ML20057B794

Partially Withheld Commission Paper Analyzing Responses of Parties to 831117 Commission Order

ML20057B794
Person / Time
Site:	Catawba
Issue date:	12/02/1983
From:	Plaine H NRC OFFICE OF THE GENERAL COUNSEL (OGC)
To:
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References
FOIA-92-436 SECY-83-490, NUDOCS 9309240017
Download: ML20057B794 (35)

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~ /*"%, l December 2, 1983 SECY-83-490 ADJUDICATORY ISSUE ,

(Affirmation)

For: The Commissioners l From: Herzel H. E. Plaine  :

General Counsel {

Subject:

DECISION ON STAY IN CATAWBA (DUKE POWER COMPANY) l t

Purpose:

To analyze the responses of the parties to the

, , Commission's Order of November 17, and to propose .

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Discussion: I. Introduction On November 17, 1983, the Commission issued a .

brief order in the Catawba operating license proceeding, inviting submissions from the parties on whether orders of the Licensing and Appeal Boards relating to contacts between attorneys and witnesses should be stayed. The Commission's.

order posed four specific questions and also asked whether the stay criteria established by 10 CFR S 2.788 (e) had been met. On November 23, responses were received from the applicant, Duke

Contact:

Peter G. Crane, OGC, 41465 Infortnation in this reewd ivas de!Med in accordance with the freedam of informaban 9309240017 930428 &pi Act, excm F0!A- - ^ nsy . yyj_ __. q PDR FDIA rti GILINSK92-436 PDR' [M i

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• n i 2 Power;thejntervenor,PalmettoAlliance;andthe NRC staff.

Briefly, on the central issue -- whether certain of Duke's employees, whose testimony in the hearing is sought both by Duke and Palmetto, o.f are A

" clients" of Duke's lawyers r._ourposes  ;

g rney-c_Uent privilege -  ;

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u or Duke, on the other hand, argues that the employees in question are " parties" to the proceeding and

" clients" of' Duke's lawyers; that the attorney-  :

1 client privilege permits Duke to bar them from talking with Palmetto's lawyers; that the Disci- l plinary Rule 7-104 of the American Bar Association forbid such contacts, whether or not the Licensing Board purports to allow them; that Duke is likely to prevail on the merits; and that it meets all ,

other criteria for the grant of a stay. ,

l OGC's supary_and analysis _Qf._the_S.ubmissions r ~swa, foll Our conclusion is that  !

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l I On November 23, before the expiration of the period for filing comments, the Government Accountability Project filed an amicus brief on behalf of Palmetto. On December 1, eight days after the comment l

period expired, the Atomic Industrial Forum filed an amicus _ brief, accompanied by a motion for leave to file out of time. That motion stated that the AIF did not learn of the Commission's order.until four days af ter it was issued, and that time was consumed in obtairting, N necessary approvals for the filing of a'i~Wur brief opinion f.Our review ,

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• ,1* ,ai prepared a draft order in accordance with these views.

II. Filings of the Parties For clarity, we will summarize the views of the parties, together with OGC's analysis, on_each question in turn. It should be borne in mind, as one reads the summaries of each party's views, that what is summarized is that party's character-  :

ization of applicable law and court decisions.

The validity of those characterizations will be discussed in the OGC analysis that follows the summaries.

A. Is there an attorney-client relationship -

between Applicant's attorneys and its witnesses, and if so, why? ,

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1. Duke Power Company Argument Yes, there is an attorney-client relationship. ,

The witnesses work for Duke, either as welding inspectors or as their supervisors. They all ,

agreed to testify at Duke's request. Pre-filed testimony was filed for all of them before the hearing began. The interests of the witnesses have not been shown to be inconsistent with In Duke's interests, or consistent with Palmetto's.

fact, their interests are consistent with Duke's, since each witness states that Duke's quality i assurance program at Catawba was adequate.

The Licensing Board erroneously adopted the

" control group" test for determining which employ-ees of a corporation should be considered

" clients" whose communications with counsel for the corporation are therefore privileged. The

" control group" test was improper, since it was rejected by the Supreme Court in Upjohn Co. v.

United States, 449 U.S. 383 (1981). In Upiohn, the Court held that corporate employees' responses to questionnaires from in-house counsel, in connection with a legal investigation, and those employees' statements during later interviews with in-house counsel, were protected by the attorney-client privilege. The Court rejected the view that only the " control group" of corporate manag-ers can be " clients". The Court stressed that the  !

attorney-client privilege existed not only to l protect the giving of legal advice to senior 1 managers, but also to protect the giving of 1 information to lawyers so that those lawyers can l

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4 formulate sound advice. The Court criticized the control group test, which,.it said, ignored the fact that middle-level and even lower-level company employees can, by actions within the scope t of their employment, embroil the company in -

serious legal difficulties, and that these employ- t ees would naturally have information needed by ,

company counsel in order to advise the client properly. The Court explained that it is often those non-control group members who are most in a need of the protections afforded by the attorney-client privilege. It stated that the attorney's ,

advice will often be more significant to non-control group members than to the control group.

The lower court's control group test, said the Supreme Court, would make it more difficult to convey full and frank legal advice to the employ- ,

ees who will put company policy into effect.

Based on Upjohn, an attorney-client relationship exists. At issue is the protection of the flow of information from the Duke employee witnesses to Duke counsel, and the giving of professional ,

advice by Duke counsel to the employees. As in,  ;

Upjohn, the company is trying to assert the  :

attorney-client privilege on behalf of middle-level and lower-level employees whose actions were t taken in the scope of their employment, and whose

'information is needed by company counsel for  ;

litigation purposes.  ;

The existence of the attorney-client relationship is confirmed by Harper & Row v. Decker, 423 F.2d '

487 (7th Cir. 1970), aff'd per curiam by an equally divided court, 400 U.S. 348 (1971).  ;

contacts between the Duke employee witnesses and corporate counsel are being made at the direction of their superiors, and the subject matter is the employees' performance of their duties. The -

Commission should know that the communications which have'already taken-place between Duke -

counsel and the employee witnesses were presumed ,

to be privileged, and have included discussions of the thoughts, impressions, views, and trial j strategy of Duke counsel.

The Appeal Board's modification of the Licensing  ;

Board order to prohibit Palmetto's lawyers from  ;

inquiring into the witnesses' consultation with 3 Duke counsel does not alleviate the violation of' i attorney-client privilege, since Duke's counsel l will have no way of ascertaining whether 1 Palmetto's counsel is complying with the ]

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restriction. Duke's witnesses are thus being denied their right to counsel, in addition to the ,

infringement on the attorney-client privilege. ,

2. Palmetto Alliance Argument The underlying dispute in this case involves the quality of welding at the plant. Palmetto obtained documents from welding inspectors reveal- '

ing pressure from Duke management to circumvent quality control procedures and to retaliate against employees who raised concerns over quality _

control violations. Palmetto therefore determined to call quality control inspectors as witnesses, and began to depose those potential witnesses who had not already prepared statements of their intended testimony. Before Palmetto designated and subpoenaed them, however, Duke designated the same quality control inspectors as its own wit-nesses, and now claims that it alone may talk to the witnesses during breaks in the hearing and after hours.

Duke's case on the question of a stay is based'on .

a blatant misreading of the Upjohn decision. Duke ;

claims that because Upjohn rejected the " control group" test, all corporate employees can be prevented from talking to opposing counsel. In fact, the case makes clear that though certain communications may be subject to attorney-client privilege, that does not prevent discussions of the underlying facts between corporate employees and attorneys for the other side -- provided that -

the employee wishes to engage in such a discussion.

The general rule on talking with an opponent's witnesses is established by the annotations to the very disciplinary rule (DR 7-104) that Duke claims ,

would be violated by contacts between the wit-nesses and Palmetto counsel. That rule is that .

attorneys are free to interview the intended witnesses of the other party without the consent -

or presence of opposing counsel. It is clear that  ;

justice and settled law allow Palmetto to talk to >

all of Duke's employee-witnesses who are not

" parties" to the action. Established case law and the Code of Professional Responsibility agree that the term " party" does not include all corporate employees, just senior executive officers who can be held personally accountable for corporate '

conduct.

