Jodi Avergun and Bret Campbell,Cadwalader, Wickersham & Taft LLP, Northstar Consulting LLC

This is an extract from the third edition of GIR's The Practitioner’s Guide to Global Investigations. The whole publication is available here

38.1 Restrictions in a criminal investigation or trial

38.1.1 Generally

The US Constitution guarantees defendants in criminal cases the right to a speedy and public trial. It also guarantees all Americans freedom of speech and freedom of the press. In the trial setting, these constitutional rights are sometimes in conflict. For instance, although freedom of the press is guaranteed, media reports about a case can taint a pool of potential jurors or might allow sworn jurors to learn about matters not in evidence. Accordingly, lawyers practising in the United States must be aware of the multiple, conflicting rights that affect judicial proceedings. These rights include the public’s right of access to trial proceedings, the media’s right to report what occurs in court, the litigants’ freedom of speech and the defendant’s right to a fair trial. No one right is absolute, and each is limited by various rules and regulations.

A lawyer’s ethical obligations, for example, may limit the attorney’s First Amendment right to speak publicly about a case. Under the American Bar Association Model Rules of Professional Conduct, which have been adopted, in whole or in part, by the vast majority of US jurisdictions, a lawyer who has or is participating in a matter must not make an ‘extrajudicial statement’ that ‘will have a substantial likelihood of materially prejudicing an adjudicative proceeding in the matter.’ In federal criminal cases, prosecutors must also comply with these rules, as well as those published in the US Attorneys’ Manual (now renamed the Justice Manual), which limits the information a prosecutor may disclose or the issues he or she may comment on.

Apart from the rules prohibiting a lawyer from publicly commenting on a pending case, a lawyer’s professional duty to keep client matters confidential may also prevent him or her from publicising information about a case.

38.1.2 Investigatory and pretrial stage

During the investigative stage of the case, before charges have been filed, a court cannot limit an individual involved in an investigation from making public statements about the case. But because such statements can be used by a prosecutor against a defendant in a subsequent criminal proceeding (either as substantive evidence or to demonstrate that the individual waived his or her right to remain silent), lawyers often counsel their clients to exercise their free speech rights carefully, if at all. Prosecutors are more constrained, however. The US Attorneys’ Manual provides that a prosecutor cannot make public statements about a case if there is substantial likelihood that the statement will materially prejudice an adjudicative proceeding. Similarly, prosecutors, but not individual witnesses, are prohibited from disclosing any matters that occur before a grand jury. Once charges have been filed, however, courts have greater ability to insulate their proceedings from the prejudicial effects of any publicity. A judge’s failure to exercise this power may, under certain circumstances, violate a defendant’s right to a fair trial.In widely publicised cases, the local rules may authorise the court to issue orders governing extrajudicial statements by parties, witnesses and attorneys, and the seating and conduct of spectators, as well as the sequestration of jurors and witnesses. Sometimes, litigants can attempt to prevent the public disclosure of private or prejudicial information prior to trial by filing their documents under seal and pursuant to protective orders. However, because the First Amendment guarantees the public’s right of access to governmental proceedings, sealed filings can only be made with the court’s permission and upon a showing of necessity or that unfair prejudice might result from public dissemination. Accordingly, motions to seal proceedings are not lightly granted, and government lawyers in particular are severely limited in their ability to file motions under seal or to consent to their opponent’s request to close proceedings. Rather than seal proceedings or files, courts must consider whether a change of venue, jury sequestration or gag orders, among other techniques, would adequately protect the rights of the parties. Upon a showing that pretrial publicity about the case will prevent the empanelment of an impartial jury or will otherwise prejudice the defendant, the defendant can move to have the case transferred to another district.

38.1.3 Trial and post-trial stage

Because the right to an impartial jury is also guaranteed by the US Constitution, a defendant may question jurors about their exposure to pretrial publicity. In one of the most highly publicised cases in modern history – the 1995 murder trial of football legend O J Simpson – it took nearly two months to seat an impartial jury not prejudiced by the near-constant media coverage of the case. During jury selection, jurors were prohibited from reading the papers, watching television or even awakening to a clock radio. In widely publicised cases, courts frequently permit lawyers additional peremptory challenges (beyond the number normally allowed), which allow lawyers to summarily disqualify a potential juror without providing a reason to the court. During the trial, jurors may be sequestered to protect them from the prejudicial effect of media reporting. In today’s day and age, the court may instruct jurors not to read or post information about the trial on social media and other internet forums.A failure to allow for a fair trial or to protect the impartiality of a jury will result in a mistrial.

