In United States v. Wells Fargo Bank, N.A., No. 12-cv-07527 (S.D.N.Y. Sept. 22, 2015) (ECF No. 295), the district court held that an employee’s due process interest in asserting an advice-of-counsel defense in a civil matter could not overcome the employer’s right to assert the attorney-client privilege. As reported in the July EWS: Litigation Update, the district court preliminarily held that an employee, Lofrano, could not waive his employer’s attorney-client privilege by asserting the advice-of-counsel defense as a personal affirmative defense in a civil fraud action brought against him and his employer, Wells Fargo. United States v. Wells Fargo Bank, N.A., No. 12-cv-7527 (S.D.N.Y. June 30, 2015) (ECF No. 243). At that time, the district court noted that, should Wells Fargo continue to object, Lofrano’s right to present a defense “could conceivably overcome Wells Fargo’s right to maintain its privilege.” Wells Fargo did continue to object, and moved for a protective order precluding Lofrano from disclosing any privileged communications. Granting the motion for protective order, the court held that, based on the United States Supreme Court’s decision in Swidler & Berlin v. United States, 524 U.S. 399 (1998), the assertion of the attorney-client privilege is not subject to a balancing test and, at least in a civil matter, a defendant’s due process right to assert an advice-of-counsel defense cannot trump the company’s right to assert the attorney-client privilege. The court explained that using a balancing test to determine whether a company, through no fault of its own, must forfeit its privilege based on an employee’s later assertion of a defense would render the privilege uncertain, in contravention of the Supreme Court’s admonition in Upjohn that “a[n] uncertain privilege, or one that purports to be certain but results in widely varying applications by the courts, is little better than no privilege at all.” 449 U.S. 383, 393. The court acknowledged that commitment to the policies and values underlying the attorney-client privilege may result in injustice in individual cases.
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Employee May Not Waive Company’s Privilege By Asserting Advice-of-Counsel Defense
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