Government Contracts Monitor

Vigilance Required, Even When Cooperating With A Government Investigation

May 1, 2012

In the event of simultaneous civil and criminal actions involving your company, vigilance is still required to maintain attorney-client privilege.  To the extent that you agree to waive the attorney-client privilege for purposes of the Government investigation to garner favor or for another valid reason, remember that such a waiver will likely result in the waiver for any other litigation. 

The Ninth Circuit Court of Appeals in In re Pacific Pictures Corporation, No. 11-71844 (9th Cir. Apr. 7, 2012), made it clear that it did not recognize selective waiver of privilege.  Pacific Pictures involved the protection of documents to the Government pursuant to a Grand Jury subpoena.  The documents were not redacted to preclude the disclosure of attorney-client communications.  The subpoena was accompanied by a letter from the United States Attorney promising not to disclose documents to third parties.  However, a party to a related civil action sought all documents produced to the United States Attorney’s Office and argued that any privilege that may have once existed was waived once the documents were produced to the Government. 

The Ninth Circuit agreed that even an involuntary disclosure of documents pursuant to a Grand Jury Subpoena does not protect those documents from waiver, and held that a party desiring the protection of the attorney-client privilege must take reasonably available actions to protect it.  The Court did not find the U.S. Attorney’s letter promising confidentiality for the record of privileged material effective.  Instead, it determined the privilege to have been waived by the production of the records to the U.S. Attorney. 

Hence, if you find yourself in the midst of a Government investigation that requires the production of records or documents containing privileged material, you need to take appropriate steps to preserve the privilege protection for those documents in other cases and venues.

 

William Powell is the attorney responsible for the content of this article.