204, 208 (N.D. Ind. 1990). Inadvertent production of privileged communications results in waiver only for the disclosed document unless the disclosure was self serving.
 
Carte Blanche (Singapore) PTE, Ltd. v. Diners Club Int'l, Inc., 130 F.R.D. 28, 33 (S.D.N.Y. 1990). Where party reveals portion of document the privilege is waived for the rest of the document so as to make the disclosure complete.
 
First Fed. Sav. & Loan Ass'n v. Oppenheim, Appel, Dixon & Co., 110 F.R.D. 557, 567-68 (S.D.N.Y. 1986). Waiver will be found for withheld information to "make the disclosure complete and not misleadingly one-sided."
 
But see
 
U.S. ex rel. Fago v. M&T Mortgage Corp., 238 F.R.D.3, 9-10 (D.D.C. 2006). Defendant's presentation to government of summary report of its internal investigations did not result in broad subject matter waiver over internal reports and other materials referenced in presentation because defendant did not intend to use government agency's non-action to its advantage in instant litigation and thus there was no need for the relator to discover the related work product.
6. Selective Waiver Doctrine
a. Disclosure to the Government
When litigants voluntarily disclose documents or communications to government agencies, the documents and communications may lose the protection of the privilege and be subject to discovery by other parties, including private litigants. Corporations have argued that these voluntary disclosures to government agencies amount to a selective waiver of the privilege solely for the benefit of the public agency's review, and should not be considered as a waiver for purposes of private civil litigation (many cases use the term limited waiver rather than selective waiver -- for a discussion of terminology see § I.G.1., above). A small minority of courts have adopted this concept of selective waiver. See, e.g., In re M&L Bus. Mach. Co., 161 B.R. 689 (Bankr. D. Colo. 1993) (more likely to find waiver when the holder selectively discloses to the government then later tries to reassert the privilege against the government or a grand jury rather than against a private litigant).
The seminal case on selective waiver is Diversified Industries, Inc. v. Meredith, 572 F.2d 596 (8th Cir. 1977) (en banc). In Diversified, a corporation responded to allegations that it had paid bribes to obtain business by forming an independent audit committee and retaining outside counsel to prepare an internal report on the issue. The internal report was subsequently produced to the SEC. The Eighth Circuit held that this disclosure constituted only a "limited waiver" which did not preclude the corporation from withholding the report from private litigants on the grounds of attorney-client privilege. Id. at 611. The Eighth Circuit explained: "To hold otherwise may have the effect of thwarting the developing procedure of corporations to employ independent outside counsel to investigate and advise them in order to protect stockholders, potential stockholders and customers." Id.; see also United States v. Shyres, 898 F.2d 647, 657 (8th Cir. 1990) (applying the reasoning of Diversified); United States v. Buco, No. Crim. 90-10252-H, 1991 WL 82459 (D. Mass. May 13, 1991) (disclosure to Office of Thrift Supervision did not waive privilege for internal investigation of banking violations); Schnell v. Schnall, 550 F. Supp. 650, 652-53 (S.D.N.Y. 1982) (public policy of encouraging disclosure to SEC compels finding of selective waiver).
Most courts have rejected or at least applied a narrow construction of selective waiver doctrine, and have held that selective disclosure of a document to the government constitutes complete waiver of the privilege. As the D.C. Circuit observed in one of the early selective waiver cases, the privilege was not designed to allow a client "to pick and choose among his opponents, waiving the privilege for some and resurrecting the claim of confidentiality to obstruct others." Permian Corp. v. United States, 665 F.2d 1214, 1219-20 (D.C. Cir. 1981).
Since the D.C. Circuit first rejected selective waiver, the First, Second, Third, Fourth and Sixth Circuits have rejected the selective waiver doctrine to varying degrees. In Westinghouse Elec. Corp. v. Republic of Philippines, 951 F.2d 1414 (3d Cir. 1991), a corporation was being investigated by the government. The court held that the corporation's voluntary disclosure of privileged documents during this investigation fully waived any attorney-client or work product privilege, even with respect to third parties in civil litigation. The court reasoned that the protection of the attorney-client privilege was not required to encourage corporations to make such disclosures to a government agency since the corporation would most likely share any exculpating documents with the government willingly, privileged or not, in order to obtain lenient treatment. Id.
In United States v. Massachusetts Institute of Technology, 129 F.3d 681 (1st Cir. 1997), the First Circuit refused to adopt the selective waiver doctrine. The court held that MIT fully waived the privilege with respect to documents it disclosed to a government audit agency (the DCAA) pursuant to the terms of a contract that it had with the government. Neither the government's interest in obtaining privileged information nor MIT's interest in supporting its relationship with the government justified preserving the attorney-client privilege. The court noted: "But the general principle that disclosure normally negates the privilege is worth maintaining. To maintain it here makes the law more predictable and certainly eases its administration." Id. at 685. Acknowledging the difficulty created by government demands, the court stated: ". . . MIT chose to place itself in this position by becoming a government contractor." Id. at 686.
 
See:
 
In re Qwest Communications Int'l, Inc., 450 F. 3d 1179 (10th Cir. 2006). Adopting majority view and rejecting selective waiver doctrine.
 
Ratliff v. Davis Polk & Wardwell, 354 F.3d 165 (2d Cir. 2003). Even if documents sent to law firm were provided to obtain legal advice, the privilege was waived when the client authorized the law firm to turn the documents over to the SEC.
 
In re Columbia/HCA Healthcare Corp. Billing Practices Litig., 293 F.3d 289, 294-310 (6th Cir. 2002). Noting inconsistent application of selective waiver and following Westinghouse in rejecting selective waiver in favor of a "bright line" rule that disclosure waives the privilege.
 
United States. v. Mass. Inst. of Tech., 129 F.3d 681, 685-86 (1st Cir. 1997), Rejecting Diversified Indus. and holding that production to the Defense Contract Audit Agency waived the privilege.
 
In re Steinhardt Partners, L.P., 9 F.3d 230, 236 (2d Cir. 1993). Court refused to acknowledge selective waiver in the case before it, but expressly declined to adopt a per se rule against selective waiver, leaving the door open where the parties enter into a confidentiality order.
 
In re Martin Marietta Corp., 856 F.2d 619, 623 (4th Cir. 1988). A client conducted an internal investigation into alleged fraudulent accounting procedures and disclosed the results to the government to avoid indictment. The court found that this disclosure resulted in waiver for other civil litigation. The resulting waiver extended to non-disclosed materials, and even to undisclosed details underlying the published data. However, the court noted that there was only a partial waiver for opinion work product.
 
In re Subpoenas Duces Tecum, 738 F. 2d 1367, 1370 (D.C. Cir. 1984). Relying on Permian, the court found that a party waived the privilege by disclosing information to the SEC, despite the fact that the party's transmittal letter stated that the documents were confidential and their submission of them to the SEC was not a waiver of any privilege.
 
In re Sealed Case, 676 F.2d 793, 824 (D.C. Cir. 1982). Court found that company had waived privilege by voluntarily submitting report of investigative counsel to the SEC. This waiver included any documentation necessary to evaluate the report.
 
In re Sulfuric Acid Antitrust Litig., 235 F.R.D. 407, 427 (N.D. Ill. 2006). Defendants waived any claim of privilege by producing documents to Department of Justice pursuant to a subpoena.
 
In re Lupron Marketing and Sales Practices Litig., No. MDL 1430, 01-CV-10861-RGS, 2004 WL 764454, at *2 (D. Mass. March 17, 2004). Holding that the voluntary disclosure of privileged documents to the Department of Justice waived the privilege.
 
In re Tyco Int'l, Inc. No. MDL 02-1335-B, 2004 WL 556715, at *2 (D.N.H. Mar. 19, 2004). Court followed In re Columbia/HCA Healthcare and declined to extend privilege to documents produced to the government despite the fact that the party had produced the documents with cover letters indicating that the production did not waive the party's attorney-client privilege. The court said that such a confidentiality agreement cannot be used against third-parties requesting the information.
 
United States v. Bergonzi, 216 F.R.D. 487, 494 (N.D. Cal. 2003). Any attorney-client privilege was waived, despite confidentiality agreement, where company disclosed information to the government and gave governmental agencies discretion to disclose the information in certain circumstances. The company's willingness to allow certain disclosures defeated its stated desire to keep the communications confidential.
 
Information Res., Inc. v. Dun & Bradstreet Corp., 999 F. Supp. 591, 593 (S.D.N.Y. 1998). Voluntary disclosure of privileged information to government agency in order to "incite it to attack the informant's adversary" waives privilege.
 
Maryville Acad. v. Loeb Rhoades & Co., 559 F. Supp. 7, 9 (N.D. Ill. 1982). Rejected concept of selective waiver and found party's disclosure to the government constituted full waiver of the privilege.

With:
 
McDonnell Douglas Corp. v. E.E.O.C., 922 F. Supp. 235 (E.D. Mo. 1996). Disclosure of attorney-client privileged information to EEOC did not waive the privilege with respect to third parties. EEOC and producing party had agreed that production of privileged information to EEOC would not constitute waiver.
 
S.E.C. v. Amster & Co., 126 F.R.D. 28, 30 (S.D.N.Y. 1989). Recognizing selective waiver if the party holding the privilege and the government have entered into a binding agreement protecting the privilege. See also Fox v. Cal. Sierra Fin. Servs., 120 F.R.D. 520, 526-27 (N.D. Cal. 1988).
Although the rule allowing selective waiver per se, as announced by the Eighth Circuit, is largely out of favor, there remains a lively debate over whether disclosure to the government waives privileges when the disclosing party has entered into a confidentiality agreement with the government. In Westinghouse, the Third Circuit held that disclosure to the government waived privileges, even when the disclosing party had entered into a confidentiality agreement with the government agency receiving the privileged materials. 951 F.2d at 1426 The Second Circuit took a softer position in Steinhardt Partners. The court stated:
 
[W]e decline to adopt a per se rule that voluntary disclosures to the government waive work-product protection. . . Establishing a right rule would fail to anticipate situations in which the disclosing party and the government. . . have entered into an explicit agreement that the [government agency] will maintain the confidentiality of the disclosed materials.
 
9 F.3d at 236. See Maruzen Co., Ltd. v. HSBC USA, Inc., No. 00 Civ. 1079 (RO), 2002 WL 1628782 (S.D.N.Y. July 23, 2002) (following In re Steinhardt and finding no waiver of attorney-client privilege where parties entered into a confidentiality agreement before internal investigation materials were disclosed to U.S. Attorney's office); see also In re Natural Gas Commodity Lit., No. 03 Civ. 6186VMAJP, 2005 WL 1457666, at *8-9 (S.D.N.Y. June 21, 2005) (holding that In re Steinhardt Partners requires examination of more than existence of confidentiality agreements, court must also consider whether requesting party has substantial need for the document(s).)
In United States v. Massachusetts Institute of Technology, 129 F.3d 681 (1st Cir. 1997), the parties had not entered into a confidentiality agreement, but the court disposed of the selective waiver doctrine with such a broad stroke, it seems that the existence of a confidentiality agreement would have made little difference.
The Sixth Circuit struck the most decisive blow yet to the selective waiver doctrine with its holding in In re Columbia/HCA Healthcare Corp. Billing Practices Litigation, 293 F.3d 289 (6th Cir. 2002). In that case, Columbia/HCA refused to disclose its internal audit materials to the Department of Justice, and ultimately did so only after entering into a confidentiality agreement with the government that stated: "[t]he disclosure of any report, document, or information by one party to the other does not constitute a waiver of any applicable privilege or claim under the work-product doctrine." Id. at 292 (emphasis added). Despite the agreement, the court rejected "the concept of selective waiver, in any of its various forms," and affirmed an order compelling the release of the audits to private litigants. Id. at 302.
Several recent cases have revived some hope for the deteriorating doctrine. In In re McKesson HBOC, Inc. Securities Litigation., No. 99-CV-20743, 2005 WL 934331, at *10 (N.D. Cal. Mar. 31, 2005), the court determined that the selective disclosure of materials to the SEC waived the attorney-client privilege but did not waive the work product doctrine. The Court noted that the weight of authority outside the Ninth Circuit rejected the selective waiver doctrine, but followed the Delaware case of Saito, above. Similarly, hope may be alive in the Second Circuit, where the Southern District of New York recently applied the doctrine. In In re Natural Gas Commodity Litigation, No. 03 Civ. 6186VMAJP, 2005 WL 1457666, at *5-6 (S.D.N.Y. June 21, 2005), the court noted that the Second Circuit in In re Steinhardt Partners, above, did not completely reject the doctrine, leaving open the possibility that disclosure to the government might not constitute a waiver in all cases. The Gas Commodity court further held that disclosure to the SEC did not waive privilege as applied to work product. The producing parties had obtained confidentiality agreements from the government and the parties seeking production already had been provided with the underlying factual material upon which the reports had been based. See also Saito v. McKesson HBOC, Inc., No. 18553, 2002 Del. Ch. LEXIS 125, at *15 (Del. Ch. Ct. Oct. 25, 2002) (citing Delaware's general reluctance to find waiver of privileges, the court upheld a form of selective waiver, compelling production of documents disclosed to the government prior to execution of a confidentiality agreement, and protecting documents disclosed after the confidentiality order was in place).
The Seventh Circuit has not yet definitely stated its position on selective waiver, and has left the door open for this theory. See Dellwood Farms, Inc. v. Cargill, Inc., 128 F.3d 1122, 1126-27 (7th Cir. 1997) (although noting that courts have generally rejected selective waiver doctrine, finding that government had not deliberately waived its law enforcement privilege by playing tapes to corporate counsel to persuade company to plead guilty merely because it made a mistake in failing to obtain a non-disclosure agreement with corporate counsel). At least one district court case in the Seventh Circuit has stepped through the door opened by Dellwood, holding that where the company "insisted on a confidentiality agreement" before disclosing privileged materials to the SEC, the selective waiver doctrine preserved the confidentiality of work product documents. Lawrence E. Jaffe Pension Plan v. Household Int'l, Inc., No. 02 C 5893, 2006 WL 3524016, at *22 (N.D. Ill. Dec. 6, 2006).
However, the trend in other courts is to reject -- or at least be slow to adopt -- the selective waiver doctrine. See McKesson v. Green et al., 610 S.E.2d 54 (Ga. 2005); In re Tyco Int'l, 2004 WL 556715 (D.N.H. March 19, 2004); United States v. Bergonzi, 216 F.R.D. 487, 494-98 (N.D. Cal. 2003) (rejecting selective waiver doctrine despite confidentiality agreement with the government). In In re Qwest Communications Int'l, Inc., 450 F.3d 1179, 1192 (10th Cir. 2006), the court did a thorough analysis of the split of authority among the circuits and concluded that "the record in this case is not sufficient to justify the adoption of a selective waiver doctrine as an exception to the general rules of waiver upon disclosure of protected material.
The Advisory Committee on Evidence Rules recently approved a proposed Rule 502(c) governing "selective waiver" that would provide additional protection for corporations that waive the privilege in the context of federal investigations. See supra Section IV(E)(4)(a). It is too early to determine whether proposed Rule 502(c) will be adopted -- or whether the Rule will undo the case law on waiver.
b. Partial Selective Waiver: Extent of Selective Waiver
Production of privileged documents exposes a party not only to the risk that a disclosed document or communication will be subject to discovery by other parties, but also the risk that additional documents and communications relating to the same subject matter will also be left unprotected. The party seeking disclosure typically argues that the party asserting the privilege may not select only those portions of a confidential communication that it wants to disclose.
Decisions in this area depend on the particular facts of the case, including the importance of the additional documents for a fair assessment of the disclosures made voluntarily, the nature of the person or entity requesting the material, and the efforts taken by the producing party to limit disclosure of privileged materials. In any event, there is a substantial risk that disclosures to a government agency will result in a waiver both as to disclosed documents and non-disclosed documents regarding the same subject matter. But see:
 
United States v. Lipshy, 492 F. Supp. 35, 43-44 (N.D. Tex. 1979). Disclosures in a report to the IRS and on SEC Form 10-K concerning questionable political contributions did not result in a waiver of the attorney-client privilege with respect to all of the details underlying an investigative report prepared by the corporation.
 
In re Grand Jury Subpoena, 478 F. Supp. 368, 372-73 (E.D. Wis. 1979). The court held that disclosure of an independent counsel's report to the SEC, grand jury, and IRS did not result in a waiver of the attorney-client privilege with respect to the underlying documentation. The court based its reasoning in part on the policy argument that voluntary cooperation with government agencies and grand juries might be significantly curtailed if cooperation amounted to a full waiver of the attorney-client privilege.
 
In re BP Products of North America Inc.,     S.W.3d    , 2006 WL 2973037, at *9 (Tex. App. Oct. 13, 2006). Disclosure of reserve figure to SEC did not constitute waiver of attorney-client and work product privileges over documents detailing reserve figure methodology used by counsel.
Some courts have found a selective disclosure of otherwise privileged materials to constitute a full waiver of the privilege. The District of Columbia Circuit, in a case decided after Upjohn, found that selective disclosure fully waived the privilege. In re Sealed Case, 676 F.2d 793 (D.C. Cir. 1982). In In re Sealed Case, outside counsel for the defendant conducted an internal investigation into possible illegal foreign payments and submitted a final report to the SEC. The grand jury subpoenaed and received all but 38 of these documents. Id. at 803-04. The court of appeals held that the privilege had been waived for of all the documents, including the 38 that had been withheld. It rejected the corporation's argument that disclosure would prompt corporations to avoid voluntary cooperation with the government, and found that the corporation had "attempted to manipulate its privilege, by withholding vital documents while making a great pretense of full disclosure of their contents." Id. at 825. However, the court did state that the SEC or any other government agency could expressly agree to limitations on further disclosure consistent with their legal responsibilities. Id. at 824; see also:
 
In re Martin Marietta Corp., 856 F.2d 619, 623-23 (4th Cir. 1988). Waiver extended to details underlying the information actually disclosed to the agency.
 
In re Weiss, 596 F.2d 1185, 1186 (4th Cir. 1979). The court compelled an attorney to testify before a grand jury because he already had testified and produced documents before the SEC.
 
In re M & L Bus. Mach. Co., 161 B.R. 689, (Bankr. D. Colo. 1993). Bank produced documents to the U.S. Attorney under an express reservation of privilege and the U.S. Attorney agreed to treat the production as privileged and confidential. In a later suit, the court found selective waiver and upheld the privilege based on the confidentiality provision, the express reservation of rights, the fact that the disclosure was not self-serving (vs. a voluntary compliance program), and the fact that the bank's assertion of privilege was in a suit brought by a private litigant rather than the government.
 
Rauh v. Coyne, 744 F. Supp. 1181, 1185 (D.D.C. 1990). Disclosure of counsel's conclusion after an internal investigation did not waive work product protection for the report and underlying materials.
 
Triax Co. v. United States, 11 Cl. Ct. 130, 134 (1986). Voluntary disclosure of privileged communications by the Air Force to the Government Accounting Office constituted full waiver of all communications on the same subject. However, the court adopted a narrow interpretation of which subject matter had been disclosed.
7. The "Culture of Waiver" and the Government View of the Privilege
2006 brought significant developments with respect to waiver in the context of corporate cooperation with government investigations. In the wake of the Enron-like scandals of 2000 and 2001, the Department of Justice moved to toughen the standards applied to corporate internal investigations. First, on January 20, 2003, then acting Deputy Attorney General Larry D. Thompson issued a Memorandum entitled "Principles of Federal Prosecution of Business Organizations" (the "Thompson Memorandum"), followed by the memorandum issued on October 21, 2005 by then Acting Deputy Attorney General Robert D. McCallum, Jr., entitled "Waiver of Corporate Attorney-Client and Work Product Protections (the "McCallum Memorandum"). The Thompson and McCallum Memoranda established a number of strict requirements for corporate cooperation in government and internal investigations in order to avoid fraud or other criminal prosecutions on par with the Enron and WorldCom disasters. The Thompson Memorandum instructed prosecutors to consider specific factors in the corporate charging context, such as whether "the corporation's timely and voluntary disclosure of wrongdoing and its willingness to cooperate with the government's investigation." Included in this factor was whether a company waived attorney-client and work product privileges to aid the government investigation, and whether the company pays the attorney's fees of its employee(s) where not required by state law. One of the many effects of these factors was the creation of a significant tension between counsel's ability to root out internal wrongdoing through a open and frank dialogue with the company's directors, officers and employees, and the possibility that the government would require the company to turn over that information to the government and act as a kind of de facto, quasi-public prosecutor going forward by helping prosecutors to uncover additional information on an ongoing basis.
This "culture of waiver" is well documented in a report released on March 6, 2006, by the Association of Corporate Counsel & National Association of Criminal Defense Lawyers, entitled, "The Decline of the Attorney-Client Privilege in the Corporate Context" (the "ACC/NACDL Report"). Available at http://www.acca.com/Surveys/attyclient2.pdf (last accessed November 15, 2006). The Report notes that nearly 75 percent of respondents (comprised of both in-house and outside corporate counsel) reported that the government has created a "culture of waiver" in which it is routinely expected that a company under investigation will broadly waive legal privileges to demonstrate that the entity is cooperating with investigators and in order to secure favorable treatment. Id. at 3. Attorneys also reported that such "requests" are in fact communicated more like ultimatums and that prosecutors or enforcement officials make such direct statements as, "asserting the attorney-client privilege was inconsistent with cooperation." Id. at 20. Pushing against this government pressure was the fact that 15 percent of the survey participants whose companies were the targets of a government investigations within the past five years also subsequently found themselves facing related third-party civil suits. Id. at 4. These responses were consistent across all sizes and types of companies, with more than 50 percent of both in-house and outside counsel reporting an erosion of the corporate attorney-client privilege. Id. at 4-5.
a. Legal Community Response
In 2006, the corporate world, the federal judiciary and the Congress fought back against the culture of waiver. In U.S. v. Stein, 435 F. Supp. 2d 330 (S.D.N.Y. 2006), Judge Kaplan of the Southern District Court of New York issued a scathing opinion lambasting the Thompson Memorandum and the "culture of waiver" it had created. Stein involved prosecutorial conduct in connection with the indictment of several former partners and employees of the accounting firm, KPMG, as a result of a series of allegedly fraudulent tax shelter schemes promoted by the firm. It was the long-standing policy of KPMG to advance and pay legal fees for individual counsel for partners, principals and employees of the firm in civil, criminal or other investigatory proceedings involving conduct arising in the scope of the individual's duties or responsibilities with the firm. Id. at 340. As the result of a series of discussions between the U.S. Attorney's office and KPMG's outside counsel, during which the government repeatedly and emphatically reinforced the inherent threat in the Thompson Memorandum that payment of legal fees and expenses of its personnel would be construed as contrary to full cooperation, KMPG entered into a Deferred Prosecution Agreement which essentially allowed the firm to avoid criminal indictment in exchange for its broad cooperation with the government, including, but not limited to, ceasing payment of attorney's fees for its indicted employees and partners. Id. at 340-50. The court ruled that the government's conduct consistent with and in furtherance of the Thompson Memorandum directly caused KPMG to cease paying the legal fees and expenses of its former employees and partners thereby depriving the defendants of their Fifth Amendment right to due process and their Sixth Amendment right to counsel. Id. at 352-53; 362-64. Although the opinion did not directly address the issue of the attorney-client and work product privileges, it did signal a strong condemnation of the government's heavy-handed application of the Thompson Memorandum. Id. at 365 ("The individual prosecutors in the USAO acted pursuant to the established policy of the DOJ as expressed in the Thompson Memorandum. They understood, however, that the threat inherent in the Thomson Memorandum, coupled with their own reinforcement of that threat, was likely to produce exactly the [desired] result."). The court's strong language, though focused on this narrow issue, arguably implicated the broader scope of the DOJ's coercive practices developed under the Thompson Memorandum. Cf. In re Qwest, 450 F.3d at 1197-99 (discussing "culture of waiver" and rejecting creation of new privilege for materials surrendered during government investigations and noting the "absence of Tenth Circuit precedent and a dearth of favorable circuit authority" to support such a privilege).
In April 2006, the United States Sentencing Commission recommended amendments to the United States Sentencing Guidelines to delete language that authorized and encouraged prosecutors to require corporations to waive the attorney-client and work product privileges as a condition for receiving "cooperation credit" in government investigations. See U.S. SENTENCING GUIDELINES, 71 Fed. Reg. 28, 063, 28, 073, cmt. n.13 ("the Commission received public comment and heard testimony at public hearings ... [which stated] that the sentence at issue could be misinterpreted to encourage waivers."); see also David H. Kirstenbroker, Pamela G. Smith, David S. Slovick, & Alyx S. Pattison, Criminal and Civil Investigations: United States v. Stein and Related Issues, 1574 PLI/Corp 401, 421 (Sept. 2006). These amendments became effective in November 2006.
Pressure on the DOJ to revamp its approach in 2006 also came from Congress. On December 7, 2006, Sen. Arlen Specter introduced the "Attorney-Client Privilege Protection Act of 2006" (the "Privilege Act"), which would specifically prohibit federal prosecutors from using certain conduct by the corporation as a factor in determining whether a corporation is cooperating with the government. The specific actions the Privilege Act sought to protect were: (1) any legitimate assertion of the attorney-client privilege or work product doctrine; (2) the payment of an employee's legal fees; (3) the entry into a joint defense agreement with an employee; (4) the sharing of relevant information with an employee; and (5) the refusal to terminate or sanction an employee for exercising his or her constitutional rights. On January 4, 2007, Sen. Spector re-introduced the legislation in the 110th Congress as S. 186.
b. DOJ's Response: The McNulty Memorandum
In response to pressure from the private sector and the legislative and judicial branches, on December 12, 2006, Deputy Attorney General Paul J. McNulty issued revised corporate charging guidelines for federal prosecutors nationwide. Paul J. McNulty, "Principles of Federal Prosecution of Business Organizations", Dec. 12, 2006. The "McNulty Memorandum" added new restrictions for prosecutors seeking privileged information from companies, including privileged attorney-client communications. When requesting a waiver of attorney-client or work product privileged information, prosecutors must: (1) establish a "legitimate need" for privileged communications; (2) seek approval of the U.S. Attorney who, in turn, must (3) obtain written approval of the Deputy Attorney General. Id. at 8-9.
"Legitimate need" is distinguished from "desirable or convenient" information and depending upon:
 
(1) the likelihood and degree to which the privileged information will benefit the government's investigation;
 
(2) whether the information sought can be obtained in a timely and complete fashion by using alternative means that do not require waiver;
 
(3) the completeness of the voluntary disclosure already provided; and
 
(4) the collateral consequences to a corporation of a waiver.
 
