Summary of Contents Chapter 1 The Attorney-Client Privilege Chapter 2 The Work Product Doctrine Introduction Chapter 3 The Accountant—Client Privilege Chapter 4 The Privilege Against Self-Incrimination Chapter 5 Spousal Privileges Chapter 6 The Clergy Communications Privilege Chapter 7 The Physician-Patient, Psychotherapist-Patient, and Related Privileges

Volume 2 Chapter 8 The Journalist's Privilege Chapter 9 Executive and Governmental Privileges Chapter 10 Settlement Negotiations Privilege Table of Laws and Rules Table of Cases

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Table of Contents CHAPTER 1 THE ATTORNEY-CLIENT PRIVILEGE

I. INTRODUCTION § 1:1 Rationale for the privilege § 1:2 The privilege deŽned § 1:3 —Federal Rule of Evidence 501 § 1:4 —Proposed Federal Rule of Evidence 503; Uniform Rule of Evidence 502 § 1:5 —Common law deŽnitions § 1:6 State privilege law § 1:7 Choice of law

II. THERE MUST BE A COMMUNICATION § 1:8 In general § 1:9 Underlying facts not privileged § 1:10 The existence and nature of the professional relationship and the services performed § 1:11 The identity of the client § 1:12 The address or whereabouts of the client § 1:13 Demeanor, acts, and physical characteristics of the client § 1:14 Real evidence § 1:15 Pre-existing documents sent to the attorney § 1:16 Minutes or memoranda of corporate meetings § 1:17 Attorney-prepared materials in the attorney's Žles § 1:18 Communications from the attorney

III. THE REQUIREMENT OF PRIVILEGED PERSONS—IDENTIFYING THE ATTORNEY § 1:19 In general § 1:20 Bar membership § 1:21 In-house counsel § 1:22 Investigative counsel; Special review counsel § 1:23 Agents and representatives § 1:24 Accountants § 1:25 —Insurance claims investigators § 1:26 —Experts § 1:27 Persons reasonably believed to be attorneys

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IV. THE REQUIREMENT OF PRIVILEGED PERSONS—IDENTIFYING THE CLIENT § 1:28 In general § 1:29 Successors to the client § 1:30 Representatives and agents of the client § 1:31 Communications with third parties § 1:32 Joint clients § 1:33 The organization: Identifying the client § 1:34 Representation of individual employees by organizational counsel § 1:35 Former employees of organizational clients § 1:36 Privilege within the corporation § 1:37 Actions by shareholders and others to whom Žduciary duties are owed

V. THE COMMUNICATION MUST BE MADE IN CONFIDENCE. § 1:38 In general § 1:39 The requirement to guard conŽdences § 1:40 The risk of inadvertent disclosure § 1:41 ConŽdentiality within organizations § 1:42 E-mail and conŽdentiality

VI. THE PURPOSE OF THE COMMUNICATION MUST BE TO SECURE LEGAL ADVICE § 1:43 In general § 1:44 Cases of mixed purpose: Business and technical advice § 1:45 Ministerial and nonlegal services: The lawyer as clerk, agent, negotiator, witness, or scrivener § 1:46 Accounting services; Tax returns

VII. EXCEPTIONS TO THE APPLICABILITY OF THE PRIVILEGE § 1:47 The crime-fraud exception § 1:48 Abrogation of privilege by sixth amendment right of confrontation § 1:49 Disputes between attorney and client; Defense by attorney against charges of wrongdoing; Collection of fees

VIII. ASSERTING THE PRIVILEGE § 1:50 In general § 1:51 Assertion of the privilege by an organization § 1:52 Assertions by the attorney; Depositions of counsel vi Table of Contents

§ 1:53 Rules of privilege in grand jury proceedings § 1:54 Grand jury subpoenas issued to attorneys § 1:55 The privilege in congressional investigations § 1:56 Proving the elements of privilege § 1:57 Privilege logs § 1:58 In camera review § 1:59 Sanctions for violating discovery rules § 1:60 Obtaining appellate review of rulings regarding privilege § 1:61 Inferences drawn from assertions of privilege § 1:62 Duration of the privilege

IX. WAIVER OF THE PRIVILEGE § 1:63 In general § 1:64 Authority to waive privilege § 1:65 Intentional disregard of conŽdentiality § 1:66 Disclosure within an organization § 1:67 Disclosure by testimony § 1:68 Disclosure through document production § 1:69 Disclosure to auditors § 1:70 Disclosure during negotiations § 1:71 Making privileged communications an issue in the case § 1:72 Waiver by use of privileged documents to refresh recollection § 1:73 Disclosure of privileged documents to testifying expert witnesses § 1:74 Inadvertent disclosure § 1:75 Involuntary disclosure § 1:76 The scope of waiver § 1:77 Selective waiver

X. EXTENSIONS OF THE PRIVILEGE BASED ON COMMON INTEREST § 1:78 In general § 1:79 Joint defense privilege § 1:80 Common interest doctrine § 1:81 Aliates and subsidiaries § 1:82 Insurance companies and the common interest privilege

XI. PATENTS AND THE ATTORNEY-CLIENT PRIVILEGE § 1:83 Patents and legal advice § 1:84 Waiver of privilege and the good faith reliance on advice of counsel defense to willful infringement § 1:85 Scope of the waiver § 1:86 Bifurcating trial and staying discovery

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§ 1:87 The inequitable conduct defense and the crime-fraud exception § 1:88 Patent agents § 1:89 Application of attorney-client privilege to foreign patent agent communications

XII. THE SELF-CRITICAL ANALYSIS PRIVILEGE § 1:90 Self-critical analysis privilege

XIII. THE ATTORNEY'S DUTY TO PROTECT CONFIDENCES § 1:91 Attorney's duty to protect conŽdential information § 1:92 Attorney's duty to disclose § 1:93 —Disclosure in the corporate context § 1:94 Disclosure under securities laws

XIV. INTERNAL INVESTIGATIONS § 1:95 Internal investigations generally § 1:96 Internal investigations and the attorney-client privilege § 1:97 Internal investigations and the work product doctrine

XV. RECOMMENDATIONS § 1:98 Recommendations CHAPTER 2 THE WORK PRODUCT DOCTRINE INTRODUCTION

I. INTRODUCTION § 2:1 Origins and rationale of the work product doctrine: Hickman and Rule 26(b)(3)

II. TYPES OF WORK PRODUCT § 2:2 Opinion work product § 2:3 Selection of documents as opinion work product § 2:4 Ordinary work product § 2:5 Mixed opinion and ordinary work product

III. ASSERTING WORK PRODUCT PROTECTION § 2:6 Overview: 3-part test § 2:7 The mechanics of asserting work product protection § 2:8 Documents, tangible things, and other protected material viii Table of Contents

§ 2:9 Work product must be prepared by or for a party or by or for its representative § 2:10 Work product must be prepared in anticipation of imminent litigation § 2:11 Required imminence of litigation § 2:12 Preparation of documents must be motivated by litigation § 2:13 Using previously prepared documents in subsequent litigation

IV. SCOPE OF WORK PRODUCT PROTECTION § 2:14 Opinion work product: Near absolute protection § 2:15 Ordinary work product: May be overcome by showing of substantial need and undue hardship § 2:16 Showing substantial need § 2:17 Showing undue hardship

V. WAIVER OF WORK-PRODUCT PROTECTION § 2:18 Consent and defective assertion § 2:19 Authority to waive work product protection § 2:20 Voluntary disclosure § 2:21 Inadvertent disclosure § 2:22 ‘‘At issue’’ defenses: Advice of counsel § 2:23 Testimonial use § 2:24 Scope of waiver § 2:25 Selective waiver: Reporting to government agencies

VI. WAIVER: USE OF DOCUMENTS BY WITNESSES AND EXPERTS § 2:26 Refreshing recollection of fact witnesses § 2:27 Use of documents by testifying experts § 2:28 Consulting experts who become testifying experts § 2:29 Waiver of the privilege as to a withdrawn but previously designated testifying expert

VII. EXCEPTIONS TO WORK PRODUCT PROTECTION § 2:30 The crime-fraud exception § 2:31 Exception for attorney misconduct § 2:32 Fiduciary exception: The Garner doctrine § 2:33 Common interest extensions of work product protection CHAPTER 3 THE ACCOUNTANT—CLIENT PRIVILEGE § 3:1 Introduction

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I. FEDERAL LAW § 3:2 The Couch and Arthur Young decisions § 3:3 IRS § 7525 § 3:4 Accountants and the attorney-client privilege § 3:5 Risk of waiver of attorney-client privilege and work product protection through disclosure to auditors

II. STATE LAW § 3:6 Generally § 3:7 Who is an accountant? Agents of accountants § 3:8 Who is an accountant? Georgaphic applicability of state statutes § 3:9 Who is the client? § 3:10 Who may assert the privilege? § 3:11 What types of communications and information are protected? § 3:12 The conŽdentiality requirement § 3:13 When is the privilege waived? Waiver by consent to disclosure § 3:14 Exceptions to the privilege APPENDIX 3-1 State Statutes on the Accountant-Client Privilege APPENDIX 3-2 Other State Statutes Regarding ConŽdentiality of Accountant Information CHAPTER 4 THE PRIVILEGE AGAINST SELF-INCRIMINATION

I. INTRODUCTION § 4:1 The privilege deŽned § 4:2 Incrimination deŽned § 4:3 Exposure under the criminal laws of jurisdictions other than the one in which the privilege is claimed § 4:4 Exposure to noncriminal sanctions

II. WHO MAY CLAIM THE PRIVILEGE § 4:5 Personal character of the privilege § 4:6 Corporations, partnerships, and other collective entities § 4:7 Sole proprietorships § 4:8 Agents and independent contractors § 4:9 The special status of public employees

