Maryland State Bar Association
Public Counsel Newsletter

The Government's Attorney-Client Privilege:
Should It Have One?

by Paul R. Rice

The attorney-client privilege is designed to encourage more candid and complete communications between the client and his attorney. The privilege's premise is that clients will be more forthright with their attorneys if their communications can never be used against them. It is believed that if clients are more forthcoming, attorneys will able to give better advice, and society, ultimately, will benefit by increased compliance with the law. P. R. Rice, Attorney-Client Privilege in the United States, § 2:3 (West Group 2nd ed. 1999).
 

Critical to the premise's legitimacy is the absolute nature of the privilege protection, absent a waiver by the client. Therefore, client control over the privilege protection is central to its success.
 

The Privilege is a Personal Right
 

Despite the fact that the privilege was a personal right designed to encourage personal conduct, after corporate entities were recognized, they sought, and were given, the same protection for their communications with corporate legal counsel. Unites States v. Louisville & Nashville Railroad, 236 U.S. 318 (1915). This application of the privilege protection, however, was sanctioned with no explanation of how the dynamics of corporate communications were sufficiently similar to those of the individual's to warrant the extension of the privilege.
 

How, for example, is a corporation encouraged to communicate more openly with legal counsel by the application of the privilege? The corporate entity is a legal fiction that cannot speak or act exception through the individuals who represent it..
 

While corporate employees can speak on behalf of the corporation, they receive no personal protection from the corporation's privilege. It is asserted or waived solely on the basis of the corporation's benefit--not on the benefit or needs of a particular individual. Upjohn v. United States, 449 U.S. 383 (1981).
 

Equally important, those employees who speak for the corporation have no meaningful or lasting voice in the decision whether to assert or waive the corporation's privilege protection. An officer or director has only one vote on corporate decisions to waive privilege claims, and even that power is lost when the corporate agent's authority is terminated--it passes to that person's successor. Commodity Futures Trading Commission v. Weintraub, 471 U.S. 343 (1985). Consequently, corporate agents have little or no control over the indirect benefit that they may receive from the corporation's exercising its privilege protection for its own benefit.
 

The privilege that is designed to encourage communications, is given to an entity that cannot speak, and denied to the individuals who speak for it. Consequently, the privilege cannot encourage a level of candor from those individuals that justifies the suppression of relevant evidence. Indeed, from the way the corporate privilege is currently applied, it is unlikely that its abolition would prompt corporate employees to be less candid with corporate counsel than they are today.
 

A privilege is justified only if it encourages desired conduct that would be suppressed without it. In the corporate structure, there is no evidence that the corporation's privilege provides any encouragement to employees to speak more candidly about their own misdeeds over and above the encouragement from economic threats of employer sanctions or discharge for failing to cooperate.
 

In support of the corporate attorney-client privilege it might be argued that regardless of its impact on corporate employees, if the corporate privilege were abolished, corporate managers and directors would be less likely to seek legal assistance in the first instance. This, of course, is not realistic since those corporate agents responsible for seeking the advice would subject themselves to personal liability for their negligent mismanagement of corporate assets through their failure to obtain that assistance.
 

The Problem is Expanded with the Privilege
 

Despite this unresolved issue, courts have universally extended the privilege protection to all entities, including governmental bodies. By doing so, they have created the same unexplored problem. Why will government employees, who are communicating about things that could personally embarrass or incriminate themselves, be more willing to speak openly because the government can claim the privilege when information is sought by third parties?
 

The problem with applying the attorney-client privilege to governmental bodies is exaggerated by the political environment in which the privilege is exercised or waived. Since control over entity privileges passes to successors in power, a different political party may be quite willing to waive the privilege claims that apply to a predecessor's tenure, in order to embarrass or otherwise hurt their opponents. This is particularly true since governmental officials agreeing to the waiver cannot be held personally liable for the negligent mismanagement of the public's assets.
 

An Additional Problem with the Government Privilege
 

The extension of the attorney-client privilege to governmental bodies created an additional problem that courts have not addressed: Who is the client? Is the government itself one monolithic client, or, since the state and federal governments are divided into three separate and equal branches, does each branch represent a separate client? Any answer to this question will only spawn lead to many issues.
 

Who has control over the privilege claims of each agency or division within a given branch of the government? While this definition issue generally has not created problems, because disputes between governmental agencies are usually resolved informally, it did in the recent grand jury investigation of President Clinton. In In re Lindsey Grand Jury Testimony, 332 U.S. App. D.C. 357; 158 F.3d 1263 (D.C. Cir. Oct. 9, 1998), cert. denied Office of the President v. Office of Independent Counsel, 1998 U.S. LEXIS 7266 (Nov. 9, 1998), the court held, for the first time, that government attorneys could not refuse to disclose information to a federal grand jury on the ground of the government's attorney-client privilege.
 

The Troublesome Lindsey Decision
 

It was not the result in Lindsey, but the Court's reasoning, that was troubling. The Court refused to resolve the privilege question through the application of well established corporate precedent. This refusal was surprising because, after the extension of the privilege protection to governmental bodies, courts had unquestioningly applied the wealth of corporate precedent to resolve virtually all questions about scope, application and waiver of the government's privilege protection. In this instance there was adequate precedent for the Lindsey result without breaking new ground by holding that in some circumstances public policy dictates that the privilege cannot even be asserted.
 

In the corporate context, courts have recognized the right of shareholders to gain access to privileged communications between corporate officers and corporate legal counsel when "good cause" is demonstrated. Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1988). Over the years this exception has been radically expanded and descriptively dubbed the "fiduciary duty" exception. Whenever a fiduciary duty is owed to another, the beneficiary of that duty, upon a showing of good cause, can gain access to confidential attorney-client communications relating to the fulfillment of those responsibilities.
 

In the government context, the citizens are the equivalent of the corporate shareholders, and the grand jury investigation being conducted by Kenneth Starr on their behalf could have been an appropriate context for the court to announce an equivalent "good cause" exception. To do this, however, the Court would have had to precisely define who constitutes the government client.
 

Avoiding that issue, the Lindsey court unnecessarily complicated the federal government's attorney-client privilege with a whole new public policy exception that has unclear boundaries. For example, can a government attorney raise the government's attorney-client privilege in response to a subpoena from a legislative committee that is investigating activities that will be legislated upon? Wouldn't the legislative subpoena represent a stronger public policy interest than a grand jury subpoena investigating the conduct of a single individual?
 

Another Approach--Abolishing the Government Privilege
 

Rather than creating exceptions to the government attorney-client privilege, perhaps the better approach would be to abolish it altogether. Under the logic of open meetings, sunshine, and freedom of information acts, seven states have done this. See P.R. Rice, Attorney-Client Privilege: State Law § 8:27 (Rice Publishing 1999). While some of these states have continued to recognize the privilege in a litigation context (much like the work product immunity), they have opened many formerly privileged communications to public scrutiny. Significantly, there have so far been no reported adverse consequences from this action.
 

What Will Happen Next
 

The illogic of the privilege in the government context cannot be ignored forever. As more states appreciate this, more legislatures will abolish their government's attorney-client privilege protection. Perhaps the states will again set the example for the federal government. Perhaps, too, this will prompt a reassessment of the initial extension of the privilege protection to corporate entities as well.