A Case Against the Adoption of a "Selective Waiver" Doctrine, by Vlad Frants

Privileges, such as the Attorney-Client privilege, are designed “to encourage full and frank communication”[1] between persons in certain relationships. For example, it is understood that “a lawyer’s assistance can only be safely and readily availed of when free from the consequences or the apprehension of disclosure.”[2] Thus, the confidential nature of privileged communications is naturally in conflict with the truth-seeking purpose of a trial in an American court. Courts have responded to this tension by making sure that “[p]rivileges...[are] narrowly construed and expansions narrowly extended.”[3]

Generally speaking, the Attorney-Client privilege exists where a “communication between the client and the attorney has been made in confidence of the relationship and under circumstances from which it may reasonably be assumed that the communication will remain in confidence.”[4] The Attorney-Client privilege also includes certain communications made by corporate employees to the corporation’s counsel.[5] Yet, the Attorney-Client privilege can be waived.[6] For example, “the privilege once established can be waived if the communication is shared with corporate employees who are not ‘directly concerned’ with or did not have ‘primary responsibility’ for the subject matter of the communication.”[7] Also, the Attorney-Client privilege has been held to become waived when a company discloses its internal investigations to the government.[8] The information then becomes available to others who seek discovery of that material for ensuing civil suits.[9] On the other hand, the Eight Circuit has recognized in Diversified Industries v. Meredith[10] the concept of selective waiver, under which a corporation is permitted to selectively waive the privilege to an agency such as the SEC without effecting a broader waiver.[11] Some courts[12] “have applied selective waiver of the Attorney-Client privilege where disclosures were protected by a confidentiality agreement.”[13] However, most circuits have rejected selective waiver of the Attorney-Client privilege.[14] Despite this, a new Federal Rule of Evidence was proposed, which included and would have codified the selective waiver doctrine. Ultimately, the selective waiver provision[15] was not included in the final rule. Since the codification of selective waiver may come up again, it would be interesting to consider the pros and cons of such a codification. I believe that the rule should not have been adopted – and should never be.

Despite trying to be objective in my analysis, I can rely on only a couple of somewhat palpable, interrelated, arguments for why some could argue that the selective waiver doctrine should have been codified in the Federal Rules. First, a rule protecting selective waiver in circumstances where there is disclosure of information to a government agency, arguably furthers the policy of cooperating with the government.[16] This is because corporations would be more comfortable disclosing information to the government without fear of private parties using the information in civil suits. Second, codification of selective disclosure maximizes the effectiveness and efficiency of government investigations.[17] The reason for this is that the costs of government investigations would theoretically decrease.

On the other hand, I believe that there are strong reasons why the selective waiver doctrine should not be codified into a Federal Rule of Evidence.

First, selective waiver would be fundamentally unfair because it would deprive private parties of information that may be essential to private recovery. Why should the government have access to information that would benefit it, but not private parties? There is no justification for this disparity other than that the government acts for the public interest and private parties act for themselves – however, it is unfair to brand this as always being the case.

Second, the purpose of the Attorney-Client privilege is to “foster frank communication between a client and his or her attorney.”[18] Yet, the purpose of the selective disclosure doctrine is based on public policy concerning the public’s need for cooperation between companies and the government.[19] The selective disclosure doctrine does not seem to fulfill the purpose of the Attorney-Client privilege.[20] Inextricably connected to this point is the notion that the Attorney-Client privilege has historically been narrowly construed and strictly constructed,[21] but that the selective waiver doctrine not only goes beyond the purpose of the Attorney-Client privilege but also borders on the creation of an entirely new privilege.

Third, the selective waiver doctrine does not fulfill the purpose of the Attorney-Client privilege for yet another reason.[22] While there are exceptions to the general rule that disclosure to third parties waives the Attorney-Client privilege, the selective waiver doctrine is very different from the other exceptions.[23] Those exceptions include the presence of interpreters or paralegals, to whom the information is disclosed.[24] In those cases, the theory underlying the Attorney-Client privilege is fulfilled because disclosure to those persons is necessary for the client to obtain legal advice.[25] However, disclosure to the government is not necessary for the client to obtain legal advice.[26]


Since the selective waiver doctrine has been rejected by most of the federal courts,[27] there would have to be some very good reasons for justifying such a rule. Moreover, since privileges are usually created by the states and derived from common law,[28] wouldn’t the codification of the selective waiver doctrine be the first federal codification of a specific privilege, and thus require further justification? On balance, I don’t think this burden of justification has been met. Not only do the quantity and merits of the clear-cut cons outweigh the pros, but the codification of the doctrine raises a number of concerning issues, even if the wording of the proposed rule were to change one day.