III. PROCEEDINGS IN WHICH THE PRIVILEGE MAY BE CLAIMED § 4:10 Introduction x Table of Contents

§ 4:11 Criminal proceedings § 4:12 Probation revocation hearings § 4:13 Civil cases § 4:14 Legislative proceedings § 4:15 Administrative proceedings § 4:16 Juvenile proceedings § 4:17 Internal revenue forms and proceedings § 4:18 Registration and other self-reporting requirements § 4:19 Prison context

IV. SCOPE OF INFORMATION WITHIN THE PRIVILEGE § 4:20 Testimonial communications and evidence § 4:21 Oral testimony § 4:22 Books, records, and other documents § 4:23 Business records § 4:24 Private records § 4:25 Noncommunicative acts § 4:26 Physical examinations and exemplars § 4:27 Mental examinations

V. THE MEANING OF COMPULSION § 4:28 Introduction § 4:29 DeŽning custodial interrogation and applying Miranda § 4:30 Prison context § 4:31 Statutes and compulsion § 4:32 Searches and seizures § 4:33 Determining the voluntariness of confessions and other statements

VI. MECHANICS OF CLAIMING AND ENFORCING THE PRIVILEGE § 4:34 Informing the witness of his or her rights § 4:35 Suciency and timing of witness's claim of privilege § 4:36 Determination of privilege by the court § 4:37 Contempt § 4:38 Appeals of rulings on the privilege § 4:39 The issue of the jury's presence § 4:40 Inferences drawn by the jury from a decision not to testify § 4:41 Jury instructions reecting on defendant's silence § 4:42 Comments by counsel referring to defendant's silence § 4:43 Comments by prosecutor § 4:44 Statements that the prosecution's evidence was uncontroverted

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§ 4:45 References to past assertion of the privilege § 4:46 Comments by counsel for a codefendant § 4:47 Comments on exemplars § 4:48 References to the invocation of privilege for impeachment purposes

VII. WAIVER AND ABROGATION OF THE PRIVILEGE § 4:49 Introduction § 4:50 Oral testimony § 4:51 Preparation or submission of documents § 4:52 Eect of testimonial waiver in subsequent proceedings § 4:53 Guilty pleas and convictions § 4:54 Immunity § 4:55 Adequacy of immunity § 4:56 The power to grant immunity § 4:57 Right of defendant to object to the granting of immunity or to compel immunization § 4:58 Immunized testimony in subsequent proceedings CHAPTER 5 SPOUSAL PRIVILEGES § 5:1 Introduction

I. TESTIMONIAL IMMUNITY § 5:2 Overview § 5:3 The required marital relationship § 5:4 Persons who may claim immunity § 5:5 Waiver of the immunity § 5:6 Exceptions to the doctrine

II. MARITAL COMMUNICATIONS PRIVILEGE § 5:7 Source of the law and rationale for the privilege § 5:8 Nature of relationships subject to the privilege § 5:9 Who may assert the privilege? § 5:10 What is a communication? § 5:11 Requirement of conŽdentiality § 5:12 Waiver § 5:13 Exceptions to the privilege § 5:14 Parent-child privilege Spousal Privilege—State By State CHAPTER 6 THE CLERGY COMMUNICATIONS PRIVILEGE

I. INTRODUCTION § 6:1 Rationale for the privilege xii Table of Contents

§ 6:2 The privilege deŽned § 6:3 The privilege in state courts § 6:4 The privilege in federal courts: Federal Rule of Evidence 501 and Proposed Rule 506

II. WHO IS A MEMBER OF THE CLERGY? § 6:5 In general § 6:6 Members of particular denominations; Lay ocials

III. WHO IS A PENITENT AND WHO MAY ASSERT THE PRIVILEGE § 6:7 Who is a penitent? § 6:8 Who may assert the privilege?; Waiver of the privilege

IV. WHAT TYPES OF COMMUNICATIONS ARE PROTECTED AND WHAT IS THE SCOPE OF THE PROTECTED RELATIONSHIP? § 6:9 In general § 6:10 Requirement that the communication be part of discipline enjoined by church § 6:11 Requirement that the communication be made to a minister in professional character; Applicability to counseling activity by minister § 6:12 Requirement that the communication be penitential or confessional in nature § 6:13 Requirement of conŽdentiality, presence of third parties § 6:14 Emerging issues: The clergy communications privilege and mandatory reporting statutes CHAPTER 7 THE PHYSICIAN-PATIENT, PSYCHOTHERAPIST-PATIENT, AND RELATED PRIVILEGES

I. INTRODUCTION § 7:1 General deŽnitions and sources of the law § 7:2 Rationales for the privilege

II. WHAT KINDS OF PROVIDERS ARE COVERED? § 7:3 Physicians § 7:4 Psychotherapists § 7:5 Social workers and other professional counselors § 7:6 Others in the health Želd § 7:7 Recipients of improper disclosures

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III. WHO IS A PATIENT? § 7:8 Information from family members or others § 7:9 Assertion of the privilege by persons other than the patient

IV. WHAT MATTERS ARE PROTECTED? § 7:10 Communications from the patient § 7:11 Other information gained in examinations or treatment § 7:12 Information unrelated to the care sought § 7:13 Conclusions, diagnoses, and treatments § 7:14 Medical records § 7:15 Information that does not aect the patient's reputation

V. WHEN IS A CONSULTATION MEDICAL? § 7:16 Consultations for purposes other than treatment § 7:17 Conversations in a nonprofessional capacity

VI. REQUIREMENT OF CONFIDENTIALITY § 7:18 Presence of third parties § 7:19 Relevance of subsequent disclosures

VII. WAIVERS AND EXCEPTIONS § 7:20 Who may waive the privilege? § 7:21 Express waivers § 7:22 Implied waivers § 7:23 Placing medical condition at issue § 7:24 Criminal proceedings § 7:25 Commitment proceedings § 7:26 Will contests § 7:27 Required reports § 7:28 Child custody disputes § 7:29 ‘‘Dangerous patient’’ exception

VIII. MECHANICS OF ASSERTING THE PRIVILEGE § 7:30 Where patient or client is a party § 7:31 Where patient or client is not a party

IX. THE RELATIONSHIP OF PRIVILEGE AND CONFIDENTIALITY § 7:32 State laws governing conŽdentiality § 7:33 The HIPAA privacy regulations § 7:34 Access to one's own medical records xiv Table of Contents Volume 2 CHAPTER 8 THE JOURNALIST'S PRIVILEGE

I. INTRODUCTION § 8:1 The journalist's privilege: An overview

II. HISTORY AND DEVELOPMENT OF PROTECTION FOR JOURNALISTS' INFORMATION § 8:2 Historical antecedents § 8:3 Garland v. Torre and the birth of the First Amendment privilege § 8:4 Branzburg v. Hayes : The Supreme Court limits the privilege § 8:5 Post- Branzburg development of the constitutional privilege § 8:6 State shield laws § 8:7 Department of justice guidelines § 8:8 Who may assert the privilege § 8:9 ConŽdential sources and o-the-record information § 8:10 Other unpublished information and work product § 8:11 Information published or disclosed to third parties

III. OVERCOMING THE FIRST AMENDMENT PRIVILEGE: THE THREE-PART TEST § 8:12 Introduction § 8:13 Relevance to the underlying proceeding § 8:14 Unavailability from alternative sources § 8:15 Compelling need

IV. THE FIRST AMENDMENT PRIVILEGE IN DIFFERENT SETTINGS § 8:16 Grand jury investigations § 8:17 Criminal trials § 8:18 Civil proceedings: Third-party testimony § 8:19 Civil proceedings: The journalist as a party § 8:20 Invoking the privilege § 8:21 In camera review and related procedures § 8:22 Obtaining review: Appeal and contempt

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CHAPTER 9 EXECUTIVE AND GOVERNMENTAL PRIVILEGES

I. INTRODUCTION § 9:1 Summary of privileges and quasi privileges § 9:2 Role of Freedom of Information Act

II. CONSTITUTIONAL EXECUTIVE PRIVILEGE § 9:3 In general § 9:4 Scope of the privilege § 9:5 Overcoming the privilege § 9:6 Relation to executive immunity

III. JUDICIAL PRIVILEGE § 9:7 Judicial privilege

IV. THE DELIBERATIVE PROCESS PRIVILEGE § 9:8 Deliberative process exemption to FOIA § 9:9 Elements of the privilege § 9:10 Limitations on the privilege § 9:11 Waiving the privilege § 9:12 Invoking the privilege § 9:13 Extensions of the privilege

V. PRIVILEGE FOR MILITARY, DIPLOMATIC, AND STATE SECRETS § 9:14 State secrets privilege generally § 9:15 Application of the common law privilege § 9:16 Privilege for classiŽed information in criminal proceedings § 9:17 Application of the Freedom of Information Act to state secrets

VI. PRIVILEGES FOR INFORMATION RELATING TO LAW ENFORCEMENT § 9:18 Privilege for information obtained for law enforcement purposes § 9:19 Grand jury material § 9:20 Informer's privilege § 9:21 —Criminal proceedings § 9:22 —Pretrial proceedings § 9:23 —Prison disciplinary proceedings § 9:24 —Civil enforcement proceedings xvi Table of Contents

§ 9:25 —Freedom of Information Act Exemption 7(D) § 9:26 —Proposed Federal Rule of Evidence 510; Uniform Rule 509 § 9:27 Novel investigative techniques § 9:28 Required reports privilege § 9:29 Trade secrets and conŽdential business information submitted to government § 9:30 Bank examination privilege § 9:31 Reverse FOIA actions § 9:32 Privacy privilege § 9:33 Tax return information § 9:34 —Return information § 9:35 —§ 6103 exceptions § 9:36 Freedom of Information Act Exemption 3 CHAPTER 10 SETTLEMENT NEGOTIATIONS PRIVILEGE

I. INTRODUCTION § 10:1 The privilege deŽned

II. VIABILITY OF THE PRIVILEGE § 10:2 Courts recognizing the settlement negotiations privilege § 10:3 Courts rejecting the settlement negotiations privilege; burden on requesting party to justify discovery Table of Laws and Rules Table of Cases

