Gerogia Pacific Corporation v GAF Building Materials Corporation

Decision of USDC - SDNY Dismissing Counterclaim for Fraudulent Misrepresentation

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ATTORNEY-CLIENT PRIVILEGE: BEWARE - NOT ALL LAWYERS ARE TREATED EQUALLY

Clients utilizing in-house counsel may not have the same rights to claim attorney-client privilege as clients who engage retained counsel, and counsel must be careful not to serve the client as both an attorney and business adviser.

This "oldie but goodie" - in which I, personally, was the subject - suggested that standards of attorney-client privilege for in-house counsel were not as sacrosanct as those for retained counsel. The court also held that attorneys who provide both business as well as legal advice may compromise privilege as to the latter.

While this decision has been the subject of much subsequent scholarship, and its holding has been refined in subsequent cases, it is the case of first impression on the issue of the scope of attorney-client privilege in the SDNY. Thus, it is worth a look.

As an aside, my deposition was subsequently reconvened so that I could provide verbal answers to those questions the Court found were not subject to attorney-client privilege. Amusingly, after receiving my verbal answers, counsel for the plaintiff asked if there were documents memorializing my advice. There were, and the plaintiff demanded their production, which I refused on the grounds of privilege. These documents - which added nothing to my verbal testimony - were reviewed by the Court in camera. The judge exploded, "Counsel, you can't obtain these documents. They're privileged." So, perhaps written advice is subject to greater protection than oral advice?

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Published In: Business Torts Updates, General Business Updates, Environmental Updates, Mergers & Acquisitions Updates

Reference Info:Decision | Federal, 2nd Circuit, New York | United States