There is a question as to how a federal codification of the selective waiver doctrine would effect the application of the doctrine in state courts. I’m not sure how effective the selective disclosure doctrine would be if it did not also apply to state courts. If state courts would be compelled to apply the doctrine, wouldn’t this raise federalism questions? On the other hand, if the doctrine would apply in federal courts but not state courts, this may cause forum shopping. Since an entire case could rise or fall based on a single item of disclosure, is it fair to permit parties to forum-shop on this basis? The answer is probably no because this would turn into too much of a trial tactic and the privilege would, in essence, be misused. Even if a future proposed rule adopts the In re M & L Business Machine Co.[29] version of selective waiver and becomes one where the prerequisite for the shield of selective waiver is that a confidentiality agreement should first be obtained from the government, this would be a bad idea. This is because the privilege would rise or fall based on the structure of the agreement itself and not on the practicality of the privilege – the policy of government cooperation, one of the most important arguments for selective waiver, would clearly be undermined. Ultimately, there would be no certainty as to when certain disclosures would or would not be privileged.

Interestingly, even in the event that the proposed rule were adopted as is, and the company would be protected from having to disclose information to private parties when disclosing to the government, nothing in the present form of the proposed rule prevents the government agencies from sharing the information among each other[30]. Knowing this possibility may hinder the Attorney-Client relationships because the company may be afraid to disclose certain conversations regarding, for instance, the company’s questionable antitrust and securities activities to the Department of Justice (DOJ) for fear that the DOJ will pass along the information to the Securities and Exchange Commission (SEC). Then again, as the court pointed out in In Re Sealed Case,[31] “[t]he SEC or any other government agency could expressly agree to any limits on disclosure to other agencies consistent with their responsibilities under law.” Of course, these agencies would first have to agree to do so.

While Judge Boggs made an interesting point in his Sixth Circuit dissent arguing for the selective disclosure doctrine, stating that “[a]s the harms of selective disclosure are not altogether clear, the benefits of the increased information to the government should prevail,”[32] I respectfully disagree, grounding my argument in the notion that the obvious harms, the higher burden of justification, and the serious issues that would arise, weigh against adoption of a selective waiver doctrine in any form.

[1] U.S. v. Schwimmer, 892 F.2d 237, 245 (2nd Cir. 1989)
[2] Id.
[3] U.S. v. Weissman, 195 F. 3d 96, 101 (2nd Cir. 1999).
[4] In re Qwest Comm., 450 F.2d 1179, 1184 (10th Cir. 2006).
[5] See generally Upjohn Co. v. U.S., 449 US 383 (1981)
[6] See generally Hopson v. Mayor, 232 F.R.D. 228 (2005).
[7] Muro v. Target, 243 F.R.D. 301, 308 (2007).
[8] See generally In Re Qwest Communications International, Inc. 450 F.3d 1179 (2006).
[9] Id.
[10] 572 F2D 596, 611 (1977).
[11] In Re Qwest Communications International, Inc. 450 F.3d 1179, 1187 (2006).
[12] See In Re M&L Business Mach. Co., 161 B.R. 689 (D. Colo. 1993).
[13] In Re Qwest Communications International, Inc. 450 F.3d 1179, 1189 (2006).
[14] Id.
[15] The proposed language read as follows:
"In a federal or state proceeding, a disclosure of a communication or information
covered by the Attorney-Client privilege or work product protection when
made to a federal public office or agency in the exercise of its regulatory,
investigative, or enforcement authority does not operate as a waiver of the
privilege or protection in favor of non-governmental persons or entities. The
effect of disclosure to a state or local government agency, with respect to
non-governmental persons or entities, is governed by applicable state law.
Nothing in this rule limits or expands the authority of a government agency to
disclose communications or information to other government agencies or as
otherwise authorized or required by law. F.R.E. 502(c) as originally proposed."
[16] In Re Qwest Communications International, Inc. 450 F.3d 1179, 1192 (2006).
[17] Id.
[18] See In Re Qwest Communications International, Inc. 450 F.3d 1179, 1194 (2006).
[19] Id.
[20] See In Re Qwest Communications International, Inc. 450 F.3d 1179, 1187 (2006).
[21] Id.
[22] See id.
[23] In Re Qwest Communications International, Inc. 450 F.3d 1179, 1193 (2006).
[24] See id at 1193-94.
[25] See id at 1193-94.
[26] See id at 1193-94.
[27] In Re Qwest Communications International, Inc. 450 F.3d 1179, 1189 (2006).
[28] See FRCP 501.
[29] See infra note 14 and accompanying text.
[30] See 676 F.2d 793,824, (D.C. Cir. 1982)
[31] 676 F.2d 793,824, (D.C. Cir. 1982)
[32] See In Re Qwest Communications International, Inc. 450 F.3d 1179, 1187 (2006)(quoting In re Columbia/HCA Healthcare Corp. Billing Practices Litigation, 293 F.3d 289, 311 (6th Cir.2002)).
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Thanksuing/Thanksgiving: A time to Appreciate, Reflect Upon and Ask Tough Questions About Our Adversarial System, by Vlad Frants