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§ 1:77 Testimonial Privileges

§ 1:77 Selective waiver Research References West's Key Number Digest, Witnesses ”219(3) When a party voluntarily discloses documents or com- munications to a government agency,1 the documents and communications may lose the protection of the privilege and be subject to discovery by other parties, including private litigants.2 Corporations have argued that these voluntary disclosures to government agencies amount to a selective waiver of the privilege solely for the beneŽt of the public agency's review, and should not be considered as a waiver for purposes of private civil litigation. Only a small minority of courts have adopted this concept of selective waiver.3 The clear trend, and the majority rule under federal law,

[Section 1:77] 1There is increasing pressure on companies to disclose internal investigatory materials to government agencies in order to avoid prosecu- tion, or at least to obtain leniency in the event of criminal conviction. For example, amendments to the Federal Sentencing Guidelines that became eective on November 1, 2004 reduce an organization's ‘‘culpability score’’ if, among other factors, the organization ‘‘fully cooperated in the investiga- tion’’ of its wrongdoing. See United States Sent. Guidelines § 8C2.5(g)(1). Application Note 12 to Section 8C2.5. The Guidelines provide the follow- ing guidance regarding when ‘‘cooperation’’ may require waiver of the attorney-client privilege: waiver of attorney-client privilege and of work product protections is not a pre- requisite to a reduction in culpability score under subdivisions (1) and (2) of subsection (g) unless such waiver is necessary in order to provide timely and thorough disclosure of all pertinent information known to the organization.

2See D. Greenwald and M. Thomas, Selective Waiver of Privileges, For The Defense, December 2002. 3See, e.g., DiversiŽed Industries, Inc. v. Meredith, 572 F.2d 596, 1977-2 Trade Cas. (CCH) P 61591, 1978-1 Trade Cas. (CCH) P 61879, 23 Fed. R. Serv. 2d 1473, 24 Fed. R. Serv. 2d 1201 (8th Cir. 1977) (rejected by, Re- public of Philippines v. Westinghouse Elec. Corp., 132 F.R.D. 384, 17 Fed. R. Serv. 3d 1476 (D.N.J. 1990)) and (disapproved of by, U.S. v. Mas- sachusetts Institute of Technology, 957 F. Supp. 301, 97-1 U.S. Tax Cas. (CCH) P 50269, 37 Fed. R. Serv. 3d 711, 79 A.F.T.R.2d 97-595 (D. Mass. 1997)) and (rejected by, In re Columbia/HCA Healthcare Corp. Billing Practices Litigation, 293 F.3d 289, 58 Fed. R. Evid. Serv. 1451, 53 Fed. R. Serv. 3d 789, 2002 FED App. 0201P (6th Cir. 2002)). See also In reM&L Business Mach. Co., Inc., 161 B.R. 689 (D. Colo. 1993) (rejected by, In re Columbia/HCA Healthcare Corp. Billing Practices Litigation, 293 F.3d 289, 58 Fed. R. Evid. Serv. 1451, 53 Fed. R. Serv. 3d 789, 2002 FED App. 0201P (6th Cir. 2002)) (more likely to Žnd 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).

1-300 Attorney-Client Privilege § 1:77 is that waiver as to even one government agency constitutes waiver as to all, including other government agencies and private litigation adversaries. The seminal case on selective waiver is DiversiŽed Industries, Inc. v. Meredith.4 In Diversi- Žed, 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.5 The Eighth Circuit explained: ‘‘To hold otherwise may have the eect 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.’’6 Most courts have rejected or at least applied a narrow

4DiversiŽed Industries, Inc. v. Meredith, 572 F.2d 596, 1977-2 Trade Cas. (CCH) P 61591, 1978-1 Trade Cas. (CCH) P 61879, 23 Fed. R. Serv. 2d 1473, 24 Fed. R. Serv. 2d 1201 (8th Cir. 1977) (rejected by, Republic of Philippines v. Westinghouse Elec. Corp., 132 F.R.D. 384, 17 Fed. R. Serv. 3d 1476 (D.N.J. 1990)) and (disapproved of by, U.S. v. Massachusetts Institute of Technology, 957 F. Supp. 301, 97-1 U.S. Tax Cas. (CCH) P 50269, 37 Fed. R. Serv. 3d 711, 79 A.F.T.R.2d 97-595 (D. Mass. 1997)) and (rejected by, In re Columbia/HCA Healthcare Corp. Billing Practices Liti- gation, 293 F.3d 289, 58 Fed. R. Evid. Serv. 1451, 53 Fed. R. Serv. 3d 789, 2002 FED App. 0201P (6th Cir. 2002)). 5DiversiŽed Industries, Inc. v. Meredith, 572 F.2d 596, 611, 1977-2 Trade Cas. (CCH) P 61591, 1978-1 Trade Cas. (CCH) P 61879, 23 Fed. R. Serv. 2d 1473, 24 Fed. R. Serv. 2d 1201 (8th Cir. 1977) (rejected by, Re- public of Philippines v. Westinghouse Elec. Corp., 132 F.R.D. 384, 17 Fed. R. Serv. 3d 1476 (D.N.J. 1990)) and (disapproved of by, U.S. v. Mas- sachusetts Institute of Technology, 957 F. Supp. 301, 97-1 U.S. Tax Cas. (CCH) P 50269, 37 Fed. R. Serv. 3d 711, 79 A.F.T.R.2d 97-595 (D. Mass. 1997)) and (rejected by, In re Columbia/HCA Healthcare Corp. Billing Practices Litigation, 293 F.3d 289, 58 Fed. R. Evid. Serv. 1451, 53 Fed. R. Serv. 3d 789, 2002 FED App. 0201P (6th Cir. 2002)). 6DiversiŽed Industries, Inc. v. Meredith, 572 F.2d 596, 611, 1977-2 Trade Cas. (CCH) P 61591, 1978-1 Trade Cas. (CCH) P 61879, 23 Fed. R. Serv. 2d 1473, 24 Fed. R. Serv. 2d 1201 (8th Cir. 1977) (rejected by, Re- public of Philippines v. Westinghouse Elec. Corp., 132 F.R.D. 384, 17 Fed. R. Serv. 3d 1476 (D.N.J. 1990)) and (disapproved of by, U.S. v. Mas- sachusetts Institute of Technology, 957 F. Supp. 301, 97-1 U.S. Tax Cas. (CCH) P 50269, 37 Fed. R. Serv. 3d 711, 79 A.F.T.R.2d 97-595 (D. Mass. 1997)) and (rejected by, In re Columbia/HCA Healthcare Corp. Billing Practices Litigation, 293 F.3d 289, 58 Fed. R. Evid. Serv. 1451, 53 Fed. R. Serv. 3d 789, 2002 FED App. 0201P (6th Cir. 2002)). See also U.S. v. Shyres, 898 F.2d 647, 657 (8th Cir. 1990) (applying the reasoning of DiversiŽed); U.S. v. Buco, 1991 WL 82459 (D. Mass. 1991) (disclosure to Oce of Thrift Supervision did not waive privilege for internal investiga-

K 2005 Thomson/West, 3/2005 1-301 § 1:77 Testimonial Privileges construction of the 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 conŽdentiality to obstruct others.’’7 Since the D.C. Circuit Žrst rejected selective waiver, the First, Second, Third, Fourth and Sixth Circuits have rejected the selective waiver doctrine to varying degrees. In Westing- house Elec. Corp. v. Republic of Philippines,8 the Third Circuit held that disclosure to the government waived privi- leges, even when the disclosing party had entered into a conŽdentiality agreement with the government agency receiving the privileged materials. In that case, the SEC and the DOJ had investigated allegations that Westinghouse had obtained a contract to build a nuclear power plant in the Philippines by bribing foreign ocials. After entering into a tion of banking violations); Schnell v. Schnall, 550 F. Supp. 650, 652–53, Fed. Sec. L. Rep. (CCH) P 98871, 12 Fed. R. Evid. Serv. 97, 35 Fed. R. Serv. 2d 885 (S.D. N.Y. 1982) (rejected by, Manufacturers and Traders Trust Co. v. Servotronics, Inc., 132 A.D.2d 392, 522 N.Y.S.2d 999 (4th Dep't 1987)) and (rejected by, In re Columbia/HCA Healthcare Corp. Bill- ing Practices Litigation, 293 F.3d 289, 58 Fed. R. Evid. Serv. 1451, 53 Fed. R. Serv. 3d 789, 2002 FED App. 0201P (6th Cir. 2002)) (public policy of encouraging disclosure to SEC compels Žnding of selective waiver). 7Permian Corp. v. U.S., 665 F.2d 1214, 1219, 1220, Fed. Sec. L. Rep. (CCH) P 98280, 8 Fed. R. Evid. Serv. 1424, 32 Fed. R. Serv. 2d 429 (D.C. Cir. 1981). Occidental Petroleum produced a large number of documents to Mead under a stipulation that inadvertent production would not waive the attorney-client privilege. Occidental allowed the SEC access to these documents for an on-going SEC investigation under an agreement that prohibited certain further disclosures by the SEC. The Department of Energy then sought the disclosed documents from the SEC. The District of Columbia Circuit found that the disclosure of the documents to the SEC resulted in waiver. Permian Corp. v. U.S., 665 F.2d 1214, 1222, Fed. Sec. L. Rep. (CCH) P 98280, 8 Fed. R. Evid. Serv. 1424, 32 Fed. R. Serv. 2d 429 (D.C. Cir. 1981). The court refused to Žnd that the public policy to encourage cooperation with the SEC overrode the requirements of the privilege. Permian Corp. v. U.S., 665 F.2d 1214, 1220–1222, Fed. Sec. L. Rep. (CCH) P 98280, 8 Fed. R. Evid. Serv. 1424, 32 Fed. R. Serv. 2d 429 (D.C. Cir. 1981). It concluded that any privilege had been waived, stating ‘‘the attorney-client privilege should be available only at the traditional price: a litigant who wishes to assert conŽdentiality must maintain genu- ine conŽdentiality.’’ Permian Corp. v. U.S., 665 F.2d 1214, 1222, Fed. Sec. L. Rep. (CCH) P 98280, 8 Fed. R. Evid. Serv. 1424, 32 Fed. R. Serv. 2d 429 (D.C. Cir. 1981). 8Westinghouse Elec. Corp. v. Republic of Philippines, 951 F.2d 1414, 35 Fed. R. Evid. Serv. 1070, 22 Fed. R. Serv. 3d 377 (3d Cir. 1991).