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• 14 B. Are Applicant's Witnesses "A Party" In The Context Of ABA Disciplinary Rule 7-104?'

l. Duke Power Company Argument Yes, the witnesses are parties. Applicable case law applies the term " party" broadly, to include such individuals as the unindicated target of a grand jury investigation, when that person has retained counsel, a lienholder represented by counsel in the non-litigation setting, and grand jury witnesses represented by counsel. But the Disciplinary Rule does not depend on party or non-party status, it depends on the existence of an attorney-client relationship.

2. Palmetto Alliance Argument No, they are not. Case law suggests that the term

" party" cannot be stretched to include all of a While senior managers may be company's employees.

considered parties, the welders and welding inspectors at issue here cannot. The fact that,a person appears as a witness does not make him a party. There is, moreover, no identity of inter-ests between the employees, who raised concerns f~

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C Does The Validity Of The Board's Orders Depend Upon Whether The Witnesses Are

" Clients" Or " Parties"?

A. Duke Power Company Argument Yes. As demonstrated in response to question 1, Upjohn dictates that the attorney-client relation-ship applies to these witnesses, who are therefore

" clients" and " parties." The Licensing Board's order fails to recognize this and is therefore invalid.

B. Palmetto Alliance Argument No. The validity of the orders does not depend on whether the witnesses are clients or parties.

Even if clients, they could be questioned on underlying facts.

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D. A here Any Circumstances Und Which Applicant's Witnesses, Who Are Also Its Employees, Simultaneously Can Be Inter-venor's Witnesses? If So, Are Those Circumstances Present In This Case, And What Effect Does This Have On The Validity Of The Board's Orders?

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1. Duke Power Company Argument The only circumstance in which that could arise would be if the applicant were to call an employee as a witness on one subject and the intervenor were to call the same witness on another subject.

Here, however, the witnesses are exclusively Duke's. Palmetto can not, by subpoenaing Duke's ,

witnesses or calling them as witnesses, defeat an existing attorney-client relationship. Palmetto had ample opportunity to seek information from the witnesses during the discovery process, but it failed to make use of that opportunity. ,

2. Palmetto Alliance Argument When, as here, certain witnesses have information essential to both sides, it is fair to treat them as witnesses of both sides. The Commission need not reach the question whether witnesses may appear for both sides, since it is well estab-lished that a party has the right to question witnesses without the presence, permission, or even knowledge of opposing counsel. The answer to ,

this question thus does not affect the validity of the Board's orders.

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E. Criteria For A Stay Rather than describe in detail the parties' views

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on whether the criteria for a stay have Duke, been which met, I we will summarize them very briefly.

has the burden of showing that the criteria for a stay have been met, asserted in its November 15 motion that it has a high likelihood of prevailing {

on the merits, that it will suffer irreparable '

injury if the stay is not granted, that other parties would not be harmed by the grant of a stay, and that the public interest in assuring ethical conduct by attorneys favored the grant of

( a stay. It did not supplement this discussion of ,{

I the stay criteria in t is filing it submitted on l November 23. Palmetto . . . . '~

I- the opposite view: no Rellhood that 6 uke ~will prevail on the merits, no demonstrated harm to Duke if the stay is denied, tangible harm to Palmetto if the stay is granted, and injury to ^~

public interest A e v is oranted s 3 As indicated in our discussion

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In accordance with these views, Q .,' D L.

Recommendation:

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Herzel H. E. Plaine General Counsel Attachments:

A. Draft Order B. Supreme Court decision in Upjohn

v. United States, 449 U.S. 383, 66 L.Ed.2d 584 (1981)

Commissioners' comments should be provided directly to SECY ASAP. .

This paper is tentatively scheduled for affirmation at an open meeting on Tuesday, December 6, 1983.

DISTRIBUTION:

Commissioners OGC OPE ,

SECY

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Attachment B I .

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.- 66 L Ed 2d i U.S. SUPREME COURT REPORTS 4 a l

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)' .3 y tus es sas) f- UPJOHN COMPANY et al., Petitioners,

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- UNITED STATES et al. .

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449 US 3S3,66 L Ed 2d 584,101 S Ct 677

• [No. 79- 886)

Argued November 5,1980. Decided January 13,1981.

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~ ~~ Decision: Communications between corporate general counsel and corpo- -

rate employees, held protected by attorney client privilege; work product  ;

~~ doctrine, held applicable to Internal Revenue Service summons.

SUMMARY

After a corporation's general counsel was informed of certain questionable

- H ':: payments made by one of the corporation's foreign subsidiaries to foreign

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government oscials, he began an internal investigation which included the Sending of questionnai.es to foreign managers seeking detailed information '

concerning the payments. Interviews were also conducted with the manag-

,. ers and other corporate o$cers and employees. The Internal Revenue Service, during the course of an investigation to determine the tax conse-cog._ quences of the payments, issued a sumtoons pursuant to 26 USCS 9 7602 4- d. L demanding production of. among other things, the questionnaires and the general counsel's notes on the interviews. The corpora: ion declined to d

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-M F produce the material sought on the grounds that it was protected from disclosure by the attorney client privilege and constituted the " work prod-

- n- uet" of an attorney prepared in anticipation of litigation. The United States

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. . sought enforcement of the summons in the United States District Court for the Western District of Michigan, which adopted a magistrate's conclusion

' that the summons should be enforced. On appeal, the United States' Court of

.;j. Appeals for the Sixth Circuit held that the attorney <lient privilege did not

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. "J apply to the extent the communications were made by c5cers and agents not responsible for directing the corporation's actions in response to legal L.[

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~ advice, because the communications were not those of the " client," and that ,*

the work-product doctrine did not apply to IRS summonses (600 F2d 1223).

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' '# On certiorari, the United States Supreme Court rev'ersed and remanded. i le . ' {. -

• Briefs of Counsel, p 967, infra.

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• UPJOHN CO. v UNITED STATES *

! 449 US 383. 66 L Ed M '.S4.1015 Cr 677 i In an opinion by RnnvertsT, J., joined by BRExNAN, STEWART, WHrrE,

yesH4u., Bl.ACKMUN, POWEt.t, and STEVENS, JJ., and joined in pertinent part by Beacat, Ch. J., it was held that (1) the communications between the ccrporation's employees and the general counsel, which were evidenced both by the responses to the questionnaires and by notes taken by the general counsel refecting employee responses during the interviews, were protected i by the attorney-client privilege, and acecrdingly disclosure of such commu-nications could not be compelled by the Internal Revenue Service pursuant to an admuustrative summons under i7602 since the communications at issue were made by the employees to the general counsel, acting as such, at the direction of corporate superiors, in order to secure legal advice from counsel, and concerned matters within the scope of the employees' corporate duties, and (2) the work-product doctrine may be applied to tax summonses issued by the Internal Revenue Service under 9 7602, and therefore the work prtduct of the corporation's general counsel, including notes and memoranda based on the oral statements of employees interviewed by the attorney, to the extent such material did not reveal communications already prmected by the attorney-client privilege, did not have to be disclosed to the Internal Revenue Service simply on a showing of" substantial need" and the inability to obtain the equivalent "without undue hardship," especially in .

view of Rule 26 of the Federal Rules of Civil Procedure which accords and corpo- =:wial protection to work product revealing an attomey's inental processes.:

irk-product BeacEx, Ch. J., concurring in part and concurring in the judgment, agreed with the court's holding as to the work-product doctrine, and ex-pressed the view that the cou:'., although properly holding that the commu-2estionable nications in the casa at bar were protected by the attorney-client privilege, to foreign shou]d have made clear that, as a general rule, a communication is privi-

.cluded the leged at least when an employee or former employee speaks with an aformation attorney at the direction of the management regarding conduct or proposed he manar-conduct within the scope of employment, provided the attorney is one J Revenue authori:ed by the management to inquire into the subject and is seeking tax conse-information to assist counsel in evaluating whether the employee's conduct has bound or would bind the corporation, assessing the legal consequences.

SCS $7602 es and the if any, of that conduct, or formulating appropriate legal responses to actions

!eclined to that have been or may ba taken by othe-s with regard to that conduct.

eeted from work prod-Jted States t Cour: for conclusion es Court of ege did not -

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." and that "d1223L remanded.