38.1.4 Discovery of internal corporate communications

Issues of public access affect other areas of legal practice. Even where confidentiality of process and information is assumed, rules governing discovery in civil or criminal cases can lead to the disclosure of internal communications and records, even in sensitive investigations. The Federal Rules of Civil Procedure allow for pretrial discovery that is far more expansive compared to other jurisdictions. Specifically, Rule 26(b)(1) allows parties to conduct discovery of ‘any non-privileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case.’ As a result, companies that find themselves subject to class-action or shareholder derivative lawsuits that result from internal investigations are often forced to hand over troves of potentially damaging internal corporate communications. For example, the shareholder derivative litigation against the board of the Walt Disney Company lasted more than eight years, and the extensive discovery produced a damaging factual record about the board’s corporate governance practices that ultimately forced Disney CEO and board member Michael Eisner to resign.

Civil discovery is not the only means through which seemingly confidential internal communications and records can become public. Many companies are forced to initiate or expand the scope of internal investigations after a regulator issues a subpoena or civil investigative demand for internal records. Additionally, certain public institutions, such as colleges and universities, are subject to public records laws that may require the institutions to release or publish documents both during and after the investigation. And, increasingly, large-scale document leaks thrust internal corporate documents into the public sphere without warning. The practical reality is that any organisation undergoing an internal investigation must prepare for the possibility that it will have to produce internal documents at some point.

Although a detailed description of all the defensive measures available to companies is beyond the scope of this chapter, a basic list should include confidentiality agreements to cover sensitive communications with third parties; protective orders (where available) to limit the scope and permitted usage of produced materials; and the careful maintenance of the attorney–client and work-product privilege during investigations.

38.1.5 Consulting a public relations expert

Given the likelihood that the public may become aware of internal corporate communications relating to an investigation, many organisations (and some well-resourced individuals) resort to hiring a public relations expert to assist counsel during the course of an investigation. Public relations experts can serve a variety of functions, including preparing executives for public appearances during investigations, developing communications strategies around key investigation events (e.g., press conferences regarding investigation status), and planning for potential crises (e.g., a witness leaking the preliminary findings of an investigation prior to the investigation’s completion). For many organisations, hiring a public relations expert to advise during an internal investigation can be a foregone conclusion in the relentless 24-hour news cycle. Volkswagen, for example, hired three public relations firms based in three different countries to advise during its investigation of alleged emissions cheating.During an investigation into potential corporate misconduct, special considerations arise when the public relations specialist works closely with legal counsel for the company. Frequently, questions of whether the attorney–client privilege applies to protect communications between lawyers and public relations experts arise during an investigation. Although the attorney–client privilege normally requires that the protected communication occur between a lawyer and his or her client and exclude third parties, in some circumstances the privilege extends to communications between a non-lawyer consultant and the lawyer’s client. In United States v. Kovel, for example, the Second Circuit held that communications from the client to a consultant are privileged if they are made in confidence and ‘for the purpose of obtaining legal advice’.

Kovel, however, does not create a blanket privilege to protect communications between attorneys, their clients and public relations experts. Instead, after Kovel, courts determining whether to apply the attorney–client privilege to communications with consultants such as public relations experts have focused on whether the communications with the consultant were ‘imparted in connection with the legal representation.’ For example, when Martha Stewart and her attorneys hired public relations consultants to assist them in dealing with the media in her high-profile insider trading case, the court protected those communications under the attorney–client privilege because the communications were made for the purpose of giving or receiving advice directed at handling Stewart’s legal problems. Applying Kovel, the court explained:

[T]his Court is persuaded that the ability of lawyers to perform some of their most fundamental client functions – such as (a) advising the client of the legal risks of speaking publicly and of the likely legal impact of possible alternative expressions, (b) seeking to avoid or narrow charges brought against the client, and (c) zealously seeking acquittal or vindication – would be undermined seriously if lawyers were not able to engage in frank discussions of facts and strategies with the lawyers’ public relations consultants.