1-302 Attorney-Client Privilege § 1:77 conŽdentiality agreement with the DOJ, and in reliance on SEC regulations stating that materials furnished during an investigation were non-public and conŽdential, Westinghouse provided internal investigation reports to the agencies. Almost a decade after the conŽdentiality agreement, the Philippines brought suit against Westinghouse and sought the reports Westinghouse had disclosed to the government. The Third Circuit held that, by disclosing the reports to the government years earlier, Westinghouse had waived its priv- ilege as to all litigation adversaries, despite the terms of the conŽdentiality agreement and SEC regulations. 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. In U.S. v. Massachusetts Institute of Technology,9 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 obtain- ing privileged information, nor MIT's interest in supporting its relationship with the government, justiŽed preserving the attorney-client privilege. The court noted: ‘‘But the gen- eral principle that disclosure normally negates the privilege is worth maintaining. To maintain it here makes the law more predictable and certainly eases its administration.’’10 Acknowledging the diculty created by government de- mands, the court stated: ‘‘ . . . MIT chose to place itself in this position by becoming a government contractor.’’11 Although the rule allowing selective waiver per se, as an-

9U.S. v. Massachusetts Institute of Technology, 129 F.3d 681, 97-2 U.S. Tax Cas. (CCH) P 50955, 48 Fed. R. Evid. Serv. 66, 39 Fed. R. Serv. 3d 4, 80 A.F.T.R.2d 97-7981 (1st Cir. 1997). 10U.S. v. Massachusetts Institute of Technology, 129 F.3d 681, 685, 97-2 U.S. Tax Cas. (CCH) P 50955, 48 Fed. R. Evid. Serv. 66, 39 Fed. R. Serv. 3d 4, 80 A.F.T.R.2d 97-7981 (1st Cir. 1997). 11U.S. v. Massachusetts Institute of Technology, 129 F.3d 681, 686, 97-2 U.S. Tax Cas. (CCH) P 50955, 48 Fed. R. Evid. Serv. 66, 39 Fed. R. Serv. 3d 4, 80 A.F.T.R.2d 97-7981 (1st Cir. 1997). See also In re Columbia/ HCA Healthcare Corp. Billing Practices Litigation, 293 F.3d 289, 294– 310, 58 Fed. R. Evid. Serv. 1451, 53 Fed. R. Serv. 3d 789, 2002 FED App. 0201P (6th Cir. 2002), cert. dismissed, 539 U.S. 977, 124 S. Ct. 27, 156 L. Ed. 2d 690 (2003) (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); In re Steinhardt Partners,

K 2005 Thomson/West, 3/2005 1-303 § 1:77 Testimonial Privileges

L.P., 9 F.3d 230, 236, Fed. Sec. L. Rep. (CCH) P 97818, 27 Fed. R. Serv. 3d 726 (2d Cir. 1993) (rejected by, In re Columbia/HCA Healthcare Corp. Billing Practices Litigation, 293 F.3d 289, 58 Fed. R. Evid. Serv. 1451, 53 Fed. R. Serv. 3d 789, 2002 FED App. 0201P (6th Cir. 2002)) (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 conŽdentiality order); In re Martin Marietta Corp., 856 F.2d 619, 623 (4th Cir. 1988) (waiver where party conducted an internal investigation into alleged fraudulent accounting procedures and disclosed the results to the government to avoid indict- ment; resulting waiver extended to non-disclosed materials, and even to undisclosed details underlying the published data, however, there was only a partial waiver for opinion work-product); In re Subpoenas Duces Tecum, 738 F.2d 1367, 1370, Fed. Sec. L. Rep. (CCH) P 91566, 16 Fed. R. Evid. Serv. 165, 39 Fed. R. Serv. 2d 611 (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 conŽdential and their submission to the SEC was not a waiver of any privilege); In re Sealed Case, 676 F.2d 793, 824, Fed. Sec. L. Rep. (CCH) P 98647, 82-1 U.S. Tax Cas. (CCH) P 9335, 10 Fed. R. Evid. Serv. 490, 33 Fed. R. Serv. 2d 1778, 50 A.F.T.R.2d 82- 5637 (D.C. Cir. 1982) (company waived privilege by voluntarily submitting report of investigative counsel to the SEC; waiver included any documen- tation necessary to evaluate the report); In re Tyco Intern., Inc. Multidis- trict Litigation (MDL 1335), 2004 DNH 53, 2004 WL 556715 (D.N.H. 2004) (disclosure of otherwise privileged material to the SEC and the New York District Attorney waived the privilege as to third-party private litigants, despite party's cover letters that stated it did not intend to waive its privileges, and an adavit from an assistant district attorney who conceded he had agreed that disclosures would not constitute waiver); In re Lupron Marketing and Sales Practices Litigation, 2004 WL 764454 (D. Mass. 2004), subsequent determination, 2004 WL 1058108 (D. Mass. 2004) (disclosure of otherwise privileged material to DOJ waived privi- leges as to third party litigants, notwithstanding government's agreement to treat the materials with the conŽdentiality accorded to documents produced to a grand jury under Fed. R. Crim. P. 6(e)); U.S. v. Bergonzi, 216 F.R.D. 487 (N.D. Cal. 2003) (disclosure of investigative materials to SEC and US Attorney's Oce waived privilege, despite agencies' agree- ment to keep the materials conŽdential; attorney-client privilege did not apply because the investigation was never intended to be conŽdential in light of company's advance agreement to disclose materials to the agen- cies); Information Resources, 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 ad- versary’’ waives privilege); Maryville Academy v. Loeb Rhoades & Co., Inc., 559 F. Supp. 7, 9, 12 Fed. R. Evid. Serv. 1324, 36 Fed. R. Serv. 2d 81 (N.D. Ill. 1982) (court rejected concept of selective waiver and found party's disclosure to the government constituted full waiver of the privilege). But see McDonnell Douglas Corp. v. U.S. E.E.O.C., 922 F. Supp. 235, 70 Fair Empl. Prac. Cas. (BNA) 980 (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, Fed. Sec. L. Rep. (CCH) P 94480, 14 Fed.

1-304 Attorney-Client Privilege § 1:77 nounced by the Eighth Circuit, is largely out of favor, there remains some debate over whether disclosure to the govern- ment waives privileges when the disclosing party has entered into a conŽdentiality 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 conŽdentiality agreement with the government agency receiving the privileged materials.12 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 rigid 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 conŽdentiality of the disclosed materials.13 In U.S. v. Massachusetts Institute of Technology,14 the par- ties had not entered into a conŽdentiality agreement, but the court disposed of the selective waiver doctrine with such a broad stroke, it seems that the existence of a conŽdential- ity agreement would have made little dierence. 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,15 In that case, Columbia/HCA refused to disclose its internal audit

R. Serv. 3d 138 (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); Saito v. McKesson HBOC, Inc., 2002 WL 31657622 (Del. Ch. 2002) (applying selective waiver doctrine based in part on Delaware's strong preference not to Žnd waiver of privilege). 12Westinghouse Elec. Corp. v. Republic of Philippines, 951 F.2d 1414, 1426, 35 Fed. R. Evid. Serv. 1070, 22 Fed. R. Serv. 3d 377 (3d Cir. 1991). 13In re Steinhardt Partners, L.P., 9 F.3d 230, 236, Fed. Sec. L. Rep. (CCH) P 97818, 27 Fed. R. Serv. 3d 726 (2d Cir. 1993) (rejected by, In re Columbia/HCA Healthcare Corp. Billing Practices Litigation, 293 F.3d 289, 58 Fed. R. Evid. Serv. 1451, 53 Fed. R. Serv. 3d 789, 2002 FED App. 0201P (6th Cir. 2002)). See Maruzen Co., Ltd. v. HSBC USA, Inc., 2002 WL 1628782 (S.D. N.Y. 2002) (following In re Steinhardt and Žnding no waiver of attorney-client privilege where parties entered into a conŽdenti- ality agreement before internal investigation materials were disclosed to U.S. Attorney's oce). 14U.S. v. Massachusetts Institute of Technology, 129 F.3d 681, 97-2 U.S. Tax Cas. (CCH) P 50955, 48 Fed. R. Evid. Serv. 66, 39 Fed. R. Serv. 3d 4, 80 A.F.T.R.2d 97-7981 (1st Cir. 1997). 15In re Columbia/HCA Healthcare Corp. Billing Practices Litigation, 293 F.3d 289, 58 Fed. R. Evid. Serv. 1451, 53 Fed. R. Serv. 3d 789, 2002 FED App. 0201P (6th Cir. 2002), cert. dismissed, 539 U.S. 977, 124 S. Ct. 27, 156 L. Ed. 2d 690 (2003).

