When the Supreme Court earlier this month denied certiorari in Office of the President v. Office of Independent Counsel, 1998 U.S. LEXIS 7266 (Nov. 9, 1998), it did an incredible disservice to the bench and bar. The Court has never fully addressed the parameters of the attorney-client privilege in the government context, and the lower court's decision raised more questions than it resolved.

The Supreme Court left standing the decision of the U.S. Court of Appeals for the D.C. Circuit, which held that no government agency (here, the White House) could refuse to produce evidence (here, confidential communications between President Bill Clinton and Deputy White House Counsel Bruce Lindsey) relating to alleged criminal activity by government officials by asserting attorney- client privilege. The Lindsey decision abolished the government privilege only for purposes of grand jury subpoenas. Principal among the newly created problems is whether legal precedent from the corporate context will continue to define the nature of the government privilege in all other contexts--as it has done in the past in literally all federal and state courts.

The D.C. Circuit set an absolute prohibition on assertion of the privilege: "[W]hen governmental attorneys learn, through communications with their clients of information related to criminal misconduct, they may not rely on the government attorney-client privilege to shield such information from disclosure to a [federal] grand jury." Quoting from the 8th Circuit's decision in In re Grand Jury Subpoena Duces Tecum, 112 F.3d 910, cert. denied, 117 S. Ct. 2482 (1997) (where the first lady's communications with White House counsel were ordered disclosed to a federal grand jury), the D.C. Circuit noted that "to allow any part of the federal government to use its in-house attorneys as a shield against the production of information relevant to a federal criminal investigation would represent a gross misuse of public assets."

In making its ruling, the D.C. Circuit rejected the balancing test employed by the trial court. Rather than barring all privilege claims, the lower court had ruled that the privilege can be overcome where "the subpoena proponent can show 'first, that each discrete group of the subpoenaed materials [or testimony] likely contains important evidence; and second that this evidence is not available with due diligence elsewhere."'

A Thing of the Past

In the past, all federal courts, including the D.C. and 8th Circuits, have extended the protection of the attorney-client privilege to communications between government employees and government attorneys. When legal advice is sought through confidential communications to a government attorney, and that confidentiality has been maintained, neither the government agency nor the agency's attorney could be compelled to disclose them--until now, in the D.C. and 8th Circuits.

Previously, questions about the application of the government privilege have been resolved by treating governmental entities like corporate entities. Just as the protection of the corporate privilege was extended to all corporate employees who spoke with a corporate attorney on matters within the scope of their employment, United States v. Upjohn, 449 U.S. 383 (1981), the privilege was similarly expanded in the government context.

But the Lindsey decision calls into question the viability of that corporate analogy. In the Lindsey case, one government agency, the Department of Justice (represented here by the Office of Independent Counsel) is given the power, without judicial supervision, to override the privileges of another agency, the Office of the President. This is consistent with the concept of the government as a single entity, like a corporation.

In fact, the U.S. government consists not of a single entity, but of three separate but equal branches. Thus, the single corporate analogy is not appropriate. More accurately, the U.S. government should be considered akin to three separate subsidiaries wholly owned by a single holding company--just as AT& T was the holding company for the Bell operating companies (which provided telephone service), Bell Laboratories (which invented phone equipment), and Western Electric (which manufactured the phones).

In the Lindsey case, both agencies were within the executive branch. But the logic of the decision gives the Justice Department the same power over communications of government employees in the legislative and judicial branches--so long as a criminal investigation of official conduct is being conducted. The problem is that established case law gives no corporate subsidiary the power to override the privileges of another subsidiary. Only the holding company has power over the separate subsidiaries, and there is no entity in the government context that personifies the "holding company."

B. The Big Question

The logic of the Lindsey decision raises another significant question relating to differences between the branches: Is there no government privilege for purposes of congressional subpoenas? Although Congress is not responsible for prosecuting individual criminal acts, its legislative responsibilities are, in many respects, far more important to the public than the resolution of a single criminal matter. Since generally the attorney-client privilege has been as applicable to congressional hearings as to grand jury and judicial proceedings--that is, Congress in practice (if not in theory) has respected the privilege--does the Lindsey reasoning render the government privilege permeable to congressional subpoenas, regardless of whether criminal activity is being examined?