Id. at 9.
Prosecutors are further admonished that "attorney-client communications should be sought only in rare circumstances," and instead to seek factual information first. Id. at 9. Factual information, or "Category I" information, may include: (1) copies of key documents; (2) witness statements; (3) purely factual information memoranda regarding the underlying misconduct; (4) organization charts created by in-house counsel; (5) factual chronologies; (6) factual summaries; and (7) reports containing investigative facts documented by counsel. Id. In contrast, "Category II" privileged information includes: (1) attorney notes; (2) memoranda or reports containing counsel's mental impressions and conclusions; (3) legal determinations reached as a result of internal investigations; and (4) legal advice given to the corporation. Id.
The McNulty Memo provides that, where a corporation chooses not to provide privileged "Category II" information, prosecutors are "not to consider that declination against the corporation in their charging decisions." However, the McNulty Memo also provides that prosecutors "may always favorably consider a corporation's acquiescence to the government's waiver request in determining whether the corporation has cooperated in the government's investigation." Id. at 10; see also the ACC/NACDL Report (reporting criticism of the lack of uniformity across U.S. Attorney's offices as to the circumstances in which a privilege waiver will be requested or approved). Whether the new guidelines will change actual practices of the DOJ or put an end to the "culture of waiver" remains to be seen.
8. Inadvertent Disclosure
Sometimes a party inadvertently discloses privileged communications, particularly in cases where large numbers of documents are produced. The courts differ as to whether these disclosures waive the attorney-client privilege. Courts have generally followed one of three distinct approaches to attorney-client privilege waiver based on inadvertent disclosures: (1) the strict approach, (2) the "middle of the road" approach, and (3) the lenient approach. Gray v. Bicknell, 86 F.3d 1472, 1483 (8th Cir. 1996). Under the strict approach, adopted by the court in In re Sealed Case, 877 F.2d 976 (D.C. Cir. 1989), any document produced, either intentionally or otherwise, loses its privileged status. Gray, 86 F.3d at 1483. The strict test has been criticized because it may chill communications between clients and attorneys. Id. Under the lenient approach, attorney-client privilege must be knowingly waived; a determination of inadvertence ends the inquiry. Id. This approach fosters open communications between client and attorney, but creates no incentive to maintain tight control over privileged material. Id. The majority of courts apply the middle approach, applying a case by case analysis to determine the reasonableness of the precautions taken to protect against disclosure and the actions taken to recover the communication. The middle approach strikes a balance between protecting attorney-client privilege and allowing, in certain situations, the unintended release of privileged documents to waive that privilege. Gray, 86 F.3d at 1484. The Restatement has collected several of the factors frequently used by courts to analyze inadvertent waiver pursuant to the middle approach:
 
(1) the relative importance of the communication (the more sensitive the communication, the greater the necessary protective measures);
 
(2) the efficacy of precautions taken and of additional precautions that might have been taken;
 
(3) whether there were externally imposed pressures of time or in the volume of required disclosure;
 
(4) whether disclosure was by act of the client or lawyer or by a third person; and
 
(5) the degree of disclosure to non-privileged persons.
 
REST. 3D § 79 cmt. h; see also Alldread v. City of Grenada, 988 F.2d 1425 (5th Cir. 1993) (five factor reasonableness test for inadvertent production); Snap-On Inc. v. Hunter Eng'g Co., 29 F. Supp. 2d 965, 971-72 (E.D. Wis. 1998). Compare:
 
In re Sealed Case, 877 F.2d 976, 980 (D.C. Cir. 1989). Holding that inadvertent production of document waives privilege and that "[s]hort of court-compelled disclosure or other equally extraordinary circumstances, we will not distinguish between various degrees of 'voluntariness' in waivers of the attorney-client privilege." [citations omitted.]
 
Transamerica Computer Co. v. IBM Corp., 573 F.2d 646, 647-51 (9th Cir. 1978). Failure to screen out all privileged documents could be excused on the ground that the production was compelled rather than voluntary due to the large number of documents produced on a tight schedule.
 
IBM v. United States, 471 F.2d 507, 509-11 (2d Cir. 1972), on reh'g, 480 F.2d 293 (2d Cir. 1973). No waiver occurred when the party asserting the privilege was ordered by the court to produce an extraordinary number of documents on an expedited basis and all reasonable precautions had been taken.
 
Harp v. King, 266 Conn. 747, 773-774, 835 A.2d 953, 969-970 (Conn. 2003). Legal memoranda disclosed in connection with freedom of information request did not constitute waiver where the privileged documents were only two of many documents produced and the documents were clearly marked confidential.
 
Lifewise Master Funding v. Telebank, 206 F.R.D. 298, 304-05 (D. Utah 2002). Ordering the return of certain privileged documents that were inadvertently produced, where these documents had been identified as privileged but were accidentally produced, but ordering that the privilege had been waived as to additional "intermingled" documents that had not been identified as privileged but were produced as non-privileged documents.
 
Scott v. Glickman, 199 F.R.D. 174, 177-78 (E.D.N.C. 2001). Holding that disclosure must be intentional to effect a waiver and that the reasonableness of precaution used to prevent disclosure is the most important factor in determining whether waiver occurs.
 
U.S. ex rel. Bagley v. TRW, Inc., 204 F.R.D. 170, 175-76 (C.D. Cal. 2001). Inadvertent production of document did not constitute waiver under facts and circumstances test where adequate screening was in place and 200,000 pages of documents were produced.
 
McCafferty's, Inc. v. Bank of Glen Burnie, 179 F.R.D. 163, 169 (D. Md. 1998). Party did not waive the privilege by tearing up a document containing privileged communications and placing it into a trash can. Although additional precautions such as shredding could have been taken, tearing the document into 16 pieces and placing it in a private trash can were reasonable measures to maintain the confidentiality of the document.
 
Aramony v. United Way of Am., 969 F. Supp. 226, 238 (S.D.N.Y. 1997). Inadvertent production of 99 pages of privileged documents that were included in a total of 65,500 pages of documents produced did not constitute waiver of the attorney-client privilege. The court analyzed the care taken by the party asserting the privilege in light of the following factors: "the reasonableness of the precautions taken to prevent inadvertent disclosure; the time taken to rectify the error; the scope of the discovery; the extent of the disclosure; overriding issues of fairness." Id. at 235; see also Urban Outfitters, Inc. v. DPIC Companies, Inc., 203 F.R.D. 376, 380 (N.D. Ill. 2001); Abbott Labs v. Andrx Pharm., Inc., No. 05 C 1490, 2006 WL 2092377, at *4 (N.D. Ill. July 25, 2006); Lawrence E. Jaffe Pension Plan v. Household Int'l, Inc., No. 02 C 5893, 2006 WL 3524016, at *11 (N.D. Ill. Dec. 6, 2006) (same where defendants produced four million pages of documents).
 
Lloyds Bank PLC v. Republic of Ecuador, No. 96 Civ. 1789 DC., 1997 WL 96591, at *3-4 (S.D.N.Y Mar. 5, 1997). Inadvertent production of fifty privileged documents, comprising 227 pages, did not waive the privilege where reasonable measures were taken and counsel acted quickly to correct the error. "As a general matter . . . 'inadvertent production will not waive the privilege unless the conduct of the producing party or its counsel evinced such extreme carelessness as to suggest that it was not concerned with the protection of the asserted privilege.'" (citation omitted).
 
Berg Elecs., Inc. v. Molex, Inc., 875 F. Supp. 261, 263 (D. Del. 1995). Privileged documents in voluminous production were tabbed with post-its, but certain privileged documents were produced when tabs fell off documents. Court ruled privilege not waived because attorney had taken reasonable steps to protect confidentiality, and a more stringent rule would punish client for attorney's carelessness.
 
Georgetown Manor, Inc. v. Ethan Allen, Inc., 753 F. Supp. 936, 939 (S.D. Fla. 1991). Inadvertent production of the transcript of a privileged communication was not a waiver when produced among thousands of documents.
 
Gramm v. Horsehead Indus., Inc., No. 87 Civ. 5122, 1990 WL 142404, at *7 (S.D.N.Y. Jan. 25, 1990). A former employee possessed a privileged memo and produced it in response to a subpoena. He refused to disclose the memo but did not realize that a second copy was in another file. The court found that the unintended and erroneous disclosure was not a waiver.
 
Kansas-Nebraska Natural Gas Co. v. Marathon Oil Co., 109 F.R.D. 12, 21 (D. Neb. 1985). Inadvertent production of one privileged document among 75,000 produced pages does not waive the privilege where the party attempted to screen such documents from production.
 
New York Times Newspaper Div. of New York Times Co. v. Lehrer McGovern Bovis, 300 A.D.2d 169, 172, 752 N.Y.S.2d 642, 645-46 (2002). Affirming trial court determination that production was inadvertent where producing party took reasonable steps to protect the document, promptly sought to retrieve document, and opposing party would not be prejudiced by protective order.
 
Leibel v. Gen. Motors Corp., 250 Mich. App. 229, 240-41, 646 N.W.2d 179, 184-85 (2002). Remanding for decision on whether memo, which was available in court files in other cases, had been voluntarily produced or inadvertently or involuntarily produced and therefore protected by the privilege and holding that, under Michigan law, privilege would continue to apply if no true waiver had occurred, notwithstanding public availability of subject memo.
 
With:
 
Engineered Prods. Co. v. Donaldson Co., Inc., 313 F. Supp. 2d 951, 1020-22 (N.D. Iowa 2004). A party's disclosure of attorney-client communications at a deposition, while represented by counsel, cannot be considered inadvertent under the middle (or even lenient) inadvertent disclosure test.
 
Urban Box Office Network, Inc. v. Interfase Managers, L.P., No. 01 Civ. 8854(LTS)(THK), 2004 WL 2375819 (S.D.N.Y. Oct. 24, 2004). Court found that disclosure was not inadvertent where the defendants made a tactical choice to disclose documents instead of fighting a discovery battle they expected to lose.
 
Murray v. Gemplus Int'l, S.A., 217 F.R.D. 362, 366 (E.D. Pa. 2003). Since defendant failed to take any action to recover privileged documents for eleven weeks after discovering the inadvertent disclosure, the court held that the defendant wanted the plaintiff to see the documents and could not now claim privilege. This theory was supported by the fact that the "privileged" documents were highly beneficial to the defendant's case.
 
Amgen, Inc. v. Hoechst Marion Roussel, Inc., 190 F.R.D. 287, 292-93 (D. Mass. 2000). Where four boxes of privileged documents were segregated in separate boxes on a separate shelf from 200,000 pages, mistakenly picked up by a copy vendor, copied along with non-privileged documents, and produced to opposing counsel, the court found that inadvertent production constituted a waiver.
 
S.E.C. v. Cassano, 189 F.R.D. 83, 85-86 (S.D.N.Y. 1999). Where SEC produced one 100 page privileged document among 52 boxes of non-privileged documents, and SEC acted twelve days later to rectify the problem, the court held that there had been inadvertent waiver. The court found persuasive evidence that on the day of the document production opposing counsel asked an SEC paralegal to copy the privileged document immediately, the paralegal telephoned SEC counsel for approval, and SEC counsel did not review a copy of the document to find out why opposing counsel was so interested in it. "The circumstances of the request [to copy the document] clearly should have suggested to the SEC attorney that defense counsel had found what they regarded as gold at the end of the proverbial rainbow. Any attorney faced with such a request in comparable circumstances should have reviewed the document immediately, if only to find out what the other side thought so compelling. . . . Yet the SEC attorney authorized production of the document, sight unseen. Any other precautions that were taken, and there were some, fade into insignificance in the face of such carelessness."
 
In re Grand Jury Investigation of Ocean Trans., 604 F.2d 672, 674-78 (D.C. Cir. 1979). Where documents were produced in response to a grand jury subpoena with no indication of their privileged status there was a complete waiver.
 
Hartford Fire Ins. Co. v. Garvey, 109 F.R.D. 323, 331 (N.D. Cal. 1985). Where there was a "complete failure to take reasonable precautions" an inadvertent production waived the privilege.
 
Chubb Integrated Sys., Ltd. v. Nat'l Bank, 103 F.R.D. 52, 67 (D.D.C. 1984). The weight of authority recognizes that waiver can occur through inadvertence.
 
Elkton Care Ctr. Assocs. Ltd. P'ship v. Quality Care Mgmt., Inc., 145 Md. App. 532, 544-45, 805 A.2d 1177, 1183-84 (2002). Finding waiver under "intermediate" five-prong test where production was not massive and where counsel did not timely bring inadvertent production to trial court's attention.
 
See also:
 
Genentech, Inc. v. U.S. Int'l Trade Comm'n, 122 F.3d 1409 (Fed. Cir. 1997). Inadvertent waiver of 12,000 pages of privileged materials in a multi-district patent infringement suit in the U.S. District Court constituted a waiver for all purposes, including discovery in an International Trade Commission proceeding. "Once the attorney-client privilege has been waived, the privilege is generally lost for all purposes and in all forums." Id. at 1416.
In general, the client must take prompt and reasonable steps to recover a privileged document after an inadvertent disclosure is discovered. See Permian Corp. v. United States, 665 F.2d 1214, 1220-21 (D.C. Cir. 1981); JOHN W. STRONG, McCORMICK ON EVIDENCE § 93 (5th ed. 1999). In some cases, parties have made provision for inadvertent disclosure in protective orders. At least one court has acknowledged such an arrangement in dictum. See Chubb Integrated Sys., Ltd. v. Nat'l Bank, 103 F.R.D. 52, 67-68 (D.D.C. 1984) (court suggested that contractual agreements between the parties which provided that inadvertent disclosure of documents will not be a waiver would be enforceable against a signatory); REST. 3D § 79 cmt. h; but see Snap-On Inc. v. Hunter Eng'g Co., 29 F. Supp. 2d 965, 971 (E.D. Wis. 1998) (refusing to grant preemptive order that provided that inadvertent disclosure would not result in waiver because there was not solid basis for the preemptive order in Seventh Circuit case law, the relevant jurisdiction for attorney-client privilege issues in the case).
The courts that have found waiver based on inadvertent disclosures are split over whether a full or partial waiver results. Compare:
 
In re Grand Jury Proceedings, 219 F.3d 175, 183 (2d Cir. 2000). Where waiver is a result of inadvertent document disclosure, scope of waiver should be limited based on the circumstances and overall fairness, including prejudice to the opposing party.
 
Koch Materials Co. v. Shore Slurry Seal, Inc., 208 F.R.D. 109, 118-19 (D.N.J. 2002). Inadvertent disclosure of in-house counsel's handwritten notes waived privilege as to particular documents and not as to entire subject matter concerned.
 
Metzger v. City of Leawood, No. 00-2015-KHV, 2000 WL 1909637, at *2 (D. Kan. Dec. 20, 2000). Noting that modern rule is to limit waiver to the individual document produced rather than to subject matter of which document is a part.
 
Mergentime Corp. v. Wash. Metro. Area Transp. Auth., 761 F. Supp. 1, 2 (D.D.C. 1991). Inadvertent production of notes waived the privilege for the notes but not for other related privileged documents.
 
Golden Valley Microwave Foods, Inc. v. Weaver Popcorn Co., 132 F.R.D. 204, 208 (N.D. Ind. 1990). Inadvertent production of privileged communications results in waiver only for the disclosed document unless the disclosure was self-serving.
 
With:
 
In re Sealed Case, 877 F.2d 976, 980-81 (D.C. Cir. 1989). Inadvertent disclosure constitutes waiver not just for the single document disclosed but of all other communications relating to the same subject matter.
 
Weil v. Inv./Stet. Indicators, Research & Mgmt., Inc., 647 F.2d 18, 25 (9th Cir. 1981). Even if inadvertent, voluntary disclosure constitutes waiver of all communications on the same subject.
 
First Wis. Mortgage Trust v. First Wis. Corp., 86 F.R.D. 160, 173-74 (E.D. Wis. 1980). Even inadvertent disclosure can waive the privilege for related documents.
To facilitate the rapid production of documents and reduce the risk that the inadvertent production of privileged material will result in an irrevocable loss of privilege, some litigants have submitted to extra-judicial confidentiality agreements. Such agreements provide that, in the event of an inadvertent production of privileged material, the party receiving such material will return the documents and decline to assert a waiver of privilege.
Where the producing party has not been "completely reckless," at least some courts have enforced such agreements. See United States Fid. & Guar. Co. v. Braspetro Oil Servs. Co., Nos. 97 Civ. 6124, 98 Civ. 3099, 2000 WL 744369, at *5 (S.D.N.Y. June 8, 2000).
9. Involuntary Disclosure
Traditional attorney-client privilege analysis required absolute confidentiality in attorney-client communications. See 8 JOHN H. WIGMORE, EVIDENCE §§ 2325-26. Thus, the client assumed the risk that some third party would obtain the otherwise privileged information, whether by surreptitiously overhearing the conversation, or by later theft. See In re Grand Jury Proceedings Involving Berkley and Co., 466 F. Supp. 863, 869 (D. Minn. 1979).
The modern trend has been to maintain the privilege where reasonable precautions have been taken against eavesdropping or theft. See id. (directing the government to turn over to the court for in camera review of privileged status documents stolen from a corporation and turned over to the government by a disgruntled former employee); see also In re Dayco Corp. Derivative Sec. Litig., 102 F.R.D. 468, 470 (S.D. Ohio 1984) (diary subject to attorney-client and work product privilege remained privileged after publication of excerpts in a newspaper where no indication existed that the diary was voluntarily supplied to the paper).
Where the party asserting a waiver of the privilege has itself engaged in improper conduct resulting in inadvertent production, courts have been particularly protective of the subject of such conduct. For example, in Stephen Slesinger, Inc. v. Walt Disney Co., No. BC 022365, 2004 WL 612818, at *1-12 (Cal. Sup. Ct. March 29, 2004), the plaintiff hired a private investigator to obtain documents from the defendant over a multi-year period. The private investigator apparently obtained documents from Disney trash bins on Disney property and, in some cases, off of desktops at Disney. The plaintiff, or its private investigator further altered certain of these documents to remove headers or other indicia of attorney-client privilege. The plaintiff maintained that it had obtained all of its documents from a single Disney dumpster, but the court rejected this claim in light of the time-span and variety of documents involved and the credibility of the plaintiff's witnesses. In light of the plaintiffs illegal and abusive discovery behavior, the court not only declined to find a waiver on the defendant's part, but directed a verdict against the plaintiff as a discovery sanction. Id. at *13.
Where, however, insufficient precautions have been taken to maintain confidentiality, discovery by a third person may still result in waiver. For example, where privileged documents are placed in a trash can and thereafter recovered by a third party, some courts will find a waiver to have occurred. See Suburban Sew 'N Sweep, Inc., v. Swiss-Bernina, Inc., 91 F.R.D. 254, 260 (N.D. Ill. 1981) (noting the "modern trend" toward finding a lack of waiver in "eavesdropper" cases, but concluding that "if the client or attorney fear such disclosure, it may be prevented by destroying the documents or rendering them unintelligible before placing them in a trash dumpster").
In addition, where a party discloses documents pursuant to a court order, that disclosure is considered involuntary. See Rambus, Inc. v. Infineon Techs. AG, 220 F.R.D. 264, 275 (E.D. Va. 2004). However, where a party felt it had no choice but to disclose the communications, and no order actually compels the disclosure, the disclosure will not be considered to have been judicially compelled. Id. at 276-77.
10. "At Issue" Defenses
The attorney-client privilege may be deemed waived when the privileged communication is itself an issue in the litigation. This occurs when the client alleges that she relied on the advice of counsel, misunderstood an agreement, diligently investigated a claim, or otherwise puts an attorney's advice into issue. See e.g., Peterson v. Wallace Computer Servs., Inc., 984 F. Supp. 821, 825 (D. Vt. 1997) (defendant waived the attorney-client privilege with respect to notes and memoranda prepared for the defendant's attorney during the course of an internal investigation of sexual harassment complaints by asserting that it conducted an adequate investigation of plaintiff's complaints); REST. 3d § 80(1)(b); see also Employment Discrimination Cases: "At Issue" Waiver, § IX.C.2., below. Defenses to a criminal or civil action that the client's legal assistance was ineffective, negligent or wrongful would also waive the privilege. In re Cont'l Ill. Sec. Litig., 732 F.2d 1302, 1315 n.20 (7th Cir. 1984); Tasby v. United States, 504 F.2d 332, 336 (8th Cir. 1974); United States v. Woodall, 438 F.2d 1317, 1324-25 (5th Cir. 1970); Fischel & Kahn, Ltd. v. Van Straaten Gallery, Inc., 189 Ill. 2d 579, 585 (2000). Similarly, where a client asserts a claim for malpractice against an attorney, the party waives the privilege with respect to the advice at issue. See In re Marriage of Bielawski, 328 Ill. App. 3d 243, 254, 764 N.E.2d 1254, 1263-64 (2002) (holding that privilege was waived in later action to rescind marital settlement agreement where wife sued former attorney for malpractice related to the same); but see Jackson v. Greger, 854 N.E.2d 487, 491 (Ohio 2006) (in malpractice action against plaintiff's criminal attorney, privilege over attorney-client communications and related work product documentation of plaintiff's appellate counsel was not waived by plaintiff's discussion with appellate counsel regarding the possible negligent representation by her criminal attorney). However, merely denying allegations in defending a lawsuit does not cause "at issue" waiver. N.River Ins. Co. v. Philadelphia Reinsurance Corp., 797 F. Supp. 363 (D.N.J. 1992). Some courts have found that the at-issue waiver applies where a party asserts a position "the truth of which can only be assessed by examination of the privileged communication." Pereira v. United Jersey Bank, Nos. 94 Civ. 1565 & 1844, 1997 WL 773716, at *5 (S.D.N.Y. Dec. 11, 1997) (the attorney-client privilege was waived where defendant placed its knowledge and intent at issue and the defendant's in-house attorney played a major role in shaping and informing the defendant's knowledge and intent). Other courts have held that a party must affirmatively try to use the privileged communications to defend itself in the lawsuit in order to invoke the at-issue waiver. See:
 
Rhone-Poulenc Rorer, Inc. v. Home Indem. Co., 32 F.3d 851, 863-64 (3d Cir. 1994). Where the client makes the affirmative decision to place the advice of the attorney in issue, the privilege is waived.
 
United States v. Mendelsohn, 896 F.2d 1183, 1188-89 (9th Cir. 1990). In claiming that a party's attorney advised the party that an action was legal, party waived privilege as to attorney's testimony that he had in fact advised as to the action's illegality.
 
Parker v. Prudential Ins., 900 F.2d 772, 776 & n.3 (4th Cir. 1990). No waiver where opponent attempted to put advice of counsel at issue.
 
Walker v. County of Contra Costa, 227 F.R.D. 529, 533-34 (N.D. Cal. 2005). When employer presents an internal investigation of discrimination as an affirmative defense, the privilege with regard to investigation-related documents is waived. Here the court conducted an in camera review to avoid disclosure of documents not related to the subject matter of the affirmative defense.
 
Roehrs, M.D. v. Minn. Life Ins. Co., 228 F.R.D. 642, 646-47 (D. Ariz. 2005). Defendant waived privilege with regard to communications between insurance adjusters and in-house counsel when the defendant affirmatively relied on these communications to show good faith on behalf of the adjusters in denying the plaintiffs claims.
 
Atlantic Inv. Mgmt., LLC v. Millennium Fund I, Ltd., 212 F.R.D. 395, 398-99 (N.D. Ill. 2002). Attorney-client privilege is generally waived when the client asserts claims or defenses that put his attorney's advice at issue in the litigation.
 
Harter v. Univ. of Indianapolis, 5 F. Supp. 2d 657, 664-65 (S.D. Ind. 1998). Plaintiff, asserting a claim against his former employer under the Americans with Disabilities Act (ADA), did not waive the attorney-client privilege by alleging that his former employer failed to make reasonable accommodations for his disability through good faith negotiations with the plaintiff's attorney. While the plaintiff's claim placed his purported effort of making good-faith negotiations at issue, the plaintiff did not depend on privileged communications to make out his ADA claim.
 
In re Carter, 62 B.R. 1007, 1014 (Bankr. C.D. Cal. 1986). Trustee sued attorneys claiming that they had not rendered valuable services to the bankruptcy estates. When attorneys defended by claiming that they had provided valuable services, court found that no waiver had occurred since it was not attorneys who had put the value of the services in issue. The court held that "[s]killful pleadings may not render a privilege a nullity."
 