K 2005 Thomson/West, 3/2005 1-305 § 1:77 Testimonial Privileges materials to the Department of Justice, and ultimately did so only after entering into a conŽdentiality 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.’’16 Despite the agreement, the court rejected ‘‘the concept of selective waiver, in any of its various forms,’’ and armed an order compelling the release of the audits to private litigants.17 Some courts, however, have left the door open to the selective waiver doctrine where the parties entered into a conŽdentiality agreement with the government.18

X. EXTENSIONS OF THE PRIVILEGE BASED ON COMMON INTEREST § 1:78 In general Ordinarily the presence of third parties at a professional legal consultation, or the later disclosure to third persons of communications made as part of a legal relationship, will de- stroy the conŽdentiality that is essential to a valid assertion of the attorney-client privilege. Courts have, however, recognized several extensions of the attorney-client privilege which allow clients and lawyers with common interests to

16In re Columbia/HCA Healthcare Corp. Billing Practices Litigation, 293 F.3d 289, 292, 58 Fed. R. Evid. Serv. 1451, 53 Fed. R. Serv. 3d 789, 2002 FED App. 0201P (6th Cir. 2002), cert. dismissed, 539 U.S. 977, 124 S. Ct. 27, 156 L. Ed. 2d 690 (2003) (emphasis added). 17In re Columbia/HCA Healthcare Corp. Billing Practices Litigation, 293 F.3d 289, 302, 58 Fed. R. Evid. Serv. 1451, 53 Fed. R. Serv. 3d 789, 2002 FED App. 0201P (6th Cir. 2002), cert. dismissed, 539 U.S. 977, 124 S. Ct. 27, 156 L. Ed. 2d 690 (2003). See also U.S. v. Bergonzi, 214 F.R.D. 563 (N.D. Cal. 2003), opinion amended and superseded, 216 F.R.D. 487 (N.D. Cal. 2003) (rejecting selective waiver doctrine despite conŽdentiality agreement with the government). But see Saito v. McKesson HBOC, Inc., 2002 WL 31657622 (Del. Ch. 2002) (citing Delaware's general reluctance to Žnd waiver of privileges, the court upheld a form of selective waiver, compelling production of documents disclosed to the government prior to execution of a conŽdentiality agreement, and protecting documents disclosed after the conŽdentiality order was in place). 18See, e.g., In re Columbia/HCA Healthcare Corp. Billing Practices Liti- gation, 293 F.3d 289, 308, 58 Fed. R. Evid. Serv. 1451, 53 Fed. R. Serv. 3d 789, 2002 FED App. 0201P (6th Cir. 2002), cert. dismissed, 539 U.S. 977, 124 S. Ct. 27, 156 L. Ed. 2d 690 (2003) (J. Boggs dissenting) (‘‘the circuit courts of appeal are deeply split on whether a disclosure of privileged in- formation to the government, in the course of an investigation and with a conŽdentiality agreement, waives the privilege as to all other parties.’’).

1-306 The Accountant—Client Privilege § 3:5 privilege; hence a client's records delivered by the client's ac- countant to a second accountant retained by the taxpayer's attorney would not be protected.9 Where a joint defense is undertaken by parties and their lawyers, the protection can in proper cases extend to communications which pass from one party to the accountant hired on behalf of both parties.10 A party, however, cannot resurrect the privilege by adding another party, and that party's accountant to the mix. This is true even if they share a common interest. The common interest rule presumes a valid underlying privilege. One cannot create a privilege, where previously there was none, simply by introducing a third party (with or without a com- mon interest) into the circle within which documents are shared.11

§ 3:5 Risk of waiver of attorney-client privilege and work product protection through disclosure to auditors In response to recent corporate accounting scandals, the long-standing role of the independent auditor as a ‘‘public watchdog’’ with responsibilities to creditors, stockholders, and the investing public, has taken on heightened signiŽcance.1 In order to comply with SEC regulations and generally accepted accounting standards, auditors request a wide variety of information in the course of their annual audits. Among other things, auditors may request informa- and Co. Partnership, 89-1 U.S. Tax Cas. (CCH) P 9163, 63 A.F.T.R.2d 89- 650, 1989 WL 47285 (W.D. Pa. 1989), at *2 (attorney-client privilege does not prevent subpoena of amended tax returns, even if the accountant prepares the returns at the taxpayer's attorney's request; preparation of a tax return usually does not require legal advice). 9U.S. v. Clark, 847 F.2d 1467, 1470, 88-1 U.S. Tax Cas. (CCH) P 9369, 25 Fed. R. Evid. Serv. 1391, 61 A.F.T.R.2d 88-1313 (10th Cir. 1988). 10U.S. v. Schwimmer, 892 F.2d 237, 244, 29 Fed. R. Evid. Serv. 434 (2d Cir. 1989). 11Cavallaro v. U.S., 284 F.3d 236, 2002-1 U.S. Tax Cas. (CCH) P 50330, 52 Fed. R. Serv. 3d 761, 89 A.F.T.R.2d 2002-1699 (1st Cir. 2002) [Section 3:5] 1See In re Raytheon Securities Litigation, 218 F.R.D. 354, 360 (D. Mass. 2003), citing U.S. v. Arthur Young & Co., 465 U.S. 805, 817, 818, 104 S. Ct. 1495, 79 L. Ed. 2d 826, Fed. Sec. L. Rep. (CCH) P 99721, 84-1 U.S. Tax Cas. (CCH) P 9305, 15 Fed. R. Evid. Serv. 15, 53 A.F.T.R.2d 84- 866 (1984); Medinol, Ltd. v. Boston ScientiŽc Corp., 214 F.R.D. 113, 116 (S.D. N.Y. 2002) (‘‘And, as has become crystal clear in the face of the many accounting scandals that have arisen as of late, in order for auditors to properly do their job, they must not share common interests with the company they audit. ‘[G]ood auditing requires adversarial tension be- tween the auditor and the client.'’’) (citation omitted).

K 2005 Thomson/West, 3/2005 3-15 § 3:5 Testimonial Privileges tion from counsel regarding loss contingencies2 (‘‘audit let- ters’’) and may request access to board minutes, case reserves, and other sensitive information, much of which may be protected by the attorney-client privilege and/or the work product doctrine. Because generally accepted accounting standards3 require Žnancial statements to accrue or disclose loss contingencies, auditors require their clients to provide them with informa- tion regarding pending or threatened litigation and actual or possible claims and assessments. Auditors typically request that clients ask counsel to provide them with information regarding litigation, claims, and assessments involving the client. In some cases, auditors may be unwilling and/or un- able to issue unqualiŽed audit opinions unless they review these types of information.4 Clients and their attorneys are faced with a serious dilemma in attempting to respond to auditors' requests for information. On the one hand, failure to disclose material loss contingencies may expose clients and their attorneys to liability for misrepresentation.5 On the other hand, disclo- sures may waive both the attorney-client privilege and work- product protection over materials disclosed, while at the same time giving notice to those possessing potential claims against the corporation; in eect, advertising for lawsuits that might otherwise not be Žled.6 The American Bar Association (ABA) and the American Institute of CertiŽed Public Accountants (AICPA) have at- tempted through separate statements of policy to reach an

2Loss contingency is deŽned as ‘‘an existing condition, situation or set of circumstances involving uncertainty as to possible . . . loss . . . to an enterprise that will ultimately be resolved when one or more future events occur or fail to occur.’’ American Institute of CertiŽed Public Accounts, Statement of Financial Accounting Standards No. 5, Accounting for Contingencies (Mar 1975), reprinted at 31 Bus. Law 1727 (1976). 3American Institute of CertiŽed Public Accounts, Statement of Financial Accounting Standards No 5, Accounting for Contingencies (Mar 1975), reprinted at 31 Bus. Law 1727 (1976). See also American Bar As- sociation, Auditor's Letter Handbook (1990). 4American Institute of CertiŽed Public Accounts, Statement of Financial Accounting Standards No 5, Accounting for Contingencies (Mar 1975), reprinted at 31 Bus. Law 1727 (1976). See also American Bar As- sociation, Auditor's Letter Handbook, 24–25 (1990); Medinol, Ltd. v. Bos- ton ScientiŽc Corp., 214 F.R.D. 113, 115, 116 (S.D. N.Y. 2002) (discussing auditors and their independent role in providing opinion letters). 5See ch. 1. 6Michael F. Sharp, Abraham M. Stanger, Audit Inquiry Response In The Arena of Discovery: Protected By the Work Product Doctrine, 56 Bus. Law 183 (2000).

3-16 The Accountant—Client Privilege § 3:5 accommodation regarding the responsibilities of auditors, clients, and attorneys in making such disclosures. The state- ments attempt to reconcile the public interest in full Žnancial disclosure with the public interest in preserving the conŽden- tiality of attorney-client communications. The AICPA Statement provides that auditors should: b. Obtain from management a description and evalua- tion of litigation, claims and assessments that existed at the date of the balance sheet being reported on ... c. Obtain assurances from management . . . that they have disclosed all unasserted claims that the lawyer has advised them are probable of assertion and must be disclosed in accordance with Statement of Financial Accounting Standards No. 5.7 The AICPA Statement also provides that the auditor should require the client to send a letter asking counsel to corroborate or supplement this information as to matters to which counsel devoted ‘‘substantive attention’’ on behalf of the company.8 With respect to pending or overtly threatened litigation, the AICPA statement advises that clients should request counsel to provide the auditor with a description of the nature of the matter, the progress of the case to date, the ac- tion the client plans to take, an evaluation of the likelihood of an unfavorable outcome, and an estimate, if one can be made, of the amount or range of potential loss. Financial Accounting Standard No. 5 provides that disclosure of a loss contingency ‘‘shall be made when there is at least a reasonable possibility that a loss or an additional loss may have been incurred.’’9 It continues by stating that: The disclosure shall indicate the nature of the contingency and shall give an estimate of the possible loss or state that such an estimate cannot be made. Disclosure is not required of a loss contingency involving an unasserted claim or assess- ment when there has been no manifestation by a potential claimant of an awareness of a possible claim or assessment unless it is considered probable that a claim will be asserted

7American Institute of CertiŽed Public Accountants, Statement of Auditing Standards No 12, ¶ 5 (Jan 1976). For a description of the require- ments of Financing Accounting Standard No. 5, see text below. 8American Institute of CertiŽed Public Accountants, Statement of Auditing Standards No 12 ¶¶ 8 & 9 (Jan 1976). 9American Institute of CertiŽed Public Accountants, Statement of Financial Accounting Standards No 5, Accounting for Contingencies ¶ 10 (Mar 1975), reprinted at 31 Bus. Law 1727, 1728 (1976) (emphasis added).

