Got Privilege? When It Comes to Internal Investigations, Think Again …

by Seyfarth Shaw LLP
Contact

Seyfarth Synopsis: A recent decision out of the U.S. District Court for the District of Columbia serves as a helpful reminder on the difficulties of maintaining privilege during internal company investigations.  But with a clear understanding of the limitations of the attorney-client privilege, thoughtful preparation of the investigation’s goals, and pro-active planning, employers can put themselves in the best possible position to control what information becomes public and maintain work-product and attorney-client privileges.

When conducting an internal investigation, every in-house counsel pays particular attention to maintaining privilege throughout the investigation. But maintaining privilege can be very difficult.  A recent decision from the U.S. District Court for the District of Columbia tackles this issue, and it provides useful lessons for helping to ensure that confidential and privileged internal investigation notes and reports remain confidential and privileged.

Background on the Case

In Banneker Ventures, LLC v. Graham, the U.S. District Court for the District of Columbia ordered the production of 51 interview memoranda prepared by an outside law firm during an internal company investigation. The Washington Metropolitan Area Transit Authority (WMATA) had been in negotiations with Banneker Ventures, LLC over a development project.  When negotiations broke down, Banneker’s attorney sent a letter to WMATA outlining what Banneker believed to have been improper actions on the part of WMATA and its Board of Directors.  WMATA briefly responded to the letter, but did not reopen negotiations on the project.

After more than two years, WMATA retained an outside law firm to conduct an investigation into the actions of WMATA’s Board in connection with the project. The investigation took approximately five months, included interviews of 34 individuals (including 19 current or former WMATA Board members or employees), and resulted in the drafting of 51 interview memoranda.  These memos were created by the outside attorneys conducting the investigation, and they were marked “attorney work product.”

In addition, the outside law firm prepared an investigative report for WMATA, which included references to and citations from the interview memoranda. The WMATA Board subsequently voted to publicly release the investigative report, but the Board did not release any of the 51 interview memos.

Banneker eventually sued WMATA for breach of contract and other claims, and during discovery, Banneker sought all 51 of the interview memos. After considering whether the memos were protected by the attorney work-product doctrine or the attorney-client privilege, the court ordered WMATA to produce the memos.

The Court’s Reasoning

The Court first addressed whether the interview memoranda were protected attorney work-product. To be work-product, they must have been prepared “in anticipation of litigation or for trial.”  The Court looked at the time between Banneker’s letter to WMATA and the start of the investigation, and it tried to ascertain the intent behind the investigation.  WMATA argued that Banneker’s letter caused it to believe litigation was probable.  Although not articulating any specific amount of time, the Court found that the more than two years between the letter and the start of the investigation was too long for the investigation to have any link to the letter sent by Banneker’s attorney.  In addition, the Court reasoned that the interview memos would have been created in the ordinary court of business, with or without litigation.  The WMATA Board had stated that the investigation was to formulate and recommend changes to policies, standards, and procedures; the Court said this was a business—not litigation—goal.  And the Court concluded that none of the interview memos were protected by the attorney work-product doctrine.

The Court next addressed the attorney-client privilege. To be privileged, the documents must have been “confidential communications between attorneys and their clients made for the purpose of obtaining or providing legal advice.”  The interview memos clearly fit this criteria.  However, Banneker argued that WMATA had waived the attorney-client privilege for the interview memos when it publicly released the investigative report.  The Court agreed, reasoning that the report and the memos concerned the same subject matter and the report cited extensively to the memos, even containing references to at least 23 different witness interviews.  The Court also explained that WMATA could not use the investigative report to its advantage during litigation while withholding the remaining information in the interview memos (this invokes the old maxim that a party cannot use privileged information both as a sword and a shield).  But the Court did give WMATA some relief, allowing WMATA to redact any information from the interview memos on subjects that were not included in the investigative report.  In other words, by publicly releasing the report, WMATA had only waived privilege on the subject matters that were actually contained in the public report.

Takeaways and Best Practices

This decision can serve as a useful reminder to both in-house attorneys and outside counsel on the importance of carefully planning all internal investigations. Following are some tips to assist employers when conducting internal investigations.

  1. Clearly articulate the reasons for and the goals of the investigation. Often investigations, such as workplace harassment and other company investigations, are conducted for multiple purposes. When the investigation is conducted in anticipation of litigation, that reason should be clearly articulated. Management directing the investigation and the individuals conducting the investigation—whether in-house attorneys or outside counsel—should clearly understand the reasons for and the goals of the investigation.
  2. Expect interview notes to be discoverable. Remember that privilege does not attach to underlying facts. In many cases, interview notes will be discoverable in a subsequent lawsuit. Accordingly, interview notes should contain only clear statements of facts and information gathered during the interview. It is important to thoroughly train the interviewers to include only appropriate information in their notes, especially if the company is conducting the investigation itself.
  3. Prepare an Executive Summary. An executive summary can provide a broad overview of the investigation and its results, while at the same time protecting confidential and privileged information that should be reserved to a more select audience. When preparing an executive summary, carefully scrutinize the amount of detail necessary and consider whether citation or detailed discussion of the underlying investigation documents is necessary.
  4. Consider whether a public or more general release serves the company’s purposes. Be especially careful when releasing information or conclusions gathered during the investigation to anyone outside of the organization. As the Banneker case makes clear, public disclosure can result in waiver of the attorney-client privilege. Remember that this may also include disclosure to government agencies or other third-parties. If some disclosure is necessary, consider whether a confidentiality agreement or a joint-defense agreement serves the company’s interest.
  5. Maintain realistic expectations. Finally, no amount of planning can guarantee that an investigation will not become public. Remember that anything created during an investigation may become public. Accordingly, handle all communications, notes, and any other documents created during the investigation with this in mind.

Internal investigations are a necessary part of any company’s business, and this recent decision can serve as a helpful reminder of the importance of thoroughly planning any investigation. By knowing the rules relating to privilege and pro-actively planning any internal investigation, employers can put themselves in the best possible position to control what information becomes public and maintain work-product and attorney-client privileges.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Seyfarth Shaw LLP | Attorney Advertising

Written by:

Seyfarth Shaw LLP
Contact
more
less

Seyfarth Shaw LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.