Both in-house and outside counsel can learn valuable lessons from In re General Motors, a recently-issued federal opinion on the attorney-client privilege and work-product doctrine. While some recent decisions have chipped away at the protections for attorney notes and internal memos, this opinion reaffirms that documents a lawyer creates during a corporate investigation will be protected if kept confidential.
Notes and memos from ignition switch investigation
In connection with GM’s investigation of ignition switch problems, the company’s outside counsel conducted more than 350 interviews of over 200 current and former employees. The interview notes were used to generate a report that was later publicly disclosed, referred to in the opinion as the “Valukas Report.”
Plaintiffs moved to compel production of the notes and memos. But Judge Furman, of the Southern District of New York, held that both the attorney-client privilege and the attorney work-product doctrine protected: (1) attorney notes taken during interviews; (2) summaries generated after the interviews; and (3) formal memos created after the interviews.
According to the court, Upjohn Co. v. United States – the seminal case on the attorney-client privilege and work-product doctrine in the corporate context – squarely applied.First, the interviews were conducted in connection with GM’s request for legal advice in light of possible misconduct, accompanying government investigations and anticipated litigation. Second, outside counsel began each interview by stating that its purpose was to collect information to assist with providing legal advice, and therefore, the matters discussed would be confidential. Third, the interview materials were shared only with GM’s other outside counsel, and with GM itself.
A promise to disclose facts – not lawyer communications
Plaintiffs argued that the attorney-client privilege did not apply because GM’s CEO testified before Congress that everything related to safety would be shared. That testimony, according to the plaintiffs, demonstrated there was no intent to keep confidential the materials generated in preparing the Valukas Report. The plaintiffs also argued that interview materials were generated to provide business advice, not legal advice. Judge Furman rejected both arguments.
The court distinguished between facts and communications, reasoning that GM’s promise to disclose facts failed to show any lack of intent to keep the communications confidential. A contrary rule, according to the court, would mean attorney-client communications connected to any publicly-filed document or court pleading would be subject to disclosure.
And while GM’s CEO promised transparency with regard to the underlying facts, she did not pledge to disclose attorney-client communications. Moreover, outside counsel informed each interviewee that the interview was to gather information to help provide legal advice and was confidential. That, according to the court, further demonstrated GM’s intent to maintain confidentiality.
Advice “not exclusively legal”
The court recognized that the reason for the ignition switch investigation was “not exclusively legal.” But citing the D.C. Circuit Court’s decision last year in In re Kellogg Brown & Root (which we previously blogged about here), the court recognized that if legal advice is “one of the significant purposes” of the investigation, the privilege applies.
In GM’s case, the company hired lawyers in the face of criminal investigations by the Department of Justice and an inevitable storm of civil litigation. In that context, GM’s outside counsel was retained to provide legal advice on a “wide variety of matters relating to the recalls.” Accordingly, providing legal advice was a significant purpose of the investigation, thus raising the privilege.
Factors supporting confidentiality and privilege
This case points to some key factors that establish a company’s intent to maintain the confidentiality of an internal investigation:Expressly advising the employee that the interview’s purpose is to assist in providing legal counsel and should be kept confidential – before generating work product such as notes and memos; Making clear that the lawyer is providing legal advice, if that is the case.
Business advice may sometimes naturally accompany a corporate investigation. Under the reasoning of the GM decision, mixed business and legal advice may be privileged if a significant purpose is to give legal advice. Check the law in the applicable jurisdiction, however, on the extent to which mixed business and legal advice can be deemed privileged, and the tests used to analyze that issue.