K 2005 Thomson/West, 3/2005 3-17 § 3:5 Testimonial Privileges

and there is a reasonable possibility that the outcome will be unfavorable.10 The ABA Statement of Policy11 takes a narrower approach to disclosure. First, the Statement carefully limits the types of information that may properly be provided by the lawyer to the auditor: When properly requested by the client, it is appropriate for the lawyer to furnish to the auditor information concerning the following matters if the lawyer has been engaged by the client to represent or advise the client professionally with re- spect thereto and he has devoted substantive attention to them in the form of legal representation or consultation: (a) overtly threatened or pending litigation, whether or not speciŽed by the client; (b) a contractually assumed obligation which the client has speciŽcally identiŽed and upon which the client has speciŽcally requested, in the inquiry letter or a supplement thereto, comment to the auditor; (c) an unasserted possible claim or assessment which the client has speciŽcally identiŽed and upon which the client has speciŽcally requested, in the inquiry letter or a supplement thereto, comment to the auditor.12 With regard to category (c) above, encompassing cases in which there has been no manifestation by a potential claim- ant of a present intention to assert a claim, the ABA State- ment provides that the client should request the lawyer to furnish information to the auditor only if: (1) the claim is material; (2) the ‘‘prospects of non-assertion seem slight’’; and (3) ‘‘the prospects of the claimant not succeeding are judged to be extremely doubtful.’’13 In all cases, the ABA Statement notes, auditors should as- sume that lawyers will advise their clients on the applicable requirements of Financial Accounting Standard No. 5 and

10American Institute of CertiŽed Public Accountants, Statement of Financial Accounting Standards No 5, Accounting for Contingencies ¶ 10 (Mar 1975), reprinted at 31 Bus. Law 1727, 1728 (1976) (emphasis added). 11American Bar Association, Statement 31 Bus Law 1709 of Policy Regarding Lawyers' Responses to Auditors' Requests for Information (1975), reprinted at 31 Bus. Law 1709 (1976). See also American Bar As- sociation, Auditor's Letter Handbook, 8–9 (1990). 12American Bar Association, Statement of Policy Regarding Lawyers' Responses to Auditors' Requests for Information ¶ 5 (1975), reprinted at 31 Bus. Law 1709 (1976) (emphasis in original). See also American Bar Association, Auditor's Letter Handbook, 8–9 (1990). 13American Bar Association, Statement of Policy Regarding Lawyers' Responses to Auditors' Requests for Information ¶ 5 (1975), reprinted at 31 Bus. Law 1709 (1976) (emphasis added). See also American Bar As- sociation, Auditor's Letter Handbook, 8–9 (1990).

3-18 The Accountant—Client Privilege § 3:5 the need for disclosure in each instance.14 The Commentary on the ABA Statement cautions, however, that: If a client discloses to a third party a part of any privileged communication he has made to his attorney, there may have been a waiver as to the whole communication; further, it has been suggested that giving accountants access to privileged statements made to attorneys may waive any privilege as to those statements. Any disclosure of privileged communications relating to a particular subject matter may have the eect of waiving the privilege on other communications with respect to the same subject matter...... It might be argued that any evaluation of a claim, to the extent based upon a conŽdential communication with the client, waives any privilege with respect to the claim. Another danger inherent in a lawyer's placing a value on a claim, or estimating the likely result, is that such a statement might be treated as an admission or might be otherwise prejudicial to the client.15 It is well-settled under federal common law that the attorney-client privilege generally does not protect com- munications with auditors or accountants.16 The exception to this rule is where the auditor or accountant is acting as the agent of counsel to assist counsel in formulating speciŽc

14American Bar Association, Statement of Policy Regarding Lawyers' Responses to Auditors' Requests for Information ¶ 6 (1975), reprinted at 31 Bus. Law 1709 (1976). See also American Bar Association, Auditor's Letter Handbook, 10 (1990). 15American Bar Association, Statement of Policy Regarding Lawyers' Responses to Auditors' Requests for Information commentary to ¶ 1 (1975), reprinted at 31 Bus. Law 1709 (1976) (emphasis in original). See also American Bar Association, Auditor's Letter Handbook, 12–13 (1990). 16See, e.g., In re John Doe Corp., 675 F.2d 482, 488, Fed. Sec. L. Rep. (CCH) P 98648, 10 Fed. R. Evid. Serv. 1390 (2d Cir. 1982) (‘‘We have previously held that statements to accountants unrelated to the seeking of legal advice are not privileged.’’) (citations omitted); U.S. v. El Paso Co., 682 F.2d 530, 540, 82-2 U.S. Tax Cas. (CCH) P 9534, 11 Fed. R. Evid. Serv. 502, 34 Fed. R. Serv. 2d 918, 50 A.F.T.R.2d 82-5530 (5th Cir. 1982) (‘‘Our Circuit does not recognize an accountant-client communications privilege and, as the Supreme Court has acknowledged, neither does any other federal court.’’) (citations omitted); In re Honeywell Intern., Inc. Se- curities Litigation, 2003 WL 22722961 (S.D. N.Y. 2003), at *3 (attorney- client privilege does not extend to communications between a company and its accountants or auditors); First Federal Sav. Bank of Hegewisch v. U.S., 55 Fed. Cl. 263, 269 (2003) (documents transmitted to an agent for the preparation of an audited Žnancial statement are not privileged); U.S. v. South Chicago Bank, 1998 WL 774001 (N.D. Ill. 1998), at *3 (‘‘auditors are not generally part of the circle of persons, including secretaries and interpreters, for example, with whom conŽdential information may be shared without destroying the privilege.’’) (citations omitted).

K 2005 Thomson/West, 3/2005 3-19 § 3:5 Testimonial Privileges legal advice for the client.17 Independent auditors conducting annual audits are not acting as agents of counsel for the purpose of providing legal advice, and communications be- tween the corporation or its counsel and the auditor gener- ally are not protected by the attorney-client privilege.18 Disclosure to an auditor of information that is otherwise privileged under the attorney-client privilege generally will waive the privilege,19 including the privilege over unredacted

17See, e.g., Ferko v. National Ass'n for Stock Car Auto Racing, Inc., 218 F.R.D. 125, 140 (E.D. Tex. 2003). In Ferko, general counsel of International Speedway Corp. hired an independent appraisal Žrm to investigate and appraise the economic value of certain agreements pursuant to recently revised accounting standards relating to intangible assets, because counsel believed that the company had taken an aggressive stance that could trig- ger litigation with the SEC. 218 F.R.D. at 129. Although the court noted the general rule that ‘‘a client's disclosure of documents directly to an auditor, accountant or tax analyst destroys conŽdentiality with respect to those documents’’ (218 F.R.D. at 134), the court held that communications with the accountant were privileged in this case because counsel had hired the accountant to help translate complicated Žnancial information to enable him to formulate legal advice for the company. 218 F.R.D. at 139; see also § 3:4 (accountants as privileged agents). 18See U.S. v. El Paso Co., 682 F.2d 530, 539, 82-2 U.S. Tax Cas. (CCH) P 9534, 11 Fed. R. Evid. Serv. 502, 34 Fed. R. Serv. 2d 918, 50 A.F.T.R.2d 82-5530 (5th Cir. 1982); First Federal Sav. Bank of Hegewisch v. U.S., 55 Fed. Cl. 263, 268 (2003); In re PŽzer Inc. Securities Litigation, 1993 WL 561125 (S.D. N.Y. 1993), at *7. 19U.S. v. El Paso Co., 682 F.2d 530, 540, 82-2 U.S. Tax Cas. (CCH) P 9534, 11 Fed. R. Evid. Serv. 502, 34 Fed. R. Serv. 2d 918, 50 A.F.T.R.2d 82-5530 (5th Cir. 1982) (disclosure of tax pool analysis to auditors ‘‘destroys conŽdentiality’’ and waives the attorney-client privilege); In re John Doe Corp., 675 F.2d 482, 488, 489, Fed. Sec. L. Rep. (CCH) P 98648, 10 Fed. R. Evid. Serv. 1390 (2d Cir. 1982) (conversation between corporate general counsel and accountant during course of annual audit regarding questionable payments to a lawyer that had been the subject of an internal investigation ‘‘either waives the privilege or, what is much the same thing in the circumstances of this case, evidences a corporate decision to use the materials for purposes other than seeking legal advice’’); Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 1162, Fed. Sec. L. Rep. (CCH) P 97004, 36 Fed. R. Evid. Serv. 761 (9th Cir. 1992) (Pennzoil conceded that district court was correct in Žnding waiver with respect to documents disclosed to outside auditor; appellate court limited scope of waiver to the communica- tions actually disclosed rather than extending it to all communications concerning the same subject matter); In re Honeywell Intern., Inc. Securi- ties Litigation, 2003 WL 22722961 (S.D. N.Y. 2003), at *3 (disclosure to outside auditor waived attorney-client privilege); U.S. ex rel. Robinson v. Northrop Grumman Corp., 2002 WL 31478259 (N.D. Ill. 2002), subsequent determination, 2003 WL 21439871 (N.D. Ill. 2003) (privilege with respect to documents prepared by auditors during course of Žrst, privileged review, waived to extent used by same auditors for second, non-privileged review); see also U.S. ex rel. Robinson v. Northrop Grumman Corp., 2003 WL 21439871 (N.D. Ill. 2003), at *3 (following further review, Northrop Grum-

