Preserving the Attorney-Client Privilege

Within the context of corporations and other commercial entities, maintaining and preserving the protections afforded by the attorney-client privilege and work-product doctrine require special precautions. If access to information and materials otherwise protected from disclosure is provided to individuals other than those who 'need to know,' then a corporate client may inadvertently waive the protections offered by the attorney-client privilege and work-product doctrine. The U.S. Court of Appeals for the District of Columbia explored these issues in Federal Trade Commission v. GlaxoSmithKline, 294 F.3d 141 (D.C. Cir. 2002).

In Glaxo, the FTC issued a subpoena to GlaxoSmithKline (GSK) during the course of its investigation into whether GSK listed its patents properly in the FDA compilation of Approved Drug Products with Therapeutic Evaluations. The FTC sought two categories of documents:

• Documents concerning the medication known as Paxil that the U.S. District Court for the Northern District of Illinois had ordered to be disclosed in separate litigation.
• Information regarding the manufacturing and marketing of Paxil.

Although GSK and the FTC reached an agreement regarding the documents that would be produced, including a process for resolving any disputes, GSK withheld certain documents on the grounds that they were protected from disclosure by the attorney-client privilege and work-product doctrine.

The FTC argued that GSK forfeited its right to assert any privilege or work-product immunity because GSK had widely disseminated all the documents within GSK, as well as to consultants and other third parties. The FTC also contended that the production of certain documents in the Illinois litigation effectively estopped GSK from withholding the same documents in response to the FTC's subpoena. The FTC further maintained that the attorney-client privilege was inapplicable because the information at issue was not
confidential.

The D.C. Circuit agreed with the FTC. The court found that GSK did not prove the documents were only distributed to people on a 'need to know basis,' or to employees who were authorized to act on behalf of GSK. The court also determined that the information called for by the subpoena was not confidential. In addition, the court concluded that there was no proof that certain documents were prepared in anticipation of litigation and, therefore, subject to the protections afforded by the work-product doctrine.

Chief Judge Douglas H. Ginsburg, writing for the D.C. Circuit, reversed the district court. Ginsburg analyzed whether GSK failed to establish that the documents at issue were, in fact, confidential. The FTC claimed that GSK's broad dissemination of the documents waived any privilege.

In response, GSK argued that the documents were only distributed to certain employees and contractors, most of whom were lawyers or managers providing input to the legal department. In an effort to resolve this argument, Ginsburg determined that the answer focused on whether the documents were distributed on a 'need to know basis,' or to employees who were authorized to act on behalf of GSK.
 

The court in Glaxo held that the district court erred when it concluded that:

• GSK waived the attorney-client privilege when it disseminated the documents to a large group of individuals.
• GSK failed to meet its burden to establish why each of the individuals received the documents.
  

Ginsburg reasoned that GSK had the burden to demonstrate that it limited the distribution of the documents in a manner consistent with the privilege; GSK was not required to justify why each and every person obtained the documents. More specifically, the Glaxo court stated that 'when a corporation provides a confidential document to certain specified employees or contractors with the admonition not to disseminate further its contents and the contents of the documents are related generally to the employees' corporate duties, absent evidence to the contrary, we may reasonably infer that the information was deemed necessary for the employees' or contractors' work.'

As a result, Ginsburg concluded that it would be unreasonable to presume that a company, such as GSK, would circulate documents in a restricted manner to anyone other than those on a 'need-to-know' basis.

Significantly, Ginsburg further concluded that the distribution of privileged documents to consultants hired by GSK had no impact on the continued confidential status of the documents, as long as the consultants acted for the company and possessed information that the attorneys would later use to render legal advice.

Glaxo reminds us that if corporations and other business entities intend to disseminate documents that are protected from discovery by the attorney-client privilege and work-product doctrine, they must ensure that the recipients are individuals who 'need to know' or provide information that facilitates the rendering of legal advice. Otherwise, the unmanaged and widespread distribution of documents throughout a corporation and to consultants may result in the forfeiture of the attorney-client privilege and work-product doctrine protections.