Even if it were clear in the wake of the Lindsey decision that the corporate analogy should continue to be followed in judging other uses of the government privilege, that wouldn't mean that a more comprehensive Supreme Court opinion wasn't needed. An identical tracking of corporate law in judging the government privilege could still create serious problems in the political environment. For example, do successors in the government context have the same power over the privilege as in the corporate context? Under Commodity Futures Trading Commission v. Weintraub, 471 U.S. 343 (1985), outgoing executives lose control over corporate privileges to their successors. This is true even if the executives were personally involved in the communications, and the disclosure of them could expose those executives to civil or criminal liability.

If this were applicable to government officials, a Republican successor to President Clinton could waive all White House privilege claims, thereby forcing now current White House counsel to testify in any future federal criminal or civil court proceeding. Conversely, President Clinton would be in control of the privilege protection applicable to communications between President Ronald Reagan and White House counsel during the Iran-Contra period. He could waive those privilege protections and, subject to other protections not being applicable, compel former White House counsel to reveal what Reagan knew about the operations of Oliver North. Of course, the Lindsey decision now permits any D.C. grand jury that might investigate possible perjury by Reagan (when he testified that he had no knowledge of North's actions) to compel the testimony of the former president's White House counsel.

In the corporate context, there is ample precedent for compelling testimony under circumstances similar to those in the Lindsey case. Courts have given shareholders access to privileged corporate communications when fiduciary duties may have been breached by officers and directors whose communications with corporate counsel might provide evidence of those violations. Under the widely followed decision in Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970), cert. denied, 401 U.S. 974 (1971), the attorney-client privilege may be overridden upon a demonstration of "cause," which includes such considerations as the bona fides of the claim, the percentage of stock represented by the plaintiff shareholders, the availability of other evidence, and the nature of the illegality alleged.

While acknowledging this authority in its Lindsey decision, the D.C. Circuit chose to ignore the arguments for a balancing test and to support instead an outright denial of the privilege vis-a-vis grand jury subpoenas. It did so for the specious reason that the Supreme Court had unanimously reversed the circuit's decision in Swidler & Berlin v. United States, 118 S. Ct. 2081 (1998), because the circuit had employed a balancing test to conclude that Vincent Foster's attorney-client privilege did not survive his death. But the Supreme Court's rejection of the balancing test in the context of a private individual's right is not dispositive of modifications of the same right in the corporate and government contexts, where it is the entity, not the individuals involved, that is afforded protection.

The Garner precedent would have been the perfect solution to the Lindsey case. The independent counsel clearly represented the interests of all government "shareholders," he was conducting an investigation of a criminal matter, there was no other source of such information, and a bona fide claim was shown to have existed. Therefore, Kenneth Starr should have been given access to the communications, but under a theory that required judicial oversight.

In theory, the Lindsey decision should not have a significant impact on communications between government employees and government lawyers, since current analogies to corporate law give no protection to individual employees in any case. In practice, however, the decision may have an educational impact, alerting government employees to the reality under which they have always worked. As predicted by Justice Stephen Breyer in his opinion dissenting from the denial of certiorari, government employees may be prompted to "choose the cautious course, holding back information from Government counsel, perhaps hiring outside lawyers instead."

In rejecting the corporate precedent, the D.C. Circuit gave unbridled power to the Justice Department and to any appointed special prosecutor to get around any other agency's attorney-client privilege by initiating a grand jury investigation. With the potential for independent prosecutions to become politically charged, such outright power is inappropriate.

Yet the Supreme Court simply walked away from the case. In so doing, the Court not only called into question the relevance of the admittedly imperfect corporate analogy, but destabilized an entire body of law relative to the scope and application of the government privilege. At the same time, the Federal Rules of Evidence Advisory Committee is apparently unwilling to touch the privilege rules, and Congress provides no comprehensive solution but sporadically dots the landscape with privilege legislation (for example, the recent extension of the attorney-client privilege to accountants serving as tax advisers). The Supreme Court cannot, in good conscience, afford to pass up opportunities to address such critical issues.