ACC’s 2010 Annual Meeting Be the Solution. Monday, October 25 4:30pm-6:00pm 411 - Is This Communication Privileged? Nicholas Billings Vice President & Assistant General Counsel AIMCO Wendy Breau Director Ernst & Young Stephen Roth Vice President & General Counsel America's Collectibles Network, Inc. This material is protected by copyright. Copyright © 2010 various authors and the Association of Corporate Counsel (ACC). Materials may not be reproduced without the consent of ACC. Reprint permission requests should be directed to ACC’s Legal Resources Department at ACC: +1 202.293.4103, x338; [email protected] ACC's 2010 Annual Meeting Be the Solution. Session 411 Faculty Biographies Nicholas Billings Nicholas M. Billings is vice president and assistant general counsel for Apartment Investment and Management Company (AIMCO). AIMCO is a real estate investment trust, or REIT, that acquires, manages and redevelops apartment properties in the United States. Mr. Billings oversees issues, employees and vendors in the areas of litigation, insurance, employment and document management. Prior to joining AIMCO, Mr. Billings worked as a litigator at the Denver law firm of Hollland & Hart. Mr. Billings graduated from Dartmouth College and University of Virginia School of Law before clerking on the Tenth Circuit Court of Appeals. Wendy Breau Wendy Breau is a director with Ernst & Young in their global quality and risk management team. Her responsibilities include assisting member firms worldwide with their professional indemnity insurance and litigation matters. Prior to joining Ernst & Young, Ms. Breau was a litigation partner with Freeman, Freeman & Salzman PC and Dickinson Wright in Chicago, where she practiced in the areas of commercial, accountants' liability and employment litigation. Ms. Breau currently is the vice-chair of the ACC's litigation committee and volunteers with Ovarian Cancer Canada in Toronto. Ms. Breau received a BA from Providence College and her JD from Case Western Reserve School of Law. Stephen Roth Stephen E. Roth is the vice president & general counsel of America's Collectibles Network, Inc. (ACN) in Knoxville, Tennessee. ACN is a privately-held multichannel retailer that sells jewelry and gemstones on a national television network under its Jewelry Television(R) and JTV(R) brands and on the internet at www.jtv.com. Prior to joining ACN, Mr. Roth was a shareholder in Baker Donelson, a firm with offices throughout the Southeast and in Washington, DC. His practice focused on intellectual property litigation. Mr. Roth served on Baker Donelson's board of directors, as the managing shareholder of the firm's Knoxville office, as chair of the firm's Commercial Litigation Practice Group, and as the chair of the Intellectual Property Practice Group. Copyright © 2010 Association of Corporate Counsel 2 of 357 ACC's 2010 Annual Meeting Be the Solution. Session 411 While in private practice, he was recognized in The Best Lawyers in America and SuperLawyers. Mr. Roth has served as the chair of the Tennessee Bar Association's Intellectual Property Section, as a member of the board of directors of the Knoxville Bar Association and as president of the Rotary Club of Knoxville. Mr. Roth has also served as the secretary (vice-chair) of the Knox County Election Commission, and has been active in numerous local, state, and national political campaigns. He is a frequent member of the leadership teams for the capital campaigns of Legal Aid of East Tennessee. Mr. Roth received his BA and JD degrees from the University of Tennessee, where he became a member of Phi Beta Kappa and the Order of the Coif. Copyright © 2010 Association of Corporate Counsel 3 of 357 ACC's 2010 Annual Meeting Be the Solution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opyright © 2010 Association of Corporate Counsel 4 of 357 ACC's 2010 Annual Meeting Be the Solution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opyright © 2010 Association of Corporate Counsel 5 of 357 ACC's 2010 Annual Meeting Be the Solution. Portfolio Media, Inc. | 860 Broadway, 6th Floor | New York, NY 10003 | www.law360.com Phone: +1 646 783 7100 | Fax: +1 646 783 7161 | [email protected] 3 Myths Of In-House Attorney-Client Privilege Law360, New York (May 03, 2010) -- Corporate employees too often believe that they are having privileged communications with in-house lawyers, when in fact they are not. This happens when corporate employees believe one or more of three myths. These myths probably developed because corporations and their in-house lawyers want the privilege to apply to as many communications as possible. Corporations understand that in-house attorneys are a readily available source of a powerful tool — the privilege — that can keep information secret from competitors, governments and litigants. In-house lawyers want their corporate clients to be as honest and open with them as possible. The result can be a tacit understanding between in-house lawyers and their corporate clients that all of their communications will be privileged. That understanding is wrong, and it is usually based on one of the following myths. Myth #1: The Privilege Applies Equally to Outside and In-House Counsel This first myth actually is true on the surface. In-house counsel have the same capacity as outside counsel to have privileged communications with clients. The first significant case to address the question noted that the “apparent factual differences between these house counsel and outside counsel are that the former are paid annual salaries, occupy offices in the corporation’s buildings and are employees rather than independent contractors. These are not sufficient differences to distinguish the two types of counsel for purposes of the attorney-client privilege.” United States v. United Shoe Machine Corp., 89 F. Supp. 357, 360 (D. Mass. 1950). Numerous other courts have reached the same conclusion. There is no question that in-house lawyers can have privileged communications with their clients to the same extent that outside lawyers can. Corporate employees expect that their communications with outside counsel are protected by the privilege, and they see no reason to have a different expectation with respect to in-house counsel. The problem is that despite what courts say about this in the abstract, they often do not treat in-house and outside counsel equally. The difference in treatment is a result of the fact that a “communication is not privileged simply because it is made by or to a person who happens to be a lawyer.” Diversified Industries Inc. v. Meredith, 572 F. 2d 596, 602 (8th Cir. 1977). A communication is privileged only if the dominant purpose of the communication is to further the objectives of the attorney-client relationship. 2,202 Ranch LLC v. Superior Court, 113 Cal. App. 4th 1377, 1390 (2003). ________________________________________________________________________________________________________________ All Content Copyright 2003-2010, Portfolio Media, Inc. Copyright © 2010 Association of Corporate Counsel 6 of 357 ACC's 2010 Annual Meeting Be the Solution. In other words, the communication must be made for the purpose of seeking, obtaining, or providing legal assistance. Restatement, The Law Governing Lawyers § 118. “For example, the privilege is not applicable when the attorney acts merely as a negotiator for the client or is providing business advice.” Costco Wholesale Corp. v. Superior Court, 47 Cal. 4th 725, 743 (2009). The reality is that outside counsel face less scrutiny than do in-house counsel when the question is whether the lawyer provided legal advice or business advice. Most corporate legal advice involves at least some element of business advice, and whether any particular communication is “legal” or “business” in nature can be unclear. But when there is a challenge to a claim of privilege involving an outside lawyer, it makes sense to presume that the corporation hired outside counsel to provide legal advice. After all, the corporation already has employees who can render business advice.