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The 2d U.S. Circuit Court of Appeals recently clarified the principle of fairness that governs waiver of work-product protection; and, in so doing, it provided a rationale for the proposition that arguments to law enforcement officials do not create a subject-matter forfeiture (or waiver) of work-product protection or the attorney-client privilege as to undisclosed information. A grand jury’s subpoena for work product In In re Grand Jury Proceedings, nos. 01-6079 and 01-6222, 2003 WL 22461676 (2d Cir. Oct. 30, 2003), the court held that counsel’s submission to a U.S. attorney’s office of a letter asserting the lawfulness of certain conduct on the basis of assurances received from a government agency did not waive work-product protection of attorneys’ notes of meetings with personnel of the agency or notes of subsequent conversations relating to the assurances. The decision puts the 2d Circuit in conflict with the 4th Circuit. A federal grand jury was investigating the role of John Doe Co. in firearms transactions. The issues included whether Doe needed a license, whether other parties to transactions involving Doe had violated federal law and, if so, whether Doe bore responsibility for those violations. Doe’s lawyers submitted to the U.S. attorney’s office a 46-page letter contending that Doe had proceeded in the good-faith belief that its operations complied with applicable law, and that it had consulted with personnel of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and had repeatedly been advised that Doe’s operations were lawful and that no license was required. The letter provided the names and telephone numbers of the ATF personnel who had given that advice. Thereafter, the grand jury subpoenaed the notes made by Doe’s lawyers during meetings with ATF personnel and the lawyers’ notes of interviews with Doe personnel relating to the substance of ATF’s advice. Doe objected. The district court granted the government’s motion to compel. The 2d Circuit reversed. The court held that there was no forfeiture (or waiver) of work-product protection because the assertion of the good-faith defense had been addressed to an adversary, not to an impartial decision-maker. Forfeitures of privileges and other protections are governed by considerations of fairness, and there was no unfairness to the government from its receipt of the letter without the lawyers’ notes. A typical case for forfeiture was United States v. Bilzerian, 926 F.2d 1285, 1291-94 (2d Cir. 1991). There, the court held that a criminal defendant’s affirmative assertion of a good-faith belief that his actions were lawful (as distinct from a general denial of criminal intent, as to which the government had the burden of proof) would open him to cross-examination as to the basis for that belief, including otherwise privileged communications with his lawyer. The court invoked the principle that “[a] defendant may not use the privilege to prejudice his opponent’s case or to disclose some selected communications for self-serving purposes . . . .Thus, the privilege may implicitly be waived when defendant asserts a claim that in fairness requires examination of protected communications.” Id. at 1292. The same principle of fairness applies to work product. In United States v. Nobles, 422 U.S. 225 (1975), a criminal defendant wished to present the testimony of an investigator who had interviewed the prosecution’s principal witness. The defendant refused to produce the investigator’s report of his interviews with the witness, on the ground that it was work product. The Supreme Court held that the investigator’s proposed testimony would waive work-product protection of the report. By contrast, In re Von Bulow, 828 F.2d 94 (2d Cir. 1987), held that, although a client’s acquiescence in his lawyer’s extra-judicial disclosure (in a book) of certain privileged communications waived the privilege as to those communications, it did not waive the privilege as to any other attorney-client communications. The court explained: “[T]his rule protecting the party, the factfinder, and the judicial process from selectively disclosed and potentially misleading evidence does not come into play when, as here, the privilege-holder or his attorney has made extrajudicial disclosures, and those disclosures have not subsequently been placed at issue in litigation.” Id. at 102. Further, “where, as here, disclosures of privileged information are made extrajudicially and without prejudice to the opposing party, there exists no reason in logic or equity to broaden the waiver beyond those matters actually revealed.” Id. at 103. The proposed testimony in Bilzerian and Nobles would have been in front of the jury in a criminal trial, and would have been intended to advance a litigant’s interests in that trial. The disclosure in Von Bulow was outside any legal proceeding, and was not intended to advance any interest of Von Bulow in any such proceeding. Doe’s circumstances