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. HEADNOTES ,

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u Canifed m U.S. Supre:ne Court D: gest. Lawyers' Edition

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Internal Revenue i 74.5 - IRS sum- investigation USCS i7602.during the course of an mto the tax consequences

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.. mons - corporate co:nmunica- of the pay: tents, where the commn*m-

-p s t f tions - attorney-client privilege tions at issue were made by the corpora-i i^ ,

la Ib. Co:nmunications between cor. tion's employees to the general counsel.

i-porate ernployees and a corporation's ac.ing as such, at the direction of corpo-l general counsel-whi:h are evidenced rate superiors in order to secure legal Ip' i ' both by responses to questionnaires edvice from counsel, and where the com-

<fg made by the corporation's foreign man- munications concerned matters within g agers in connectics with a corporate the, scope of the employees corporate

,4 4 investigation into qu~stiona'.Je payments dunes.

W' made to foreign govern =ent ' o$cials, B- and by notes taken by the general coun- Internal benue i 74.5 - IRS sum-h .'

se! resecting res;ceses in inten iews mons - work-product doctrine p;; 2a, 2b. The work-product doctrine is with corperste e:nplcyec;-are protected applicable to tax summonses issued by

[. by the aticeney-client privilege, ar.d ac- the Internal Revenue Service under 26 pj cordingly disclosure of such communica-3' tions may cet be compelled by the Inter- USCS i 7602; acco-dingly, the work

y. ~ nal Revenue Service pursuant to an ad- product of a corporation's general coun-

'k,* ministrative summons issued under 26 sel including actes and me norsn:ia m

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t TOTAL CLIENT SERVICE IJERARY! REFERENCES

h. .

p. .

35 Am Jur 2d, Federa! Taxation ;[ 9003. 9024 II Am Jur P1 & Pr Forms (Rev), Federnl Practice and t.. -

h..

?; -

Procedure, Form 1093.2 c' a  :-

13 Am Jur Trials 1, Defending Federal Tu Evesion Cases 64 26 USCS { 7602 9- RIA Federal Tax Cocrdinatcr 2d U T-1135 et seq.

L US L Ed Digest, Internal Revenue f 74.5 y j, L Ed Index to Annos, Attorney and Client: Income Taxes y: I ~.

ALR Quick Index, Disecvery; Income Taxes; Privileged and Erl '

12 Con 5dential Matters

- d :"

Federal Quick Index. Privileged Communications; Tax En-M ' t, forcement; Work Product Doctrine M^'.

.e a ANNOTATION Ru utENCES 15

.3 4 Whr.t :.a e s a.re rrc.r.ed by stwrneydent privCege or are proper rdject of mqury by Intern:d T.evenue Sem.r when atmrr.cy .s "' st='noced in ~ eor.nection

"* t f e.th taxpayer-clie:t tr.2er federal ta.x exa:ninanor.15 ALR Ted

,%. Atwrney-dient privCege in federal :ourts under what circu:nr.ances can corpo-P*

• / 4 rs:m ::aun privCege for cornmunications frces ia e=p! oms and agent corpars-tien's atwrney. 9 ALR Ted M5.

LA t. f , v Taybr, of " work pr-2xt* d:crea. 35 ALR3d .

Develepn2ent, ainee HVr an

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. i 66 L Ed 2d UPJOHN CO. v UNITED STATES 449 US 383. 66 L Ed 2d M4.101 S Ct 677 based on the oral statements of corpo- ilege - scope of protection rate employees intemewed by the atter. 3. The attorney-client privilege exists course of an . ney in connection with an investigation to protect not only the giving of pref --

consequences into questionable payments made to for- sional advice to those who can act en it, e communica- eign govemment o5cials-to the extent but aho the giving of information te the i v the corpora- such materials do not reveal communica- lawyer to enable him to give sound and

' eral counsel, n tiens already protected by the attorney- informed advice.

tion of corpo- client privilege-need not be disclosed to .

i secure legal the Internal Revenue Service during the Evidence j 699 - attorney client priv-llege - scope of protection -

here the com- course of a tax investigation into the atters within payments. simply on a showing by the aus un er c mmun cadons es' corporate Service of " substantial need" and the ammey ent prWe only E" ## # "#' " "" #* * **; 5*

inability to obtain the equivalent with- does not protect disclosure of the under.

- IRS m out undue hardship" especially in view lying facts by those who communicated tdxtdu f Rule 26 of the Pederal Rules of Civil with the attorney.

- doet Pr cedure, which accords special pmtee-L gg'g"' tion from disclosure to work product Internal Revenue 174 5 - tax sum.

. ice under 26 reve% an ammefs mental pmcesses, mons ---

tud!donal psileges

, the work such as the general counsel's notes and and limitations gener:] coun- rnemoranda. 5. The obligation , imposed by a tax memoranda summ ns remains subject to the tradi.

Evidence i 699 - attorney client priv- tional privileges and limitations. ,

SY1.LABUS BY REPORTER OF DECISIONS

'gg i 1 When the Geners] Counsel for peti- privilege and constituted the work prei -

tiener pharmaceutical manufacturing uct of attorneys prepared in anticipation and c rp rati n (hereafier petitioner) was in- of litigation. The United States then formed that one of its foreign subsidiar- Eled a petition in Fedem! District Coun ies had made questionable partments to seeking enforcement of the summons.

s foreign governtsent c5eials in order to That coun adopted the Magistrate's r-c.

secure govemment business, an internal ommendation that the summons should investigation of such payments was initi- be enforced, the Magistate having con-sted. As pan of this investi;ntion, peti- cluded, inter alia. that the attorneyeli-tioner's attorneys sent a questionna re to est privilege had been waived and that all foreign managers seeking detailed the Government had made a suscient and information concerning such payI:enta- showmg of necessity to overcome the and the responses were returned to the protecnon of the work-product doctrine.

En- Geneml Cowel. General Counsel and outside counsel also miem,ewed the The Court of Appeals rejected the Magis-trate's Ending of a waiver of the atter-recipients of the questic.inaire and other nepelient privilege, but held that under company cScers and empicyees. Subse- the so called " control group test" the quently, based on a repon voluntarily m ed by peWomer disclosmg the privilege did not apply "[t)o the extent ctueet of that the comtnunications were made bv

, questionable payments, the Internal Rev-enue Semce (IRS) began an investiga- e5cers and agents not responsible fo'r

, tion to determine the tax consequences, directing [ petitioner's) actions in re-of such payments and issued a summons

,, g , , , g g ,;

corpo ,

pursuant to 26 USC i 7602 [26 USCS reason that the communications were

M.R3d p 7602) de=anding nroduction of, inter not the , client,s.,,, The coun'also held alia, the questionnaires and the memo- that the work-product doctrine did not rands and notes of the interviews. Peti- apply to IRS summonses.

tioner refused to produce the documents O#]d#

on the grounds that they were pmtected L The communicat.ons by petitioner,s from daclosure by the attorney-client employees to counsel are covered by the 587

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• 'i f t'  !

attorney client privilege insofar as the counsel for petitioner acting as such, at II'. "f ., I -

I responses to the questionnaire and any the direction of corporate superiors in -

E 45 23  ! ' notes resecting responses to interview order to secure legal advice from coun-i . !' .' : questions are concerned. sel. Information not available from up-

't (a) The control group test everlooks per-echelon management was needed to lEj3;

.e-the fact that such privilege er.ists to supply a basis for legal advice concern-protect not orJy the giving of profes- ing compliance with securities and tax

!8*. sional advice to those who can act on it laws, foreign laws, currency regulations,

-( ?,

L but also the givmg of information to the duties to shareholders, and potential liti-lawyer to enable him to give sound and gation in each of these areas. The com-

4 , .i informed acvice. While in the case of the munications concerned matters within W} individual client the provider of informa- the scope of the empicyees' corporate s!i iM

> tion and the person who acts on the duties, and the employees themselves lawyer's advice are one and the sarne, in were susciently aware that they were

• [* the corporate contert it will frequently being questioned in order that the corpo.

be employees beyond the control group ration could obtain legal advice. ,

4;.- (as denned by the Court of Appeals) who 2. The work-product doctrme applies will possess the information needed by to IRS summonses.

d I ,: the corparation's lawyers. Middle-level- (a) The obligation imposed by a tax

.t.; ' and indeed lower-level-employees can, summons remains subject to the tradi.

.1,. by actions within the scope of their em. tional privileges and limitations, and T ployment, embrou the corporation in se- nothing in the language or legislative rious legal di5eulties, and it is only history of the IRS summons provisions

- 1,f}' natural that these employees would have suggests an intent on the part of Con-h{ g the relevant infor=ation needed by cor- gress to preclude appliention of the -

. , . porate counsel if he is adequately to werk product doctrine.