Chase Manhattan Bank N.A. v. Drysdale Sec. Corp., 587 F. Supp. 57 (S.D.N.Y 1984). No waiver occurs when plaintiff seeks to force waiver by using defendant's privileged communications to prove its case.
a. Reliance On Advice Of Counsel
A client who claims that he acted pursuant to the advice of a lawyer cannot use the privilege to immunize that advice from scrutiny. See Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 1162-63 (9th Cir. 1992); REST. 3D § 79 cmt. c. Such a defense clearly places the lawyer's advice at issue and waives the privilege for all materials concerning the same subject matter. See JOHN W. STRONG, McCORMICK ON EVIDENCE § 93 (J. Strong. 4th ed. 1992); see also:
 
Bittaker v. Woodford, 331 F.3d 715, 719-21 (9th Cir. 2003). By asserting ineffective assistance of counsel related to prior habeas petition, criminal litigant effected implied waiver of attorney-client privilege, but only as to issues related to habeas petition, and only to the extent necessary to allow the state to fairly litigate matters put at issue.
 
SRI Int'l, Inc. v. Advanced Tech. Lab., Inc., 127 F.3d 1462, 1465 (Fed. Cir. 1997). In a patent infringement case, plaintiffs can obtain patent opinions issued by defendant's counsel where defendant asserts defense of reliance on advice of counsel in order to prove willful infringement.
 
In re Grand Jury Proceedings Oct. 12, 1995, 78 F.3d 251, 254-55 (6th Cir. 1996). The owner and president of a laboratory disclosed to government investigators that they had consulted Medicare attorney regarding certain charging practices reflected in the laboratory's marketing plan, and that they had relied on the attorney's advice. Court held that the laboratory had waived the attorney-client privilege with respect to the specific aspect of the marketing plan discussed with investigators, but not with respect to other aspects of the marketing plan discussed with the attorney.
 
Glenmede Trust Co. v. Thompson, 56 F.3d 476, 486-87 (3d Cir. 1995). Plaintiff shareholders were entitled to law firm's file concerning services provided to defendant corporation. Court concluded that defendant had waived the privilege for these materials by alleging that it had relied on the law firm's advice about tax regulations.
 
Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 1162-63 (9th Cir. 1992). Pennzoil claimed it had reasonably relied on counsel for its position that purchase of stock in Chevron would receive favorable tax treatment. Court stated that no attorney-client privilege existed for documents relating to counsel's position since the party cannot shield documents that could possibly refute the defense.
 
United States v. Bilzerian, 926 F.2d 1285, 1292-94 (2d Cir. 1991). The court refused to permit party to testify that he believed in good faith based on advice of counsel that his actions were legal without being subject to cross-examination about the basis for this belief and the actual communications he had with his attorney.
 
Conkling v. Turner, 883 F.2d 431 (5th Cir. 1989). Plaintiff claimed that he did not know of the falsity of some information until his attorney notified him. Court found that attorney was subject to deposition because these privileged communications had been placed in issue by plaintiff.
 
Collaboration Props., Inc. v. Polycom, Inc., 224 F.R.D. 473, 476 (N.D. Cal. 2004). In patent infringement action, party waived privilege with regard to advice of counsel regarding infringement by relying on the advice as an affirmative defense. However, the waiver did not extend to litigation-related communications made after the complaint had been filed.
 
Sanofi-Synthelabo v. Apotex Inc., 299 F. Supp. 2d 303, 308-09 (S.D.N.Y. 2004). Where the plaintiff relied on advice of counsel to cancel certain process claims in a patent infringement suit, the court held that the plaintiff must disclose communications relating to that decision because those may be relevant to the overall validity of the patent.
 
Sedillos v. The Board of Educ. of Sch. Dist. No. 1, 313 F. Supp. 2d 1091, 1094 (D. Col. 2004). By relying on the advice of counsel to defend his actions, the defendant waived the attorney-client privilege with regard to all communication on the subject matter of that advice.
 
Sharper Image Corp. v. Honeywell Int'l Inc., 222 F.R.D. 621, 638-40 (N.D. Cal. 2004). Defendant's reliance on advice of counsel regarding patent infringement waived the privilege with regard to communications on infringement issues. Waiver applied to relevant communications pre- and post-complaint in the instant action. However, the waiver did not extend to the defendant's communications with counsel regarding two pending patent applications.
 
Convolve, Inc. v. Compaq Computer Corp., 224 F.R.D. 98, 103-04 (S.D.N.Y. 2004). When defendant advanced an advice of counsel defense, it waived attorney-client privilege with respect to all communications relating to attorney's advice regarding willful infringement of a patent. The waiver extended to communications with all attorneys on that subject matter.
 
Blackhawk Molding Co., Inc. v. Portola Packaging, Inc., No. 03 C 6060, 2004 WL 2211616, at *1-2 (N.D. Ill. Oct. 1, 2004). Court found waiver of attorney-client privilege where defendant relied on counsel's opinion letter regarding patent validity and enforceability. The court extended the subject matter of the waiver to include infringement in general in addition to communications relating to validity and enforceability.
 
Irwin Indus. Tool Co. v. Orosz, No. 03 C 1738, 2004 U.S. Dist. LEXIS 4265, at *4 (N.D. Ill. Mar. 17, 2004). Party that relies on advice of counsel in defending patent infringement claim must disclose all attorney-client communications on the subject matter.
 
Verizon Cal. Inc. v. Ronald A. Katz Tech. Licensing, L.P., 266 F. Supp. 2d 1144, 1147 (C.D. Cal. 2003). Defense to willful patent violation of reliance on advice of counsel waived privilege as to all communications related to willfulness of infringement.
 
BASF Aktiengesellschaft v. Reilly Indus., Inc., 283 F. Supp. 2d 1000, 1005-06 (S.D. Ind. 2003). Where defendant relied on advice of counsel as an affirmative defense in a patent infringement case, the court held that the attorney-client privilege was waived to the broadest extent possible. The waiver encompassed post-suit communications because the defendant altered its position since the inception of the litigation.
 
McLaughlin v. Lunde Truck Sales, Inc., 714 F. Supp. 916 (N.D. Ill. 1989). Court found that a defense of good faith reliance on the advice of Department of Labor acted as waiver of the attorney-client privilege. Party cannot ask for an inference of good faith then use the privilege to shield information that could show there was no good faith reliance.
 
Hartz Mountain Indus., Inc. v. Comm'r, 93 T.C. 521, 525 (T.C. 1989). In a dispute over whether a settlement was an ordinary or capital loss, plaintiff filed an affidavit which set forth its internal position concerning the intent behind the settlement. Court found that this placed in issue factual matters surrounding confidential communications and thus waived the attorney-client privilege.
 
But see:
 
In re Grand Jury Subpoena Duces Tecum, 798 F.2d 32, 34 (2d Cir.1986). Holding that "the assertion that the corporation was acting upon the advice of counsel does not establish, without more . . . that the attorney-client privilege was waived."
 
Terra Novo, Inc. v. Golden Gate Prods., Inc., No. C-03-2684 MMC EDL, 2004 WL 2254559, at *3 (N.D. Cal. Oct. 1, 2004). Reliance on advice regarding infringement from "opinion counsel" did not create a waiver because confidential information was only disclosed to "litigation counsel" and "opinion counsel" did not have access to any confidential information or documents.
 
Beery v. Thomson Consumer Elecs. Inc., 218 F.R.D. 599, 605 (S.D. Ohio 2003). Patent infringement plaintiff did not waive attorney-client privilege by relying on counsel's opinions during his deposition. The plaintiff was not asserting the counsel's advice as an affirmative defense to infringement, instead the advice informed his understanding of whether he had a valid claim. Unlike an infringement defendant, for whom counsel's advice can make or break a defense of good faith, here the counsel's advice at issue did not affect the outcome of the case.
 
Akamai Techs., Inc. v. Digital Island, Inc., No. C-00-3508 CW(JCS), 2002 WL 1285126, at *9 (N.D. Cal. May 30, 2002). Provision of attorney's memo summarizing legal issues related to claim as part of settlement discussions, and pursuant to agreement that its use would be limited to such discussions, did not waive privilege.
 
Standard Chartered Bank PLC v. Ayala Int'l Holdings (U.S.), Inc., 111 F.R.D. 76 (S.D.N.Y. 1986). Privilege is waived when communications are themselves an issue in the litigation only where:

(1) the very subject of privileged communications is critically relevant to the issue to be litigated,

(2) there is a good faith basis for believing such essential privileged communications exist, and

(3) there is no other source of direct proof on the issue.

Implied waiver principle will not be expanded, however, to every case in which fraud or reliance is an issue, and the moving party alleges that a legal opinion was the actual impetus for his opponent's actions.
 
See also:
 
In re Grand Jury Subpoena, 341 F.3d 331, 336-37 (4th Cir. 2003). A client may waive the attorney-client privilege through his answers to FBI agents' questions during a non-custodial interview. Here, a man of Middle Eastern descent was interviewed by FBI agents regarding his knowledge relating to terrorism investigations. When the agents asked the man why he had answered "no" to a question on an INS "greed card" application, the man answered that he had done so on the advice of his attorney. The court held that this answer waived the privilege and enabled the government to question the attorney before a grand jury about otherwise privileged communications.
b. Lack Of Understanding
In some cases, a client may place communications with her attorney at issue by asserting a defense of lack of understanding of the terms or extent of an agreement. In Synalloy Corp. v. Gray, 142 F.R.D. 266 (D. Del. 1992), the court held that three conditions must be shown before an injected issue will be deemed to waive the privilege:
 
(1) the privilege was asserted due to the act of the asserting party (i.e., by filing suit);
 
(2) through the act of asserting the privilege, the asserting party puts confidential communications into issue by making them relevant; and
 
(3) the application of the privilege denies the non-asserting party access to information vital to its defense.
 
Id. at 269. In Synalloy, the parties signed an agreement which extinguished all "pending claims" between them. The defendant claimed this agreement extinguished liability for a short swing profit claim. The plaintiff argued that under its understanding of the agreement the profit claim was not covered, and it would never have agreed to extinguish such a claim. The court held that the misunderstanding injected a new issue of inducement through fraudulent misrepresentation, and therefore the communications of the attorney would be required to determine reliance and lack of understanding. Thus, the court held that plaintiff waived the privilege by introducing this new issue to the litigation. Id.; see also Sax v. Sax, 136 F.R.D. 542 (D. Mass. 1991) (asserting lack of mutual understanding of memorandum agreement waived attorney-client privilege); Pitney-Bowes, Inc. v. Mestre, 86 F.R.D. 444, 447 (S.D. Fla. 1980) (same).
c. Diligence And Fraudulent Concealment
The activities and communications of attorneys may also be placed in issue to prove or disprove an attorney's diligence. In New York v. Cedar Park Concrete Corp., 130 F.R.D. 16, 18-19 (S.D.N.Y. 1990), the state claimed that defendant's fraudulent concealment prevented detection of his acts and thus tolled the statute of limitations. The court determined that the state's correspondence, memoranda and attorney work papers were necessary to refute the defense of concealment. The court therefore found the privilege waived and ordered production of the papers relevant to the concealment period. See also:
 
Byers v. Burleson, 100 F.R.D. 436, 440 (D.D.C. 1983). Plaintiff asserted that the statute of limitations was tolled since his opponent had fraudulently concealed his activities. Court held that this waived the privilege for all communications relating to plaintiff's knowledge that a claim had arisen.
d. Extent Of "At Issue" Waiver
In cases where a client has waived the privilege by placing privileged communications in issue, the scope of the resulting waiver extends to all of the communications bearing on that subject matter that the court deems necessary to litigate the issue fairly. However, waiver only affects those communications that address the issue raised by the client, and not related issues. See Pray v. New York City Ballet Co., No. 96 Civ. 5723, 1998 U.S. Dist. LEXIS 2010, at *4 (S.D.N.Y. Feb. 11, 1998) (privilege waived where defendant asserted as an affirmative defense to a sexual harassment claim that it took reasonable steps to remedy plaintiff's complaints by conducting an internal investigation, but only with respect to communications concerning the steps taken to carry out the investigation and not with respect to the advice given to the defendant by its attorneys before and after the internal investigation); REST. 3D § 79 cmt. b; see also:
 
Bittaker v. Woodford, 331 F.3d 715, 719-21 (9th Cir. 2003). By asserting ineffective assistance of counsel related to prior habeas petition, criminal litigant effected implied waiver of attorney-client privilege, but only as to issues related to habeas petition, and only to the extent necessary to allow the state to fairly litigate matters put at issue.
 
Bristol-Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc., No. 95 Civ. 8833, 1997 WL 801454, at *3 (S.D.N.Y. Dec. 31, 1997). A party is not permitted to waive the privilege with respect to documents that are favorable to the party's position, while, at the same time, withholding documents that are potentially adverse to its position. All documents relating to the information that the party placed in issue must be disclosed. "Particular solicitude," however, should be given to information "encompassing the attorney mental processes.'"
 
Panter v. Marshall Field & Co., 80 F.R.D. 718, 720-21 (N.D. Ill. 1978). Waiver extends to all communications concerning the transaction for which advice was sought.
11. Witness Use of Documents
a. Refreshing Recollection of Ordinary Witnesses
The attorney-client privilege may also be waived by using privileged documents for the purpose of refreshing the recollection of a witness. Rule 612 of the Federal Rules of Evidence provides that "if a witness uses a writing to refresh memory for the purposes of testifying ... an adverse party is entitled to have the writing produced at the hearing, to inspect it, to cross-examine the witness thereon, and to introduce in evidence those portions which relate to the testimony of the witness." Under Federal Rule of Evidence 612, if the witness uses the communication to refresh or aid his testimony while he is actually testifying, then the privilege is waived and the court must order disclosure. FED. R. EVID. 612(1). However, if the witness merely used the communication to refresh his recollection prior to testifying, the court has discretion to order disclosure in the interests of justice. FED. R. EVID. 612(2). Courts and commentators have created different guidelines for the exercise of this discretion. See, e.g., 3 JACK W. WEINSTEIN ET AL., WEINSTEIN'S FEDERAL EVIDENCE, P 612[04] (2d ed. 2004) (waiver should be found only when witness has consulted a writing embodying his own communication and his testimony discloses a significant part of the communication); REST 3D § 130 cmt. e (waiver should be found only in the uncommon circumstance when the document serves as a script for the witness' testimony in place of his own memory); see also:
 
Farm Credit Bank v. Huether, 454 N.W.2d 710, 718 (N.D. 1990). Waiver extends to a document specifically referred to while testifying but not to other documents in the same file.
 
Baker v. CNA Ins. Co., 123 F.R.D. 322, 327 (D. Mont. 1988). Use of privileged documents to refresh recollection prior to deposition does not constitute waiver unless the testimony disclosed the substance of a significant portion of the communication.
 
Leybold-Heraeus Techs., Inc. v. Midwest Instrument Co., 118 F.R.D. 609, 614 (E.D. Wis. 1987). Deponent who uses privileged document to refresh his recollection before testifying waives the attorney-client privilege for the document.
 
James Julian, Inc. v. Raytheon Co., 93 F.R.D. 138, 146 (D. Del. 1982). Plaintiff waived both attorney-client and work product privileges for an attorney-assembled binder of non-privileged documents by using the binder to prepare witnesses for their depositions.
 
R.J. Hereley & Son Co. v. Stotler & Co., 87 F.R.D. 358, 359 (N.D. Ill. 1980). Attorney-client privilege waived by a deponent's use of a privileged document to refresh his recollection before testifying.
 
Wheeling-Pittsburgh Steel Corp. v. Underwriters Labs., Inc., 81 F.R.D. 8, 8-11 (N.D. Ill. 1978). Court ordered production of correspondence with attorney that witness used to refresh recollection prior to deposition.
However, courts are reluctant to order disclosure when a witness has merely looked at a document prior to testifying. See:
 
Leucadia, Inc. v. Reliance Ins. Co., 101 F.R.D. 674, 679 (S.D.N.Y. 1983). The court noted that the legislative history of the amendments to Federal Rule of Evidence 612 indicates that Congress did not intend to bar the assertion of the attorney-client privilege for writings used by a witness to refresh his memory. Court, therefore, held that the mere fact that a deposition witness "looked at" a document protected by the attorney-client privilege in preparation for a deposition is inadequate to destroy the privilege.
 
Jos. Schlitz Brewing Co. v. Muller & Phipps (Hawaii) Ltd., 85 F.R.D. 118, 199-20 (W.D. Mo. 1980). Correspondence file of attorney-witness was not discoverable even though he "looked at" it prior to his deposition.
 
Compare:
 
In re Scrap Metal Antitrust Litig., No. 1:02 CV 0844, 2006 WL 2850453, at *7 (N.D. Ohio Sept. 30, 2006). Outline used by counsel to prepare defendant's key witness after witness previous testimony revealed numerous inconsistencies with prior deposition testimony was not subject to work product protection because of the detailed nature of the outline (described as a "script" by the court) and the "articulate and detailed recollections" subsequently provided during defendant's examination of the witness.
 
Audiotext Communications Network, Inc. v. US Telecom, Inc., 164 F.R.D. 250, 254 (D. Kan. 1996). Notebook of privileged documents that witness "flipped through" the night before his deposition had an impact on witness' testimony because the witness testified that he was "astonished" that he had forgotten some of the items that were in the notebook.
 
Bank Hapoalim, B.M. v. Am. Home Assur. Co., No. 92 Civ. 3561, 1994 WL 119575 (S.D.N.Y. Apr. 6, 1994). Despite the fact that a witness testified he only "looked at" documents prior to deposition, the fact that he spent several hours reviewing them, was able to identify specific documents that he had reviewed, and displayed knowledge of the information contained in the documents showed that the documents impacted his testimony and should be produced.
In general, only a partial waiver results when a witness has used a document to refresh his recollection. The privilege is not waived for all other documents that relate to the document used to refresh recollection. Marshall v. U.S. Postal Serv., 88 F.R.D. 348, 380-81 (D.D.C. 1980) (privilege waived only as to documents used to refresh recollection, but not as to all communications on same subject). Federal Rule 612 permits the court to inspect the communications in camera and excise portions unrelated to the subject matter of the testimony. See The Extent of Waiver, § I.G.5., above.
b. Use of Documents by Experts
Where privileged documents are disclosed to a testifying expert, the court must balance two competing considerations:
 
(1) the belief that adequate truth-finding requires litigants to have access to the information on which an expert opinion is based in order to verify that opinion; and
 
(2) the belief that attorney-client communications should be protected in order to encourage disclosure of the details necessary for good legal advice.
 
Courts typically resolve questions involving waiver of the privilege in such situations by balancing the interest of the discovering party against any prejudice from abrogation of the privilege. This generally leads to discovery of the information used by experts to form their opinions. See:
 
In re Omeprazole Patent Litig, 227 F.R.D. 227, 231 (S.D.N.Y. 2005). The court held that a party waived its attorney-client privilege by disclosing to its expert the reasons for deleting certain sections of his expert reports.
 
Herrick Co. v. Vetta Sports, No. 94 Civ. 0905, 1998 U.S. Dist. LEXIS 14544 at *4 (S.D.N.Y. Sept. 14, 1998), rev'd in part on other grounds, 360 F.3d 329 (2d Cir. 2004). "[A] party waives the attorney-client and work-product privileges whenever it puts an attorney's opinion into issue, by calling the attorney as an expert witness or otherwise." Party waived privilege by designating its ethics consultant as its testifying legal ethics expert during the course of litigation. Id. at *10. The court ordered the production of all documents relating to the advice rendered by the expert to the party on the general subject matter of the expert's report filed with the court. Id. at *10-11.
 
In re E.I. du Pont de Nemours and Co. -- Benlate (R) Litig., 918 F. Supp. 1524 (M.D. Ga. 1995), rev'd on other grounds, 99 F.3d 363, 368 (11th Cir. 1996). An expert's reliance on summary data waives any privilege that might protect the more detailed underlying data.
 
Shadow Traffic Network v. Superior Court of L.A. County, 29 Cal. Rptr. 2d 693 (Cal. Ct. App. 1994). Court held that designation of an expert as a witness manifests the client's consent to disclosure of the privileged information formerly provided to the expert, and the privilege is therefore waived.
 
Coyle v. Estate of Simon, 588 A.2d 1293 (N.J. Super. App. Ct. Div. 1991). In medical malpractice case, copies of portions of the plaintiffs' written statements to their attorney were given to their expert. Court determined that the attorney-client privilege was waived after an in camera review showed that some of the statements were relevant to the expert's opinions.
 
See also The Work Product Doctrine: Use of Documents by Witnesses and Experts, § IV.E.8., below.
H. Exceptions to the Attorney-Client Privilege
1. The Crime-Fraud Exception
The attorney-client privilege does not apply when a client consults a lawyer for the purpose of furthering an illegal or fraudulent act. Clark v. United States, 289 U.S. 1 (1933); In re Antitrust Grand Jury, 805 F.2d 155, 162 (6th Cir. 1986); In re Grand Jury Subpoenas Duces Tecum, 773 F.2d 204, 206 (8th Cir. 1985); United States v. Horvath, 731 F.2d 557, 562 (8th Cir. 1984). The so-called "crime-fraud exception" removes the protection of the attorney-client privilege for communications concerning contemplated or continuing crimes or frauds. This exception encompasses criminal and fraudulent conduct based on action as well as inaction. See:
 
Nix v. Whiteside, 475 U.S. 157, 174 (1986). "A defendant who informed his counsel that he was arranging to bribe or threaten witnesses or members of the jury would have no 'right' to insist on counsel's assistance or silence. Counsel would not be limited to advising against that conduct. An attorney's duty of confidentiality, which totally covers the client's admission of guilt, does not extend to a client's announced plans to engage in future criminal conduct. "
 
In re Grand Jury Subpoena, No. 04-30508, 2005 WL 1745307, at *4-5 (5th Cir. July 26, 2005). Circuit court upheld district court ruling that privilege had been waived with regard to defendant's comments to attorney regarding obstruction of justice. The lower court properly conducted an in camera examination of the defendant's counsel and based on that evidence and affidavits, the government had indeed made a prima facie showing of criminal activity.
 
United States v. Alexander, 287 F.3d 811, 816-17 (9th Cir. 2002). Client's threats against attorney and others were not subject to privilege.
 
Craig v. A.H. Robins Co., 790 F.2d 1, 13 (1st Cir. 1986). General counsel's advice to destroy documents after loss of court case was not privileged in later suit.
 
In re Antitrust Grand Jury, 805 F.2d 155, 165-66 (6th Cir. 1986). Communications made with intent to further violations of the Sherman Act held not privileged based on the crime-fraud exception.
 
In re Grand Jury Subpoena Duces Tecum, 731 F.2d 1032, 1038-39 (2d Cir. 1984). Fraudulent conveyance was a sufficient basis for application of the crime-fraud exception.
 
Specialty Minerals, Inc. v. Pleuss-Stauffer AG, No. 98 Civ. 7775(VM)(MHD), 2004 WL 42280, at *9 (S.D.N.Y. Jan. 7, 2004). Intentional failure to disclose prior art to the Patent Office can constitute fraud on the Patent Office and would therefore waive the privilege for attorney-client communications involving the patent application proceedings.
 
In re St. Johnsbury Trucking Co., 184 B.R. 446, 455 (Bankr. D. Vt. 1995). Fraud on the court is sufficient basis for application of the crime-fraud exception.
 
Irving Trust Co. v. Gomez, 100 F.R.D. 273, 276 (S.D.N.Y. 1983). Intentional or reckless tort of refusing to release funds without a basis for belief that the customer was not entitled to his money was sufficient basis for application of the crime-fraud exception.
 
Hutchinson v. Farm Family Cas. Ins. Co., 867 A.2d 1, 6-7 (Conn. 2005). Crime-fraud exception extends to claims involving bad faith. There is no justification for a privilege where communications are made, for the purpose of, evading legal or contractual obligations.
 
People v. Dang, 93 Cal. App. 4th 1293, 113 Cal.Rptr.2d 763, (2001). Client's statement to attorney that he would kill witness if not successful in bribing the same was not protected by the privilege.
 
But see:
 
In re Public Defender Serv., 831 A.2d 890 (D.C. 2003). Crime-fraud exception does not apply where the communication did not further on-going or future crimes. The court ruled that a lawyer could not be compelled to disclose his client's communications to him in which the client may have asked the attorney to use a false affidavit at trial. The court observed that it is an attorney's duty to try to convince a client not to commit a crime or fraud that they may be contemplating. When the attorney is successful, the communication has not furthered a crime or a fraud and, as a consequence, is not discoverable.
 
Newman v. State, 384 Md. 285, 309-11, 863 A.2d 321, 335-36 (Md. Ct. App. 2004). Where defendant told attorney of plans to commit murder, the communication was privileged and not within the scope of the crime-fraud waiver. The defendant did not seek advice or assistance in furtherance of a crime nor was such a statement unusual in contested custody proceedings. Simply confessing a desire to commit a crime in the future is not sufficient to waive the privilege.
However, the crime-fraud exception does not apply to communications concerning crimes or frauds that occurred in the past. United States v. Zolin, 491 U.S. 554 (1989). Such communications remain protected. In cases where the communications at issue were made for the purpose of covering up past misconduct or obstructing justice, the privilege may be waived since these activities constitute a continuing offense. See:
 
In re Fed. Grand Jury Proceedings, 89-10, 938 F.2d 1578 (11th Cir. 1991). Court held that the crime-fraud exception applies only to current or future illegal acts. Thus, the privilege protected a memorandum sent after the fraud was completed but which memorialized communications which occurred during the fraud. Court concluded that post-crime repetition or discussion of earlier communications can be privileged even though the original conversation would not have been privileged because of the crime-fraud exception.
 