At trial, a prosecutor gets away with asking a witness, “the defendant choked you, didn’t he?,” whereas the witness merely stated during her preliminary hearing testimony that she was “lightly choked.”

While preparing his witness to take the stand, a defense attorney “clarifies” what he hears: “Correct me if I’m wrong, but you meant to say that you did not see the other car coming, right?”

During an investigation where a young boy insists that he was never molested by his teacher, overzealous detectives warn that if he doesn’t “disclose [what happened],” then the boy will grow up “gay.” [This example is from the “Complex Persecution: A Long Island Family’s Nightmare Struggle With Porn, Pedophilia, and Public Hysteria” article by Debbi Nathan (published May 20, 2003).]

***

Certainly, the mechanics of a trial, such as the cross-examination process, and unequivocally unethical behavior, such as bribing a judge, are the clear-cut cases of “this is part of the adversarial system” and “this goes beyond what is permissible in the adversarial system,” respectively. However, it is less clear where the three above-mentioned examples would fit. Are these the sort of actions that belong in an adversarial system? Do they go beyond what we should expect from an adversarial system? And if instead they fit into that gray, “in-between” area, then does the legal community today draw that proverbial line too liberally? I argue that, in the pursuit of justice today, attorneys and other players in the criminal justice system (such as law enforcement) get away with actions that go beyond what should be permissible, even in an adversarial system. Most importantly, I posit that when it comes to actions that are best characterized as fitting in that “gray area,” where there isn’t a clear-cut case of “this is what the adversarial system should permit” or “this is not something that the adversarial system should permit,” the legal community permits attorneys (and law enforcement personnel) to get away with too much unethical behavior, and justifies this by saying that this is supposed to happen in an adversarial system. I disagree.

In the opening pages of his book, Steven Lubet explains that “[t]he objective of a trial is to do justice…[and] the ultimate purpose of the adversary system is to seek the truth, and thereby to distinguish right from wrong.” Steven Lubet, Modern Trial Advocacy, p 1 (2004). Looking at the first example above, where the prosecutor asks the witness whether the defendant “choked” her, while knowing quite well that the witness admitted that she was “lightly choked,” the attorney is not seeking the truth and is thus misusing the adversary system. As George Orwell noted, “language can…corrupt thought.” [George Orwell, “Politics and the English Language,” 1946]. And certainly, hearing that someone was “choked” versus “lightly choked” elicits completely different images in one’s mind and thus guiding one’s thoughts. Were the hands wrapped tightly around the other person’s neck? Or were the hands loosely resting on the person’s neck? Certainly, I wouldn’t want either one to happen to me – but each is a different reality. One scenario is the truth and the other is not. At best, the prosecutor is “leaving false clues [as opposed to outright lying] or simply remaining silent [by leaving out the word “lightly”]…,” which, according to Elliot Cohen, is even a characteristic mark of a morally bad person [See Ellion Cohen, “Pure Legal Advocates and Moral Agents: Two Concepts of a Lawyer in an Adversary System.” Pg3].

While it is impossible to argue that the prosecutor was linguistically correct in leaving out the word “lightly,” what in fact keeps this situation in the “gray area” (as opposed to the “goes beyond the scope of what is expected in an adversarial proceeding” category) is the fact that in an adversarial system the defense is expected to jump on this verbal exchange between witness and prosecutor during cross-examination – “…the hallmark of the Anglo-American system of adversary justice.” [Steven Lubet, Modern Trial Advocacy, p 70 (2004).] The availability of cross-examination makes the exchange between prosecutor and witness somewhat appropriate, irrespective of whether the defense actually sees to it that the witness clarifies that she had used the words, “lightly choked” in her preliminary statement. For me, this is insufficient. I think that it is inappropriate to rely upon other functions of the adversarial system (i.e. cross-examination) to mitigate the harm done in direct examination by a somewhat unethical, counter-truth seeking, exchange between prosecutor and witness.