.t,' *$o, 2 advise the client with respect to such actual or potential di5:ulties (b) The Magistrate applied the wrong standard when be concluded that the 4i .- (b) The control group test thus frus. Gevernment had made a su5cient show.

trates the very purpose of the attorney- ing of necessity to evercome the pretec-

. i; , client privilege by discouraging the com- tions of the work-product doctrine. The munication of relevant information by notes and memoranda sought by the

%- ' ~

employees of the client corporation to Government constitute work product attorneys seeking to render legal advice based on oral s.atements. If they reveal

'4 to the client. The attorney's advice will cortununicationr. they are protected by also frequently be more signifcant to the attorney-client privilege. To the ex-C noncentrol employees than to those who tent they do not revea! communications

~y o5cially sanction the advice and the they reveal attorneys' mental processes control group test makes it more diScult in evaluating the communications. As T@h to cenvey fun and frank legal advice to Federal Rule of Civil Procedure 26.

M the e=ployees who will put into effect which accords special protection from the client corporation's policy. disclosure to work praduct revealing an

3 (c) The narrow scope given the atter- attor

yy's mental prxesses. and Hick-ney-client privilege by the Court of Ap- man v Taylor,329 US 495. 91 L Ed 451.

-d; (~, - peals not only makes it discult for cor- 6 S Ct 385. 34 Ohio Ops 395, make

.t a potate attorneys to forrnulate sound ad- clear, such work product annot be ds-

,@ vice when their client is faced with a closed simply on a showing of substan-s ? .g speciSc legal proble= but also threatens tial need or inability to obtain the equiv-Q to limit the valuable effor:s of corporate alent without undue hardship.

counsel to ensure their client's compli- 600 F2d 1223, reversed and remanded.

W. '

.e as:e with the law. Rehnquist, J., delivered the opinion of

• M .i . (d) Here, the communications at issue the Court, in which Brennan, Stewart,

., were made by petitioner's employees to White. Marshall. Blackmun. Powell, and

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6 L Ed 2d -

UPJOHN CO. v UNITED STATES u9 US 383. 66 L Ed 2d 554.101 S Ct 677 as such, at Stevens, JJ., joined, and in parts I and C. J., filed an opinion concurring in part

periors in **

III of which Burger, C. J., joined. Burger, and concurring in the judgment.

kom coun- '

e from up. APPEARANCES OF COUNSEL l

"d*d ** Daniel M. Gribbon argued the cause for petitioners.

Lawrence G. Wallace argued the cause fo.r. respondents.

'.s

• cad  ;

egul ,tions,  ! Briefs of Counsel, p 967, infra. l

-ential liti-

, The com- '

OPINION OF THE COURT rrs within corporate 149 US 3861 business. The accountants so in-themselves Justice Rehnquist delivered the formed Mr. Gerard Thomas, petition- '

they were - opinion of the Court. . er's Vice President, Secretary, and e,

1. 1 [1a, 2a] We granted certiorari in General Counsel. Thomas is a mem- ,

ne a'pplies this case to address important ques- ber of the Michigan and New York ,

tions concerning the scope of the Bars, and has been petitioner's Gen-by a tax attorney-client privilege in the cor- eral Counsel for 20 years. He con- ,

the tradi- potate context and the applicability sulted with outside counsel anc R. T.

ions, end of the work-product doctrine in pro- Parfet, Jr., petitioner's Chairman of ceedmgs to enforce tax summonses. the Board. It was decided that the i

legislative provisions With respect to the privilege ques- company would conduct an internal it d Con- tion the parties and various amici investigation of what were termed .

m d 6e have described our task as one of " questionable payments." As part of choosing between two " tests" which this investigation the attorneys pre h[thf have gained adherents in the courts pared a letter containing a question-

.izntshow- '

of appeals. We are acutely aware, naire which was sent to ,All Foreign de protec. however, that we sit to decide con. Generni and Area Managers" over snas. The crete cases and not abstract proposi. the Chairman's signature. The letter at by the tions of law. We decline to lay down tus Us sarl c product a broad rule or series of rules to began by noting recent disclosures ,

hey reveal govern all conceivable future ques- that several Amenean compames steeted by tions in this area, even were we able made possibly illegal payments to ,

To 6 e es- to do so. We can and do, however, f re,gn government officials and em-i canons conclude that the attorney-client phasized that the management ,

,$$ privilege protects the communica- needed full information concerning tions involved in this case from com- any such payments made by Upjohn.

edure 26, tion from i pelled disclosure and that the work. T12e letter mdicated that the Chntr-man had asked Thomas, identified as reahng an -

product doctrine does apply in tax and Hick- -

summons enforcement proceedings. "the company's Genern! Counsel,"  ;

"to conduct an investigation for the L Ed 451, 395, make

• y purpose of determining the nature 2ot be dis- and magnitude of any payments if substan- Petitioner Upjohn manufactures made by the Upjohn Company or the equm and sells pharmaceuticals here and any of its subsidiaries to any em-  ;

abroad. In January 1976 indepen- ployee or oScial of a foreign govern- i nand,ed. dent accountants conducting an au- ment." The questionnaire sought de-

'P** ** 'I . dit of one of petitioner's foreign sub- tailed information concerning such 3 ,,g Powell, end sidiaries discovered that the subsid- payments. Managers were instructed lary made payments to or for the to treat the investigation as " highly

> benefit of foreign government o5- confidential" and not to discuss it g, cials in order to secure governtnent with anyone other than Upjohn em-l 589 I

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. U.S. SUPREME COURT REPORTS 66 L Ed 2d v: 4 .

%*'si 4

ployees who might be helpful in pro-viding the requested information.

ates, and memorandums or notes .

of the interviews conducted in the Q - (- Responses were to be sent directly to United States and abroad. with o5eers and employees of the Up.

7 ;r '

Thomas. Thomas and outside coun. t i  ; sel also interviewed the recipients of John Company and its subsidiar. .

. -l ; ". ] .

the questionnaire and some 33 other les." App 17a-18a. l 4tJ Upjohn c5cers or employees as part

$ . a,4 of the investigav. n The company declined to produce h, the documents speciSed in the sec.

.i y On March 26, 1976, the company ond paragraph on the grounds that

,,if: voluntarily submitted a preliminary they were protected from disclosure a;jp -

d report to the Securities and Ex. by the attorney-client privilege and change Commission on Form 8-K constituted the work product of at.

i disclosing certain questionable pay. torneys prepared in anticipation of I; J]ae !.k --

I

ments.8 A copy of the report was litigation. On August 31,1977, the simultaneously submitted to the In. United States filed a petition seeking i {.f ternal Revenue Service, which im. enforcement of the summons under ,

i,, mediately began an investigation to 26 USC ff 7402(b) and 7604(a) [26

! .L determine the tax consequences of USCS ff 7402(b) and 7604ta)] in the '

jI@ the payments. Special agents con. United States District Court for the

> f: ducting the investigation were given Western District of Michigan. That

, 7 l~ --

lists by Upjohn of all those inter. court adopted the recommendation -

viewed and all who had responded to of a Magistrate who concluded that i'.'. ' ^

the questionnaire. On November 23, the summons should be enforced. ,

1976, the Service issued a summons Petitioner appealed to the Court of [

I " :. ; d.. pursuant to 26 USC f 7602 [26 USCS Appeals for the Sixth Circuit which

!. - . . f 7602] demanding production of: rejected the Magistrate's finding of a j f e.$ - waiver of the attorney. client privi.

"All Eles relative to the investi. lege, 600 F2d 1223,1227, n 12, but

'jt.

,s.

gation conducted under the super. agreed that the privilege did not

'**f vision of Gerard Thomas to iden. apply "[t)o the extent that the com.

tify payments to e:nployees of for. munications were made by o5cers M.qM - eign governments and any politi. and agents not responsible for di.

e!- cal recting Upjohn's actions in response

- * .@ (us t'S 3381 to legal advic . . . for the simple contributions made by the Up- reason that che communications p.A john Company or any of its amli- were not the ' client's.'" Id., at 1225.

Q4 K ates since January 1,1971 and to The court reasoned that accepting

- 7,g determine whether any funds of petitioner's claim for a broader ap-c;.:ff the Upjohn Company had been plication of the privilege would en.

t - e t. improperly accounted for on the courage upper-echelon management ymh . corporate books during the 'aame to ignore unpleasant facts 'and cre-

. W

pen d.

ate too broad ,a " zone of silence."