Duttle v. Bandler & Kass, 127 F.R.D. 46 (S.D.N.Y. 1989). Court required disclosure of documents which showed attempt to pay off an adversary in civil litigation in order to get allegations of criminal fraud withdrawn.
When an attorney dissuades or prevents his client from engaging in illegal conduct, the attorney-client relationship has not been abused; rather, the relationship has served the administration of justice by promoting legal conduct. See e.g. In re Grand Jury Investigation (Sch.), 772 N.E.2d 9, 21-22 (Mass. 2002). Whatever the client's initial intentions, the attorney-client communication in such a case does not further the commission of a crime or fraud; but instead it furthers obedience to the law. To withhold the privilege from such communications "would penalize a client for doing what the privilege is designed to encourage -- consulting a lawyer for the purpose of achieving law compliance." Restatement (Third) of the Law Governing Lawyers § 82 cmt. c (2000); accord, In re Sealed Case (Company), 107 F.3d 46, 49 (D.C. Cir. 1997).
After a party has invoked the attorney-client privilege, the person seeking to abrogate the privilege under the crime-fraud exception has the burden to present a prima facie case that the advice was obtained in furtherance of an illegal or fraudulent act. See In re Grand Jury Subpoena, 223 F.3d 213, 217 (3d Cir. 2000) (To establish crime-fraud exception, party seeking waiver must "make a prima facie showing that (1) the client was committing or intending to commit a fraud or crime, and (2) the attorney-client communications were in furtherance of that alleged crime or fraud.") (citation omitted); see also In re Grand Jury Proceedings, 401 F.3d 247, 251 (4th Cir. 2005); In re Grand Jury Subpoenas, 144 F.3d 653, 659-60 (10th Cir. 1998); United States v. Jacobs, 117 F.3d 82, 88 (2d Cir. 1997); In re Grand Jury, 845 F.2d 896, 897-98 (11th Cir. 1988); In re Sealed Case, 754 F.2d 395, 399 (D.C. Cir. 1985); In re Grand Jury Subpoena Duces Tecum, 731 F.2d 1032, 1038-39 (2d Cir. 1984); United States v. Horvath, 731 F.2d 557, 562 (8th Cir. 1984); In re Grand Jury Proceedings, 689 F.2d 1351, 1352 (11th Cir. 1982); Vardon Golf Co., Inc. v. Karsten Mfg. Corp., 213 F.R.D. 528, 534 (N.D. Ill. 2003); In re Campbell, 248 B.R. 435, 439 (Bankr. M.D. Fla. 2000); X Corp. v. Doe, 805 F. Supp. 1298, 1306-07 (E.D. Va. 1992); Coleman v. ABC, 106 F.R.D. 201, 207 (D.D.C. 1985). It is not necessary to show that the crime or fraud was actually completed -- only that the crime or fraud was the objective of the communication. In re Grand Jury Subpoena Duces Tecum, 731 F.2d 1032, 1039 (2d Cir. 1984). A party may not merely allege that a fraud occurred and that disclosure would help her prove the fraud, but must identify a specific communication made in furtherance of the fraud. See In re BankAm. Corp. Sec. Litig., 270 F.3d 639, 641-42 (8th Cir. 2001).
Courts have reached different conclusions on the burden of proof required by the prima facie case standard. See In re Feldberg, 862 F.2d 622, 62526 (7th Cir. 1988) (noting differences and finding that a prima facie case is shown by evidence sufficient to require an explanation by the party asserting the privilege). The United States Supreme Court has left open the question of what showing of proof must be made to establish the exception. United States v. Zolin, 491 U.S. 554, 563-64 n.7 (1989). At least two circuits have held that the party seeking to abrogate the privilege must demonstrate probable cause to believe that a crime or fraud was committed. In re Antitrust Grand Jury, 805 F.2d 155, 165-166 (6th Cir. 1986); In re Richard Roe, Inc., 68 F.3d 38, 40 (2d Cir. 1995) (reversing district court for applying "relevant evidence" standard rather than more stringent "probable cause" standard.); In re Richard Roe, Inc., 168 F.3d 69, 71 (2d Cir. 1999) (again reversing the district court for failure to find probable cause); In re Grand Jury Subpoena Duces Tecum, 731 F.2d 1032, 1039 (2d Cir. 1984) (standard requires probable cause to believe that a crime or fraud has been committed and that the communications were in furtherance thereof, or in other words that a prudent person has a reasonable basis to suspect the actual or attempted perpetration of a crime or fraud and that the communications were in furtherance thereof); see also S.E.C. v. Herman, No. 00 Civ. 5575 (PHK)(MHD), 2004 WL 964104, at *2 (S.D.N.Y. May 5, 2004) (applying probable cause test); In re Omnicom Group, Inc. Sec. Litig., 233 F.R.D. 400, 408, 410 (S.D.N.Y. 2006) (stating that a heightened probable cause standard should be applied given the complex technical accounting issues and the importance of preserving the attorney-client privilege). The Ninth Circuit requires a showing of "reasonable cause to believe that the attorney's services were utilized in furtherance of the ongoing unlawful scheme." See United States v. Martin, 278 F.3d 988, 1001 (9th Cir. 2002); see also In re Napster, Inc. Copyright Litig., 235 F.R.D. 463, 468 (N.D. Cal. 2006) (finding reasonable cause standard met based upon plaintiffs' use of counsel's services to prepare submissions to DOJ that were "arguably entirely false" and "certainly highly misleading."). The District of Columbia Circuit requires a showing which "offers evidence that if believed by [the] trier of fact would establish the elements of an ongoing or imminent crime or fraud." In re Sealed Case, 754 F.2d 395, 399 (D.C. Cir. 1985); see also Haines v. Liggett Group, Inc., 975 F.2d 81, 90 (3d Cir. 1992) (prima facie showing made if party seeking discovery presents evidence which if believed by the fact-finder would be sufficient to support a finding that the elements of the crime-fraud exception are met); In re Grand Jury Investigation, 445 F.3d 266, 278-79 (3d Cir. 2006) (crime-fraud exception applied to communications about client's legal obligations to comply with grand jury subpoena duces tecum where the government made a prima facie showing that client failed to satisfy her obligation to preserve electronic documents); In re Grand Jury Subpoenas, 144 F.3d 653, 660-61 (10th Cir. 1998) (prima facie showing established by "substantial and competent evidence" that the defendant used its attorney's legal services in furtherance of a crime); Sound Video Unlimited, Inc. v. Video Shack, Inc., 661 F. Supp. 1482, 1486 (N.D. Ill. 1987). In practice, these standards may not be very different. In re Public Defender Serv., 831 A.2d 890, 904 (D.D.C. 2003) (adopting "probable cause" as the test to establish crime-fraud exception). The Fifth Circuit regards such a prima facia case as requiring the showing of evidence, which if unrebutted, would result in a finding of fraud. See In re Grand Jury Subpoena, No. 04-30508 2005 WL 1745307, at *4-5 (5th Cir. July 26, 2005); In re Int'l Sys. and Controls Corp. Sec. Litig., 693 F.2d 1235, 1242 (5th Cir. 1982); In re Campbell, 248 B.R. 435, 440 (Bankr. M.D. Fla. 1999).
A party may not merely allege that a fraud occurred and that disclosure would help her prove the fraud, but must identify a specific communication made in furtherance of the fraud. See In re BankAm. Corp. Sec. Litig., 270 F.3d 639, 641 (8th Cir. 2001).
Some courts hold that a prima facie showing of inequitable conduct is insufficient to pierce the attorney-client privilege. See e.g. In re Spalding Sports Worldwide, Inc., 203 F.3d 800, 807 (Fed. Cir. 2000); Ferrara & DiMercurio, Inc. v. St. Paul Mercury Ins. Co., 173 F.R.D. 7, 13 (D. Mass. 1997); Milroy v. Hanson, 902 F. Supp. 1029, 1032-34 (D. Neb. 1995). Rather, "[t]o invoke the crime-fraud exception, a party challenging the attorney-client privilege must make a prima facie showing that the communication was made 'in furtherance of a crime or fraud." Id. at 807. A finding of fraud requires "higher threshold showings of both intent and materiality than does a finding of inequitable conduct." Id.; see also Vardon Golf Co., Inc. v. Karsten Mfg. Corp., 213 F.R.D. 528, 535 (N.D. Ill. 2003) (in order to establish a prima facie case that would destroy the protection of attorney-client privilege, the party making the claim is required to establish the elements of common law fraud). Dean Wigmore, however, considered the distinction between fraud and other intentional torts an overly "crude boundary." 8 JOHN H. WIGMORE, EVIDENCE § 2298, at 577 (McNaughton rev. ed. 1961). Following this more expansive approach, many courts have defined the exception to encompass communications in furtherance of a "tort," Horizon of Hope Ministry v. Clark County, Ohio, 115 F.R.D. 1, 5 (S.D. Ohio 1986); a "crime or tort," People v. Belge, 59 A.D.2d 307, 399 N.Y.S. 2d 539 (N.Y.A.D. 4th Dep't 1977), a "crime, fraud, or other type of misconduct fundamentally inconsistent with the basic premises of the adversary system," Coleman v. Am. Broadcasting Cos., 106 F.R.D. 201, 208 (D.D.C. 1985) (quoting In re Sealed Case, 676 F.2d 793, 812 (D.C. Cir. 1982)), or "intentional torts moored in fraud." Sackman v. Liggett Group, Inc., 173 F.R.D. 358, 364 (E.D.N.Y. 1997) (quoting Cooksey v. Hilton Int'l Co., 863 F. Supp. 150, 151 (S.D.N.Y. 1994)); see also In re Richard Roe, Inc., 168 F.3d 69, 71 (2d Cir. 1999) (a knowing pursuit of baseless litigation is sufficient to show the fraud element of the crime-fraud exception test when the suit had "little or no legal or factual basis"); Madanes v. Madanes, 199 F.R.D. 135, 149 (S.D.N.Y. 2001) (privilege does not protect communications in furtherance of an intentional tort) Rattner v. Netburn, No. 88 Civ. 2080, 1989 WL 223059, at *47 (S.D.N.Y. June 20, 1989) (same); In re Heuwetter, 584 F. Supp. 119, 127 (S.D.N.Y. 1984) (torts); Irving Trust Co. v. Gomez, 100 F.R.D. 273, 276 (S.D.N.Y. 1983) ("intentional or reckless tortious behavior"); Diamond v. Stratton, 95 F.R.D. 503, 505 (S.D.N.Y. 1982) (intentional tort).
In establishing a prima facie case, the court will generally examine evidence of the client's knowledge and intent to further the illegal act at the time the communication was made. See REST. 3D § 82 cmt. f. The client's intent is determinative; the ignorance or knowledge of the attorney does not matter. United States v. Weingold, 69 Fed. Appx. 575, 578 (3d Cir. 2003) (the privilege may be disregarded even if the lawyer is altogether innocent); In re BankAmerica Corp. Sec. Litig., 270 F.3d 639, 643 (8th Cir. 2001) (granting mandamus where district court failed to find connection between advice and intentional securities disclosure violation); In re Grand Jury Proceedings, 87 F.3d 377, 381-82 (9th Cir. 1996) (privilege is waived where communications were in furtherance of criminal activity, despite the fact that attorney was unaware of the criminal activity and may actually have hindered the attempted criminal activity); In re Grand Jury Investigation, 842 F.2d 1223 (11th Cir. 1987) (exception applies regardless of whether the attorney is aware of the client's improper purpose); see also United States v. Laurins, 857 F.2d 529 (9th Cir. 1988) (privilege waived for communications in which a client falsely told his attorney that documents were not in the country and the attorney repeated this claim to the IRS); In re Sealed Case, 754 F.2d 395, 402 (D.C. Cir. 1985); United States v. Horvath, 731 F.2d 557, 562 (8th Cir. 1984); JOHN W. STRONG, MCCORMICK ON EVIDENCE § 95 (5th ed. 1999); REST. 3D § 82 cmt. f. In addition, the client must have had the guilty intent at the time the advice was sought. See United States v. Rakes, 136 F.3d 1, 4 (1st Cir. 1998) (communications between victim of extortion and attorney did not fall within scope of crime-fraud exception even though purpose of communication was to comply with demands of individuals involved in an extortion scheme). But see In re Sealed Case, 754 F.2d 395, 402 (D.C. Cir. 1985) (party not required to make specific showing of client's intent in consulting attorney when attorneys were "front men" in scheme to subvert the judicial process by destroying and altering evidence). In cases where the attorney is involved in the crime or fraud and the client is ignorant, then the client can assert the attorney-client privilege. In re Impounded Case (Law Firm), 879 F.2d 1211, 1214 (3d Cir. 1989); see also:
 
Loustalet v. Refco, Inc., 154 F.R.D. 243, 246 (C.D. Cal. 1993). Third party witness retained attorney to assist in the preparation of a letter to the SEC which contained false statements. Court found that communications surrounding this letter were privileged since the client was consulting lawyer about the legality of his conduct and because it was the client, not the attorney, who had drafted the deceptive letter.
To establish the prima facie case, a link must also be drawn between the privileged communication and the crime or fraud. The communication must not merely relate to the crime or fraud, it must be in furtherance of it. See In re BankAmerica Corp. Sec. Litig., 270 F.3d at 643-44 (granting mandamus where district court did not link specific communications at issue to alleged fraud); United States v. White, 887 F.2d 267, 71 (D.C. Cir. 1989) (communication must be in furtherance of the crime or fraud not just related to the crime or fraud); In re Antitrust Grand Jury, 805 F.2d 155, 168 (6th Cir. 1986) ("[M]erely because some communications may be related to a crime is not enough to subject that communication to disclosure; the communication must have been made with an intent to further the crime"); Pritchard-Keang Nam Corp. v. Jaworski, 751 F.2d 277, 281-82 (8th Cir. 1984) (report of the results of an investigation into questionable payments was not itself in furtherance of crime or fraud, and therefore was not subject to disclosure under the crime-fraud exception); In re Sealed Case, 676 F.2d 793, 815 n.91 (D.C. Cir. 1982) (discussing the different standards required by the Circuit to establish the closeness of this link).
In addition, the court may not rely solely on the privileged document itself to prove the crime-fraud exception. Instead, in United States v. Zolin, 491 U.S. 554 (1989), the United States Supreme Court held that a party must make a preliminary showing before the court can conduct an in camera review. To make this showing, the movant must establish preliminary justification for a reasonable, good-faith belief that the communication is subject to the crime-fraud exception. Id. at 571-72. If this showing is made, the trial judge has the discretion to conduct an in camera examination of the entire communication. The judge is never required to conduct an in camera inspection. Id.
The reasoning in Zolin is similar to the Supreme Court's treatment of the coconspirator exception to the hearsay rule in Bourjaily v. United States, 483 U.S. 171, 107 S. Ct. 2775 (1987). In Bourjaily, the Court held that, in making a preliminary factual determination under Federal Rule of Evidence 801(d)(2)(E) about the existence of a conspiracy and the non-offering party's involvement in the conspiracy, a court may examine the hearsay statement sought to be admitted. 483 U.S. 171, 181, 107 S. Ct. 2775, 2781 (1987). In Zolin, likewise, a court may review the allegedly privileged communications in camera to determine whether the crime fraud exception applies. 491 U.S. at 572. Both Zolin and Bourjaily thus rejected the alternative rule that a court, in determining the preliminary facts relevant to the admission of the evidence, must only look to independent evidence other than the statements sought to be admitted. As distinct from the situation in Bourjaily, the Zolin court, however, required that a party seeking the in camera review must make a threshold showing that such review may reveal evidence to establish the claim that a crime-fraud exception applies. Id. at 571-72. In order to meet this preliminary showing requirement, a party opposing the privilege may use any non-privileged evidence in support of its request for in camera review, even if its evidence is not "independent" of the contested communications. Id. at 573-74 (allowing the use of partial transcripts reflecting the content of the contested communications to determine whether in camera review of the contested communications is appropriate). The party opposing the assertion of the attorney-client privilege must overcome this initial threshold showing, apparently without direct reliance on the contested evidence (although the party might show the contents of such communications by using other means or other medium of expression, like transcripts) before the contested evidence is directly examined in camera by the court. See also:
 
U.S. ex rel. Mayman v. Martin Marietta Corp., 886 F. Supp. 1243 (D. Md. 1995). A court cannot examine an otherwise privileged document in camera absent an adequate threshold prima facia showing. Court refuses to review privileged document that had been stolen from defendant by qui tam plaintiff who was former employee of defendant.
The crime-fraud exception can thus be proven during in camera inspection only after the moving party sets forth a factual basis sufficient for a reasonable person to conclude that such a review would establish the non-privileged nature of the documents. Zolin, 491 U.S. at 573-74; see also In re Grand Jury Subpoena, 2005 WL 1745307, at *4-5 (finding that district court properly conducted in camera examination where there was a good faith belief that defendant had discussed criminal conduct with counsel). In Haines v. Liggett Group, Inc., 975 F.2d 81, 96 (3d Cir. 1992), the court explored the relationship between (1) the burden to establish a prima facie case and (2) the showing required to justify an in camera review under Zolin. In the second showing, the court determines whether adequate evidence has been presented that in camera review will be fruitful. In making this determination, the court may consider only the presentation of the party challenging the privilege and seeking the in camera review. See In re Grand Jury Investigation, 974 F.2d 1068 (9th Cir. 1992). If in camera review is deemed potentially useful under this showing, the court then examines the disputed material and weighs the evidence to determine if the prima facie burden has been met. When evaluating the prima facie case, the court must follow a more formal procedure and the party invoking the protection of the privilege must be given opportunity to be heard under due process. Haines, 975 F.2d at 97; see also:
 
In re Marriage of Decker, 606 N.E.2d 1094, 1105-1107 (Ill. 1992). Illinois adopted the prima facie test of the U.S. Supreme Court in Zolin, which requires that a judge first require a factual showing adequate to support a good faith belief by a reasonable person that an in camera review of the materials may establish the claim that the crime-fraud exception applies.
After the court determines that the crime-fraud exception applies, the privilege will not protect any communications made in furtherance of the fraud. However, the exception does not remove protection for other non-related communications. See In re Sealed Case, 676 F.2d 793, 812-13 n. 74 (D.C. Cir. 1982); In re Special Sept. 1978 Grand Jury (II), 640 F.2d 49, 61 n.19 (7th Cir. 1980); REST. 3D § 82 cmt. g.
2. Exception for Suits Against Former Attorney
A client may also waive the privilege when he sues his former attorney. Laughner v. United States, 373 F.2d 326, 327 n.1 (5th Cir. 1967); REST. 3D § 83; 8 JOHN H. WIGMORE, EVIDENCE § 2327 (J. McNaughton rev. 1961); JOHN W. STRONG, MCCORMICK ON EVIDENCE § 91 (5th ed. 1999). Thus, the privilege will not protect communications relevant to a dispute over compensation or whether a lawyer acted wrongfully or negligently. 3 JACK W. WEINSTEIN ET AL., WEINSTEIN'S FEDERAL EVIDENCE P503(d)(3)[01] (2d ed. 2004); 24 CHARLES ALAN WRIGHT & KENNETH W. GRAHAM, JR., FEDERAL PRACTICE & PROCEDURE § 5503 (1986). However, an attorney may not use privileged information offensively against a client. See e.g., Siedle v. Putnam Invs., Inc., 147 F.3d 7, 11-12 (1st Cir. 1998) (complaint filed by attorney against former client that included privileged information must be sealed by the court to protect the confidentiality of the privileged communications); In re Rindlisbacher, 225 B.R. 180 (B.A.P. 9th Cir. 1998) (action filed by attorney against former client that was based on privileged information the attorney obtained while representing the former client was barred by both the attorney's ethical obligations and his obligation pursuant to the attorney-client privilege to preserve client confidences). This exception acts as a selective waiver for the attorney only. The communications remain privileged to the rest of the world. See REST. 3D § 83 cmt. e; see also:
 
Indus. Clearinghouse, Inc. v. Browning Mfg. Div. of Emerson Elec. Co., 953 F.2d 1004, 1007 (5th Cir. 1992). Institution of a malpractice suit against one's attorney does not waive the attorney-client privilege with respect to third parties. Moreover, a complaint is not waiver in itself since confidentiality is not compromised until those communications are actually revealed.
 
Cannon v. U.S. Acoustics Corp., 532 F.2d 1118, 1120 (7th Cir. 1976). Lawyers can employ privileged client information in fee claims against clients.
 
In re Marriage of Bielawski, 328 Ill. App. 3d 243, 254, 764 N.E.2d 1254, 1263-64 (2002). Privilege was waived in later action to rescind marital settlement agreement where wife sued former attorney for malpractice related to the same.
In malpractice suits, a client's attorneys may not be able to assert the attorney-client privilege over communications within the counsel's firm before the client retains new counsel. See Koen Book Distributors, Inc. v. Powell, Trachman, Logan, Carrle, Bowman & Lombardo, P.C., 212 F.R.D. 283, 285-87 (E.D. Pa. 2002). In Koen Book Distributors, the client threatened to bring a malpractice action against its attorneys. Id. at 284. Several lawyers doing the work for the client communicated not only with the retained outside counsel, but also sought the advice of another attorney within the firm concerning the potential malpractice claim. Id. In a later malpractice action, the law firm (now a defendant) asserted attorney-client privilege over its communications with the inside and outside counsel. Id.; see also Bank Brussels Lambert v. Credit Lyonnaise (Suisse), 220 F. Supp. 2d 283, 287-88 (S.D.N.Y. 2002) (holding that while firm is in client's employment, it has a fiduciary duty to the client that precludes it from asserting the attorney-client privilege with respect to internal communications reviewing potential conflicts).
3. Fiduciary Exception
An exception to the attorney-client privilege has been developed for actions between an organization and the parties to whom it owes fiduciary duties. This exception originally started in the area of shareholder derivative actions where courts were reluctant to permit corporations to invoke the attorney-client privilege to shield information from shareholders. See Garner v. Wolfinbarger, 430 F.2d 1093, 1102-04 (5th Cir. 1970). However, the Garner doctrine has been expanded to non-derivative cases and has become an important and sometimes tricky exception to the attorney-client privilege.
a. The Garner Doctrine
In Garner v. Wolfinbarger, 430 F.2d 1093, (5th Cir. 1970), perhaps the most influential decision in this area, the Fifth Circuit held in a shareholder derivative suit that:
 
[W]here the corporation is in suit against its stockholders on charges of acting inimically to stockholder interests, protection of those interests as well as those of the corporation and of the public require that the availability of the privilege be subject to the right of the stockholders to show cause why it should not be invoked in the particular instance.
 
Id. at 1103-04. The Garner court thus concluded that the protection of the privilege could be removed upon a showing of good cause. In reaching its decision, the court analogized the exception to the crime-fraud and joint-defense exceptions to the attorney-client privilege. Id. at 1102-03 (the joint-defense privilege is discussed in § II.A., below). Garner rationalized that a fiduciary relationship between the corporation and its shareholders creates a commonality of interest which precludes the corporation from asserting the attorney-client privilege against its shareholders. Id.
The Garner court set forth a number of factors relevant to the presence or absence of a shareholder's "good cause" to invoke the exception. Id. at 1104. A court should thus consider:
 
(1) The number of beneficiaries actively requesting the privileged communication and their share in the organization. See Fausek v. White, 965 F.2d 126 (6th Cir. 1992) (40% of shareholders sufficient); Ward v. Succession of Freeman, 854 F.2d 780, 786 (5th Cir. 1988) (less than 4% of shareholders not sufficient).
 
(2) The substantiality of the beneficiaries' claim and whether there is an ulterior motive to place pressure on the organization.
 
(3) The good faith of the beneficiaries.
 
(4) The apparent relevance of the requested communications to the beneficiaries' claim, and the extent to which the information is available from other non-privileged sources. See Fausek v. White, 965 F.2d 126, 133 (6th Cir. 1992) (need uniqueness, not just convenience -- in this case, the desired material was not readily available elsewhere, if at all); In re LTV Sec. Litig., 89 F.R.D. 595, 608 (N.D. Tex. 1981) (availability is an important factor, but true unavailability is needed -- ease and cheapness are not as important).
 
(5) The extent to which the beneficiaries' claim accuses the managers of the organization of clearly criminal or illegal acts.
 
(6) Whether the communication related to past acts or to future events.
 
(7) Whether the communication concerns advice about the litigation which has been brought by the beneficiaries. See Zitin v. Turley, No. Civ. 89-2061, 1991 U.S. Dist. LEXIS 10084, at *11 n.1 (D. Ariz. June 20, 1991) (Garner exception did not apply because communications that shareholders sought were not related to the decisions that gave rise to the shareholder's claims).
 
(8) The specificity of the beneficiaries' request.
 
(9) The extent to which the requested communications might contain trade secrets or other valuable information.
 
(10) The extent that protective orders will protect disclosure.
 
(11) Whether the decision not to waive the privilege was made by a disinterested group of officers or directors.
 