3-20 The Accountant—Client Privilege § 3:5 board minutes that have been disclosed as part of a regular audit.20 The courts are less uniform when confronting the work product protection. The issue of waiver of the work-product doctrine arises with respect to two types of documents: docu- ments prepared by the corporation or counsel for the audi- tor, such as audit letters that assess litigation or potential litigation, and documents prepared in anticipation of litiga- tion that were not prepared for the auditor, but which are disclosed to the auditor during the course of an audit. The court in In re Raytheon Securities Litigation21 recently analyzed whether audit letters prepared by counsel in re- sponse to an auditor's inquiry are protected by the work product doctrine. In Raytheon, plainti moved to compel the company to produce audit opinion letters and other docu- ments prepared by its attorneys that had been submitted to the company's independent audit or for use in an audit.22 The opinion provides a detailed discussion of the split among the courts on the question whether opinion letters provided to auditors are protected by the work product doctrine. The outcome often turns on the standard that a court applies for the phrase ‘‘prepared in anticipation of litigation or for trial’’ in Rule 26(b)(3) of the Federal Rules of Civil Procedure. In jurisdictions where the phrase is interpreted to encompass documents that have been prepared ‘‘because of’’ litigation, the courts generally Žnd that audit opinion letters are protected because the letters were prepared ‘‘because of’’ man failed to sustain its burden of demonstrating that interview notes were not used for the second, non-privileged review). 20See First Federal Sav. Bank of Hegewisch v. U.S., 55 Fed. Cl. 263 (2003) (disclosure of unredacted board minutes to auditor during annual audit waived the attorney-client privilege that otherwise protected counsel's advice reected in the minutes); U.S. v. South Chicago Bank, 1998 WL 774001 (N.D. Ill. 1998), at *3 (‘‘By voluntarily disclosing the minutes from the meetings of the boards of directors and special fraud committees to the year-end auditors in full and to their insurance company in part, the banks have relinquished the right to assert the privilege now against the government.’’); Eglin Federal Credit Union v. Cantor, Fitzgerald Securities Corp., 91 F.R.D. 414, 7 Fed. R. Evid. Serv. 1604, 31 Fed. R. Serv. 2d 709, 31 Fed. R. Serv. 2d 713 (N.D. Ga. 1981) (disclosure of board minutes for the purposes of annual audit waives any applicable attorney-client privilege). 21In re Raytheon Securities Litigation, 218 F.R.D. 354 (D. Mass. 2003). 22In re Raytheon Securities Litigation, 218 F.R.D. 354, 356 (D. Mass. 2003).

K 2005 Thomson/West, 3/2005 3-21 § 3:5 Testimonial Privileges litigation.23 Courts in jurisdictions that apply the ‘‘primary motiva- tion’’ test to the ‘‘anticipation of litigation’’ requirement gen- erally Žnd that audit letters are not protected by the work product doctrine.24 To the extent that a company discloses to its auditor docu- ments that were prepared in the anticipation of litigation and not for the auditor, a few courts have held that the work product protection may be waived. The work product protec-

23In re Raytheon Securities Litigation, 218 F.R.D. 354, 358 (D. Mass. 2003). See U.S. v. Adlman, 134 F.3d 1194, 1200, 98-1 U.S. Tax Cas. (CCH) P 50230, 39 Fed. R. Serv. 3d 1189, 81 A.F.T.R.2d 98-820 (2d Cir. 1998) (court adopts ‘‘because of’’ approach and concludes, in dicta, that work product doctrine would protect a memorandum prepared by a company's attorneys at an independent auditor's request ‘‘estimating the likelihood of success in litigation and an accompanying analysis of the company's legal strategies and options to assist it in estimating what should be reserved for litigation losses’’); In re Honeywell Intern., Inc. Securities Lit- igation, 2003 WL 22722961 (S.D. N.Y. 2003), at *6 (company's assertion of work product protection for its audit letters and litigation reports pre- pared by its internal and outside counsel, as well as the auditor's docu- ments memorializing the company's opinion work product, was proper); Southern Scrap Material Co. v. Fleming, 2003 WL 21474516 (E.D. La. 2003), at *9 (work product doctrine applies to audit letters sent to auditor by company's outside counsel that summarize on-going litigation and reect counsel's mental impressions, opinions and litigation strategy); In re PŽzer Inc. Securities Litigation, 1993 WL 561125 (S.D. N.Y. 1993), at *6 (disclosure of individual case reserves to company's auditor did not waive the work product protection); Tronitech, Inc. v. NCR Corp., 108 F.R.D. 655, 656, 1986-1 Trade Cas. (CCH) P 67161, 3 Fed. R. Serv. 3d 1265 (S.D. Ind. 1985) (an audit letter ‘‘is prepared because of the litiga- tion, and it is comprised of the sum total of the attorney's conclusions and legal theories concerning that litigation’’). 24In re Raytheon Securities Litigation, 218 F.R.D. 354, 358 (D. Mass. 2003). See U.S. v. Gulf Oil Corp., 760 F.2d 292, 297, 17 Fed. R. Evid. Serv. 896, 1 Fed. R. Serv. 3d 528 (Emer. Ct. App. 1985) (documents created in response to auditor's inquiry were not created for the primary purpose of assisting the company in litigation but rather to assist the auditor to prepare Žnancial reports that would satisfy the requirements of the federal securities laws); U.S. v. El Paso Co., 682 F.2d 530, 543, 54482-2 U.S. Tax Cas. (CCH) P 9534, 11 Fed. R. Evid. Serv. 502, 34 Fed. R. Serv. 2d 918, 50 A.F.T.R.2d 82-5530 (5th Cir. 1982) (documents ‘‘written ultimately to comply with SEC regulations’’ were prepared ‘‘with an eye on its business needs, nor on its legal ones’’ and do not ‘‘contemplate litigation in the sense required to bring it within the work product doctrine’’); Independent Petrochemical Corp. v. Aetna Cas. and Sur. Co., 117 F.R.D. 292, 298 (D.D.C. 1987) (declining to extend work product protection to audit letters prepared by an attorney where Magistrate Judge's in camera examination of the letter reveals that they were not prepared to assist company in present or reasonably anticipated litigation but rather to assist account- ing Žrm ‘‘in the performance of regular accounting work done by such ac- counting Žrms’’).

3-22 The Accountant—Client Privilege § 3:5 tion may be waived through disclosure.25 Disclosures to non- adversary third parties generally does not waive the protec- tion unless it substantially increases the opportunity for potential adversaries to obtain the information.26 Some courts have held that disclosure to auditors does not substantially increase this opportunity.27 Other courts have focused on the independence of the auditor and the auditor's responsibilities to creditors and the investing public.28 The court in Raytheon quoted the United States Supreme Court's characterization of an independent auditor in United States v. Arthur Young & Co.: By certifying the public reports that collectively depict a corporation's Žnancial status, the independent auditor as- sumes a public responsibility transcending any employment relationship with the client. The independent public accoun- tant performing this special function owes ultimate allegiance to the corporation's creditors and stockholders, as well as to the investing public. This ‘‘public watchdog’’ function demands that the accountant maintain total independence from the cli- ent at all times and requires complete Ždelity to the public trust.29 The court in the Raytheon decision did not decide whether the company's disclosure of work product to its auditors waived that protection, and instructed the company to pro- duce the documents at issue to the court in camera so that the court could determine, among other things, ‘‘the scope of litigation information an independent auditor or audited company can reasonably be expected to disclose in public Žnancial reports.’’30 In an unpublished Order, the court in Raytheon subsequently held that the company had waived the work product protection by disclosing the documents to

25In re Raytheon Securities Litigation, 218 F.R.D. 354, 359 (D. Mass. 2003). 26In re Raytheon Securities Litigation, 218 F.R.D. 354, 360 (D. Mass. 2003). See also ch. 2. 27In re PŽzer Inc. Securities Litigation, 1993 WL 561125 (S.D. N.Y. 1993), at *6 (auditor shared common interests with company, therefore auditor is ‘‘not reasonably viewed as a conduit to a potential adversary’’). 28In re Raytheon Securities Litigation, 218 F.R.D. 354 (D. Mass. 2003). 29U.S. v. Arthur Young & Co., 465 U.S. 805, 817–818, 104 S. Ct. 1495, 79 L. Ed. 2d 826, Fed. Sec. L. Rep. (CCH) P 99721, 84-1 U.S. Tax Cas. (CCH) P 9305, 15 Fed. R. Evid. Serv. 15, 53 A.F.T.R.2d 84-866 (1984). 30In re Raytheon Securities Litigation, 218 F.R.D. 354, 361 (D. Mass. 2003).

K 2005 Thomson/West, 3/2005 3-23 § 3:5 Testimonial Privileges its auditors.31 There is some limited additional authority supporting waiver based on disclosure of work product to a company's auditors.32 Courts that focus on the independence of auditors may draw further support from the recently enacted Sarbanes-Oxley Act, which enhances the indepen- dence requirements for auditors.33

II. STATE LAW § 3:6 Generally Eighteen states have enacted statutes which provide for an accountant-client privilege: Arizona, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Louisiana, Mary- land, Michigan, Mississippi, Missouri, Nevada, New Mexico,