were between those of Bilzerian/Nobles and those of Von Bulow. As in Bilzerian and Nobles, Doe’s affirmative assertion was made in connection with a legal proceeding (a grand jury investigation), and was intended to advance Doe’s interests in that proceeding; but, as in Von Bulow, the assertion was not communicated (or proposed to be communicated) to any fact-finder or decision-maker in an adversarial proceeding. Instead, it was communicated to the prosecutor-an adversary, not a neutral third-party decision-maker. The 2d Circuit emphasized that Doe’s letter “was delivered only to the U.S. Attorney. It was not seen by the grand jury, much less by a petit jury or court adjudicating Doe’s claims of innocent state of mind.” 2003 WL 22461676 at 4. Consequently, the court found it “impossible to see how the U.S. Attorney is subjected to any unfairness as the result of its own receipt of the Letter.” Id. The court noted that the district court had said: “it would be unfair to require the government to accept what might be a selective disclosure.” Id. at 5. The court responded: “But the government is not required to accept anything . . . .If the U.S. Attorney determines that it should not credit Doe’s claims . . . without seeing the notes . . . the U.S. Attorney will simply refuse to credit Doe’s representations.” Id. The key to the decision was that the government “does not run the risk that some independent decisionmaker will accept Doe’s representations without the government having adequate opportunity to rebut them.” Id. Without that risk, there was no unfairness to the government, and therefore no forfeiture of work-product protection. The 2d Circuit acknowledged that its analysis departed from that of the 4th Circuit in In re Martin Marietta Corp., 856 F.2d 619, 2003 WL 22461676 at 5 n.4 (4th Cir. 1988). There, Martin Marietta had submitted to a U.S. attorney a position paper arguing against indictment of the company. Later, an indicted former company employee issued a subpoena to the company; and, in opposing the company’s motion to quash on grounds of attorney-client privilege and work-product protection, he asserted that both had been waived by the company’s submission of the position paper to the government. The 4th Circuit agreed. The privilege had been waived under the general principle that “disclosure of a confidential communication outside a privileged relationship will waive the privilege as to all information related to the same subject matter.” 856 F.2d at 623. Protection of nonopinion work product was waived because disclosure to the government “when the government and Martin Marietta were adversaries constitutes testimonial use”; and, under Nobles, testimonial use creates a subject-matter waiver of nonopinion work-product protection. Id. at 625. 2d Circuit ruling is contrary to ‘Martin Marietta’ In attempting to distinguish Martin Marietta, the 2d Circuit suggested that “the facts of Martin Marietta better supported a claim that it would be unfair to the government to allow the corporation to continue thereafter to assert its privileges.” 2003 WL 22461676 at 5 n.4. Because the government had settled with Martin Marietta in reliance on its representations, it “could more plausibly assert that the corporation forfeited” its privileges. Id. In Martin Marietta, however, it was not the government, but a criminal defendant, that sought documents from Martin Marietta and asserted that the corporation had waived its privilege and its work-product protection. Thus, the new 2d Circuit decision simply is contrary to Martin Marietta as to the effect of a disclosure to a U.S. attorney’s office in creating a subject-matter forfeiture. Presumably, the rationale of In re Grand Jury Proceedings extends to disclosures to any adversary, whether governmental or nongovernmental. It may also extend to others whose role is not that of fact-finder or decision-maker in adjudicatory proceedings, e.g., mediators, congressional committees and journalists. Under the rationale, where the disclosure is to a regulatory agency having authority both to make decisions (e.g., to impose discipline such as debarment or disqualification) and to initiate, or make a referral for, formal enforcement proceedings, the fate of the privilege and work-product protection should turn on the capacity in which the agency receives the disclosure. Therefore, counsel should take care to specify in the submission the agency capacity to which it is addressed. Often, that capacity may be identifiable by reference to the particular official who receives the submission, e.g., an administrative law judge or an enforcement division. Finally, where there is a possibility of subsequent claims of forfeiture or waiver in proceedings outside the 2d Circuit, the potential applicability of Martin Marietta should be considered. Richard Cooper is a partner at Williams & Connolly in Washington. He can be reached by e-mail at [email protected].

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