See Garner, 430 F.2d at 1104. These factors are non-exclusive and of equal weight. Garner, 430 F.2d at 1104. But see RMED Int'l, Inc. v. Sloan's Supermarkets, No. 94 Civ. 5587PKLRLE, 2003 WL 41996, at *5 (S.D.N.Y. Jan. 6, 2003) (stating that the apparent necessity of the information and its availability from other sources is considered the most important factor by courts undertaking the Garner analysis). Through this analysis, the court balances the injury that may result to the corporation from disclosure against (A) the benefit to be gained from the proper disposition of the litigation and (B) the rights of the shareholders. Id. at 1101.
In general, the burden is on the party seeking the otherwise privileged materials to show "good cause" to invoke the fiduciary exception to the privilege. Martin v. Valley Nat'l Bank of Ariz., 140 F.R.D. 291, 326 (S.D.N.Y. 1991).
Most courts have followed Garner. See Fortson v. Winstead, McGuire, Sechrest & Ninick, 961 F.2d 469, 475 n.5 (4th Cir. 1992) (even though limited partners could not establish good cause, the court recognized that the fiduciary exception could apply); Fausek v. White, 965 F.2d 126, 133 (6th Cir. 1992) (recognizing that former shareholders had shown good cause to abrogate corporate privilege); In re Gen. Instrument Corp. Sec. Litig., 190 F.R.D. 527, 529-30 (N.D. Ill. 2000); Quintel Corp., N.V. v. Citibank, N.A., 567 F. Supp 1357, 1363-64 (S.D.N.Y. 1983) (ordering disclosure in a case between a client and the bank that represented it in a real estate transaction); Washington-Baltimore Newspaper Guild Local 35 v. Washington Star Co., 543 F. Supp. 906, 909-10 (D.D.C. 1982) (ordering disclosure of communications between attorney and trustee pursuant to Garner); In re LTV Sec. Litig., 89 F.R.D. 595, 608 (N.D. Tex. 1981); Ohio-Sealy Mattress Mfg. Co. v. Kaplan, 90 F.R.D. 21, 31-32 (N.D. Ill. 1980) (applying Garner but not finding good cause); In re Fuqua Indus., Inc., No. CIV.A. 11974, 2002 WL 991666, (Del. Ch. May 2, 2002) (following Garner and finding good cause); Deutsch v. Cogan, 580 A.2d 100, 106 (Del. Ch. 1990); Bland v. Fiatallis North America, Inc., 401 F.3d 779, 787 (7th Cir. 2005 (recognizing fiduciary exception in ERISA context).
However, some federal and state courts have refused to follow Garner. See Shirvani v. Capital Investing Corp., 112 F.R.D. 389, 390-91 (D. Conn. 1986) (rejecting the Garner doctrine); Milroy v. Hansen, 875 F. Supp. 646, 650-52 (D. Neb. 1995) (denying request of a director and minority shareholder to obtain privileged documents, and stating that the Garner doctrine's "continued vitality is suspect"); McDermott, Will & Emery v. Superior Court, 83 Cal. App. 4th 378, 385 (Cal. App. Ct. 2000) (rejecting Garner as inconsistent with the Evidence Code of California); see also Genova v. Longs Peak Emergency Physicians, P.C., 72 P.3d 454, 463 (Colo. App. 2003) (following Milroy, and declining to extend Garner where director/minority stockholder of a corporation had no right to documents otherwise protected under the attorney-client privilege); Hoiles v. Superior Court, 157 Cal. App. 3d 1192, 1199 (4th Dist. 1984) (rejecting Garner doctrine for shareholder derivative suits).
Several state courts have also adopted the Garner rationale. See, e.g., Neusteter v. District Court of Denver, 675 P.2d 1, 6 (Colo. 1984); Beard v. Ames, 468 N.Y.S.2d 253, 255-56 (N.Y. App. Div. 1983).
b. Extension of Garner Beyond Derivative Suits
The Garner doctrine originally arose in the context of the shareholder derivative suit. In a derivative suit, the shareholder purports to represent the corporation itself, and in such cases, there is a clear fiduciary duty owed by the directors and officers to the corporation. Recently, however, some courts have expanded the application of Garner to other areas where officers owe fiduciary duties to a company's shareholders. See:
 
In re Witness Before Special Grand Jury 2000-2, 288 F.3d 289, 293-94 (7th Cir. 2002). Rejecting claim by then-governor of Illinois George Ryan that his conversations with "in-house" government counsel were privileged and observing that "[j]ust as a corporate attorney has no right or obligation to keep otherwise confidential information from shareholders, Garner v. Wolfinbarger, 430 F.2d 1093, 1101 (5th Cir.1970), so a government attorney should have no privilege to shield relevant information from the public citizens to whom she owes ultimate allegiance, as represented by the grand jury.
 
Fausek v. White, 965 F.2d 126 (6th Cir. 1992). Minority shareholders brought direct action against the former majority shareholder for misrepresentations in valuing their stock. Shareholders sought to depose the attorney who advised the majority shareholder during the stock acquisition. Court found that Garner rationale applied even though the case was a direct action. It reasoned that Garner was not limited to derivative actions, but that the type of action was just a factor to consider in determining "good cause." Minority shareholders alleged that majority shareholder had become the alter ego of the corporation, and that he therefore had a fiduciary duty to plaintiffs which he could not circumvent by resorting to a claim of privilege. Court agreed that the majority shareholder owed a fiduciary duty to the minority, and found that Garner applies whenever the corporation stands in a fiduciary relationship to those seeking to abrogate the privilege. As a result, even though the corporation was not a named party to the case, the existence of the duty to the shareholders permitted an exception to the attorney-client privilege.
 
Ward v. Succession of Freeman, 854 F.2d 780, 786 (5th Cir. 1988). Refused to limit Garner to derivative actions. However, the court noted that it should be more difficult to show good cause in a non-derivative shareholder action because where shareholders seek to recover damages for themselves their motivations are more suspect and "more subject to careful scrutiny."
 
In re ML-Lee Acquisition Fund II, L.P., 848 F. Supp. 527, 564 (D. Del. 1994). Fact that a suit was not a derivative action was only one factor to consider under the Garner doctrine, and that factor alone did not preclude disclosure.
 
In re Bairnco Corp. Sec. Litig., 148 F.R.D. 91, 97-98 (S.D.N.Y. 1993). Court refused to limit Garner to derivative actions. It allowed shareholders in a class action against the corporation to discover corporate materials involving pending asbestos litigation.
 
Nellis v. Air Line Pilots Ass'n, 144 F.R.D. 68, 70-71 (E.D. Va. 1992). Court applied the fiduciary exception in a suit by union members against their national union. The court found that communications between union officials and union attorneys came within the exception.
 
Ferguson v. Lurie, 139 F.R.D. 362 (N.D. Ill. 1991). Court permitted limited partners suing for securities fraud to invoke Garner doctrine to obtain communications between the real estate limited partnership and its counsel.
 
Aguinaga v. John Morrell & Co., 112 F.R.D. 671, 676-682 (D. Kan. 1986). Garner doctrine applied to grant former union members access to the attorney-client communications and work product of the union.
 
Donovan v. Fitzsimmons, 90 F.R.D. 583, 584-87 (N.D. Ill. 1981). Secretary of Labor, bringing suit on behalf of beneficiaries of a pension fund, was granted access to privileged materials on the basis of Garner.
 
Broad v. Rockwell Int'l Corp., No. CA-3-74-437-D, 1977 WL 928 (N.D. Tex. Feb. 18, 1977). Garner rationale applied where corporation was sued by debenture holders.
 
In re Fuqua Indus., No. C.A. 11974, 1992 WL 296448, at *3-4 (Del. Ch. Oct. 8, 1992). Garner applies in a case involving breach of fiduciary duty through misrepresentations to shareholders.
 
Metro. Bank and Trust Co. v. Dovenmuehle Mortg., Inc., No. CIV. A. 18023-NC, 2001 WL 1671445, at *2-3 (Del. Ch. Dec. 20, 2001). Following Garner, but holding that limited partner failed to show good cause for access to otherwise privileged communications of general partner on showing of good cause.
Because courts have expanded the Garner doctrine to include other cases where a fiduciary duty is owed to constituents, courts usually require the shareholder in non-derivative actions to have been a shareholder when the alleged misfeasance or misrepresentations occurred. They reason that purchasers who acquired their interest after the wrongful actions took place were not owed any duty at the time, and therefore cannot show good cause. See Moskowitz v. Lopp, 128 F.R.D. 624, 637 (E.D. Pa. 1989); In re Atlantic Fin. Mgmt. Sec. Litig., 121 F.R.D. 141, 146 (D. Mass 1988); Quintel Corp., N.V. v. Citibank, N.A., 567 F. Supp. 1357, 1363-64 (S.D.N.Y. 1983). Other courts will allow subsequent purchasers to invoke the Garner exception to the privilege. In re Bairnco Corp. Sec. Litig., 148 F.R.D. 91, 97-98 (S.D.N.Y. 1993); Cohen v. Uniroyal, Inc., 80 F.R.D. 480, 484-485 (E.D. Pa. 1978) (Garner rationale applied in shareholder class action where plaintiffs were not shareholders at the time of the allegedly fraudulent conduct); Lawrence E. Jaffe Pension Plan v. Household Int'l, Inc., No. 02 C 5893, 2006 WL 3524016, at *9 (N.D. Ill. Dec. 6, 2006) (securities fraud class action brought to recover financially for injuries sustained by the investing public as a result of corporation's alleged fraud subject to Garner exception because the class represented a "substantial majority of shareholders who owned stock at the time of the [attorney-client] communications in question."); cf. In re Omnicron Group, Inc. Sec. Litig., 233 F.R.D. 400, 412 (S.D.N.Y. 2006) (exception did not apply where "[t]he transactions that are at the heart of the complaint and that formed the trigger for the targeted attorney-client communications were undertaken in the absence of a fiduciary relationship to a substantial portion of the class members.").
Some courts have extended the Garner doctrine to situations outside of the shareholder/corporate client context to include other fiduciary relationships. For example, in In re Baldwin-United Corp., 38 B.R. 802, 805 (Bankr. S.D. Ohio 1984), the court held that a creditor's committee, in its fiduciary capacity, ought to "go about [its] duties without obscuring [its] reasons from the legitimate inquires of [the] beneficiaries." The court held that the Garner doctrine provided the best balance between the "creditor's right to information and the committee's need for confidentiality" and held that the committee should establish good cause for withholding privileged information from the creditors. In Dome Petroleum, Ltd v. Employers Mutual Liability Insurance Co. of Wisconsin, 131 F.R.D. 63 (D.N.J. 1990), the court relied on the doctrine in part to apply to a dispute between an insurance subrogor and subrogee.
The extension of the Garner doctrine has been particularly noteworthy in the context of pension plans, where courts have extended the doctrine to communications made by attorneys acting as employee benefits plan fiduciaries. See In re Occidental Petroleum Corp., 217 F.3d 293, 297-98 (5th Cir. 2000) (attorney-client privilege did not preclude employees of a corporation's former subsidiary, who were participants in ESOP funded by corporation's stock, from discovery of relevant corporate documents in ERISA action against corporation alleging breach of fiduciary duty in relation to ESOP); Wildbur v. ARCO Chem. Co., 974 F.2d 631, 645 (5th Cir. 1992) ("When an attorney advises a plan administrator or other fiduciary concerning plan administration, the attorney's clients are the plan beneficiaries for whom the fiduciary acts, not the plan administrator."); Henry v. Champlain Enters., Inc., 212 F.R.D. 73, 83-88 (N.D.N.Y. 2003) (Garner doctrine applied to ESOP participants' derivative action against officers, directors and shareholders of their employer, who also served as plan fiduciaries); Helt v. Metro. Dist. Comm'n, 113 F.R.D. 7, 9-10 (D. Conn. 1986) (Garner doctrine applied where beneficiary of a pension plan sought to discover correspondence between attorneys for the pension plan and the plan's trustee); Washington-Baltimore Newspaper Guild Local 35 v. Washington Star Co., 543 F. Supp. 906, 909-10 (D.D.C. 1982) (court recognized that fiduciary exception could apply to allow beneficiary of a pension plan to discover the communications between attorneys for the pension plan and the plan's trustee).
However, in In re Long Island Lighting Co., 129 F.3d 268, 272 (2d Cir. 1997), the Second Circuit held that the fiduciary exception embodied in the Garner doctrine did not apply to communications between an employer and its counsel regarding amendments to an employee benefits plan even though the counsel was also the plan's fiduciary under the Employee Retirement Income Security Act of 1974 (ERISA). While acknowledging that the fiduciary exception applied to communications made by an ERISA plan fiduciary that are intended to aid an employer in administering its benefits plan, the court concluded that the communications at issue were not related to the fiduciary obligations the attorney owed to the plan beneficiaries. Id. at 272. The court found that the employer did not waive the attorney-client privilege by employing the same attorney to handle both fiduciary and non-fiduciary matters pertaining to its benefits plan. Id.
Most courts have placed the burdens of production and persuasion on the plaintiff/shareholder/beneficiary to show good cause to invoke the Garner exception. See Garner, 430 F.2d at 1103-1104; Ward v. Succession of Freeman, 854 F.2d 780, 786-87 (5th Cir. 1988); Martin v. Valley Nat'l Bank of Ariz., 140 F.R.D. 291, 323 (S.D.N.Y. 1991).
While many courts have extended Garner beyond derivative actions, some courts have refused. The Ninth Circuit has limited Garner to derivative actions, and refused to create an exception for individual shareholder actions. Weil v. Inv./Indicators, Research & Mgmt., Inc., 647 F.2d 18, 23 (9th Cir. 1981). In Weil, the court distinguished Weil's individual action from the derivative suit in Garner and therefore refused to grant a Garner exception. In addition, the court noted that Weil was a former, not present shareholder of the corporation. Despite this fact, the court allowed the requested discovery based on a finding of waiver. See also Ward v. Succession of Freeman, 854 F.2d at 786 (recognizing that "good cause" is more difficult to establish in an individual suit, but rejecting Weil); Shirvani v. Capital Inv. Corp., 112 F.R.D. 389, 390-91 (D. Conn. 1986) (court rejected Garner doctrine in action brought directly against the corporation by shareholders); Opus Corp. v. IBM Corp., 956 F. Supp. 1503, 1509-10 (D. Minn. 1996) (the Garner doctrine did not apply to prevent a general partner from invoking the attorney-client privilege to protect disclosure of communications to other partners).
The Restatement favors an expansive application of the Garner doctrine for two reasons. First, the function of the directors and managers of an organization is to advance the interests of the shareholders, members, and beneficiaries, and thus they should not keep information from their constituents. Second, in litigation between the directors and officers and their constituents, the officers have an incentive to place their own interests above those of the organization in deciding whether to waive the privilege. REST. 3D § 85 cmt. b. The Restatement thus sets out several factors that should be considered in order to invoke the exception in "organizational fiduciary" cases:
 
1) the extent to which beneficiaries seeking the information have interests that conflict with those of opposing or silent beneficiaries;
 
2) the substantiality of the beneficiaries' claim and whether the proceeding was brought for ulterior purpose;
 
3) the relevance of the communication to the beneficiaries' claim and the extent to which information it contains is available for non-privileged sources;
 
4) whether the beneficiaries' claim asserts criminal, fraudulent, or similarly illegal acts;
 
5) whether the communication relates to future conduct of the organization that could be prejudiced;
 
6) whether the communication concerns the very litigation brought by the beneficiaries;
 
7) the specificity of the beneficiaries' request;
 
8) whether the communication involves trade secrets or other information that has value beyond its character as a client-lawyer communication;
 
9) the extent to which the court can employ protective orders to guard against abuse if the communication is revealed; and
 
10) whether the determination not to waive the privilege made on behalf of the organization was by a disinterested group of directors or officers.
 
REST. 3D § 85 cmt. c.
c. Disclosure of Special Litigation Committee Reports
Special Litigation Committee (SLC) reports are likely to be discoverable upon a motion to terminate a derivative action. In Joy v. North, 692 F.2d 880, 893-94 (2d Cir. 1982), the court held that upon a motion to terminate, an SLC must disclose its report and supporting data since the motion to terminate operates as a waiver of the attorney-client privilege.
Similarly, in In re Continental Illinois Securities Litigation, 732 F.2d 1302 (7th Cir. 1984), the trial court had ordered public disclosure of an SLC report upon the motion of several newspapers for access during a hearing on a motion to terminate. The Seventh Circuit declined to adopt a per se rule requiring disclosure of the SLC report upon a corporation's motion to terminate. Instead, the court held that the presumption of public access to information before the court outweighed the corporation's need for confidentiality. Id. at 1314.
In In re Perrigo Co., 128 F.3d 430 (6th Cir. 1997), the trial court held that a report prepared by an independent director that was protected by both the attorney-client privilege and the work product immunity would become a public record if submitted to the court by either party for consideration in connection with the corporation's motion to dismiss. The Sixth Circuit reversed, and held that while the report should be disclosed to other parties to the litigation under a protective order, it was "clear error . . . to direct that simply . . . submitting [the] report . . . to . . . the court . . . automatically places it in the public domain." Id. at 441. The court explained that the trial court's order requiring automatic public disclosure left the corporation with the "choice of waiving the protection of the [r]eport or withdrawing its motion to dismiss" and that it would have "the effect of giving the derivative plaintiffs . . . the untrammeled power to waive [the corporation's protection]. . . Id. at 438-39. However, the court did indicate that there may be some point where the trial court may, after a full hearing on the matter, conclude that public disclosure of the report or certain portions of the report is necessary for limited purposes. Id. at 441.
 
See also:
 
In re Dayco Corp. Derivative Sec. Litig., 99 F.R.D. 616, 619 (S.D. Ohio 1983). Privilege not waived when only portions of the SLC's findings are released to the court and the public, and not the SLC report itself
 
Abbey v. Computer & Communications Tech. Corp., No. 6941, 1983 WL 18005 (Del. Ch. Apr. 13, 1983). "Plaintiff will be limited to taking the deposition of the Special Litigation Committee with a view toward establishing just what was done in the course of its investigation, and why. This will include production of the documentary materials utilized or relied upon by the Committee during its investigation."
 
Watts v. Des Moines Register & Tribune, 525 F. Supp. 1311, 1329 (S.D. Iowa 1981). Shareholders may discover the bases for the SLC's conclusions but not why certain factors were or were not considered.

 II. Extensions of the Attorney-Cleient Privilege Based on Common Interest
Courts have recognized several extensions of the attorney-client privilege which allow clients and lawyers with common interests to share privileged communications. See, e.g., Haines v. Liggett Group, Inc., 975 F.2d 81, 90 (3d Cir. 1992) (protection of privilege extended to communications between different persons or separate corporations when the communications are part of an on-going and joint effort to set up a common defense strategy); Gottlieb v. Wiles, 143 F.R.D. 241 (D. Colo. 1992) (no waiver occurs from exchange of privileged materials between persons with common interest); In re Bairnco Corp. Sec. Litig., 148 F.R.D. 91, 102 (S.D.N.Y. 1993) (joint-defense privilege is an extension of the attorney-client privilege); FDIC v. Cheng, No. 3:90-CV-0353-H, 1992 WL 420877 (N.D. Tex. Dec. 2, 1992) (same). These common interest extensions do not themselves confer privilege status to any of the communications involved. Instead, they merely allow communications which are already privileged to be shared between commonly interested parties without causing waiver; the communications themselves must independently satisfy the elements of the privilege. Gulf Islands Leasing, Inc. v. Bombardier Capital, Inc., 215 F.R.D. 466, 470 (S.D.N.Y. 2003); Metro Wastewater Reclamation Dist. v. Cont'l Cas. Co., 142 F.R.D. 471, 478 (D. Colo. 1992). These extensions are a form of selective waiver which allow disclosure to some persons without waiving the privilege toward others. The burden is on the party asserting the privilege to show that a common interest does in fact exist. United States v. LeCroy, 348 F. Supp. 2d 375, 381 (E.D. Pa. 2004); LaForest v. Honeywell Int'l Inc., No. 03-CV-6248T, 2004 WL 1498916, at *3 (W.D.N.Y. July 1, 2004).
Unfortunately, courts have not been consistent in their terminology and many courts apply the terms common interest exception, common defense privilege, or joint-defense privilege to discuss a variety of related but different concepts. Basically, there are two types of sharing that courts often analyze under a common interest analysis:
 
(1) Sharing between clients represented by the same lawyer: In this outline, the term joint-defense privilege is used for sharing arrangements where several clients share the same attorney. See Joint-Defense Privilege, § II.A., below.
 
(2) Sharing between clients represented by separate counsel: In this outline, the term common defense privilege is used for sharing arrangements between separately represented clients. See Common Defense Privilege, § II.B., below. As noted, some courts use the term joint-defense privilege to cover this type of sharing also.
A. Joint Defense Privilege
When two parties are represented by the same attorney, the co-clients may usually share communications with their common lawyer without destroying confidentiality. See United States v. Bay State Ambulance & Hosp. Rental Serv., Inc., 874 F.2d 20, 28-29 (1st Cir. 1989); Waller v. Fin. Corp. of Am., 828 F.2d 579, 583 (9th Cir. 1987); United States v. Keplinger, 776 F.2d 678, 701 (7th Cir. 1985); Government of Virgin Islands v. Joseph, 685 F.2d 857, 861 (3d Cir. 1982). This situation often occurs in criminal trials where co-conspirators or co-defendants utilize the same defense counsel. Under this arrangement, the joint communications remain privileged with respect to the rest of the world, and either client can assert the privilege against a third person. See United Coal Co. v. Powell Constr. Co., 839 F.2d 958, 965 (3d Cir. 1988); JOHN W. STRONG, MCCORMICK ON EVIDENCE § 91 (5th ed. 1999); REST. 3D § 75; see also:
 
Hanson v. U.S. Agency for Int'l Dev., 372 F.3d 286, 292 (4th Cir. 2004). Joint-defense privilege extended to communications between attorney, defendant and third-party where the defendant and third-party had a common interest in resolving a dispute on favorable terms and received counsel from the same attorney.
 
In re Auclair, 961 F.2d 65, 69-70 (5th Cir. 1992). Joint-defense privilege applied to the communications by three individuals (grand jury witness, secretary and her husband) who consulted a single attorney on a matter of common interest with the intention to keep the communications confidential. Court noted that the existence of joint interest will be presumed from a joint pre-representation consultation meeting.
 
Minebea Co. v. Papst, 228 F.R.D. 13, 15-17 (D.D.C. 2005). Holding that the joint defense agreement applied to communications where "(1) the communications were made in the course of a joint defense effort, (2) the statements were designed to further the effort, and (3) the privilege has not been waived." Noting that a written agreement is the best evidence of such an agreement, but that an oral agreement was sufficient to invoke the privilege.
 
Sedalcek v. Morgan Whitney Trading Group, Inc., 795 F. Supp. 329, 331 (C.D. Cal. 1992). Extended joint-defense doctrine to include joint prosecution arrangements.
 
United States v. Bicoastal Corp., No. 92-CR-261, 1992 U.S. Dist. LEXIS 21445 (N.D.N.Y. Sept. 28, 1992). Court refused to require defendant to disclose to the prosecution any facts relating to the existence or scope of a joint-defense agreement. The fact that agreement was in writing did not affect the privilege. Court did, however, analyze the representation to ensure there was not a wrongful conflict of interest in the joint representation.
 
But see:
 
In re Grand Jury Subpoena, 415 F. 3d 333, 341 (4th Cir. 2005). Rejecting former employee's claim to joint or common defense privilege over conversations with former employer's counsel where former employee did not enter into a joint defense agreement with former employer and no common litigation interest existed at time of communication.
 
Opus Corp. v. IBM Corp., 956 F. Supp. 1503, 1507 (D. Minn. 1996). Joint defense privilege did not apply even though same law firm represented both parties during the course of business negotiations because the representation of the parties "frequently had individualized, and substantially diverse, goals." At no point did the law firm serve the common or mutual interests of the parties. Under the joint defense privilege an attorney's representation of a limited partnership does not also constitute representation of each partner on an individualized basis.
 