In contrast, the court in Haugh v. Schroder Investment Management found that the attorney–client privilege did not apply to a public relations expert retained for the plaintiff when the plaintiff could not show that the expert’s services were ‘anything other than standard public relations services’ for the client, and were not necessary for plaintiff’s counsel to provide the plaintiff with legal advice. The conclusion to be drawn from these two cases is simple. To cloak communications with public relations experts advising clients in legal matters, the lawyer needs to retain the public relations expert, and the communications between the consultant and the client must be intended to assist the attorney in advising his or her client.

38.2 Social media and the press

38.2.1 Social media as an investigatory tool and as evidence

For better or for worse, social media is more than just a tool for friends and family to connect and communicate. The prevalence of social media has created a continuously updated record that is increasingly used to investigate wrongdoing and that can be admitted as evidence in judicial proceedings.

With respect to investigative activities, whether by the government or private parties, social-media users generally do not have an expectation of privacy. However, some of the typical features of social media – for example, the fact that social media users generally have password-protected accounts and various privacy settings to control what information other users can view – have created some legal distinctions. Courts have distinguished between public and non-public postings and focused on a user’s privacy settings when determining whether Fourth Amendment protections extend to social media content accessed by the government. However, even where a user limited viewable postings to his or her ‘friend network’, the government is not precluded from seeking co-operation from one of the user’s friends authorised to view the user’s content. Unlike investigators, private American lawyers are constrained by ethical rules in their use of social media. For example, the New York State Bar Association’s Committee on Professional Ethics has ruled that ‘friending’ an investigatory target or opposing party, or instructing a third party to do so on the lawyer’s behalf, is a prohibited act of deceptive conduct or making of a false statement. Accordingly, for private lawyers, care needs to be taken in how social media content is collected and used.

From the standpoint of admissibility as evidence in a proceeding, social media content is not fundamentally different from other paper or electronic evidence. The same evidentiary considerations apply: to be admissible, the evidence must be relevant, have probative value outweighing its potential to unfairly prejudice, and be authentic and free of hearsay. Some courts treat evidence from social media similarly to other types of evidence and require only a threshold showing of authenticity. Other courts require evidence that affirmatively disproves the possibility that evidence from social media was sent or manipulated by anyone other than its putative creator.

38.2.2 Social media and the jury

In jury trials, issues surrounding social media generally fall into two categories: lawyers using social media to screen potential jurors, and jurors using social media improperly during a proceeding.

In the pretrial process, lawyers are ethically permitted to screen jurors based on social media profiles. On 24 April 2014, the American Bar Association issued Formal Opinion 466, which clarified that the act of passively observing a potential juror’s public social media information is not improper ex parte contact with a juror or potential juror. However, a lawyer may not send an invitation or request to friend or connect with a potential juror to gain access to the potential juror’s information. Social media websites that provide notifications to users when their information is viewed, such as LinkedIn, also do not constitute improper contact as long as the lawyer does not make an active request to view non-public information. If defence counsel learns from internet research that a prospective juror has made misrepresentations during voir dire, counsel should bring this misconduct to the court’s attention. Failure to do so could potentially result in a waiver and an impairment of the defendant’s right to an impartial jury.

During trial, jurors’ use of social media presents a risk of mistrial. To address this risk, counsel may request jury instructions on the use of social media prior to commencement of trial. Formal Opinion 466 also suggests that courts deliver jury instructions on the use of social media ‘early and often’ and even ‘daily in lengthy trials.’ This guidance comes as jurors have used social media to publicly discuss trial issues or access witnesses and litigants, which ultimately has resulted in remands, reversals and other judicial inefficiencies.

