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Foreign Courts and Foreign Cars

I just returned from an overseas family vacation where I boldly decided to tour the countryside in a rental car.  I confess to having been a bit unprepared for the challenges of driving in a foreign country.  For example, I was embarrassed to discover that the sign that read “60” was a reference to the speed limit, not Route 60, the road on which I was supposed to have been driving.  That set me back a good half-hour.  And while I tend to rely on Siri for directions, she doesn’t do foreign languages well (her “turn left on Rehov Mendele Mocher Sefarim” was not helpful).  Perhaps most jarring, who knew that the protocol for informing a driver that he is in the wrong lane is to get out of one’s car, scream bloody murder, bang on the offender’s (my) window with both fists, and repeatedly kick the side of the car?  My driving experience bore greater resemblance to the chase scene from Bullitt than a relaxing ride in the Family Truckster.

As hard as it is to drive in a foreign country, protecting client confidences when dealing with someone in a foreign country can be an even greater challenge.  Varying legal cultures (most countries don’t have broad discovery mechanisms like we do) and different regulatory regimes (many countries have different categories of “legal professionals”) lead to a hodgepodge of rules around the globe.  (In China, for example, while there is a duty of confidentiality for “private information,” that duty may be trumped by a lawyer’s oath “to be faithful to the motherland and the people [and] to uphold the leadership of the Chinese Communist Party and the socialist system.”) 

Although we in the US take for granted that a communication between an attorney and his or her client will be protected from disclosure, a communication that might be recognized as privileged in a US court, might not enjoy the same protection in a foreign tribunal.   By the same token, where alleged privileged communications took place in a foreign country or involved foreign attorneys or proceedings, US courts won’t necessarily recognize a privilege; they may defer to the law of the country that has the “predominant” or “most direct and compelling interest.”  Astra Aktiebolag v. Andrx Pharmaceuticals, Inc., 208 F.R.D. 92, 98 (S.D.N.Y. 2002).

Akzo Nobel Chemicals Ltd v. European Commission, Case C-550/07-P (September 14, 2010), is required reading for anyone advising a client in the EU.  In that case, the European Court of Justice determined that a company is entitled to confidentiality protection only with respect to communications emanating from “independent lawyers.”  The court further found that in-house counsel did not qualify as “independent lawyers”; thus, in-house counsel’s communications with employees were not subject to protection.  Akzo (and other EU decisions) can have serious consequences for US lawyers.  Since US attorney-client privilege is based on assumption that client has a reasonable expectation of confidentiality, litigants may argue that US companies have no reasonable expectation of confidentiality in communications to and from in-house counsel shared with company personnel in Europe.   Akzo also left open the question of whether communications with non-EU regulated attorneys (i.e., US admitted attorneys) would be protected in EU proceedings. 

Cross-border representations, like driving, can be fraught with peril.  Before doing either, make sure you familiarize yourself with local laws and procedures.

Merry New Year

As the year comes to a close, we are inundated with articles and news stories about the “Best of 2013”– best videos, best sports moments, best movies, best songs, etc. But asking us to pick the year’s best Risk Tips is a little like asking a parent to pick their favorite child. And at the end of the day (or year) it’s not about which Tip had the best clip, it’s the lessons learned. So, in no particular order, here are some of the takeaways from this year’s Tips:

*Confidentiality: Remember the Harry Potter lawyer who spilled JK Rowling’s alter ego to his wife’s best friend? Rowling’s lawsuit against the firm was settled for an undisclosed amount.
*Dishonesty: Let’s not forget the big firm lawyer who was disciplined for submitting fake expense reports to his firm.
*Scams: No matter how many times we warn people about unsolicited emails from a foreign country, from a legitimate company that checks out, but whose CEO inexplicably uses a gmail account, and having splling mitstakes and not well grmmer, those email scams keep coming.
*Data security: Change passwords often, make them strong, and keep your head (or at least your documents) out of the Clouds.
*Civility: Be nice, even when your adversary calls you a Jerk . . .or when someone maligns the Steve Martin classic.

Ok, who are we kidding; of course it’s about which clip is the best. And while we can’t pick the best Tips of 2013, you, our loyal readers, can. Let us know your top choice.

Lastly, click on the attached for a New Year’s greeting from OGC.

Stranger Danger

When Martha Stewart was in the middle of her legal troubles, she wrote an email to her lawyer, describing in great detail the circumstances surrounding her purchase of ImClone stock.  The next day, she forwarded a copy of the email to her daughter.  Boom!  Attorney-client privilege waived.  US v. Stewart, 287 F. Supp. 2d 461 (S.D.N.Y. 2003).  Happily for Ms. Stewart, the email was still subject to work product protections.

A plaintiff’s lawyer decides to generate some publicity for his case by inviting a film crew to follow him around and film his work.  Whoops!  Motion to compel production of six hundred hours of footage granted.  Chevron v. Berlinger, 629 F.3d 297 (2d Cir. 2011).  Indeed, the privilege waiver snowball started rolling, such that the lawyer was later ordered to turn over two hundred thousand pages of his client files and sit for his own deposition.   

This tip is simple:  Sharing attorney-client communications, whether due to the actions of the lawyer or the client, whether contemporaneously or after the fact, can waive privilege protections.  Be careful about meetings with clients who wish to bring their spouses, children, or other advisers.  Be careful of conversations in airplanes, elevators, and hotels.  Don’t leave confidential information laying around conference rooms, coffee shops, or other places where others might access.  In other words, don’t bring a stranger into your attorney-client relationship.

Do Gentlemen Read Your Mail?

Many attorneys use their work email for personal purposes, now and then.  So do many clients.  Where individuals use work email and computers to communicate with their personal lawyers, there is a risk that those attorney-client communications may not be privileged — particularly when the employee is in a dispute with the employer who has provided the employee with the computer and internet connection in the first place. 

The Delaware Court of Chancery recently became the latest court to reject a privilege claim in In re Information Management Services.  There, shareholders owning 50% of IMS stock accused three senior officers of breach of their fiduciary duties.  The officers consulted their personal counsel using their work email accounts.  When the shareholders sought production, the officers claimed privilege.  But the IMS Policy Manual warned employees that IMS had unrestricted access to communications sent using its computers and that personal use of those computers should not be considered private. Confidentiality of the communication is essential to claim privilege, and the court found that the officers had no reasonable expectation of confidentiality, and had therefore waived any privilege as to these communications. 

This issue can arise even when the worker uses an external, password-protected email account, but accesses it through a work computer, which may save back-ups of work done on the computer.  That was the fact pattern in Stengart v. Loving Care Agency.  There the privilege was upheld, based on a factual analysis of employee expectations in the context of the employer’s policy on computer use as expressed in their employee policies.  However, two courts in neighboring New York reached a different conclusion, one with fairly similar facts. 

In light of the conflicting authority and detailed factual distinctions, it is highly desirable to advise individual clients not to communicate (at least not on anything sensitive) with outside lawyers using their work computers.  When advising corporate clients about matters involving company personnel, it is equally important to be aware of the developing law in this area.

In 1929, so the story goes, Secretary of State Henry Stimson (pictured below) shut down the State Department’s code-breaking department, purportedly remarking that “Gentlemen don’t read each other’s mail.”  As noted in one biography:   “He later reversed this attitude.”  Careful lawyers and their individual clients — both ladies and gentlemen —  need to be well aware of Stimson’s “reversed attitude” these days, and behave accordingly.

 Stimson