The burden of establishing the existence of a specific agreement to pursue a joint-defense is on the party asserting the existence of the agreement. See United States v. Dose, N. CR04-4082-MWB, 2005 WL 106493, at *17 (N.D. Iowa Jan. 12, 2005) (burden is on person asserting privilege to establish existence of joint privilege); In re Megan-Racine Assocs, Inc., 189 B.R. 562, 571-72 (Bankr. N.D.N.Y. 1995) (same); United States v. Gotti, 771 F. Supp. 535, 545 (E.D.N.Y. 1991) (same). The joint defense privilege only applies where the parties seek representation for legal purposes; joint consultations with an attorney for business or other purposes are not protected. See In re Grand Jury Proceedings, 156 F.3d 1038, 1042-43 (10th Cir. 1998) (To establish a joint-defense privilege, party asserting privilege must show that: (1) the information arose in the course of a joint-defense effort in (2) the furtherance of that effort); United States v. Aramony, 88 F.3d 1369, 1392 (4th Cir. 1996) (joint defense privilege did not apply when parties consulted with attorney regarding public relations problems caused by criminal allegations); Minebea Co. v. Papst, 228 F.R.D. 13, 15-17 (D.D.C. 2005). Furthermore, the establishment of a joint defense privilege requires the parties to show "[s]ome form of joint strategy . . . rather than merely the impression of one side." United States v. Weissman, 195 F.3d 96, 100 (2nd Cir. 1999). The mere exchange of information is not sufficient. In re Grand Jury Subpoena, 415 F.3d 333, 341 (4th Cir. 2005); United States v. Dose, N. CR04-4082-MWB, 2005 WL 106493, at *17 (N.D. Iowa Jan. 12, 2005); see also Wade Williams Distrib., Inc. v. Am. Broad. Cos., No. 00 Civ. 5002(LMM), 2004 WL 1487702, at *1-2 (S.D.N.Y. June 30, 2004) (holding that communications between corporate counsel and employee were not privileged notwithstanding understanding of employee and counsel that counsel also represented employee for purposes of deposition).
Written agreements are the best evidence for establishing the existence of a joint defense arrangement. See Minebea Co. v. Papst, 228 F.R.D. 13, 15 (D.D.C. 2005). For a sample joint/common defense agreement, see Appendix A.
1. Waiver by Consent
The parties to a joint-defense arrangement can voluntarily waive the privilege through consent. However, courts are split over who possesses the ability to confer such consent. Some courts hold that each client retains the ability to waive the privilege for communications that the client originated herself. Am. Mut. Liab. Ins. Co. v. Superior Court of Sacramento County, 38 Cal. App. 3d 579, 595 (Cal. Ct. App. 1974); 8 JOHN H. WIGMORE, EVIDENCE § 2328 (J. McNaughton rev. 1961). In this case, the non-originating co-client has no standing to object to waiver by the originating client. See generally REST. 3D § 75 cmt. e.
Other courts require all co-clients to consent to a waiver. See In re Auclair, 961 F.2d 65 (5th Cir. 1992) (one of the jointly represented clients cannot waive the privilege for all the others); In re Grand Jury Subpoenas 89-3 & 89-4, 902 F.2d 244 (4th Cir. 1990) (joint-defense cannot be waived without the consent of all parties); Ohio-Sealy Mattress Mfg. Co. v. Kaplan, 90 F.R.D. 21, 29 (N.D. Ill. 1980); State v. Maxwell, 691 P.2d 1316, 1320 (Kan. 1984) (if third party seeks communications made in joint arrangement "none of several persons -- not even a majority-- can waive this privilege").
2. Waiver by Subsequent Litigation
The joint-defense privilege is waived in subsequent litigation between the co-clients. Simpson v. Motorists Mut. Ins. Co., 494 F.2d 850, 855 (7th Cir. 1974); UNIF. R. EVID. 502(d)(5); 8 JOHN H. WIGMORE, EVIDENCE § 2312, at 603-604 (J. McNaughton rev. 1961); JOHN W. STRONG, MCCORMICK ON EVIDENCE § 91 (5th ed. 1999). However, the resulting waiver is only a selective waiver since the communications remain privileged with respect to third parties. As a result, in inter-client litigation each client can reveal the joint communications against the other, but a third party cannot obtain access to the communications at all. See REST. 3D § 75. To invoke this selective waiver, there must be actual adversarial litigation to end the co-client relationship. See State v. Cascone, 487 A.2d 186, 189 (Conn. 1985). A mere change in one co-client's position will not constitute subsequent litigation. See People v. Abair, 228 P.2d 336, 340 (Cal. Ct. App. 1951) (turning state's witness does not waive privilege); REST. 3D § 75 cmt. d.
3. Extent of Waiver
When waiver is demonstrated in a joint-defense arrangement, the extent of the waiver normally includes information concerning all relevant matters (i.e., full waiver). See REST. 3D § 76 cmt. f. In contrast, waiver under the common-defense privilege reveals only the shared information and not all relevant matters (i.e., partial waiver, discussed in § II.B.3., below).
C.	Common Defense Privilege
Most courts have been willing to expand the rationale of the joint-defense doctrine to include situations in which the clients are pursuing a common interest but do not share the same attorney. See, e.g., Haines v. Liggett Group, Inc., 975 F.2d 81, 90 (3d Cir. 1992) (protection of privilege extended to communications between different persons or separate corporations when the communications are part of an on-going and joint effort to set up a common defense strategy); In re Grand Jury Subpoenas 89-3 & 89-4, 902 F.2d 244 (4th Cir. 1990) (noting expansion from criminal co-defendants to other areas); see also UNIF. R. EVID. 502(b) (explicitly recognizing common defense extension to attorney-client privilege); United States v. Henke, 222 F.3d 633, 637 (9th Cir. 2000) (same but disqualifying attorney because of conflict arising from the same); United States v. Schwimmer, 892 F.2d 237, 244 (2d Cir. 1989) (upholding privilege as to communications between defendant and co-defendant's accountant); United States v. Melvin, 650 F.2d 641, 645-46 (5th Cir. 1981) (recognizing sharing arrangement but finding it inapplicable to the facts); United States v. McPartlin, 595 F.2d 1321 (7th Cir. 1979); REST. 3D § 76. Courts have used a variety of terms for these types of pooling/sharing arrangements including common interest privilege, common defense privilege and even joint-defense privilege. To establish a common defense arrangement, five requirements must be met:
 
(1) all participants must be pursuing a common defense in existing or anticipated litigation,
 
(2) the protected communications relate to a common issue,
 
(3) the sharing is intended to further existing or potential legal representation in pursuit of the common defense (civil, criminal, grand jury, etc.),
 
(4) the communications were made with an expectation of confidentiality, United States v. Bay State Ambulance and Hosp. Rental Serv., Inc., 874 F.2d 20, 28 (1st Cir. 1989) (rejecting claim under common defense privilege because there was no reasonable expectation of confidentiality due to the fact that the party provided the information knowing it was requested in order to address questions raised by the FBI), and
 
(5) the privilege has not been waived.
 
See, e.g., Haines v. Liggett Group, Inc., 975 F.2d 81, 94 (3d Cir. 1992) (party must show "(1) the communications were made in the course of a joint defense effort, (2) the statements were designed to further the effort and (3) the privilege has not been waived."); United States v. Schwimmer, 892 F.2d 237, 244 (2d Cir. 1989); In re Bevill, Bresler & Schulman Asset Mgmt. Corp., 805 F.2d 120, 126 (3d Cir. 1986); United States v. McPartlin, 595 F.2d 1321 (7th Cir. 1979). The key requirement for a common defense arrangement is that the clients share a common interest that is either legal or strategic in character and work together actively to pursue that interest. See Work River Ins. Co. v. Columbia Cas. Co., No. 90 Civ. 2518, 1995 WL 5792 (S.D.N.Y. Jan. 5, 1995) (The key to the common defense exception is not "whether the parties theoretically share similar interests but rather whether they demonstrate actual cooperation toward a common legal goal."). Some courts require that the parties involving the common interest privilege have identical interests. See Corning Inc. v. SRV Biosystems, LLC, 223 F.R.D. 189, 190 (D. Del. 2004). Business or commercial common interests will not support the privilege. See In re John Doe Corp., 675 F.2d 482, 489 (2d Cir. 1982) (disclosure for commercial purposes is inconsistent with legal representation purpose). Bank Brussels Lambert v. Credit Lyonnaise, 160 F.R.D. 437, 447 (S.D.N.Y. 1995) (common defense doctrine "does not encompass a joint business strategy which happens to include as one of its elements concern about litigation"); see also:
 
In re Santa Fe Int'l Corp., 272 F.3d 705, 712 (5th Cir. 2001). Common interest privilege applies (1) to co-defendants in actual litigation and (2) to potential co-defendants in anticipated litigation.
 
In re Grand Jury Subpoenas 89-3 & 89-4, 902 F.2d 244, 249 (4th Cir. 1990). Utilized the reasoning of Schwimmer to apply common-defense doctrine to an information pooling arrangement.
 
United States v. Stotts, 870 F.2d 288 (5th Cir. 1989). Statements made to co-defendant's attorney are privileged if they concern common issues and are intended to facilitate representation.
 
United States v. Zolin, 809 F.2d 1411, 1417 (9th Cir. 1987), vacated in part on other grounds, 842 F.2d 1135 (9th Cir. 1988) (en banc), aff'd in part and vacated in part on other grounds, 491 U.S. 554 (1989). Even where non-party is privy to information, has never been sued on the matter of common interest, and faces no immediate liability, non-party can still be found to have a common interest to invoke the privilege.
 
Waller v. Fin. Corp. of Am., 828 F.2d 579, 583 (9th Cir. 1987). Communications by client to his own lawyer remain privileged when the lawyer subsequently shares the information with co-defendants for the purpose of a common defense.
 
Ludwig v. Pilkington N. Am. Inc., No. 03 C 1086, 2004 U.S. Dist. LEXIS 16049, at *11 (N.D. Ill. Aug. 13, 2004). Parties may memorialize their common interest in a written agreement, but a formal written agreement is not required to invoke the privilege. Here the court ordered production of documents not covered by formal agreements, but did so because the evidence did not show any intent to cooperate between the parties with respect to communications not within the agreements.
 
Major League Baseball Props., Inc. v. Salvino, Inc., No. 00 Civ. 2855 JCF, 2003 WL 21983801 (S.D.N.Y. Aug. 20, 2003). Common interest rule applied to communications between major league clubs and corporate entity they had established to register and enforce the intellectual property rights of the clubs.
 
United States v. Stepney, 246 F. Supp. 2d 1069, 1074-75 (N.D. Cal. 2003). Recognizing common defense privilege and detailing evolution of the rule.
 
For Your Ease Only, Inc. v. Calgon Carbon Corp., No. 02 C 7345, 2003 WL 21920244, at *1 (N.D. Ill. Aug. 12, 2003). Common interest privilege requires actual cooperation in litigation, not just similar legal interests.
 
United States v. Duke Energy Corp., 214 F.R.D. 383, 387-88 (M.D.N.C. Apr. 11, 2003). "[P]ersons who share a common interest in litigation should be able to communicate with their respective attorneys and with each other to more effectively prosecute or defend their claims.
 
Sobol v. E.P. Dutton, Inc., 112 F.R.D. 99, 102-03 (S.D.N.Y. 1986). Disclosure to commonly interested former employee did not waive privilege.
 
Schachar v. Am. Acad. of Ophthalmology, Inc., 106 F.R.D. 187, 192 (N.D. Ill. 1985). Court recognized a pooling arrangement between plaintiffs who were pursuing separate actions in different states.
 
But see:
 
In re Grand Jury Subpoena Duces Tecum, 112 F.3d 910 (8th Cir. 1997). First Lady's conversations with her private attorney and attorneys from the Office of Counsel to the President are not protected by the common-interest doctrine. Although Mrs. Clinton may have had a reasonable belief that her conversations were privileged, the attorney-client privilege did not attach because the White House, as an institution, did not share a common interest with Mrs. Clinton, an individual official being investigated for wrong-doing by the Office of Independent Counsel.
 
Denney v. Jenkens & Gilchrist, 362 F. Supp. 2d 407, 415-16 (S.D.N.Y. 2004). Common defense privilege does not extend to any situation where parties' interests are aligned. Where the parties could not show a cooperative and common legal strategy, there was no privilege for communications disclosed to each other.
 
United States v. Agnello, 135 F. Supp. 2d 380, 382 (E.D.N.Y. 2001). Observing that joint defense privilege does not apply outside of common enterprise and holding that statements made at general meeting of defendants were not privileged.
 
Tribune Co. v. Purcigliotti, No. 93 Civ. 7222, 1997 WL 540810 at *3 (S.D.N.Y. Sept. 3, 1997). Standstill tolling agreement entered into by parties to a joint defense agreement was not privileged. "The mere assertion that the standstill agreement [was] part of a joint defense agreement . . . fails to establish the basis for any privilege." Id. "If anything, the standstill agreement relate[d] to potential interests [between the parties] that [were] adverse, not common." Id.
Though some courts and scholars have indicated that common defense clients need not possess entirely congruent common interests, see, e.g., Eisenberg v. Gagnon, 766 F.2d 770, 787-88 (3d Cir. 1985); REST. 3D § 76 cmt. e., other courts require parties asserting a common interest privilege to share identical interests. See LaForest v. Honeywell Int'l Inc., No. 03-CV-6248T, 2004 WL 1498916, at *3 (W.D.N.Y. July 1, 2004) (holding that parties with adverse interests lacked common interest to support privilege); SR Int'l Bus. Ins. Co. Ltd. v. World Trade Ctr. Props. LLC, No. 01 CIV. 9291 (JSM), 2002 WL 1334821, at *3-4 (S.D.N.Y. June 19, 2002) (rejecting claim of common interest privilege between World Trade Center lessees and insurance brokers invoked against insurers for lack of identical interest). Bank of Am., N.A. v. Terra Nova Ins. Co. Ltd., 211 F. Supp. 2d 493, 496 (S.D.N.Y. Jul 18, 2002) (holding that interests must be identical and legal, not merely similar or commercial, and rejecting claim of common interest privilege); Duplan Corp. v. Deering Milliken, Inc., 397 F. Supp. 1146, 1172 (D.S.C. 1975) ("The key consideration is that the nature of the interest be identical, not similar, and be legal, not solely commercial. The fact that there may be an overlap of a commercial and legal interest for a third party does not negate the effect of the legal interest in establishing a community of interest."); see also Cheeves v. Southern Clays, Inc., 128 F.R.D. 128, 130 (M.D. Ga. 1989) ("The key factor in establishing a community of interest is that the nature of the interest be identical, not similar, and be legal, not solely commercial."); Graco Children's Products, Inc. v. Dressler, Goldsmith, Shore & Milnamow, Ltd., 1995 WL 360590, at *5 (N.D. Ill. June 14, 1995) (same); Roberts v. Carrier Corp., 107 F.R.D. 678, 687-88 (D. Ind. 1985) (A third party may share a common interest privilege where "it shares identical, and not merely similar legal interest.").
Some courts adopting the broad view of the shared interest allow parties with adverse interests to share the common interest privilege. See Eisenberg, 766 F.2d at 787-88; Cadillac Ins. Co. v. Am. Nat'l Bank, Nos. 89 C 3267 & 91 C 1188, 1992 WL 58786 (N.D. Ill. Mar. 12, 1992) (privilege is not limited to parties who are perfectly aligned on the same side of a single litigation); Hewlett Packard Co. v. Bausch & Lomb, Inc., 115 F.R.D. 308, 309-12 (N.D. Cal. 1987) (common interest privilege applied to disclosure of legal opinion to prospective purchaser); Visual Scene, Inc. v. Pilkington Bros., 508 So. 2d 437, 442-43 (Fla. Dist. Ct. App. 1987) (matters of common interest are protected notwithstanding that in some other respect the parties are adversaries and on opposite sides of the litigation).
The common defense privilege is not limited to cases where the shared information relates to pending litigation. See United States v. Schwimmer, 892 F.2d 237, 244 (2d Cir. 1989); United States v. AT&T, 642 F.2d 1285, 1299-1300 (D.C. Cir. 1980) (parties have strong enough common interests to share trial preparation materials where the parties in the common defense arrangement anticipate litigation against a common adversary on the same issues); United States v. United Techs. Corp., 979 F. Supp. 108, 111-112 (D. Conn. 1997) (common interest privilege applied to documents used to develop a tax strategy for five separate corporations to form a consortium to develop and market aerospace engines); Schachar v. Am. Acad. of Ophthalmology, Inc., 106 F.R.D. 187, 192 (N.D. Ill. 1985) (common interest can include proceedings in different states); In re LTV Sec. Litig., 89 F.R.D. 595, 604 (N.D. Tex. 1981) (disclosure to actual or potential co-defendants or their counsel does not constitute waiver). The privilege applies to any matter of common interest which causes clients to consult lawyers. For example, the common defense privilege also permits plaintiffs to share information (sometimes referred to as the joint prosecution privilege). See In re Grand Jury Subpoenas 89-3 & 89-4, 902 F.2d 244, 249 (4th Cir. 1990) (common interest extension applies "whether the jointly interested persons are defendants or plaintiffs . . . ."); Sedalcek v. Morgan Whitney Trading Group, Inc., 795 F. Supp. 329, 331 (C.D. Cal. 1992) (recognizing common interest extension applies to plaintiffs). See Appendix A for an example of a common (or joint) defense agreement.
When affiliated companies, such as wholly owned subsidiaries, share privileged materials, some courts find that there has been no waiver because the companies share a common legal interest. See, e.g., Roberts v. Carrier Corp., 107 F.R.D. 678, 686-88 (N.D. Ind. 1985) sharing of information between sister corporations to defend lawsuit was covered by the common defense extension to attorney-client privilege). However, if a court insists that the companies share identical legal interests rather than business interests, the common interest doctrine may not apply. See Gulf Island Leasing, Inc. v. Bombardier Capital, Inc., 215 F.R.D. 466, 471-74 (S.D.N.Y. 2003) In Gulf Island, the court rejected application of the common interest doctrine where two wholly-owned subsidiaries shared otherwise privileged communications. One of the affiliated companies ("Capital") acted as lender to facilitate the purchase of a private jet from the other affiliated company ("Aerospace"). When Aerospace sued the purchaser for breach of contract, its in-house attorneys communicated with Capital's in-house counsel and business people to discuss the amounts due on Capital's loans. While the affiliates shared common business interests, the court found that they did not share identical legal interests:
 
"The mere existence of an affiliate relationship does not excuse a party from demonstrating the applicability of the common interest rule. Having chosen to operate as separate entities -- and to obtain whatever advantages inure from so operating -- Bombardier Capital and Bombardier Aerospace must be held to their burden of proving the applicability of any privilege in the same manner as two unrelated entities. That burden has not been met in this case."
 
Id. at 474.
When a common defense arrangement has been established, communications from one client, agent or attorney to another commonly interested client, agent or attorney are protected under the attorney-client privilege. Haines v. Liggett Group, Inc., 975 F.2d 81, 90 (3d Cir. 1992) (extension allows clients facing a common litigation opponent to exchange privileged communications and work product without waiving protection in order to prepare a defense); see also REST. 3D § 76. But see United States v. Gotti, 771 F. Supp. 535, 545-46 (E.D.N.Y. 1991) (common defense protection does not extend to conversations between the defendants themselves in the absence of any attorney); accord REST. 3D § 76 cmt. d. This protection allows a client's non-testifying experts or auditors to be present without waiving the privilege. See In re Grand Jury Investig., 918 F.2d 374, 386 n.20 (3d Cir. 1990) (presence of agent or person with common interest does not abrogate privilege); United States v. Schwimmer, 738 F. Supp. 654, 657 (E.D.N.Y. 1990), aff'd, 924 F.2d 443 (2d Cir. 1991) (communications between a client and an accountant hired to further the common defense were protected). However, the sharing arrangement does not itself confer privileged status to any communication, it only permits sharing of already privileged communications without causing waiver. See In re Grand Jury Testimony of Attorney X, 621 F. Supp. 590, 592-93 (E.D.N.Y. 1985) (common defense privilege does not cover information which first lawyer obtained in non-privileged way then shared with second member). See also:
 
United States v. Schwimmer, 892 F.2d 237, 243 (2d Cir. 1989). Client was told by his attorney to cooperate with accountant hired by another attorney for a common defense. Court upheld the privilege for these communications, noting that the joint-defense doctrine and common defense doctrine are blending together.
 
Waller v. Fin. Corp. of Am., 828 F.2d 579, 583 (9th Cir. 1987). Communications by client to his own lawyer remain privileged when the lawyer subsequently shares the information with co-defendants for the purpose of a common defense.
In a case where parties are pooling information, confidentiality must still be maintained against those outside the common defense arrangement since disclosure to a single non-privileged member or person outside the pool can constitute waiver of the information discussed in the outsider's presence. See REST. 3D § 76 cmt. c. Thus, where parties to a common defense agreement are represented by different counsel, one attorney could void the privilege if a conflict of interest forced her to reveal confidential information about one her non-clients within the common defense agreement. See e.g. United States v. Almeida, 341 F.3d 1318, 1323-24 (11th Cir. 2003).
1. Waiver by Consent
The parties to a common defense agreement can waive the privilege voluntarily. However, courts are split over who possesses the actual ability to confer such consent. Some courts hold that each pool member retains the power to waive the privilege with respect to that member's own communications. See, e.g., Great Am. Surplus Lines Ins. Co. v. Ace Oil Co., 120 F.R.D. 533, 536-38 (E.D. Cal. 1988); Western Fuels Ass'n v. Burlington N. R.R. Co., 102 F.R.D. 201, 203 (D. Wyo. 1984); 8 JOHN H. WIGMORE, EVIDENCE § 2328 (J. McNaughton rev. 1961). Likewise, a pool member who did not originate a communication does not have the implied authority to waive the privilege for that communication. See Interfaith Hous. Del., Inc. v. Town of Georgetown, No. 93-31, 1994 WL 17322 (D. Del. Jan. 12, 1994) (in a common defense arrangement, waiver by one person of information shared in the arrangement will not constitute a waiver by any other party to the communication); 8 JOHN H. WIGMORE, EVIDENCE § 2328 (J. McNaughton rev. 1961). If several members' communications have been mixed, then all of them must consent for effective waiver unless the non-consenting members' contributions can be redacted. See 8 JOHN H. WIGMORE, EVIDENCE § 2328 (J. McNaughton rev. 1961); REST. 3D § 76 cmt. g.
Some courts, however, take a different view and require all clients to consent to a waiver. See In re Grand Jury Subpoenas 89-3 & 89-4, 902 F.2d 244, 249 (4th Cir. 1990) (common defense privilege cannot be waived without the consent of all parties); John Morrell & Co. v. Local Union 304A of United Food & Commercial Workers, 913 F.2d 544, 556 (8th Cir. 1990) (same); Metro Wastewater Reclamation Dist. v. Cont'l Cas. Co., 142 F.R.D. 471, 478 (D. Colo. 1992) (under Colorado law, a waiver requires the consent of all parties participating in the common defense).
2. Waiver by Subsequent Litigation
Subsequent litigation also operates to selectively waive the privilege among the members of the common defense arrangement. See Secs. Investor Prot. Corp. v. Stratton Oakmont, Inc., 213 B.R. 433, 439 (Bankr. S.D.N.Y. 1997) (subsequent litigation between members of a common defense group operates to waive the common defense privilege to the extent joint information is at issue in new case); Ohio-Sealy Mattress Mfg. Co. v. Kaplan, 90 F.R.D. 21, 29 (N.D. Ill. 1980); In re Grand Jury Subpoena Duces Tecum etc., 406 F. Supp. 381, 393-94 (S.D.N.Y. 1975). When litigation arises, each member can use shared information against the maker unless another arrangement has been made. Securities Investor Prot. Corp., 213 B.R. at 439. However, the privilege remains effective against persons not within the common defense arrangement. Moreover, in a pooling arrangement there is no duty to share information, and thus information that is not shared as part of the common defense remains privileged even against the pool. See REST. 3D § 76 cmt. e. Similarly, sharing with only certain members of the pool retains the privilege against those members with whom no information was shared.
3. Extent of Waiver
When waiver of the common defense information is demonstrated, the waiver normally extends only to the shared information and not to all relevant matters (i.e., a partial waiver). See REST. 3D § 76 cmt. g. In contrast, waiver under the joint-defense privilege for co-clients normally reveals all relevant matters concerning the same subject matter. (i.e., full waiver, discussed in § II.A.3., above).
D.	Insurance Companies and the Common Interest Privilege
The vast majority of insurance disputes that are litigated in federal court are in federal court based on diversity jurisdiction. As a result, the courts generally apply state law to issues of attorney-client privilege pursuant to Federal Rule of Evidence 501. See Choice of Law: Identifying the Applicable Law, § X(A), below. There is, therefore, very limited federal common law regarding attorney-client privilege in the insurance context. In the area of insurance, it is important to know what states' laws may apply before communicating with a policyholder, insurer, or reinsurer. For example, a policyholder in Michigan, which does not generally protect communications between policyholders and insurers, may need to be careful about corresponding with its insurer in Illinois, which does generally protect such communications. Whether a communication is discoverable may depend on whether the discovery request emanates from a court in Michigan or one in Illinois. See generally Urban Outfitters, Inc. v. DPIC Cos., 203 F.R.D. 376 (N.D. Ill. 2001) (court in Illinois confronted conflict between Michigan and Illinois law of privilege, but did not decide issue because privilege, to the extent it existed, had been waived).
Whether the attorney-client privilege will protect a communication between and among policyholders, insurers, reinsurers, and brokers often depends upon whether the common interest doctrine applies to the situation presented. The question, therefore, is often whether the interests of the parties to the communication are sufficiently aligned for the doctrine to apply.
1. Protection of Insurer/Insured Communications From Third Parties
Where an insured communicates with its insurer for the purpose of establishing a defense, several courts have held that an insured's communication with its insurer remains privileged, at least where the communication is made for the specific purpose of obtaining legal advice or the provision of counsel. For example, in Linde Thomson Langworthy Kohn & Van Dyke, P.C. v. Resolution Trust Corp., 5 F.3d 1508, 1515 (D.C. Cir.1993), the Court of Appeals for the District of Columbia held that:
 
An insured may communicate with its insurer for a variety of reasons, many of which have little to do with the pursuit of legal advice. Certainly, where the insured communicates with the insurer for the express purpose of seeking legal advice with respect to a concrete claim, or for the purpose of aiding an insurer-provided attorney in preparing a specific legal case, the law would exalt form over substance if it were to deny application of the attorney-client privilege.
 