When considering the second example above, about the attorney preparing his client to take the stand, the expression “it’s not what you say, it’s how you say it” comes to mind. And, regrettably so. I find it remarkable that an attorney can get away with indirectly prompting the client to say one thing or another, if he does so tactically. For example, had the attorney in the second example above said to the client “tomorrow you have to say…,” then this would be inappropriate. However, if the attorney is careful in what he says, he may indirectly guide the client without violating any ethical or professional code. Quoting former Supreme Court Justice Byron White who wrote, “Our interest in not convicting the innocent permits counsel…to put the State’s case in the worst possible light…In this respect…we countenance or require conduct which in many instances has little, if any, relation to the search for truth,” Frederic Dannen wrote that “[c]ritics tend to forget that in our adversarial system it is defense counsel’s prescribed role to be disingenuous if it will help win an acquittal for his client.” Frederic Danne, “Annals of Law: Defending the Mafia.” So this seems to suggest that the reason why “tactfully guiding” a client to say one thing or another during testimony remains in that “gray area,” and should not be considered to go beyond the scope of what is permissible in the adversarial system, is because it gives attorneys the opportunity to acquit innocent clients. But, this is not what an attorney is supposed to do – and certainly not something that should be embraced by the adversarial system, especially because everyone is presumed innocent until proven guilty in a court of law. “Through the use of logical theories and artful techniques, the advocate will present the most compelling arguments for her client,” not by fabricating the story. [Steven Lubet, Modern Trial Advocacy, p 1 (2004)] There is absolutely no justification for an attorney to be able to “tactfully guide” a client to tell aspects of the story, if the story did not, in fact, occur that way.

The third example above, where the detective attempts to coerce the boy into telling him the story he wants to hear, is an example of something that taints the trial later on. If the objective of a trial is to do justice, and the ultimate purpose of the adversary system is to seek the truth, then how can either of these be accomplished if the trial itself is based on falsities? Some would justify the behavior of the detective by making an argument which is completely opposite to Frederic Dannen’s argument. Whereas Dannen would argue that a defense attorney should do anything in his power to free the innocent, some would argue that a prosecutor or law enforcement personnel, as in this instance, should do anything in their power to penalize the guilty – even if it means using unethical means to extract the kind of incriminating evidence that they are looking for. This, and because of the deference the legal and broader communities tend to give our law enforcement personnel, keeps a lot of their actions in the “gray area” and not beyond the scope of what is permissible in an adversarial system.

For each of the examples above, there are arguments that justify keeping many otherwise potentially unethical actions carried out by members of the legal and law enforcement community in the “gray area,” as opposed to the “outside the scope of actions permissible in an adversarial system.” However, I wonder whether such arguments really do or should justify those actions, which are, in my opinion, unethical and problematic. Despite these arguments, I wonder whether the legal community has stopped to think about why we are still permitting these activities and questioning if the justifications that have permitted these actions really are sufficient. It seems that, absent the most egregious, clear-cut cases of impropriety, an attorney’s actions are justified as simply "well that's just how the adversarial system works." This is no longer a valid justification. The legal community needs to stop and think about what its members want from an adversarial system. As Elliot Cohen argues, “[f]or it is our full conception of the role of a professional which sets the parameters on the kind of personality compatible with that role and which serves to shape the personalities of its participants accordingly...”[Ellion Cohen, “Pure Legal Advocates and Moral Agents: Two Concepts of a Lawyer in an Adversary System.” Pg33.] Without giving these “gray area” actions more thought, simply maintaining a habit of justifying the unethical behavior we see as “natural consequences of an adversarial system” is no different than upholding an antequated tradition of stoning to death the unlucky villager who draws the wrong slip of paper from a little black box simply because that’s the way things have always been. [See: The Lottery by Shirley Jackson].

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Joining a Non-Profit Board Can Boost You and Your Practice, by Vlad Frants

Sir Winston Churchill once said, "You make a living by what you get; you make a life by what you give." But, I think that volunteering on a Non-Profit Board can help attorneys with both.

Citing fastcompany, Carolyn Elefant of myshingle outlines five professional benefits of serving on a non-profit board:

1. Learn about an issue outside of (or complementary to) your area of business expertise--whether it's housing, healthcare, the environment, economic development, healthcare, or education, just to name a few.

2. Gain new perspectives by engaging with people from diverse backgrounds, including board and staff members, the nonprofit's funders, and the community it serves. This can help enrich your awareness of your business's and clients' broader base of customers and shareholders here in the US and globally.

3. Better understand the role and responsibilities of corporate governance by serving on a board yourself.

4. Experience the perspective of the CEO and board of the corporation, including the actual responsibility of envisioning the organization's greater potential, and creating and achieving the organization's revenue/business model.

