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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 11 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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<img style="max-width: 100%;height: auto;max-width: 100%;height: auto" loading="lazy" class="alignright size-medium wp-image-3375" src="https://www.thelawforlawyerstoday.com/wp-content/uploads/sites/754/2017/06/Investigation-and-notes-2-300x300.jpg" alt="Contract" width="300" height="300">Whether you are in-house or outside counsel, your clients want the attorney-client privilege and/or work-product shield to apply to materials created as part of an internal corporate investigation.&nbsp; But the applicability of these doctrines is very fact-specific, and difficult facts&nbsp;can doom that desired outcome.&nbsp; That was the conclusion of&nbsp;the Washington, D.C.&nbsp;district court&nbsp;in an <a href="http://filehost.thompsonhine.com/uploads/Banneker_Ventures_v._Graham_cd2d.pdf">opinion</a> last month involving the&nbsp;D.C. transit authority&nbsp; board.
Development dispute
The transit authority&nbsp; was negotiating with a developer on a construction project.&nbsp; After discussions broke down in March 2010, the developer sent a letter to the transit board detailing what it believed to be improper actions of the authority and its board, and indicting that it would seek its available &ldquo;remedies at law or in equity&rdquo; if negotiations did not resume.&nbsp; The alleged &ldquo;improper actions&rdquo; (set out in an <a href="http://filehost.thompsonhine.com/uploads/12.22.16_-_Decision_e58f.pdf">earlier decision</a>),&nbsp;centered on a transit board member who was also a D.C. city council member and who favored a different developer &mdash;&nbsp;a major campaign contributor &mdash; for the project.&nbsp; The situation generated a &ldquo;public outcry.&rdquo;
Over two years later, the transit authority hired Cadwalader, Wickersham &amp; Taft to &ldquo;provide investigative and legal services&rdquo; regarding the board&rsquo;s actions in connection with the failed project.
The investigation included interviews with current and former transit personnel as well as non-transit-personnel.&nbsp; It generated 51 interview memos, each marked &ldquo;Attorney Work Product.&rdquo;
After Cadwalader submitted its report and recommendations, the board decided to release it to the public.&nbsp; The report cited and referred to the interview memos&nbsp;prepared during the investigation.&nbsp; The developer sued the board, and sought the memos, arguing that the work-product doctrine did not apply and that the board had waived any attorney-client privilege.
The district court agreed, denied the board&rsquo;s motion for protective order,&nbsp;and ordered the transit authority to turn over all the memos, subject only to some limited redaction.
Timing is (nearly) everything
The work-product shield did not apply to&nbsp;the 21 memos of interviews with non-transit-board personnel, the court said, because too much time had elapsed between the letter threatening legal action and the preparation of the&nbsp;memos.&nbsp; Even if litigation could reasonably have been anticipated at the time the board received the letter, it did not hire Cadwalader until two years later, and did nothing in the interim.&nbsp; Although acknowledging that &nbsp;&ldquo;there is no standard or rule regarding how close in time potential litigation must be,&rdquo; two years was too long, the court said.
Further, the D.C. Circuit has adopted the &ldquo;because of&rdquo; standard to assess the motivation for creating materials later claimed to be attorney&nbsp;work product.&nbsp; For instance, Cadwalader&rsquo;s recommendation to the board said it had been retained &ldquo;to provide general governance recommendations&rdquo; and to evaluate the board&rsquo;s code of ethics.&nbsp;&nbsp;The court said the evidence showed that the board did not commission the investigation &ldquo;because of&rdquo; possible future litigation, and would have conducted an&nbsp; investigation to evaluate its business and ethics practices&nbsp;even without any anticipated litigation.
Attorney-client privilege waived
Citing D.C.&rsquo;s strict definition and narrow construction&nbsp;of privilege, the court also held that no privilege shielded the remainder of the memos, created after interviews of transit authority personnel.
Cadwalader&rsquo;s report, with its legal and factual conclusions about the construction project negotiations,&nbsp;had originally been intended to&nbsp; be disclosed only to the transit board.&nbsp;&nbsp;Intentionally releasing the report to the public,&nbsp;with multiple references to at least 23 different witness interviews,&nbsp;was not consistent with &ldquo;zealously protect[ing]&rdquo; the privileged materials.&nbsp; Rather, publication constituted a&nbsp;subject-matter waiver of&nbsp;the privilege as to the memos&nbsp;used to compile the report, and &ldquo;fairness dictat[ed]&rdquo; that the memos be considered together with the report, the court said.
Takeaways?&nbsp;
In the investigation context, facts dictate the outcome of a privilege battle.&nbsp; Here, the transit authority couldn&rsquo;t get out from under some difficult&nbsp;facts that sank its&nbsp;work product and privilege arguments:&nbsp; waiting so long after the threat of litigation to launch an investigation; and making the report public, which was likely a political necessity in any event.&nbsp; The court&rsquo;s strict holdings were&nbsp;the result.

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Ethics

Legal Ethics, Professional Responsibility and the Business of Law

No shield for investigation interviews, district court holds in D.C. transit authority case