See also Goh v. CRE Acquisition, Inc., No. 02 C 4838, 2004 WL 765238, at *3 (N.D. Ill. Apr. 6, 2004) ("To assert a privilege for a communication between an insured and an insurer [under Illinois law], one must establish: "(1) the insured's identity; (2) the insurance carrier's identity; (3) the insurance carrier's duty to defend the insured; and (4) that a communication was made between insured and an agent of the insurance carrier."); Am. Special Risk Ins. Co. v. Greyhound Dial Corp., No. 90 Civ. 2066, 1995 U.S. Dist. LEXIS 10387 (S.D.N.Y. July 24, 1995) (holding that because the disclosure of the facts required to show the insured's potential liability may be necessary to obtain that representation, such communications should be deemed in "pursuit of legal representation" and therefore privileged); Lectrolarm Custom Sys., Inc. v. Pelco Sales, Inc., 212 F.R.D. 567, 572 (E.D. Cal. 2002) (holding common interest doctrine applies to communications between insurer and insured); Schipp v. General Motors, Corp., 457 F. Supp. 2d 917, 922-24 (E.D. Ark. 2006) (insured's recorded statement to insurer on the night of accident, for which insured was clearly at fault and which resulted in the death of two people, was "a step in the process of obtaining legal representation pursuant to the insurance contract" and therefore protected by the attorney-client privilege; summary of same and subsequent insurer investigator's report, including notes from witness interviews were protected work product prepared in anticipation of litigation).
Other courts have rejected the proposition that the interests of the insured and insurer are sufficiently aligned for the privilege to be maintained. See Go Med. Ind. Pty, Ltd. v. C.R. Bard, Inc., No. 3:95 MC 522, 1998 WL 1632525 (D. Conn. Aug. 14, 1998) rev'd in part on other grounds, 250 F.3d 763 (Fed. Cir. 2000) ("An insurer's contractual obligation to pay its insured's litigation expenses does not, by itself, create a common interest between the insurer and the insured that is sufficient to warrant application of the common interest rule of the attorney client privilege."); see also SR Int'l Bus. Ins. Co. Ltd. v. World Trade Ctr. Props. LLC, No. 01 CIV. 9291 (JSM), 2002 WL 1334821, at *3-4 (S.D.N.Y. June 19, 2002) (rejecting claim of common interest privilege between World Trade Center lessees and insurance brokers invoked against insurers for lack of identify of interest); Cigna Ins. Co. v. Cooper Tires and Rubber, Inc., No. 3:99CV7397, 2001 WL 640703, at *1 (N.D. Ohio May 24, 2001) (Insured and insurance broker do not share common-interest privilege).
Some courts have rejected the extension of a privilege to insurer/insured communications on the additional ground that such communications are made for a business, and not a legal, purpose. See Calabro v. Stone, 225 F.R.D. 96, 98 (E.D.N.Y. 2004) (insured's recorded message giving notice of claim was not made for purposes of obtaining legal advice); Bovis Lend Lease, LMB, Inc. v. Seasons Contracting Corp., No. 00 Civ. 9212, 2002 U.S. Dist. LEXIS 23322 (S.D.N.Y. Dec. 4, 2002) (communications between insured and insurer were either for business purposes or not prepared in anticipation of litigation); Aiena v. Olsen, 194 F.R.D. 134 (S.D.N.Y. 2000) (holding that defendants failed to establish that the advocacy of their position to the insurer was intended either to obtain legal advice or to convey information regarding the claims for the use of potential future defense counsel); In re Imperial Corp. of Am., 167 F.R.D. 447 (S.D. Cal. 1995) ("The letters were written for the purpose of apprising American Casualty of the status of the case, not for seeking or imparting legal advice."); In re Pfizer Inc. Sec. Litig., No. 90 Civ. 1260, 1993 WL 561125 at *8 (S.D.N.Y. Dec. 23, 1993) ("Pfizer's communications are for the purpose of seeking insurance coverage, not legal advice, from its carriers. As such, they do not fall within the scope of the attorney-client privilege.").
2. The Insurer's Access to the Insured's Privileged Communications
In Waste Management, Inc. v. Int'l Surplus Lines Ins. Co., 144 Ill.2d 178, 194, 579 N.E.2d 322, 328 (Ill. 1991), the Illinois Supreme Court upheld an order in a coverage dispute compelling an insured to produce its attorney's files from the underlying action. The court based its decision on the existence of a policy cooperation clause requiring the insured to turn over such documentation, and on the common interest doctrine. Similarly, in Independent Petrochemical Corp. v. Aetna Cas. & Surety Co., 654 F. Supp. 1334 (D.D.C. 1986), the court found that a coverage dispute did not obviate the common interest between the insurer and insured. There, the court held that:
 
[W]hile those documents may be privileged from discovery by party opponents in the underlying claims, they cannot be privileged from carriers obligated to shoulder the burden of defending against those claims. . . . The documents were generated in anticipation of minimizing something of common interest to both parties in this suit: exposure to liability from tort claimants.
 
Id. at 1365; see also Dendema v. Denbur, Inc., No. 00-C-4438, 2002 U.S. Dist. LEXIS 3804 (N.D. Ill. Mar. 8, 2002) (holding insurer and insured had a common interest in defending the third-party lawsuit "despite the coverage dispute that developed, so documents created during the lawsuit were not privileged between the parties."); EDO Corp. v. Newark Ins. Co., 145 F.R.D. 18 (D. Conn. 1992) (compelling disclosure of insured's communications because insured could not "demonstrate that its attorneys prepared these documents in anticipation of a lawsuit with the . . . insurers."); Metro Wastewater Reclamation Dist. v. U.S. Fire Ins. Co., 142 F.R.D. 471 (D. Col. 1992) (rejecting insured's claim of privilege and relying upon common interest doctrine to require insured to produce documents arising from settlement with third party where insurer had refused coverage); Truck Ins. Exch. v. St. Paul Fire & Marine Ins. Co., 66 F.R.D. 129, 132-33 (E.D. Pa. 1975) ("It thus seems clear that, in relation to counsel retained to defend the claim, the insurance company and the policy-holder are in privity. Counsel represents both, and, at least in the situation where the policy-holder does not have separate representation, there can be no privilege on the part of the company to require the lawyer to withhold information from his other client, the policy-holder."); Coregis Ins. Co. v. Lewis, Johs, Avallone, Aviles & Kaufman, LLP, No. 01 CV 3844 (SJ), 2006 WL 2135782, at *15-16 (E.D.N.Y. July 28, 2006) (common interest doctrine permitted insurer to use an otherwise privilege report from insured's attorney to deny coverage).
Numerous courts have rejected this approach, however, citing a lack of common interest between the parties. See N. River Ins. Co. v. Columbia Cas. Co., No. 90 Civ. 2518, 1995 WL 5792 (S.D.N.Y. Jan. 5, 1995) ("The insurer may have the same 'desire' as the insured that the insured not be found liable for damages in an underlying action, but this does not qualify as an identical legal interest."); First Pac. Networks, Inc. v. Atl. Mut. Ins. Co., 163 F.R.D. 574 (N.D. Cal. 1995) (insurer's reservation of rights injected tension into insurer-insured relationship, entitling insured to withhold communications with attorney); Int'l Ins. Co. v. Newmount Mining Corp., 800 F. Supp. 1195 (S.D.N.Y. 1992) (insurer's desire for successful defense of underlying action an insufficient common interest to warrant invasion of attorney-client relationship); Owens-Corning Fiberglas Corp. v. Allstate Ins. Co., 660 N.E.2d 765 (Ohio Ct. Com. Pl. 1993) (rejecting the application of the common-interest doctrine, because, since this was an embittered dispute over whether coverage applies, the parties could not be more at odds, rendering any reference to a common interest "somewhat laughable."). Other courts have rejected the proposition that cooperation clauses could require the production of privileged materials. Remington Arms Co. v. Liberty Mut. Ins. Co., 142 F.R.D. 408 (D. Del. 1992) (concluding that a cooperation clause did not imply a duty to produce documents otherwise protected by the attorney-client privilege - the insurer did not seek the documents to cooperate on underlying litigation but to succeed in the coverage suit with the insured); Bituminous Cas. Corp. v. Tonka Corp., 140 F.R.D. 381 (D. Minn. 1992) (absent a showing that the parties intended waiver, cooperation clause did not contractually waive privilege); see also Eastern Air Lines, Inc. v. U.S. Aviation Underwriters, Inc., 716 So.2d 340 (Fla. Dist. Ct. App. 1998) (cooperation clause applies only when the insured and insurer are in a fiduciary relationship; where the fiduciary relationship exists, the court may compel production of documents as between the two parties; where it does not exist and the parties are in an adversarial position, the attorney-client privilege is not waived.); Wisc. v. Hydrite Chem. Co., 582 N.W.2d 411 (Wis. Ct. App. 1998) (cooperation clause does not supersede the attorney-client privilege); Rockwell Int'l Corp. v. Superior Court, 26 Cal. App. 4th 1255 (Cal. Ct. App. 1994) (rejecting Waste Management's rule that a cooperation clause imposes a broad duty of cooperation that requires an insured to disclose communications with defense counsel in an underlying action).
3. Privilege Issues Arising Between Insurers and Reinsurers
Insurers have invoked the common interest privilege to shield disclosures made to reinsurers from discovery by insureds. Several courts have found that the insurer-reinsurer relationship involves a common interest sufficient to preserve the privilege. See:
 
Minn. Sch. Bds. Assoc. Ins. Trust v. Employers Ins. Co. 183 F.R.D. 627 (N.D. Ill. 1999). No waiver of privilege where insurer provided documents to reinsurer intending and expecting confidentiality and protection from common adversaries.
 
Great Am. Surplus Lines, Inc. v. Ace Oil Co., 120 F.R.D. 533 (E.D. Cal. 1988). Disclosure of documents by insurer to reinsurer did not constitute waiver of privilege because the reinsurer, which had a financial stake in the outcome of the underlying litigation, had a "need to know" the information.
 
Durham Indus., Inc. v. N. River Ins. Co., No. 79 Civ. 1705, 1980 WL 112701 (S.D.N.Y. Nov. 21, 1980). Privileged information disclosed by insurer to reinsurer not discoverable by policyholder in coverage dispute over surety bond. The common interest privilege applies. "Here, where the reinsurers bear a percentage of liability on the bond, their interest is clearly identical to that of the [defendant insurer.]"
 
Hartford Steam Boiler Inspection & Ins. Co. v. Stauffer Chem. Co., Nos. 701223, 701224, 1991 WL 230742 (Conn. Super. Ct. Nov. 4, 1991). Disclosure of privileged documents by an insurer to its reinsurer did not waive the privilege. The interests of the insurer and reinsurer were "inextricably linked by the reinsurance treaty" that imposed on obligation on the reinsurer to bear a 7.5% share of any liability imposed on the insurer.
 
But see:
 
Reliance Ins. Co. v. Am. Lintex Corp., No. 00 Civ. 5568, 2001 U.S. Dist. LEXIS 7140 (S.D.N.Y. May 31, 2001). Court rejected insurer's argument that it and the reinsurer shared a "unity of interest." While their commercial interests coincided, no evidence demonstrated that the insurer and reinsurer shared the same counsel or coordinated legal strategy in any way.
 
Front Royal Ins. Co. v. Gold Players, Inc., 187 F.R.D. 252 (W.D. Va. 1999). Insurer sought to shield reports sent to and received from its reinsurer regarding a claim by insured. The court rejected insurer's argument that these reports were shielded by the common interest doctrine, stating that insurer "seeks to use the common interest rule to protect documents which were created in the ordinary course of business under the contractual obligations between insurer and reinsurer."
 
McLean v. Cont'l. Cas. Co., No. 95 Civ. 10415 HB HBP, 1996 WL 684209 (S.D.N.Y. Nov. 25, 1996). "[T]he relationship between insurer and reinsurer is simply not sufficient to give rise to the common interest privilege."
 
N. River Ins. Co. v. Columbia Cas. Co., No. 90 Civ. 2518, 1995 U.S. Dist. LEXIS 53 (S.D.N.Y. Jan. 5, 1995). "The interest of the ceding insurer and the reinsurer may be antagonistic in some respects and compatible in others."
 
Allendale Mut. Ins. Co. v. Bull Data Sys., Inc., 152 F.R.D. 132 (N.D. Ill. 1993). While noting that the common interest doctrine could exist between an insurer and its reinsurers, the court held that the insurer's and reinsurer's interests were not identical in this case. "In general, different persons or companies have a common interest where they have identical legal interest in a subject matter of a communication between an attorney and a client concerning legal advice. The interest must be identical, not similar, and be legal, not solely commercial." [internal citations omitted] Here, there was no consultation between the attorneys for the purpose of developing a joint defense against a litigation opponent or for the purpose of maintaining a common legal interest; the communications were normal communications between parties with a contractual obligation to keep each other informed about insurance claims.
 
N. River Ins. Co. v. Phil. Reins. Corp., 797 F. Supp. 363 (D.N.J. 1992). In a dispute over reinsurance coverage, reinsurer sought privileged documents that were created by primary insurer in proceedings with its insured. The court refused to compel disclosure under the common interest doctrine, finding that reinsurer had no input into the relationship between insurer and its counsel and did not control the relationship.

III. Recommendations for Preserving the Attorney-Client Privilege
The following are some suggestions to maximize the protection of the attorney-client privilege.

A.	Legal Communications

- Do not disclose the contents of privileged communications or documents beyond those who have a need to know.
 
- Keep all privileged communications and documents segregated from business documents.
 
- Clearly mark each privileged document as an "attorney-client communication" and instruct all recipients concerning the need for confidentiality.
 
- Avoid mixing business advice with legal advice in a privileged communication.
 
- When communicating via e-mail or on the internet, use an encrypted format to prevent disclosure to unintended recipients.
 
B. WITNESS INTERVIEWS
 
- In deciding whether to have employees sign interview statements or transcripts, consider the requirement under Fed. R. Civ. P. 26(b)(3) that signed statements and transcripts be produced, upon request, to the person making the statement.
 
- All interviews should be conducted by legal personnel. If notes are taken at all, they should be taken by legal personnel. Notes should incorporate impressions, analyses and opinions of counsel which would be protected by the work product privilege. Where a witness to the content of the interview may be required, an investigator working for the attorney should be present. Keep a record of all persons present during oral interviews with employees.
 
- Do not use privileged information to refresh the recollection of a witness.
 
C. EXPERTS
 
- If non-legal experts are necessary, the attorney, and not the corporation, should hire them. Express authority to hire non-legal experts should be given in a directive to in-house counsel or in the retention letter to outside counsel. It may be desirable to use experts who are not regularly retained in a business capacity by the corporation.
 
- The attorney should send a letter of retention to each non-legal expert, setting forth the nature of the expert's obligation and the necessity of expert information in rendering legal advice. The letter of retention also should state the confidential nature of all communications and information.
 
- Do not provide an expert with privileged information.
 
D. CORPORATE EMPLOYEES
 
- Where corporate employees will be interviewed, an appropriate high-ranking corporate executive should send a letter to the employees emphasizing the importance of the investigation, the need for full cooperation from all employees, and the confidential nature of the investigation. The letter also should state that the purpose of the investigation is to provide legal advice to the corporation.
 
- If an investigation will include the questioning of middle or lower level employees, the attorney should memorialize the fact that the information sought is not available from higher level employees and the reasons why it is not available.
 
- The attorney should restrict communications with lower level employees to matters within the scope of their employment.
 
- The attorney or corporation should inform employees who are interviewed or questioned that the attorney does not represent them individually.
 
E. DISCLOSURE TO GOVERNMENT AGENCIES
 
- Where disclosure of privileged communications to a government agency is required or advisable, attempt to obtain a specific written commitment from the agency to maintain the confidentiality of all communications in perpetuity.
 
- Be aware of statutes and regulations regarding agency disclosure. Take advantage of statutory or regulatory schemes that decrease the risk of further disclosure.
 
- If possible, maintain custody and control of any privileged documents disclosed to government agencies by allowing the agencies access to the documents without relinquishing possession.
 
IV. The Work Product Doctrine
The work product doctrine, established in Hickman v. Taylor, 329 U.S. 495 (1947), can also be a valuable means of protecting confidential documents. While the work product doctrine does shield an attorney's mental impressions, opinions and legal conclusions from discovery, work product is not, like attorney-client communications, privileged. Mfg. Admin. and Mgmt. Sys., Inc. v. ICT Group, Inc., 212 F.R.D. 110, 112 (E.D.N.Y. 2002). Rather, work product is given qualified protection from discovery as a concession to the necessities of the adversary system. As one court recently explained: "Our adversarial system of justice cannot function properly unless an attorney is given a zone of privacy within which to prepare the client's case and plan strategy, without undue interference." Davis v. Emery Air Freight Corp., 212 F.R.D. 432, 434 (D. Maine 2003) (quoting In re San Juan Dupont Plaza Hotel Fire Litig., 859 F.2d 1007, 1014 (1st Cir. 1988); see United States v. ChevronTexaco Corp., 241 F. SUPP. 2d 1065, 1081 (N.D. Cal. 2002) ("At its core, the work-product doctrine shelters the mental processes of the attorney, providing a privileged area within which he can analyze and prepare his client's case.") (quotations omitted)). Courts widely echo this "zone of privacy" rationale for the work product doctrine. See:
 
Coastal States Gas Corp. v. Dep't. of Energy, 617 F.2d 854, 864 (D.C. Cir. 1980). "[Work product] doctrine stands in contrast to the attorney-client privilege; rather than protecting confidential communications from the client, which provides a working attorney with a 'zone of privacy' within which to think, plan, weigh facts and evidence, candidly evaluate a client's case, and prepare legal theories."
 
In re Cendant Corp. Sec. Litig., 343 F.3d 658, 661 (3d Cir. 2003). "The work-product doctrine is governed by a uniform federal standard set forth in Fed. R. Civ. P. 26(b)(3) and shelters the mental processes of the attorney, providing a privileged area within which he can analyze and prepare his client's case."
 
Simmons, Inc. v. Bombardier, Inc., 221 F.R.D. 4, 7 (D.D.C. 2004). "The work-product privilege is designed to 'balance the needs of the adversarial system' by 'safeguarding the fruits of an attorney's trial preparation' while serving the general interest in 'revealing all true and material facts relevant to the resolution of a dispute.' (quoting In re Subpoenas Duces Tecum, 738 F.2d 1367, 1371 (D.C.Cir. 1984)).
 
In re Gabapentin Patent Litig., 214 F.R.D. 178, 183 (D.N.J. 2003). Describing policies underlying work product doctrine, including providing an attorney privacy in which to develop client's case.
 
Lifewise Master Funding v. Telebank, 206 F.R.D. 298, 303 (D. Utah 2002). "The work-product privilege protects against invading the privacy of an attorney's course of preparation and where the privilege exists the burden is on the party seeking to invade the privilege to establish adequate reasons for production. However, the party asserting the work-product privilege has the burden of showing the applicability of the doctrine."
 
Iowa Protections and Advocacy Servs., Inc., 206 F.R.D. 630, 640 (S.D. Iowa 2002). "The work-product doctrine was designed to prevent 'unwarranted inquiries into the files and mental impressions of an attorney,' and recognizes that it is 'essential that a lawyer work with a certain degree of privacy, free from unnecessary intrusion by opposing parties and their counsel." (quoting Simon v. G.D. Searle & Co., 816 F.2d 397, 400 (8th Cir. 1987).)
 
Strougo v. BEA Assocs., 199 F.R.D. 515, 520 (S.D.N.Y 2001). "This privilege exists to protect 'attorneys' mental impressions, opinions or legal theories concerning specific litigation from discovery."
The work product doctrine is broader than the attorney-client privilege in that it protects a wider array of materials than just communications between client and attorney. See Strougo, 199 F.R.D. at 520 (citing In re Grand Jury Proceedings, 219 F.3d 175, 190 (2d Cir. 2000) (citing Hickman, 329 U.S. at 508, and United States v. Nobles, 422 U.S. 225, 238 n.11 (1975))); SmithKline Beecham Corp. v. Pentech Pharms., Inc., No. 00 C 2855, 2001 WL 1397876, at *2 (N.D. Ill. Nov. 6, 2001); see also Judicial Watch, Inc. v. U.S. Dep't of Justice, 337 F. Supp. 2d 183, 185 (D.D.C., 2004). However, in Hickman the Supreme Court indicated that this protection is not absolute, and that discovery might be permitted if the party seeking access established adequate reasons. Hickman, 329 U.S. at 511-12. In this way, the work product doctrine "balances the interest of the system in providing lawyers with a degree of privacy free of unnecessary intrusion by opposing parties against the societal interest in ensuring that all parties obtain knowledge of the relevant facts involved in a dispute." Emery Air Freight Corp., 212 F.R.D. at 434 (quoting San Juan Dupont Plaza Hotel Fire Litig., 859 F.2d at 1014); see also Pamida, Inc. v. E.S. Originals, 281 F.3d 726, 732 (8th Cir. 2002) ("When a party seeks a greater advantage from its control over work-product than the law must provide to maintain a healthy adversary system, the privilege should give way.") (quoting In re Sealed Case, 676 F.2d 793, 818 (D.C. Cir. 1982)).
Federal Rule of Civil Procedure 26(b)(3) substantially codified the work product doctrine set forth in Hickman, for tangible materials. Garcia v. City of El Centro, 214 F.R.D. 587, 591 (S.D. Cal. 2003); Anderson v. Hale, 202 F.R.D. 548, 554 (N.D. Ill. 2001), though the work product protection provided under Hickman is broader than that provided under Rule 26. See Stanley v. Trinchard, No. Civ.A. 02-1235, 2004 WL 1562850, at *2 (E.D. La. July 12, 2004) ("Rule 26(b)(3) only provides protection for the disclosure of tangible things. For protection for nontangible work product, Mr. Smith must look to Hickman v. Taylor . . .").
In relevant part, Rule 26(b)(3) provides:
 
[A] party may obtain discovery of documents and tangible things otherwise discoverable under subdivision (b)(1) of this rule and prepared in anticipation of litigation or for trial by or for another party or by or for that other party's representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent) only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of the party's case and that the party is unable without undue hardship to obtain the substantial equivalent of the materials by other means. In ordering discovery of such materials when the required showing has been made, the court shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation.

Fed. R. Civ. P. 26(b)(3) (2003).
Interpreting Rule 26(b)(3), courts have generally distilled the applicability of the work product doctrine into a three-part test. To qualify for the protections of the work product doctrine, courts hold that items must be: (1) documents or tangible things; (2) prepared by or for a party (i.e., by or for a party or a party's representative); and (3) prepared in anticipation of litigation or for trial. Aktiebolag v. Andrx Pharm., Inc., 208 F.R.D. 92, 104 (S.D.N.Y. 2002); Anderson, 202 F.R.D. at 554. Although, if read literally, Rule 26(b)(3) applies only to tangible things, courts widely recognize that the work product doctrine encompasses intangible information as well. See In re Cendant Corp. Sec. Litig., 343 F.3d 658, 662-63 (3d Cir. 2003) (holding that it is "clear" from Hickman that work product protection extends to both tangible and intangible work product). Work product may include material prepared by non-attorneys so long as it was prepared in anticipation of litigation. See Haugh v. Schroder Inv. Mgmt. N. Am. Inc., 2003 WL 21998674, at *5 (S.D.N.Y. 2003) (holding that work product doctrine applies to attorney communications with public relations agent, even where he is only retained in an extrajudicial capacity); Mancuso v. D.R.D. Towing Co., No. Civ.A. 05-2441, 2006 WL 889383, at *2-3 (E.D. La. Mar. 10, 2006) (barring defendant's expert from shadowing plaintiff's expert's inspection of ship because it could reveal attorney's privileged work product, such as mental impressions, conclusions and legal theories). Courts may require the disclosure of materials that would otherwise meet the criteria for work product protection, if the moving party can demonstrate: (1) substantial need of the materials, and (2) that a substantial equivalent cannot be obtained without undue hardship. In re Cendant Corp. Sec. Litig., 343 F.3d 658, 663 (3d Cir. 2003). However, courts are required under Rule 26(b)(3) "to protect against disclosure of the mental impressions, conclusions, and opinions, or legal theories [referred to as 'core' or 'opinion' work product] of an attorney or other representative of a party concerning the litigation." Fed. R. Civ. P. 26(b)(3).
A. Defining Work Product
1. "Documents and Tangible Things"
Under Rule 26(b)(3), as drafted, work product is composed of "documents and tangible things." Taken literally, Rule 26(b)(3) would not apply to information in an unwritten form. 4 J. MOORE ET AL., MOORE'S FEDERAL PRACTICE P 26.64 (2d ed. 1983). Thus, courts must look back to Hickman for guidance when dealing with work product protection of intangible things (such as attorney recollections or other unrecorded information). See id. (noting that because of its wording Rule 26(b)(3) leaves the area of unrecorded work product unchanged and subject to Hickman); see also In re D.H. Overmyer Telecasting Co., 470 F. Supp. 1250, 1255 n.6 (S.D.N.Y. 1979) (content of communications between co-counsel held protected by Hickman although Rule 26(b)(3) was inapplicable).
Under Hickman, work product encompasses unrecorded and intangible forms of information. There the Court held that attempts to secure "personal recollections" prepared by counsel without any necessity or justification were prohibited. Hickman v. Taylor, 329 U.S. 495, 510 (1947).
Despite being grounded on different precedents, the protections afforded tangible and intangible materials are essentially the same in most cases. The Third Circuit has recently held that "[i]t is clear" from Hickman that work product protection extends to both tangible and intangible work product. In re Cendant Corp. Sec. Litig., 343 F.3d 658, 662 (3d. Cir. 2003); see also U.S. Info. Sys., Inc. v. IBEW Local Union No. 3, No. 00 Civ. 4763, 2002 WL 31296430 (S.D.N.Y. Oct. 11, 2002) (holding that work product doctrine was informed by case law beyond Rule 26(b)(3) and applied to intangible things such as conversations).
One common type of intangible work product is unrecorded recollections of attorneys. Some commentators have noted that unrecorded work product is really oral opinion work product. See Jeff A. Anderson et al., The Work Product Doctrine, 68 CORNELL L. REV. 760, 842-43 (1983). Such oral materials or recollections necessarily include the mental impressions of the attorney. Id. at 839. When an attorney is asked about her recollection of an interview, the attorney will only recount those items which she analyzed and deemed significant enough to remember. Thus, when recounted, the underlying information takes on aspects of opinion work product as it is strained through the attorney's mental processes, perceptions, and evaluations. Id. As a result, unrecorded information may more easily qualify as opinion work product and therefore gain extra protection. Apparently recognizing this, a few courts have included such material within the category of opinion work product. See In re Grand Jury Subpoena Dated Nov. 8, 1979, 622 F.2d 933, 935 (6th Cir. 1980) (defining work product as "the tangible and intangible material which reflects an attorney's efforts at investigating and preparing a case, including one's pattern of investigation, assembling of information, determination of the relevant facts, preparation of legal theories, planning of strategy, and recording of mental impressions").
2. Work Product Must Be Prepared By or For a Party or By or For Its Representative
Although protected work product is most commonly prepared by an attorney, work product protection extends to any materials prepared in anticipation of litigation by or for a party. Hertzberg v. Veneman, 273 F. Supp. 2d 67, 76 (D.D.C. 2003); see United States v. AT&T, 642 F.2d 1285 (D.C. Cir. 1980) (noting that work product protection developed in Hickman encompasses nonparty work product); In re Cendant Corp. Sec. Litig., 343 F.3d 658, 662-63 (3d Cir. 2003) (Work product protection "extends beyond materials prepared by an attorney to include materials prepared by an attorney's agents and consultants.") Indeed, by its own terms, Rule 26(b)(3) protects materials prepared "by or for another party or by or for that other party's representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent). . . ." Fed. R. Civ. P. 26(b)(3); see also Hertzberg, 273 F. Supp. 2d at 76 ("By its own terms, then, the work-product privilege covers materials prepared by or for any party or by or for its representative; they need not be prepared by an attorney or even for an attorney.") (emphasis in original) (internal citations omitted). Some old case law only recognizes work product prepared by attorneys and would deny Hickman protection to non-lawyer work product. See Groover, Christie & Merritt v. LoBianco, 336 F.2d 969, 973-74 (D.C. Cir. 1964) (documents not prepared under supervision of attorney not work product); Burke v. United States, 32 F.R.D. 213 (E.D.N.Y. 1963) (material not work product since not product of legal skill). But see Alltmont v. United States, 177 F.2d 971 (3d Cir. 1949) (Hickman applies to all witness statements irrespective of whether attorney or party actually obtained the statement); 8 CHARLES ALAN WRIGHT, ET AL., FEDERAL PRACTICE & PROCEDURE § 2024 (2d ed. 1994) (protection should not depend on who obtained the statement).
To be sure, protected work product only includes materials prepared in anticipation of litigation (see § IV.A.3., below.). As a practical matter, demonstrating that material prepared by a non-lawyer was prepared in anticipation of litigation may be more difficult. However, in a case involving agents of an attorney, the Supreme Court explained the importance of protecting the work product of such agents:
 
At its core, the work-product doctrine shelters the mental processes of the attorney, providing a privileged area within which he can analyze and prepare his client's case. But the doctrine is an intensely practical one, grounded in the realities of litigation in our adversary system. One of those realities is that attorneys often must rely on the assistance of investigators and other agents in the compilation of materials in preparation for trial. It is therefore necessary that the doctrine protect material prepared by agents for the attorney as well as those prepared by the attorney himself.
 
