US v. Ruehle

Ninth Circuit Decision in US v. Ruehle


The Ninth Circuit stepped into a conflict between former Broadcom CFO William Ruehle and lawyers at Irell & Manella. The disagreement concerned a type of misunderstanding on whether lawyers during an internal company probe are representing a singular executive or the company itself.

At issue was whether Irell clearly explained to Ruehle that it was representing the company and anything he told them could be shared with third parties. They ended up realeing information to the government. Irell lawyers maintained they told Ruehle. Ruehle said he couldn’t remember receiving such notice.

The lower court said the law firm breached its duty of loyalty to Ruehle by revealing his statements to the government and banned the government from using those statements in its trial. Most famously, the judge also referred the lawyers to the California state bar for disciplinary action.

In this opinion penned by Judge Richard C. Tallman, the court rejected Carney’s analysis and ruled that the “overwhelming evidence” shows that Ruehle’s statements to the Irell lawyers were not made in confidence. Ruehle should have understood that lawyers investigating the stock-option issue would likely share any information he provided with the company’s auditors.

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Reference Info:Decision | Federal, 9th Circuit | United States

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.

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