IEO "The records should include but Noting that petitioner's counsel had

.4 not be liinited to written question. interviewed oscials such as the grE . naires .et t to managers of the Chairman and President, the Court -

p.,- 2R Upjohn Company's foreign affili. of Appeals remanded to the District

. . ,. y .

• Q

1. On July 28,1976, the company fled an amendment to this report disching further y paymen.L

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fif"Z5sM@23 h ## 4,WWWR-66 L Ed 2d UPJOHN CO. v UNITED STATES 449 US 333,66 L Ed 2 59.102 S Ct 677

=s or notes Coun so that a determination cf who Court, see Hunt v Blackburn.128 ueted in the tus Us 3ssl US 464,470,32 L Ed 485,9 S Ct 125

. bro 2d with was within the " control group" (1888) (privilege "is founded upon of the Up- .

could be made. In a corcluding foot- the necessity, in the interest and s subsidiar. note the coun stated that the work- administration of justice, of the aid product doctrine "is not applicable of persons having knowledge of the to administrative summonses issued law and skilled in its practice, which to produce under 26 USC y 7602 [26 USCS ass: stance can only be safelv and in the see- s 7602)." Id., at 122S. n 13. readilv availed of when free" from rounds that the e5nsequences or the apprehen-n disclosun U sion of disclosure"). Admittedly com-ridlege and plications in the application of the cduct of at- Federal Rule of Evidence 501 pro- privilege arise when the client is a deipation of vides that "the privilege of a witness corporation, which in thcory is an 1,1977, the . . shall be governed by the princi- arti5cial creature of the tion seeking ples of the common law as they may [449 t's 3901 mens under be interpreted by the couns of the law. and not 760ta) [26 United States in light of reason and an individual; but this Court has

)4(a)] in the experience." The attornev-client assumed that the privilege applies curt for the privilege is the oldest of the privi. when the client is a corporation, higan. That leges for eenSdential communica. United States v Louisville & Nash .

nm:ndation tions known to the common law. 8 J. ville R. Co. 236 US 318,336. 59 L Ed

.cluded that Wigmore, Evidence ! 2290 t Me. 598, 35 S Ct 363 (19151, and the e enforced. Naughton rev 1961). Its purpose is to Government does not contes: the he Court of encourage full and frank communi. general propositaon.

muit which cation between attorneys and the2 [3] The Court of Appeals, however, findmg of a ebents and thereby promote broader considered the application of the

bent privi- public interests in the observance of privilege in the corporate context to 4, n 12, but law and administration of justice. present a "different problem." since ge did not The privilege recognizes that sound the client was an inanimate entity at the com- legal advice or advocacy serves pub- and "oniv the senior managemeni, by oEicers be ends and that such acvice or guiding and integrating the several

~

ibl2 for di- advocacy depends upon the lawyer opera *sns, . can be said to pos-in response being fully mformed by the chent. sess an identity~ analegous to the As we stated last Term in Tremel corpo-ation as a whole." 600 F2d, at the simple nunications v United States,445 US 40, 51,63 L 1226. The first case to articulate the Id., et 1225. Ed 2d 156,100 S Ct 906 (1950r. "Tne so-called " control group test" t accepting lawyer <lient privilege res:s on the adopted bv the court below. Phila-broader ap- need for the advocate and counselor delphia v Westinghouse Electric

! wculd en. to know all that relates to the cli- Ccrp. 210 F Supp 453, 485 (ED Pa),

sanagement ent s reasons for seking upresenta- petition for mandamus and prohibi-

.ts and cre- tion if the professional mission is to tion denied sub. nom. General Elec-of silence." be carried out." And in Fisher v tric Co. v Kirkpatrick, 312 F2d 742 counsel had t United States. 425 US 391,403,48 L (CA31962), cert denied,372 US 943, ch as the Ed 2d 39, 96 S Ct 1569 (1976), we 9 L Ed 2d 9G9, S3 S Ct 93i (1963),

~

, the Court -

recognized the purpose of the privi. reflected a similar conceptual ap-the District j lege t be "to encourage cliens to Foa c.M

make full disclosure to their attor- " Keeping in mind that the ques-IW reAer neys." This rationale for the privi- tion is, Is it the corporation which lege has long been recognized by the is seeking the lawyer's advice 591 l

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• /, U.S. SUPREME COURT REPORTS 66 L Ed 2d  ;

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I when the asserted privileged com. of the client but also encourages 9- munication is made?, the most sat- laymen to seek early legal assis-

' l '. # ..

isfactory solution, I think, is that tance." .

c][ ,

if the employee making the corn-mumeation of whatever rank495, he511,

%& 91HihL Ed v451, TW67329 US S Ct 385, l

J. j

)! may be, is in a position to control

, j- i or even to take a substantial part 34 Ohio Ops 395 (1947).  ;

j, , in a decision about any action In the case of the individual client I. ,L which the corporation may take the provider of information and the

-ih upon the advice of the attorney, person who acts on the lawyer's ad-g

. . . then, in effect, he is (or per- vice are one and the same. .m the  :

e3,s- sonides) the corporation when he corporate context, however, it will makes his disclosure to the lawyer frequently be employees beyond the Q

.h {i

j ,

, and the privilege would apply" control group as de6ned by the court (Emphasis supplied.) below "of5cers and agents . . re-

• i, sponsible for directing [the compa-  !

,. g Such a view, we think, overlooks the ny's) actions in response to legal

, i n,y,e , fact that the priv21ege exists to pro- advice"-who will possess the infor- l

,jt_ teet not only the givmg of profes- mation needed by the corporation's i

. ,, ; sional advice to those who can act b yers. Middle-level-and indeed '

• : 2. , on it but also the giving of informa- lower-level-employees can, by ac.

, li' tion to the lawyer to enable him tions within the scope of their em-  !

e p give sound and informed advice. See ployment, embroil the corporation in

. ji3 Trammel, supra, at 51, 63 L Ed 2d serious legal difEculties, and it is

• IS6,100 S Ct 906; Fisher, supra, at only natural that these employees ,

M 'l ' '

403, 48 L Ed 2d 39, 96 S Ct 1569. would have the relevant information i The first step in the resolution of needed by corporate counsel if he is >

y{ .;a- ,

any legal problem ts ascer:aining adequately to advise the client with

-4a, the factual background and sifting respect to such actual or potential '

yt through the facts dif5culties. This fact was noted is ius es sen Diversified Industries Inc. v Mere-

d. A& +

• 2th an eye to the dith, 572 F2d 596 (CAS 1978) (en f.e. * . legally relevant. See ABA Code of hancy' Professional Responsibility, Ethical

-i.fP Consideration 4-1: "In a corporation, it may be Q y , ,,A lawyer should be fully m. -

necessary to glean information rel-evant to a legal problem from mid-J. pg. formed of all the facts of the mat- die management or non. manage.

Mi ter he is handling in order for his ment personnel as well as from g.%

,, y client to obtain the full advantage of our legal system. It is for the top executives. The attorney deal-ing with a complex legal problem I,-:. 9 . lawyer in the exercise of his inde- .is thus faced with a "Hobson's

~W pendent professional judgment to choice". If he interviews ensploy-

,2,g. separate the relevant and impor- ees tact having "the very highest

-.;-- tant from the irrelevant and un- authority",

_U .f." important. The observance of the i44s Us 3s21

-G- ethical obligation of a lawyer to their communications hold inviolate the confidences and to him will not be privileged. If, on

.'Q*'-

2 .g% . secrets of his client not only facili- the other hand, he interviews only *-

}' d4 tates the full development of facts those employees v4.th "the very

.II essential to proper representation highest authorit'y", he may find it

,* f .

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r iQqW~g@lQ$fD 5Yh WY 66 L Ed 2d i UPJOHN CO. v UNITED STATES

' 449 US 363. 66 L Ed Od 554.101 S Ct 677

) encourages legal assis-  ; extremely sible, to di$determine cult, if not impos- complicated array of regulatory leg-i what islation confronting the modern cor-happened.'" Id., at 60S-609 ing Weinschel, Corporate Em- (quot- potaticn, corporations, unlike most ylor, 329 US ,

ployee Intenfews and the Attor- individuals, " constantly go to law.