Within the context of corporations and other commercial entities, maintaining and preserving the protections afforded by the attorney-client privilege and work-product doctrine require special precautions. If access to information and materials otherwise protected from disclosure is provided to individuals other than those who 'need to know,' then a corporate client may inadvertently waive the protections offered by the attorney-client privilege and work-product doctrine. The U.S. Court of Appeals for the District of Columbia explored these issues in Federal Trade Commission v. GlaxoSmithKline , 294 F.3d 141 (D.C. Cir. 2002).

In Glaxo, the FTC issued a subpoena to GlaxoSmithKline (GSK) during the course of its investigation into whether GSK listed its patents properly in the FDA compilation of Approved Drug Products with Therapeutic Evaluations. The FTC sought two categories of documents:

• Documents concerning the medication known as Paxil that the U.S. District Court for the Northern District of Illinois had ordered to be disclosed in separate litigation.
• Information regarding the manufacturing and marketing of Paxil.

Although GSK and the FTC reached an agreement regarding the documents that would be produced, including a process for resolving any disputes, GSK withheld certain documents on the grounds that they were protected from disclosure by the attorney-client privilege and work-product doctrine.

The FTC argued that GSK forfeited its right to assert any privilege or work-product immunity because GSK had widely disseminated all the documents within GSK, as well as to consultants and other third parties. The FTC also contended that the production of certain documents in the Illinois litigation effectively estopped GSK from withholding the same documents in response to the FTC's subpoena. The FTC further maintained that the attorney-client privilege was inapplicable because the information at issue was not
confidential.

The D.C. Circuit agreed with the FTC. The court found that GSK did not prove the documents were only distributed to people on a 'need to know basis,' or to employees who were authorized to act on behalf of GSK. The court also determined that the information called for by the subpoena was not confidential. In addition, the court concluded that there was no proof that certain documents were prepared in anticipation of litigation and, therefore, subject to the protections afforded by the work-product doctrine.

Chief Judge Douglas H. Ginsburg, writing for the D.C. Circuit, reversed the district court. Ginsburg analyzed whether GSK failed to establish that the documents at issue were, in fact, confidential. The FTC claimed that GSK's broad dissemination of the documents waived any privilege.

In response, GSK argued that the documents were only distributed to certain employees and contractors, most of whom were lawyers or managers providing input to the legal department. In an effort to resolve this argument, Ginsburg determined that the answer focused on whether the documents were distributed on a 'need to know basis,' or to employees who were authorized to act on behalf of GSK.
 

The court in Glaxo held that the district court erred when it concluded that:

• GSK waived the attorney-client privilege when it disseminated the documents to a large group of individuals.
• GSK failed to meet its burden to establish why each of the individuals received the documents.
  

Ginsburg reasoned that GSK had the burden to demonstrate that it limited the distribution of the documents in a manner consistent with the privilege; GSK was not required to justify why each and every person obtained the documents. More specifically, the Glaxo court stated that 'when a corporation provides a confidential document to certain specified employees or contractors with the admonition not to disseminate further its contents and the contents of the documents are related generally to the employees' corporate duties, absent evidence to the contrary, we may reasonably infer that the information was deemed necessary for the employees' or contractors' work.'

As a result, Ginsburg concluded that it would be unreasonable to presume that a company, such as GSK, would circulate documents in a restricted manner to anyone other than those on a 'need-to-know' basis.

Significantly, Ginsburg further concluded that the distribution of privileged documents to consultants hired by GSK had no impact on the continued confidential status of the documents, as long as the consultants acted for the company and possessed information that the attorneys would later use to render legal advice.

Glaxo reminds us that if corporations and other business entities intend to disseminate documents that are protected from discovery by the attorney-client privilege and work-product doctrine, they must ensure that the recipients are individuals who 'need to know' or provide information that facilitates the rendering of legal advice. Otherwise, the unmanaged and widespread distribution of documents throughout a corporation and to consultants may result in the forfeiture of the attorney-client privilege and work-product doctrine protections.