United States v. Nobles, 422 U.S. 225, 238-39 (1975). Under this rationale, work product includes material prepared "by or for [a] party's representative" as long as the agent is assisting in preparing for litigation. Fed. R. Civ. P. 26(b)(3) advisory committee's note ("the weight of authority affords protection of the preparatory work of both lawyers and nonlawyers. . . ."); In re Grand Jury Subpoena, 220 F.R.D. 130, 141-42 & n.2 (D. Mass 2004) (noting that work protect created by an attorney's representative constitutes protected work product); Gator Marshbuggy Excavator L.L.C. v. M/V Rambler, No. Civ. A. 03-3220, 2004 WL 1822843, at *2 (E.D. La. Aug. 12, 2004) (notes taken by investigator in response to a request made by an attorney were protected work product); Fine v. Facet Aerospace Prods. Co., 133 F.R.D. 439, 445 (S.D.N.Y. 1990); Residential Constructors, LLC v. Ace Property & Cas. Ins. Co., No. 2:05-cv-01318-BES-GWF, 2006 WL 3149362, at *14-15 (D. Nev. Nov. 1, 2006) (independent claims adjuster hired by insurer to handle investigation of a claim is considered a claims employee of the insurer and therefore communications between the adjuster and insurer's defense counsel were protected by attorney-client privilege); In re ContiCommodity Servs., Inc. Sec. Litig., 123 F.R.D. 574 (N.D. Ill. 1988) (work product doctrine does not prevent discovery of tax refund claim form prepared by an accountant, but documents prepared by the accountant as an agent for the lawyer would be protected); But see In re Six Grand Jury Witnesses, 979 F.2d 939, 942 (2d Cir. 1992) (work product doctrine does not protect information about analyses prepared by employees at direction of corporate counsel); In re Grand Jury Proceedings, No. M-11-189, 2001 WL 1167497, at *19 (S.D.N.Y. Oct. 3, 2001) (holding that work conducted by an investigator was protected by the work product doctrine when conducted under the direction and control of a party's counsel, but not when the same investigator acted independently); In re Public Defender Serv., 831 A.2d 890, 895-96 (D.C. 2003) (where criminal defendant's comrades extracted written confession from witness at knife point, and defendant provided confession to attorney, confession was not protected work product because it was not prepared by attorney or his agents).
Some courts strictly apply Rule 26(b)(3)'s use of the term "party" to preclude non-parties from asserting work product protection. "[D]ocuments prepared by one who is not a party to the present suit are wholly unprotected by Rule 26(b)3) even though the person may be a party to a closely related lawsuit in which he will be disadvantaged if he must disclose in the present suit." Ramsey v. NYP Holdings, Inc., No. 00 Civ. 3478, 2002 WL 1402055, at *6 (S.D.N.Y. June 27, 2002) (noting "[t]his conclusion has been adhered to by the Supreme Court in dictum, by at least one circuit court and by numerous district courts") (citations omitted). See also In re Cal. Pub. Util. Comm'n, 892 F.2d 778 (9th Cir. 1989) (a nonparty to a suit cannot assert work product protection); Ricoh v. Aeroflex, 219 F.R.D. 66, 68 (S.D.N.Y. 2003) (holding that communications between non-parties are not protected even if they are initiated or requested by a party or a party's counsel); Klein v. Jefferson Parish Sch. Bd., No. Civ.A. 00-3401, 2003, WL 1873909, at *3-4 (E.D. La. April 10, 2003) (holding that prosecutor's file from previous criminal action was not protected by work product doctrine in related civil action where the prosecuting county was not a party); Ramsey, 2002 WL 1402055 at *2 (holding that "in accordance with the substantial weight of legal authority, that a non-party cannot invoke the work-product immunity of [Rule] 26(b)(3) to withhold documents created for the non-party's benefit" where investigative materials prepared on behalf of parents, but minor plaintiff was only interested party in the lawsuit); Ostrowski v. Holem, No. 02 C 50281, 2002 WL 31956039, at *3 (N.D. Ill. Jan. 21, 2002) (holding that work product doctrine did not protect prosecutorial file of state's attorney in civil litigation between party claiming false arrest against city). But see 8 CHARLES ALAN WRIGHT, ET AL., FEDERAL PRACTICE & PROCEDURE § 2024 (2d ed. 1994) (criticizing this interpretation and suggesting a court could issue a protective order to provide protection anyway). Some courts have noted that the courts ability to preclude or limit discovery on a showing of "good cause," may blunt the potential harshness of this interpretation. Ramsey, 2002 WL 1402055 at *6.
The operation of the work product doctrine does not differ when applied to in-house rather than outside counsel. See Shelton v. Am. Motors Corp., 805 F.2d 1323, 1328 (8th Cir. 1986).
3. Work Product Must Be Prepared in Anticipation of Imminent Litigation
It is important to note that the attorney-client privilege protects communications between a client and a lawyer relating to all kinds of legal services, while the work product doctrine protects only litigation related materials. See Research Inst. for Med. & Chem., Inc. v. Wis. Alumni Research Found., 114 F.R.D. 672 (W.D. Wis. 1987) (work product doctrine inapplicable to patent application process which involves ex parte non-adversarial proceedings); REST. 3D § 87 cmt. h. However, the definition of "litigation" is quite broad and includes criminal and civil trials as well as other adversarial proceedings (such as administrative hearings, arbitration, and grand jury proceedings). See Abdallah v. The Coca-Cola Co., No. Al: 98CV3679, 2000 WL 33249254, at *5 (N.D. Ga. Jan. 25, 2000) ("A document may be considered to have been prepared in anticipation of litigation even if the litigation that caused its preparation was an investigation by a government agency, and not a traditional civil suit."); see also United States v. Stewart, 287 F. Supp. 2d 461 (S.D.N.Y. 2003) (finding that work product doctrine applies to grand jury proceedings, though suggesting possible difference when applied in criminal context); Galvin v. Hoblock, No. 00 Civ. 6058, 2003 WL 22208370, at *3-4 (S.D.N.Y. Sept. 24, 2003) ("[T]he term "litigation" encompasses not only litigation in court, but also quasi-judicial proceedings before a government agency."); Jumper v. Yellow Corp., 176 F.R.D. 282 (N.D. Ill. 1997) (documents prepared in anticipation of arbitration were protected by the work product privilege).
"The decision whether documents were prepared in anticipation of litigation varies depending on the nature of the claim and the type of information sought and, therefore, turns on the facts of each case." Abdallah, 2000 WL 33249254 at *5. The determination of whether a document has been prepared in anticipation of litigation often depends upon both the imminence of the anticipated litigation and the motivation behind the preparation to the material to be shielded from discovery. Robinson v. Tex. Auto. Dealers Ass'n, 214 F.R.D. 432, 441, vacated on other grounds, No. Civ. A. 5:97-CV-273, 2003 WL 21909777, at *1 (E.D. Tex July 28, 2003) (noting that this factor has both a temporal and motivating factor).
a. Required Imminence of Litigation
To establish that a document was prepared in anticipation of litigation, a party must demonstrate that the threat of litigation was impending. Fed. R. Civ. P. 26(b)(3); Hickman v. Taylor, 329 U.S. 495 (1947). Courts perform a case-by-case analysis to determine if the anticipated litigation has the requisite level of imminence. A general fear of ever-present litigation in the future will not meet the anticipation requirement. In re Gabapentin Patent Litig., 214 F.R.D. 178, 183 (D.N.J. 2003) ("In general, though, a party must show more than a remote prospect, an inchoate possibility, or a likely chance of litigation."). Instead, there must be some particularized suspicion that litigation is likely. Often courts will describe the immediacy of litigation requirement in terms of whether an articulable claim existed at the time the material to be protected was prepared. See:
 
In re Sealed Case, 146 F.3d 881, 884 (D.C. Cir. 1998). In order for work product protection to apply, an attorney must have "had a subjective belief that litigation was a real possibility, and that belief must have been objectively reasonable." Documents prepared prior to the materialization of specific claim were protected because they were prepared "in anticipation of possible litigation."
 
Martin v. Bally's Park Place Hotel & Casino, 983 F.2d 1252 (3d Cir. 1993). After employee contacted OSHA with health problems, counsel for Bally's ordered expert to conduct a test on the emissions of a dishwasher. Later, Bally's claimed work product protection for this report. Court agreed that the report had been in anticipation of litigation despite the fact that OSHA had mentioned closing the file if the emissions were corrected. Court declared that OSHA had not been unequivocal that it was possible to avoid the litigation.
 
Minebea v. Papst, 229 F.R.D. 1 (D.D.C. 2005). Holding that parties were not 'anticipating litigation' where a lawsuit had not been filed, and the parties instead entered into a tolling agreement in a serious, good faith effort to negotiate a patent license.
 
Celmer v. Marriot Corp., No. Civ.A. 03-CV-5229, 2004 WL 1822763, at *3 (E.D. Pa. Jul. 15, 2004) Holding report prepared by loss prevention officer whose primary role was to gather facts following accident was not protected work product because litigation was not anticipated at time of the creation of the report.
 
Binks Mfg. Co. v. Nat'l Presto Indus., Inc., 709 F.2d 1109, 1119 (7th Cir. 1983). There must be more than a remote prospect of future litigation for work product protection to apply. Work product immunity requires at least some articulable claim likely to lead to litigation and a document which was prepared because this litigation was fairly foreseeable.
 
United States v. Bergonzi, 216 F.R.D. 487, 494-98 (N.D. Cal. 2003). Work product doctrine was implicated because investigation conducted by attorneys was done in response to securities fraud suits being filed against company.
 
Hertzberg v. Veneman, 273 F. Supp. 2d 67, 75 (D.D.C. 2003). "While litigation need not be imminent or certain in order to satisfy the anticipation-of-litigation prong of the test, this circuit has held that at the very least some articulable claim, likely to lead to litigation was fairly foreseeable at the time the materials were prepared." (internal quotations omitted) (citing Coastal States Gas Corp. v. Dep't of Energy, 617 F. 2d 854, 865 (D.C. Cir. 1980)).
 
SmithKline Beecham Corp. v. Pentech Pharms., Inc., No. 00 C 2855, 2001 WL 1397876 (N.D. Ill. Nov. 6, 2001). "[T]o be subject to work-product immunity, documents must have been created in response to 'a substantial and significant threat' of litigation, which can be shown by 'objective facts establishing an identifiable resolve to litigate.' Documents are not work-product simply because 'litigation [is] in the air' or there is a remote possibility of some future litigation."
 
Miller v. Pancucci, 141 F.R.D. 292 (C.D. Cal. 1992). Police department documents prepared in the ordinary course of an internal affairs investigation in response to citizen complaint are not in anticipation of specific litigation and therefore not protected work product.
 
Heyman v. Beatrice Co., No. 89 C 7381, 1992 WL 97232 (N.D. Ill. May 1, 1992). "[T]he prospect of litigation must be identifiable because of specific claims that have already arisen." A mere contingency of litigation will not give rise to work product protection. Thus, documents that were prepared to analyze or preclude future litigation not regarding existing claims were not protected work product.
 
James Julian, Inc. v. Raytheon Co., 93 F.R.D. 138, 143 (D. Del. 1982). Party not required to know who will sue it or the theory of recovery, but the prospect of litigation must be "sufficiently strong."
 
Nat'l Eng'g & Contracting Co. v. C. & P. Eng'g & Mfg. Co., No. 49A05-9607-CV-303, 676 N.E.2d 372 (Ind. Ct. App. 1997). Photographs taken in ordinary course of business were discoverable, but photographs taken in anticipation of litigation were protected work product.
Some courts have held that litigation related to a future event may be sufficiently "anticipated" to satisfy the requirements of the work product doctrine even though no litigation then existed. See United States v. Adlman, 68 F.3d 1495, 1501 (2d Cir. 1995) (holding memorandum containing opinion work product relating to potential tax litigation arising out of a proposed merger may be protected; "[T]here is no rule that bars application of work-product protection to documents created prior to the event giving rise to litigation"). In In re Sealed Case, 146 F.3d 881, 887 (D.C. Cir. 1998), the Circuit Court for the District of Columbia held that documents prepared prior to the transaction that formed the basis for the claim were protected work product. The court reasoned that the work product privilege "turns not on the presence or absence of a specific claim, but rather on whether, under 'all of the relevant circumstances,' the lawyer prepared the materials in anticipation of litigation." Id. at 884-885. Under this standard, the court found that an attorney must have "had a subjective belief that the litigation was a real possibility, and that belief must have been objectively reasonable" in order for work product protection to apply. Id. at 884.
b. Preparation of Documents Must Be Motivated By Litigation
Some courts de-emphasize the temporal requirement of imminence in favor of consideration of the motivation for creating the allegedly protected material. Robinson v. Tex. Auto. Dealers Ass'n, 214 F.R.D. 432, 442 n. 6, vacated on other grounds, No. Civ. A. 5:97-CV-273, 2003 WL 21909777, at *1 (E.D. Tex. July 28, 2003) (noting that the "Fifth Circuit focuses more on the motivational factor than it does the temporal factor") (citing In re Kaiser Aluminum and Chem. Co., 214 F.3d 586, 593 (5th Cir. 2000)).
In establishing the "anticipation of litigation" prong of work product protection, a party must demonstrate that use in litigation was the motivation underlying preparation of a document subject to a claim of work product protection. The party asserting the work product doctrine carries the burden of proving that the writings or documents were prepared for litigation purposes. See Wyo. v. U.S. Dep't of Agric., 239 F. Supp. 2d 1219, 1231 (D. Wy. 2002), appeal dismissed and vacated as moot, 414 F.3d 1207 (10th Cir. 2005). Courts find that without more, merely citing a purpose of avoiding future litigation is an insufficient basis on which to assert work product protection, as such would "represent an insurmountable barrier to normal discovery and could subsume all compliance activities by a company as protected from discovery." In re Grand Jury Proceedings, No. M-11-189, 2001 WL 1167497, at *15 (S.D.N.Y Oct. 3, 2001) (quotations and citations omitted).
Regardless of the particular degree of litigation-related motivation that courts may require, virtually all courts hold that materials that are "assembled in the ordinary course of business, or pursuant to public requirements unrelated to litigation" are not protected. Fed. R. Civ. P. 26(b)(3) (advisory committee's note on 1970 Amendment); see also In re Grand Jury Subpoenas dated March 19, 2002 and August 2, 2002, 318 F.3d 379, 384-85 (2d Cir. 2003) (holding that work product protection did "not extend to documents in an attorney's possession that were prepared by a third party in the ordinary course of business and that would have been created in essentially similar form irrespective of any litigation anticipated by counsel"); Nat'l Union Fire Ins. Co. v. Murray Sheet Metal Co., 967 F.2d 980, 984 (4th Cir. 1992); In re Bairnco Corp. Sec. Litig., 148 F.R.D. 91, 103 (S.D.N.Y. 1993) (documents in the nature of facts and statistics, updates of claim status, costs and exposure were created for purpose other than preparation of litigation). But see United States v. Adlman, 134 F.3d 1194, 1204 (2d Cir. 1998) (documents prepared to inform a business decision were protected if the documents would not have been prepared but for anticipated litigation arising out of the business decision); 4 J. MOORE ET AL., MOORE'S FEDERAL PRACTICE P 26.64[3] (2d ed. 1983) (arguing that blind denial of protection to all materials prepared in the ordinary course of business is a misinterpretation). Attorney billing records are an example of an ordinary business record that may nevertheless be protected by the work product doctrine. Cardenas v. Prudential Ins. Co. of Am., No. Civ. 99-1422, 2003 WL 21302957, at *3 (D. Minn. May 16, 2003) (holding that attorney billing records containing narrative descriptions of conversations between clients and attorneys, the subjects of legal research or internal legal memoranda, and activities undertaken on the client's behalf prepared in anticipation of litigation are protected by attorney-client privilege and work product protection). Courts have held that "[d]ocuments prepared . . . pursuant to regulatory requirements are not classified as attorney work-product." Syngenta Crop Prot., Inc. v. U.S. Envtl. Prot. Agency, No. 1:02CV0334, 2002 WL 31778791, at *5 (M.D.N.C. Nov. 5, 2002); but see Pacific Gas & Elec. Co. v. U.S., 69 Fed. Cl. 784, 808 (Fed. Cl. 2006) (reviewing in detail the various tests for the work product doctrine and holding that the adversarial aspects of proceedings before the state public utility commission and nuclear regulatory commission constituted litigation for purposes of work product doctrine).
Pre-existing documents not prepared in anticipation of litigation may not be immunized merely by transmitting them to an attorney in response to the prospect of litigation. See Brown v. Hart, Schaffner & Marx, 96 F.R.D. 64, 68 (N.D. Ill. 1982). Similarly, the mere "fact that general counsel may be involved in oversight does not make it self-evident that the documents prepared were prepared in anticipation of litigation." Guardsmark, Inc. v. Blue Cross and Blue Shield, 206 F.R.D. 202, 210 (W.D. Tenn. 2002) (citing Sandberg v. Va. Bankshares, Inc., 979 F.2d 332, 356 (4th Cir. 1992). But see Triple Five of Minnesota, Inc. v. Simon, 212 F.R.D. 523, 528 (D. Minn. 2002) (finding that documents produced by in-house counsel were privileged where defendants had turned over hundreds of documents related to the in-house counsel's "business" function and the 10 year history of litigation of parties or threatened litigation made it likely that documents were prepared in anticipation of litigations). However, counsel's selection and compilation of pre-existing documents may constitute opinion work product. See Selection of Documents as Opinion Work Product, § IV.B.1.a., below; see also:
 
SmithKline Beecham Corp. v. Pentech Pharms., Inc., No. 00 C 2855, 2001 WL 1397876 (N.D. Ill. Nov. 6, 2001). "The threshold determination of work-product generally is whether, in light of the nature of the document and the factual situation in the particular case, the document can fairly be said to have been prepared for or obtained because of the prospect of litigation. Therefore, documents that were prepared for other reasons, such as documents created in the ordinary course of business, cannot be withheld as work-product." (emphasis in original.)
For purposes of applying the work product doctrine, courts differ with respect to the degree of motivation that a party must show to establish that a document was prepared in anticipation of litigation. Some courts, including the Second, Third, Fourth, Seventh, Eighth, Ninth and D.C. Circuits agree that "if in light of the nature of the document and the factual situation in the particular case, the document can fairly be said to have been prepared or obtained because of the prospect of litigation it is eligible for protection by the work-product privilege." Resolution Trust Corp. v. Mass. Mut. Life Ins. Co., 200 F.R.D. 183, 189 (W.D.N.Y. 2001) (internal quotations omitted) (emphasis in original); see also In re Grand Jury Subpoena (Mark Torf/Torf Env't Mgmt.), 357 F.3d 900, 908 (9th Cir. 2004) (adopting the "because of" standard in the Ninth Circuit); Mattenson v. Baxter Healthcare Corp., 438 F.3d 763, 767-69 (7th Cir. 2006) (work product doctrine protected notes written by in-house counsel during a meeting with a plaintiff's supervisors, even if the supervisors were not anticipating litigation, because the meeting notes were used by counsel to determine the company's "legal vulnerabilities"). Other courts, most notably the Fifth Circuit, have adopted the more stringent "primary motivating" factor test. See United States v. Davis, 636 F.2d 1028, 1040 (5th Cir. 1981); see also Garcia v. City of El Centro, 214 F.R.D. 587, 592 (S.D. Cal. 2003) (noting circuit split on when documents are prepared in litigation for purposes of the work product doctrine, finding no Ninth Circuit Authority rejects "primary motivating purpose" and "substantial probability" approach, court chooses to analyze particular factual elements of instant case) (citing Simon v. G.D. Searle & Co., 816 F.2d 397, 401 (8th Cir. 1987). Each approach is discussed below:
(1) Primary Motivating Factor Test
Some courts have concluded that preparation for litigation must be the primary motivating factor underlying the creation of a document in order to invoke work product protection. See McMahon v. Eastern S.S. Lines, Inc., 129 F.R.D. 197, 199 (S.D. Fla. 1989). The Fifth Circuit has been the leading circuit following this approach. S. Scrap Material Co. v. Fleming, No. Civ. A. 01-2554, 2003 WL 21474516, at *5 (E.D. La. June 18, 2003) (citing In re Kaiser Aluminum and Chem. Co., 213 F.3d 586, 592 n.19 (5th Cir. 2000)). Under this test, the Fifth Circuit recognized that:
 
It is admittedly difficult to reduce to a neat formula the relationship between the preparation of a document and possible litigation necessary to trigger the protection of the work-product doctrine. We conclude that litigation need not necessarily be imminent, as some courts have suggested, as long as the primary motivating purpose behind the creation of the document was to aid in possible future litigation.

United States v. Davis, 636 F.2d 1028, 1039 (5th Cir. 1981); S. Scrap Material Co. v. Fleming, No. Civ. A. 01-2554, 2003 WL 21474516, at *5-6 (E.D. La. June 18, 2003); Elec. Data Sys. Corp. v. Steingraber, No. 4:02 CV 225, 2003 WL 21653414, at *4 (E.D. Tex. July 9, 2003) (same). "Factors that courts rely on to determine the primary motivation for the creation of a document include the retention of counsel, his involvement in the generation of the document and whether it was routine practice to prepare that type of document or whether the document was instead prepared in response to a particular circumstance." S. Scrap Material Co. v. Fleming, No. Civ. A. 01-2554, 2003 WL 21474516, at *6-7 (E.D. La. June 18, 2003) (internal quotations omitted); see also:
 
United States v. Bornstein, 977 F.2d 112 (4th Cir. 1992). IRS issued a subpoena to defendant, a tax preparer and attorney, for the documents used to prepare a tax return. Court remanded for a determination of whether the materials were prepared primarily for defendant in his capacity as an accountant/tax preparer or as an attorney.
 
Simon v. G.D. Searle & Co., 816 F.2d 397, 401-02 (8th Cir. 1987). Defendant had compiled risk management documents giving an attorney's estimates of anticipated legal expenses, settlement values, etc. Court concluded that these documents served a variety of business planning purposes and that the risk management department was not involved in giving legal advice or strategy in any individual case. Thus, court held that the work product doctrine did not apply.
 
United States v. Gulf Oil Corp., 760 F.2d 292, 296-97 (Temp. Emer. Ct. App. 1985). Document does not get work product protection unless the primary motivating purpose behind its creation was to assist in impending litigation.
 
United States v. Davis, 636 F.2d 1028, 1040 (5th Cir. 1981). The test is whether the primary motivating factor behind the creation of the document was to prepare for pending or impending litigation.