Thank you for sharing!

Your article was successfully shared with the contacts you provided.
If ever there were a case to make corporate counsel think twice about waiving their company’s attorney-client privilege, it would be the federal prosecution of Chiquita Brands International, Inc. As part of the company’s plea deal, Chiquita agreed to waive its privilege, and its outside lawyer Laurence Urgenson literally-and unwillingly-became a key witness for the prosecution. Prosecutors grilled Urgenson at least seven times about Chiquita’s illegal payments to terrorists, for about four hours each session. “Think about that,” Chiquita defense attorney Eric Holder, Jr., complained in court. “That’s 28 hours-28 hours of our chief lawyer being questioned and answering every question.” Holder, a partner at Covington & Burling in Washington, D.C., began representing the Cincinnati company when Urgenson and his firm, Kirkland & Ellis, were forced to withdraw after the Chiquita lawyer was required to cooperate with the government. That cooperation included letting prosecutors use Urgenson’s attorney-client work product-notes of five separate conversations with Chiquita’s general counsel and others-as evidence against the company [[see " Advice of Counsel." ]. The government even included excerpts from the notes in its criminal complaint. But that wasn’t enough. Prosecutors still dragged Urgenson before a grand jury that was considering charges against ex-Chiquita general counsel Robert Olson and other executives. Ironically, Holder, a former U.S. deputy attorney general and acting attorney general, authored the eponymous Holder Memo-the original authority for federal prosecutors to ask corporations to waive attorney-client privilege-while he was at the U.S. Department of Justice. It’s the precursor to the Thompson Memo, which further expanded that guideline. Chiquita’s waiver came under the Thompson Memo (named for former deputy attorney general Larry Thompson, who is now general counsel at PepsiCo, Inc.). In most cases, a waiver is narrowly focused and involves turning over results of an internal investigation or checking a company’s defense that it was just following advice of outside counsel. But with Chiquita, the Justice Department swung the waiver like a scythe, using it as a weapon in gathering evidence to attack the company and its executives. Not only was that highly unusual, but Holder and others say that they know of no other case in which the department turned a company’s outside counsel into a prosecution witness before a grand jury. One attorney involved with the case, who asked not to be named, called it “the worst case of privilege waiver you’ll ever see. . . . They waived [privilege] as to the advice they were getting during the investigation. That’s unheard of.” James Thompson, Chiquita’s current general counsel, wasn’t with the company at the time but defends the waiver as “reasonable” and consistent with its efforts to self-report the crime and to fully cooperate in the probe. Deciding to waive privilege “is extremely difficult in any circumstances,” Thompson says. “I only hope that other companies . . . [never have] to face the kinds of decisions Chiquita had to make.” The waiver came in two parts. First, the company waived the privilege in mid-2003 while it was cooperating with the Justice Department’s investigation of its payments to terrorists. Chiquita then withdrew its waiver when the U.S. attorney served a search warrant on the company and subpoenaed its officers in March of 2004. But Chiquita reinstated the waiver as part of its plea deal in March of 2007, agreeing to let Urgenson testify in the government’s continuing investigation of individual officers. Urgenson declined to discuss his role for this article, except to point out that he only testified before the grand jury because of the company’s plea deal. The grand jury was looking closely at whether Olson had reported Urgenson’s advice up the ladder, according to sources. Attorneys close to the case say that Urgenson anguished over the repeated questioning, and that it was a “nightmare” for the veteran Kirkland partner. But Urgenson had no choice. The attorney-client privilege actually belongs to the company, not the lawyer. So when Chiquita waived the privilege, Urgenson was legally bound to answer the prosecutors’ questions. The Chiquita case is sure to stoke the fiery debate over the Justice Department’s practice of asking for waivers. Last year, Thompson’s successor, former deputy attorney general Paul McNulty, issued a milder form of the guidelines, limiting when a U.S. attorney can seek a waiver. But that concession did little to placate critics like Susan Hackett, general counsel of the Association of Corporate Counsel in D.C. Hackett and others have pushed hard for Congress to pass a pending Senate bill that would prohibit the government from requesting waiver of the privilege. The Chiquita case, Hackett says, “is a classic example of how over-the-edge the Justice Department is in looking at lawyers as the means to make their cases for them . . . beating up lawyers to look for whether or not they may have relevant information to squeal on their clients.”

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.