Government Contracts Monitor

Government Seeks Privileged Documents Under the Crime-Fraud Exception

February 14, 2013

On January 30, 2013 Federal prosecutors asked a judge in Louisiana to require BP LLC’s lawyers to produce documents from the lawyers’ files relating to admitted fraudulent statements made by BP representatives to Congress and to the Securities and Exchange Commission.  The relevant statements concern the rate oil was flowing into the Gulf of Mexico during the 2010 oil platform disaster.  The wide-ranging, non-specific request for documents included those that were previously withheld under claims of attorney-client and attorney work-product privilege as well as any other documents not previously identified.

The government’s motio follows the January 29, 2012 acceptance of a plea agreement by United States District Judge Sara Vance under which BP pleaded guilty to numerous offenses, including obstruction of justice by providing false and misleading testimony and other information to a Congressional committee and to the SEC during the oil spill.  BP also admitted guilt to 11 counts of manslaughter in connection with the deaths of workers on the oil rig “Deepwater Horizon.”  Total fines imposed on BP under the terms of the plea agreement are $4 billion to resolve its criminal exposure and $525 million to resolve securities fraud claims.

The government’s motion seeking materials containing communications among BP representatives and lawyers representing the Company cites the crime-fraud exception to the attorney client communication privilege.  The crime fraud exception is a recognized exception to the attorney-client communication privilege.  Where communication between client and attorney or attorney work-product is intended to further continuing or future criminal or fraudulent activity an assertion of the attorney-client privilege is overcome.  The government alleges that BP used its in-house and external
attorneys to aid in developing the false flow rate information provided to Congress and BP shareholders.

In seeking the documents and other materials the government argues that “[b]ecause BP has now admitted that it endeavored to influence, obstruct and impede a congressional investigation, and long ago admitted that these responses were crafted through a process organized and directed by lawyers, these documents must be disclosed.”  This case serves as an important reminder that allegedly privileged documents are not always protected from disclosure.  Stay tuned to learn how the Court decides this issue.

 

Pete Hoffman is the attorney responsible for the content of this article.