67 S C: 385 ney-Client Privilege,12 BC Ind & vers to find out how to obev the Com L Rev 873. 876 (1971D. law," Bumham. The Attorney Client vidua1 eli nt Privilege in the Corporate Arena,24

,i n The control group test adopted by Bus Law 901, 913 (1969), particu-ad the court below thus frustrates the larly since co:npliance with the law M. In the very purpose of the privilege by dis- in this area is hardly an instinctive ygg couraging the commumcation of rel* matter, see, e. g., United States v be5o;nd the #""" inf rmat) n by employees of United States Gypsum Co. 438 US by the court the eb. ent to attorneys seeking t 422, 440-441, 57 L Ed 2d 854, 98 S

>h . re-j render legal advice to the chent cor- Ct 2S64, 1978 CCH Trade Cases hhe compa- p ration. N ammefs adme w D 1 62103 (1978) C'the behavior pro-y 7, geg also frequently be more sigm6 cant scribed by the [Sherman) Act is l

ss the infor- ,

to econtrol group members than W9Usan]

orporation's i to those who oScially sanction the of.

and indeed advice, and the control group test ten discult to distinguish from the -

can, by ac.

makes it more di$ cult to convey full gray zone of socially acceptable and of their em- and frank legal advice to the em- economically justifiable business con- t rporation in and it i3 ]i ployee8 who will put into effect the d uct"L8 The test adopted bv the ch.

ent corporation's pohey. See, e g., court below is di5 cult to api >ly in e employees information Duplan Corp. v Deering Milliken, practice, though no abstractly for-

Inc., 39. F Supp 1146.1164 (SC mulated and unvarying " test" will nsel if he is i client with 1974) C After the lawyer forms h

,s or necessarily enable courts to decide or potential her opiruon, it is of no immediate questions such as this with mathe-as noted in '

beneSt to tne Chairman of the Board matical precision. But if the purpose nc. v Mere-or the President. It must be given to of the attorney-client privDege is to 3 1978) (en l the corpora:e personnel who will be served the attorney and client apply i ). 9g pg gg d nty Wh micu-it may be The narrow scope g:ven the attor- lar discussions will be protected. An r=ation rel- ney client privilege by the court be. uncer.ain privilege, or one which n from mid- low not only makes it di$ cult for purports to be certain but results in son-manage- corporate attorneys to formulate widely varying applications by the ell as fro:n sound advice when their client is cour.s, is little better than no privi-tcrney deal- faced with a sWe legal problem lege at all. The very terms of the gal proble:n but also threatens to limit the valu- test adopted by the ~eourt below sug-i "Hobson s '

able eforts of corporate counsel to gest the unpredictability ofits appli-tws ernploY' ensure their client's compliance with cation. The test restricts the availa-ery highest j the law. In light of the vast and bility of the privilege to those oS-

- 2. "D:e Gevernment argues that the ruk of nunications em! or enminal liability su5ces to ensure much, erin:e it applies to a13 communications i that corporadons will seek legal advice in the cov red by the privilege: an individual trpeg

1. Eed, if, on absere of the protection of the pnvilege. Thts to comply with the law or faced with a legal nlews ony,y I response ignores the faa that the depth and problem also has strong incentive to disclose

• tha very j quality of any investignbons to ensure compli* informadon to his lawyer. yet the common may End it  ; ance with the low would suzer. even wer' 1aw has recqnir.ed the value of the pnvilege they underuken. The reepen* also proves toe in further facititating communications.

593 i

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V% U.S. SUPREME COURT REPORTS 66 L Ed 2d

.,T. , '

,y*% -

cers who play a'" substantial role" in regulations, duties to shareholders.

.f . '~,:

' j deciding and directing a corpora- and potential litigation in each or tion's legal response. Disparate deci- these areas.' The communicatiens sions in cases applying this test illus- concerned matters within the scope V3 .

trate its unpredictnbility. Compare, of the employees' corporate duties,

{ .

e.g., Hogan v Zlet:. 43 FRD 308, .and the employees themselves were

• ,j, -

315.-316 (ND Okla 1967), a5d in part suEciently aware that they were

^' sub nom Natta v Hegan, 392 F2d being questioned in order that the g 686 (CA101968) (control group in- corporation could obtain legal ad-cludes managers and assistant man-vice. The questionnaire identiSed

- agen of patent division and research Thomas as "the company's General and development department), with Counsel" and referred in its opening

~ t i Congoleu n Industdes, Ine v GAF sentence to the possible illegality of Corp., 49 FP.D 82, 83-e5 (ED Pa payments such as the ones on which 3 ,

19691, afd,478 F2d 1395 (CA31973) information was sought. App 40a. A y *. ; statement of poucy accompanying (control group includes only division the questionnaire clearly indicated h4} - , and corporate vice presidents, and the legal implications of the investi-9 . .: not two directon of research and j4 D' vice president for production and gation. The policy statement was issued "in order that there be no

~

research). uncertainty in the future as to the h$ M8 US *l policy with respect to the practices .

h- [1b] The communications at issue 8 which are the subject of this investi-y& ..',-

were made by T.spjonn employees to g ation."

counsel for Upjohn acting as such, at 949 rs 3951

@f -

the direction of corporate superiors It began "Up.

E7 J m orcer to secure legal advice from John will comply with all laws and v sI counsel. As the Magistrate found, regulations," and stated that corn-t t "Mr. Thomas consulted with the missions or payments "will not be Chairman of the Scard and outside used as a sub:erfuge for bribes or counsel and thereaf:er conducted a illegal payments" and that au pay-p[- factual investigation to de:ennine ments must be " proper and legal."

the nature and ertent of the ques- Any future agreements with foreign dy

~

tionable paymen:s and to be in a distdbutors or agents were to be position tc give legal addce to the ^ apprnved "by a company attorney"

, company wiu respect to the pay- and any questions concerning the

.i ment.s." Emphasis supplied.) 75-1 policy were to be referred "to the M, 22 - USTC 19277, pp 53,5M, 83,599. In- company's General Counsel." Id., at l

i'~~ formation, not available from upper- 165a-166a. This statement was is-

((7

(

echelon :nanagement, was needed to sued to Upjohn employees world-supply a basis for legal advice con- wide, so that even those interdewees cerning compliance with securities not receiving a questionnaire were

,tes.

-T and tax laws, foreign laws, currency aware of the legal implications of y'

,. :.~

3. Seven of the e'ghty4ix e=phyees inter- Coct of Ap-cals had enien to address this a !ssue, and we decline to decide it mthout the r.cwed by eccael had termi .ned their em- .

,g *

,' ? - pby nent mth Upjohn at de time of the bene 5t of treatment 1elow.

intsmew. App 33a.35a. Petitioner argues that 4. See id.. at OEa-2"a.103a,123a-124a. See an; 0 - - -

the pnvilege shou!d scoede'eu app!y to com.

1 aho in re Grsed Jurv Investigation. 599 F2d mumes: ions by these Termer ernpbyees cen.

1024. 1229 (CA3 1979t. In re Ctand Jury h/f]

jbc ,

re-ning actinties dunne the:r penod of em. Sdpc.ena. 599 F".4 504. 511 (CA219791 pkyrnent. Ne6ther the Datn:t Coun nor the 7A _ > -

594

-@; i .

p .

sw* 4

! _._._._n ,,__mu -f

~~

L Ed 2d UPJOHN CO. v UNITED STATF" 449 US 333,66 L Ed ": .m. . J G 677 ehold:rs, , the interviews. Pursuant to expH at See also Diversi5ed Industries, 572 cch of instructions from the Chairmm of F2d, at 611; State ex rel. Dudek v sic-tions the Board, the communicatiom were Circuit Court, 34 Wis 2d 559, 550 he scope considered " highly conSiential" s duties, when made, id., at 39a, 43a, and 150 NW2d 387. 399 (1967) ("the

<es w:re have been kept con 6dential by the courts have noted that a party can-ey w:re company.' Consistent with the un- not conceal a fact merely by reveal-

hat the derlying purposes of the attorney <h- it to b byu"). Here the Gov-Tal ed- ent privilege, these communications ernment was free to question the l g

sentiSed must be protected against compelled employees who communicated with Gen:ral disclosure. Thomas and outside counsel. Upjohn opening has provided the IRS with a list of gality of [4] The Court of Appeals declined such employees, and the IRS has n which to er:end the attorneydient pnv)- already interviewed some 25 of a&A lege beyond the limits of the control them. While it would probably be an group test for fear that doing so more convenient for the Go ernment di w uld entail severe burdens on dis- to secure the results of petitioner's investi- covery and create a broad , zone of internal investigation by simply sub.