For example, in Dimas-Martinez v. State, a death row inmate’s murder conviction was reversed and remanded, in part because of a juror’s tweets during trial. The jury received instructions at the beginning of the trial warning them not to tweet or use social media but a juror nonetheless tweeted at the conclusion of the evidence in the sentencing phase of the trial. The defendant’s lawyer notified the court, and the court questioned the juror. The juror admitted to the tweet and promised to discontinue use of social media for the duration of the trial.But even though the juror tweeted at least two more times, the trial court refused a motion for a new trial, finding that the defendant suffered no prejudice from the tweets. The Supreme Court of Arkansas disagreed, concluding that the juror’s tweets were impermissible public discussion of the case, and that the insubordination of the juror to the court’s instructions contributed to the defendant’s denial of a fair trial.

38.3 Risks and rewards of publicity

38.3.1 Risks

High-profile criminal cases often generate media attention. And while courts may adopt judicial measures to limit the adverse effects of publicity, it may become so pervasive that it prejudices jurors’ opinions regarding the question of guilt. In such cases, a court may declare a mistrial to protect the defendant’s Sixth Amendment guarantee to have his or her case decided by an impartial jury.

In other extraordinary situations, defence attorneys may face disciplinary measures – the most severe of which is disbarment – for improperly engaging the media in a manner that prejudices the proceedings.Prosecutors are held to a higher standard than civilian attorneys under the professional rules. For example, in June 2007, Michael B Nifong, the North Carolina prosecutor who pursued a false accusation of sexual assault against three Duke University lacrosse players, was disbarred by the State Bar Disciplinary Commission for making inflammatory statements to the media in violation of Rules 3.6 and 3.8(f) of the State Bar’s Rules of Professional Conduct, among other violations.

Unpopular defendants can face extraordinary difficulties in managing publicity while seeking an impartial hearing, which can increase both the cost and complexity of the defence. An example of this situation is the prosecution of Martin Shkreli, a former pharmaceutical CEO and hedge fund manager who was convicted of securities and wire fraud violations stemming from losses suffered by investors in his funds and companies. Prior to his arrest, as the then CEO of Turing Pharmaceuticals, Mr Shkreli unapologetically raised the price of a life-saving drug by 5,000 per cent and became known in the media as ‘the most hated man in America’. Mr Shkreli’s notoriety generated daily news coverage of his subsequent federal trial which, combined with his ill-advised attempts to personally manage the publicity, required the trial judge to issue orders addressing the media’s and Mr Shkreli’s potential influence on the jury. Mr Shkreli was convicted on two counts of securities fraud and one count of conspiracy to commit securities fraud.

Civil defamation claims may also follow highly publicised cases. When numerous women accused actor and comedian Bill Cosby of sexual assault, Mr Cosby and his team publicly denied the allegations and accused the women of lying. Several of the alleged victims filed civil defamation suits against Mr Cosby. A federal judge in Pennsylvania dismissed one of the suits on the basis that Mr Cosby’s statements did not support a claim for defamation under state law, while another defamation suit remains pending in federal court in Massachusetts.

38.3.2 Rewards

When properly executed, tactical media coverage during an investigation or trial can counter negative public impression and alleviate prosecutorial pressure to bring charges. The public relations consultants hired by Martha Stewart in connection with her insider trading case focused narrowly on neutralising the media coverage that reached the prosecutors and regulators responsible for charging decisions so that they could make their decisions without ‘undue influence from the negative press coverage.’ In ruling on the attorney–client privilege afforded to certain communications among Stewart, her attorneys and the public relations firm, the Court recognised the necessity of developing a communications plan in high-profile cases:

Just as an attorney may recommend a plea bargain or civil settlement . . . so too an attorney may take reasonable steps to defend a client’s reputation and reduce the adverse consequences of indictment . . . . A defense attorney may pursue lawful strategies to obtain dismissal of an indictment or reduction of charges, including an attempt to demonstrate in the court of public opinion that the client does not deserve to be tried.

Given the importance of advocating outside the courtroom, it may also be beneficial for an attorney to exercise the right to reply under the Model Rules of Professional Conduct. Notwithstanding the prohibition at Rule 3.6(a) against extrajudicial statements that are substantially likely to materially prejudice a fair trial, Rule 3.6(c) permits a lawyer to make extrajudicial statements that protect a client from the ‘substantial undue prejudicial effect’ of recent publicity that was not initiated by the lawyer or the client to the extent that they are necessary to mitigate the adverse publicity.

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