A New York magistrate judge recently ruled that an in-house counsel's inactive status in his state bar association resulted in the loss of the attorney-client privilege and therefore exposed his client communications to discovery by the opposing party. Gucci America, Inc. v. Guess?, Inc., No. 09 Civ. 4373 (SAS)(JL), 2010 WL 2720079 (S.D.N.Y. June 29, 2010).

In Gucci America, Inc. v. Guess?, Inc., Gucci sued Guess and others, asserting trademark infringement and related claims arising out of the defendants' use of certain trademarks, logos and designs. During the course of discovery, Gucci submitted a privilege log that included e-mail communications of its in-house counsel. Gucci's in-house counsel subsequently testified during his deposition that he was an inactive member of the California Bar and had been so for years.

Guess demanded that Gucci produce the in-house counsel's communications, arguing that they were not covered by the attorney-client privilege because, given his inactive bar status, the in-house counsel was not an attorney to whom the privilege would apply.

A New York federal court agreed with Guess, holding that the attorney-client privilege contemplates that the client communicate with an individual who is not simply trained in the law, but is actually authorized to engage in the practice of law. Because the in-house counsel did not possess the type of bar membership that authorized him to engage in the practice of law, Gucci's communications with him did not satisfy any standard of the attorney-client privilege.

Further, even though there was "strong evidence" that Gucci believed its in-house counsel was a licensed attorney, the court found that such a belief was not reasonable. In fact, the court held that although Gucci was plainly in a position to confirm the extent of its in-house counsel's qualifications as a legal professional, it failed to do so even though a simple search of the California State Bar website would have revealed that the in-house counsel had been an inactive member since 1996. Thus, the court concluded, Gucci itself bore responsibility for allowing its counsel to represent its interests without ensuring that he was authorized to do so.