nt was silence" over wrporate aHairs. M poenaing the questionnaires and i be no ph,eadon of the auorney client pr2vi- notes taken by petitioner's attor-5 to the lege t comc2unicat2ons such as neys, such considerations of conve-ractices those involved here, however, puts nience do not overcome the policies -

investi- the admsary in no worse posit 2on sened by the attorney-client privi-than if the communicat2cas had jege. As Justice Jackson noted in his e never taken place. The privilege concurring opinion in Hickman v -

in "'Up. only protects disclosure of communi- Taylor,329 US, at 516,91 L Ed 451-

.ws cad cadons; it does not protect disclosure 67 S Ct 355, 34 Ohio Ops 395. " Dis-it corn. of the underlying facts by those who covery was hardly intended to ena-not be communicated with the attorney-ble . lecmed profession to perform ibes or "[T]he protection of the privilege its functions . . on wits borrowed

'II p*?'

extends only to communications f**m 'h' *d**?'*'Y*

.J Cal."

oreie, and not to facts. A fact is one thing and a communication con- ,

Needless to say, we decide only g g gggg

.orn y" 8 h

! g e take to draft a set of rules which mg th2  ! 14 a t's 39q should govern challenges to investi-

"to th2 thing. The client cannot gatory subpoenas. Any such a p.

Id ct be cornpelled to answer the que,- preach would violate the spint of was is- tion, 'What did you say cr write to Federal Rule of Evidence 50L See S world. .

the attorney?' but may not refuse Rep No. 93-1277, p 13 (1974) ("the viewees } to disclose any relevant fact recognition of a privilege based on a e were I within his knowledge merely be- con 5dential relationship . . . should ions of cause he incorporated a statement be determined on a case-by-case ba-of such fact into his communica- sis")'. Trammel, 445 US, at 47. 63 L hs this Sat th*

tion to his attorney." Philadelphia Ed 2d 186,100 S Ct 906; United v Westinghouse Electric Corp.,205 States v Gillock,445 US 360,367. 63 F Supp 830,831 (ED Pa 1962L L Ed 2d 454,100 S Ct 1185 (1980).

2 .See 599 P2d j nd Jury 5. See Magistrate's opinion. 78-1 US7C have been treaW u con 5dential mater.al

192 7, p 83.599

**The responses to the ques- and have not tr

91. W to anyone enep:

l tionna2res and the notes of the interviews Mr. Thomas and ;ounsel."

l 595

^

nAT%&wualu_LJL - -- #

~

.. t'

,1] '!

66 L Ed 2d U.S. SUPREME COURT REPORTS

~

• -1 -

While such a " case-by-case" basis apply to IRS summonses. Brief for

{ iL, k' .

may to some slight extent under- Respondents 16, 48. This doctrine >

, ,[ !!* mine desirnble certainty in the was announced by the Court over 30 boundaries of the attorney. client years ago in Hickman v Taylor,329 Ls US 495,91 L Ed 451,67 S Ct 385,34 ius Us 3973 .

l?j ' priv- Ohio Ops 395 (1947). In that case the

."- ilege,it obeys the spirit of the Rules. Court ~ rejected "an atternpt, without

'?b.s At the same time we conclude that purported necessity or justification, 4

. f4 the narrow " control group test" to secure written statements, private 4

sanctioned by the Court of Appeals memoranda and personal recollee- 1 jf Q in this case cannot, consistent with tions prepared or formed by an ad-

j f:- ,the prmeiples of the common law verse party's counsel in the course of as . . . interpreted . . . m the light his legal duties." Id., at 510,91 L Ed

.g . of reason and experience, Fed Rule 451, 67 S Ct 385,34 Ohio Ops 395.

l

y Evid 501, govern the development of The Court noted that "it is essential I that a lawyer work with

, h.pf ,-

the law m this area-149 US 398) at. E a certain y% degree of privacy" and reasoned that

'O Our decision that the communica. if discovery of the material sought l<: tions by Upjohn employees to coun. were permitted

• sel are covered by the attorney cli. '

. *f* ent privilege disposes of the case so "much of what is now put down in '

..g. ,

far as the responses to the question- writing would remain unwritten.

naires and any notes redecting re- h my's thoughts, heretofore

• $ . < sponses to mterview questions are inviolate, would .not be his own.

- - concerned. The summons reaches ineSciency, unfa:rness and sharp

.further, however, and Thomas has practices would mevitably develop T'!. testi6ed that his notes and memo- m the giving oflegal advice and m M j'; randa of interviews go beyond re- ,

the preparation of cases for trial.

3' cording responses to his questions. The effect on the legal profession  ;

App 27a-28a,91a-93a. To the extent would be demorabzing. And the

' - k. that the material subject to the sum, Interests of the clients and the

$Uj,3 ',' mons is not protected by the attor. cause of justzee would be poorly

'I'dh ney client privilege as disclosing served." Id., at 511, 91 L Ed 451, M h.

communications between an em. 67 S Ct 385,34 Ohio Ops 395. l M' ' ' a ployee and counsel, we must reach the ruliv by the Court of Appeals The " strong public policy" underly-

.5 { that the work. product doctrine does ing the work-product doctrine was

, ,,2 ; - not apply to summonses issued un- reafirmed recently in United States 4

p. . der 26 USC f7602 (26 USCS v Nobles,422 US 225,236-240,45 L

. g e.

I7602) Ed 2d 141,95 S Ct 2160 (1975), and

.../f ? . The Government concedes, wisely, has been substantially incorporated

.Ciy that the Court of Appeals erred and in Federal Rule of Civil Procedure jhN that the work-product doctrine does 26(b)(3).'

c r .

. Q:' .

E. The fo!!owing d2scussion will also be 7.This providea. in pertinent part

"(A] party may obtain discovery of documents .

.,!'q'~*! nlevant to counsel's notes and memcranda of

.g interviews mth the seven fer:ner employees and tangible things otherwise discoverable under subdivision (bK1) of this rule and pre.

. (*(; / *'. should it be determined that the attorney-

.M L -s.

f client pnvilege does not apply to them. See a pared in anticipation oflitigation or for trial by or for another party or by or for that other y b.[ - _ 3. supra.

iHhi 596

$.$.!-i s

. m

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h

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p m p w w w w & M w KW g&RCnd 66 L Ed 2d UPJOHN CO. v UNITED STATES es. Brief for

• 449 US *L33. 66 L Ed M W.101 S Ct 677

'his dxtrine ' [5] As we stated las't Term, the longer available or can be reached

'ourt over 30 obligation imposed by a tax sum. only with difSculty." 329 US, at Tavlor. 329 mons remains " subject to the tradi.

tional pnvileges and limitations." 511, 91 L Ed 451, 67 S Ct 360. 34 ,

S Ci 385, 34 Ohio Ops 395.

iat case the United States v Euge, 444 US 707, npt, without j 714, 63 L Ed 2d 141,100 S Ct 874 The Government stresses that m.ter-justi5 cation. '

09BOL Nothing in the language of viewees are scat

• area across the ents, private the IRS summons provisions or their globe and that Upjohn has forbidden ud recollec- legislative histcq suggests an intent its employees to answer quest 2cns it ,

d by an ad- on the pan of Congress tn preclude considers irrelevant. The above-he course of application of the work. product doc- quoted language from Hickman, 10, 91 L Ed trine. Rule 26(by3) codifes the work. however, did not apply to oral Jo Ops 395. product doctrine, and the Federal Rules of Civil Procedure are made statements made by witnesses .

is essential applicable wheier present]y m, the form of

[449 l'S 3?91

[the attorney's) mental impressions a ce:tain to summons enforcement or memoranda." Id., at 512, 91 L Ed prc,eeedings by Rule SI(ay3L See 451, 67 S Ct 385, 34 Ohio Ops 395.

isoned that

-ial sought Donaldson v United States. 400 US As to such material the Court did 517, 528, 27 L Ed 2d 550, 91 S Ct "not beneve that any showing of 534 (1971). While conceding the ap- necessity can be made under the et down in plicability of the work-product doc- circumstances of this case so as to unwritten. trine, the Government asserts that it justify production. .. If there heretofore has made a su!Scient showing of shou $ be a rare situatin justifying -

his own. necessity to overcome its protect 225- preduction of these matters, petition-and sharp," The Magistrate apparentJy so found' e,.'s case is not of that type." Id., at, ly develop 781 USTC 5 9177, p 83.605. The 512-513, 91 L Ed 451, 67 S Ct Of 5, see and in Government rehes on the following 34 Ohio Ops 395. See also Nobies,