5. Have an opportunity to step up to lead, by chairing a committee, or serving as an officer; you will learn how to build consensus through process, and you will understand what it means to be accountable to the community that your organization serves.

These are only a few of the dozens of personal and professional benefits of serving on a Non-Profit Board. Few things really are more rewarding than supporting and following through with a good cause.

In September 2009 I founded The Good Heart Group, a New York State-registered Non-Profit corporation, whose mission is to enrich the lives of individuals with health problems stemming from disease or age through art, entertainment and learning. Some of our activities include bringing high school bands to nursing homes and artists to sick children in hospitals. My experience thus far has been educational and rewarding.

For more information on how to join the board of a Non-Profit, Carolyn suggests checking out sites like BoardNetUSA, which matches volunteers with non-profit board positions, or Idealist, which has a searchable database of volunteer positions.

Vlad's Post on Russian Corruption was Picked-Up by Blawg Review!!

Well done, Vlad! You can see the original post here. Blawg Review # 237 is here (Vlad's reference is in the sixth paragraph below the Smokey the Bear picture).

Is there an Antidote for Russia's Corruption Problem? by Vlad Frants

Recently, a BusinessWeek article depicted corruption as "Russia's economic stumbling block." Sure, if corruption were decreased then people would be less weary of investing in Russia and a major economic stumbling block would be removed. But how easy can it be to markedly decrease corruption in a place where for so many years judicial enforcement was almost nonexistent, substantive legal remedies available to underpaid and inexperienced judges were ill-defined and Russians were working under tremendous cultural constraints to not follow the law?

Anti-corruption laws don't sound bad and Russia has already made important strides in the right direction by overhauling a problematic tax system, introducing bright-line limitations on local authorities in order to reduce arbitrary bureaucratic actions and creating the Council for Combating Corruption. But perhaps the focus shouldn't be only on decreasing corruption by side line participants. Perhaps there should be a solution from the inside-out.

What if there existed a corporate governance model for Russia that itself led to decreased corruption by molding the right cultural mindset? Bright-line rules, rather than standards, to define proper and improper behavior. Strong legal remedies to compensate for the low probability that the sanctions will be applied. Greater protection of outside shareholders than is common in developed economies. Enforcement, as much as possible, through actions by direct participants in the corporate enterprise (shareholders, directors, managers), rather than indirect participants (judges and regulators).

These are elements of the "self-enforcing" model of corporate law which was introduced by professors Bernard Black and Reinier Kraakman in 1995 for Russia. After creating the model and seeing that it was unable to withstand the socio-economic difficulties and setbacks that Russia faced in the years preceding Russian President Vladimir Putin's tenure, the professors abandoned the model.

In a law review article entitled "Russian Corporate Law: is "Self-Enforcement" Still the Way to Go?, 13 UCLA J. INT'L L. & FOR. AFF. 435 (2008), I reviewed some of the positive changes that President Putin implemented in Russia and argued that we should reconsider a self-enforcing model for Russia.

Perhaps assimiliating the elements of the professors' "self-enforcing" model, coupled with aggressive anti-corruption campaigns, would be the best antidote for Russia's corruption problem.

Introducing Guest Blawger, Vlad Frants

I am very pleased to welcome Vlad Frants to the blawg. Vlad is a new attorney and will be guest blawgging at here for the next month.

I'm particularly excited to have Vlad blawg here as his research and publication has been quite active over the last two years. His recent publications include:

• Taxation of Nerves: Understanding Innocent Spouse Relief from Joint Return Liability, 41 FAMILY LAW REVIEW 3 (forthcoming) (Fall 2009).
• A Functionalist Perspective on the Effectiveness of the Gramm-Leach-Blilely Networking Exception and its Related Regulation R Provisions, New York Business Law Journal, New York State Bar Association (forthcoming) (Winter 2009).
• Russian Corporations Law: Is "Self-Enforcement" Still the Way to Go? 13 UCLA J. INT'L L. & FOR. AFF. 435 (2008).

Vlad graduated with high honors from Stony Brook University. While a law student at Brooklyn Law School, he sat on the Brooklyn Journal of Corporate, Financial and Commercial Law. He has taken courses through the Harvard University Extension School, but is currently a full-time graduate student at Fordham University's School of Business, working towards a M.S. in Taxation. While at Fordham, Vlad started and is acting President of the Fordham Tax and Accounting Society.

Outside of his research and professional studies, Vlad has undertaken and founded a not-for-profit that fosters ties between the larger New York community and those facing health issues, The Good Heart Group.

Welcome, Vlad! I am pleased that you could join us and am excited to see what research you contribute here.