31In re Raytheon Sec. Litig., No. Civ. A. 99-12142-PBS, unpublished Or- der, at pp. 1, 2 (D. Mass. February 3, 2004). The Order states in part: ‘‘PwC has indicated that it relied on these materials in performing its audit procedures and that it ‘intends to introduce evidence of such work as necessary to rebut plainti's assertions that PwC failed to conduct a GAAS audit.' It is permitted to do so ‘in the case of legal process or the auditor's defense of the audit'. See ABA Statement of Policy Regarding Lawyers' Response to Auditors' Requests for Information, ¶ 7 and Com- mentary . . . Therefore, Raytheon understood that PwC retained the right to disseminate the information for the limited purpose of defending the audit, and it has waived any work product protection (even for opinion work product) at least to the extent the standard was applicable.’’ The court ordered that any opinion work product be sealed and subject to a protective order so that trial adversaries in other litigation would not have access to counsel's opinions. In re Raytheon Sec. Litig., No. Civ. A. 99-12142-PBS, unpublished Order, at p. 2 (D. Mass. February 3, 2004). 32See Medinol, Ltd. v. Boston ScientiŽc Corp., 214 F.R.D. 113, 116, 117 (S.D. N.Y. 2002) (Auditor's interests not aligned with company's; while disclosure of special litigation committee minutes to auditor may not substantially increase the risk that such work product would reach potential adversaries, disclosure to auditor did not serve the privacy interests that the work product doctrine was intended to protect); In re Diasonics Securities Litigation, Fed. Sec. L. Rep. (CCH) P 92817, 1986 WL 53402 (N.D. Cal. 1986) (documents disclosed to public auditor not entitled to work product protection and, when entitled to such protection, the protection was waived). But see Merrill Lynch & Co., Inc. v. Allegheny Energy, Inc., 2004 WL 2389822 (S.D. N.Y. 2004) at *5 to 8 (holding that the relationship of the auditor should be evaluated on a case by case basis and Žnding no waiver where company supplied internal investigation reports to its auditor. 33See generally Matthew A. Melone, United States Accounting Stan- dards — Rules or Principles? The Devil is Not in the Details, 58 U. Miami L. Rev. 1161, 1210–1213 (2004) (discussing Sarbanes-Oxley rules increas- ing independence of auditors); Larry Cata Backer, The Duty to Monitor: Emerging Obligations of Outside Lawyers and Auditors To Detect and Report Corporate Wrongdoing Beyond The Federal Securities Laws, 77 St. John's L. Rev. 919 (2003); Jared Kopel, The SEC's New Auditor Indepen- dence Rules, 17 No. 3 Insights 2, March, 2003.

3-24 The Privilege Against Self-Incrimination § 4:1

KeyCiteL: Cases and other legal materials listed in KeyCite Scope can be researched through the KeyCite service on WestlawL. Use KeyCite to check citations for form, parallel references, prior and later history, and comprehensive citator information, including citations to other decisions and secondary materials.

I. INTRODUCTION § 4:1 The privilege deŽned Research References West's Key Number Digest, Witnesses ”297 The Fifth Amendment to the United States Constitution provides, in part, that ‘‘[n]o person... shall be compelled in any criminal case to be a witness against himself....’’1 Once deŽned by the Supreme Court as ‘‘the essential mainstay of our adversary system,’’2 the privilege against self-incrimination guarantees each individual the right to remain silent without penalty,3 and, more speciŽcally, the right not to be compelled to produce testimonial or com- municative evidence that may be incriminating. A witness protected by the privilege may rightfully refuse to answer questions or testify unless he or she is protected against the use of the compelled testimony, and evidence derived from compelled testimony, in any subsequent criminal prosecu- tion against him or her. If the witness is nonetheless com- pelled to answer without such protection, the answers are inadmissible against him or her in a subsequent criminal trial.4

[Section 4:1] 1The Fourteenth Amendment makes the Fifth Amendment privilege binding on the states as well as the federal government. Grin v. Califor- nia, 380 U.S. 609, 615, 85 S. Ct. 1229, 14 L. Ed. 2d 106 (1965). A state may grant its citizens greater, but not less, protection against self- incrimination than that of the Fifth Amendment. See U. S. ex rel. Laino v. Warden of Wallkill Prison, 246 F. Supp. 72, 77, 78 (S.D. N.Y. 1965), judg- ment a'd, 355 F.2d 208 (2d Cir. 1966). 2Miranda v. Arizona, 384 U.S. 436, 460, 86 S. Ct. 1602, 16 L. Ed. 2d 694, 10 A.L.R.3d 974 (1966); see also Murphy v. Waterfront Com'n of New York Harbor, 378 U.S. 52, 55, 84 S. Ct. 1594, 12 L. Ed. 2d 678, 56 L.R.R.M. (BNA) 2544, 49 Lab. Cas. (CCH) P 51102 (1964) (the Fifth Amendment privilege ‘‘reects many of our fundamental values and most noble aspira- tions . . .”). 3Malloy v. Hogan, 378 U.S. 1, 8, 84 S. Ct. 1489, 12 L. Ed. 2d 653 (1964). 4Garner v. U. S., 424 U.S. 648, 653, 96 S. Ct. 1178, 47 L. Ed. 2d 370, 76-1 U.S. Tax Cas. (CCH) P 9301, 76-1 U.S. Tax Cas. (CCH) P 16218, 37 A.F.T.R.2d 76-1042-A (1976).

K 2005 Thomson/West, 3/2005 4-5 § 4:1 Testimonial Privileges

In light of the historical origins of the privilege,5 courts have applied the privilege broadly. The Supreme Court has held that the privilege should ‘‘be accorded liberal construc- tion in favor of the right it was intended to secure.’’6 The privilege may be invoked in many types of proceedings: civil, criminal, quasi-criminal, administrative, legislative, judicial, investigatory, and adjudicatory. The privilege also bars disclosures that the witness ‘‘reasonably believes could be used in a criminal prosecution or could lead to other evi- dence that might be so used.’’7 The privilege is not unlimited, however. It may be invoked only to protect against ‘‘real dangers, not remote and specula- tive possibilities,’’8 and only to avoid being forced to person- ally produce incriminating evidence, not to prevent the pro- duction of incriminating evidence from other sources. Ultimately, the judge, focusing on what a ‘‘truthful answer might disclose,’’9 must determine the legitimacy of the wit- ness' claim of privilege. When a witness invokes the Fifth Amendment privilege against self-incrimination, the judge must determine whether that privilege is applicable to the case at hand. As a general rule, where there can be no further incrimination, there is no basis for the assertion of the privilege. If no adverse consequences can be visited upon the convicted person by reason of further testimony, then there is no fur-

5For good discussions of the historical development of the privilege, see Ullmann v. U.S., 350 U.S. 422, 445-49, 76 S. Ct. 497, 100 L. Ed. 511, 53 A.L.R.2d 1008 (1956), and sources cited in De Luna v. U.S., 308 F.2d 140, 144 n3, 1 A.L.R.3d 969 (5th Cir. 1962) (rejected by, U.S. v. Pirro, 76 F. Supp. 2d 478 (S.D. N.Y. 1999)); see also 8 Wigmore § 2250, at 267–92 (McNaughton rev ed 1961); L. Levy, Origins of the Fifth Amendment (1968). 6Homan v. U. S., 341 U.S. 479, 486, 71 S. Ct. 814, 95 L. Ed. 1118 (1951); see also Application of Gault, 387 U.S. 1, 87 S. Ct. 1428, 18 L. Ed. 2d 527 (1967). 7Kastigar v. U.S., 406 U.S. 441, 445, 92 S. Ct. 1653, 32 L. Ed. 2d 212 (1972). Izen v. Catalina, 256 F.3d 324 (5th Cir. 2001). 8Zicarelli v. New Jersey State Commission of Investigation, 406 U.S. 472, 478, 92 S. Ct. 1670, 32 L. Ed. 2d 234 (1972); see also Marchetti v. U.S., 390 U.S. 39, 53, 88 S. Ct. 697, 19 L. Ed. 2d 889, 68-1 U.S. Tax Cas. (CCH) P 15800, 21 A.F.T.R.2d 539 (1968) (danger must be ‘‘real and ap- preciable’’ not merely ‘‘friing or imaginary’’); U.S. v. Bowling, 239 F.3d 973, 976 (8th Cir. 2001). 9Zicarelli v. New Jersey State Commission of Investigation, 406 U.S. 472, 478, 92 S. Ct. 1670, 32 L. Ed. 2d 234 (1972).

4-6 The Privilege Against Self-Incrimination § 4:1 ther incrimination to be feared.10 The duty of a trial court when confronted with an invoca- tion of a party's Fifth Amendment privilege in a civil case is to ‘‘strive to accommodate a party's Fifth Amendment interests’’ while at the same time being careful to ‘‘ensure that the opposing party is not unduly disadvantaged.’’ The burden on the party asserting the privilege ‘‘should be no more than is necessary to prevent unfair and unnecessary prejudice to the other side.’’11 In the wake of the Supreme Court's decision in Brogan v. U.S.,12 which rejected the ‘‘exculpatory no’’ doctrine and held that simple denials of culpability to investigators can be prosecuted as a false statement, one further caveat must be added. To assert the privilege, a witness may either invoke the privilege or (if wrongly required by a judicial ocer) testify truthfully and seek later to have the wrongfully com- pelled testimony suppressed as violative of the privilege. However, false statements under oath—even if obtained under a grant of immunity—can be the basis of a subsequent perjury prosecution.13 As in other areas of constitutional law, the precise scope of the Fifth Amendment privilege is not constant, although it is possible to identify recurring themes. This chapter is intended to describe the contours of the privilege articulated by the federal courts; counsel are advised to consult state precedents where necessary. The chapter is also intended to distinguish those aspects of the privilege that are relatively well established from those that are relatively unsettled. The case law in this area is both voluminous and complex. Thus, the chapter focuses primarily on the key elements of the privilege. After discussing the concept of incrimination, the chapter turns to the following questions: First, who may (and who may not) claim the privilege? Second, in which proceedings may the privilege be claimed? Third, what evi- dence falls within the privilege? Fourth, what constitutes compulsion? Fifth, what are the mechanics of claiming and protecting the privilege? Finally, how and to what extent may the privilege be waived or abrogated?

10In re Vitamins Antitrust Litigation, 120 F. Supp. 2d 58, 2000-2 Trade Cas. (CCH) P 73092 (D.D.C. 2000). 11In re Vitamins Antitrust Litigation, 120 F. Supp. 2d 58, 2000-2 Trade Cas. (CCH) P 73092 (D.D.C. 2000). 12Brogan v. U.S., 522 U.S. 398, 118 S. Ct. 805, 139 L. Ed. 2d 830 (1998). 13U. S. v. Apfelbaum, 445 U.S. 115, 100 S. Ct. 948, 63 L. Ed. 2d 250 (1980).

K 2005 Thomson/West, 3/2005 4-7