!anguage in Hickman: supra, at 252-253, 45 L Ed 2d 141, 95 S Ct 2160 < White, J, concurringt r[. e "We do not mean to sav that all Forcing an attorney to disclose notes written materials obtaine'd or pre- and memcranda of mtnesses' od

.'"dI Ed '

pared b'v an adversarv's counsel statements ts particularly disfavored

~

with an eye toward litigation are because it ands to revea] de attor-

'.'95'

~ necessarily free from discovery in ney's taen'.21 processes. 329 US, at all cases. hue relevant and na- 513, 91 L M G, C 5 C M M underly- prhi]eged facts remain hidden in Ohio Ops 395 ("what he saw Et to

-ine was an attorney's Ele and where pro- write dcwn regarding witnesses re-2 States duction of those facts is essential marks"); id., at 516-517, 91 L Ec

?40, 45 L to the preparation of me's case, 451, 67 S C: 335, 34 Ohio Ops 390 US),and discovery may properly be had. f"the s at.ement would be his [tne rporated And production Inight be jus-

[449 US 4001 rocedure tifed where the minesses are no attorney's) language, permeated prtysultan cor a representa t,

surety.:ve tincludinginsurer inde=nlict. ha atterrey.

er suetrtals by cther mear.s. In ordermg dxevery of agenti only upon a shomng that the p rry =2:4 .a's when the required shevmg hetunent, hs.s been ende. the coun sha!! proc. against seennt drava y has substantial need of the acoverable matertals in the preparation of ha case and d.xlosu e of the :nental i=pree.si:ns. conclu-and pr,. s) cts. opi .lons. or laga! theer:es of an atter-r for tr.'aj that he is unable mthout undue hardsh2p to obtain the substantial equivalent of the mate- ney er other rtp.evntanve of a prh eco-ist ether cer .mg the 1:tigat2en."

597

• $M84,;t"ik.^-M19GR. 5 -Aww2%L'EE2gmGw.w w_ v - _- ~~:_

_ w_

r s-2,F M4 !

T M-1. ' .' '. 6. h' ! ,

U.S. SUPREME COURT REPORTS 66 L Ed 2d

- 1 1  : '1 , i with his inferences") (Jackson, J.,

~

oral interviews. The courts have ste-  !

E -

j concurring).' adfastly safeguarded against disclo.  ;

y. gi] ,

sure of lawyers' mental impressions  ;

.c

j [2b] Rule 26 accords special pro- and legal theories . . ."). .

tection to work product revealing

[449 US 4011 i,i4 I i the attorney's mental processes. The Based on the foregoing, some i i 2 M,! Rule permits disclosure of docu- courts have concluded that no show-Em ' 3 ;..,;.'

l S [;i.T ments and tangible things constitut-

i M ing attorney work product- upon a Ing of necessity can overcomg pmtec-ti n f w rk product which is based l

showing of substantial need and ina. n ral statements from witnesses.

i 'k{,J.l D bility to obtain the equivalent with- See, e.g., In re Grand Jury Proceed- l W i' 3

• N. b,i out undue hardship. This was the ings, &3 F2d 840, S48 (CA81973) i 4 standard applied by the Magistrate, (personal recollections, notes, and

~ $EjN 78-1 US'IC { 9277, p 83,604. Rule 26 memoranda pertammg to conversa-goes on, however, to state that 'Tiln y"<UOY.h,i ordering discovery of such materialsJury t2 n Investigati with witnesses); InSupp re Grand l

~

7j[

WW when the required showing has been 949 @ Pa IM6)(notes of conversa-n, 412 F 943,

~I4 f E i made, the court shall protect against tion w% witness are so much a j

/ 5..M E, d. !9c4Ff

• • k" '! .i. r4 '! b

t.

disclosure of the mental impressions, pmduct of the lawyer s thinkmg and conclusions, opinions or legal theo. s pmbatsve of the witness's ries of an attorney or other. repre- actual words that they are abso-

9 . sentative of a party concernmg the lutely protected from disclosure").  !

I* - - !a litigation." Although this language These courts declining to adopt an

( Y;iOI does not spect$cally refer to memo- absolute rule have nonetheless ree-

r. 9 r .q,g* - l randa based on oral statements of ognized that such material is enti-g% witnesses, the Hickman court IIed * " al P" #* ^~ See' E' li '

!l MIN C W, ' -

stressed the danger that compelled In re Grand Jury Investigation,599 i j disclosure of such memoranda would F2d 1224,1231 (CAS 1979) ("special i 1 .:gge:. p:.W .* .  ;

reveal the attorney's me.ntal pro- considerat2ons . . . must shape any f

gwb ; . .

cesses. It is clear that this is the sort ruling on the discoverability ofinter- '

d y"i'd of material the draftsmen of the view memoranda . . .; such docu-

$h .7. -

Rule had m mind as deserving spe- ments will be discoverable only in a c:al protect 2on. See Notes of Advi- . rare situation * "); cf. In re Grand i

I g

g ,3 ,

sory Committee on 1970 Amendment Jury Subpoena, 599 F2d 504, 511- i 4 to Rules, 28 USC App, p 442 ("The 512 (CA21979).

Ts ,;g;- .

i subdivision . . . goes on to protect i

r agamst disclosure the mental im- We do not decide the issue at this 3

Wa pressions, conclusions, opinions, or time. It is clear that the Magistrate  !

g legal theories . . . of an attorney or applied the wrong standard when be i

[r*Qc

.g other representative of a party. The concluded that the Government had Hickman opinion drew special atten- made a suficient showing of neces-i Q- b y I tion to the need for protectmg an sity to overcome the protections of p& _d ^oe

- 1 " :.. . ., '.;

pga

- attorney against discovery of memo- the work product doctrine. The Mag-r Bisp '

[;p randa prepared from recollection of istrate applied the " substantial i

• • = -- @

• 2 M.

b 8. Thomaa described his notes of the inter. they related to other questiona. In some in-  ;

f$ views as containing "what I co:uridert i to be stances they might even suggest other ques-I M. y:

d, "

.y the important questions, the rubstance of the nous that I would have to ask or things that !

' ' ,S & responses to them. my beliefs as to the impo . needed to find ebewhers" 754 USE 192 7, k..ffder t

tance of these, my beliefs as to how they p 83.599.

% related to the inquiry, my thoughts sa to how t". 79i'.

I <

L.e ..

st

• c'.b d 598 ,

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..  ?;;MV;

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-es

1 l  !

l UPJOHN CO. v UNITED STATES Ed 2d  ;

r 449 US 383. 66 L Ed 2d 584.101 S Cr 677 e ste-

'- need" and "without undue hard- bility made by other by the means than Government was or applied r

i iisclo- ship" standard articulated in the by the Magistrate in this case would i mons first part of Rule 26(bX3). The notes be necessary to compel disclosure.

and memoranda sought by the Gov- Since the Court of Appeals thought ernment here, however, are work that the work-product protection ,

i product based on oral statements. If was never applicable in an enforce-  :

soms '

they reveal communications, they ment proceeding such as this, and  !

show- I are, in this case, protected by the smee the Mag: strate whose recom- i

-otee. .

' attorney client privilege. To the ex.

2ased tent they do not reveal communica. apptedm,endations the District applied too lenient a stan- Court i

.sses.

• [ tions, they reveal the attorneys' dard of protection, we think. the best ceed- I I mental processes in evaluating the procedure with respect to this aspect 1973) 3 cad j communications. As Rule 26 and of the case would be to reverse the t Hickman make clear, such work judgment of the Court of Appeals for ersa. l i product cannot be disclosed simply the Sixth Ctreutt and remand the rand l on a showing of substantial need and case to it for such further proceed-943,

• inability to obtain the equivalent mgs m connetson with ,the work-ersa- without undue hardship. pmduct claim as are conststent with

h a - I and While we are not prepared at this t s opinion.

m, juncture to say that such material is Accordingly, the judgment of the i

_g always protected by the work-prod- Court of Appeals is reversed, and the re"). "Ct I ** **

case remanded for further proceed- l' t an gg,5 g ## '

think a far stronger T showing of necessity and unavaila- It is so ordered.

',"t

g, SEPARATE OPINIONS 599 . Chief Justice Burger, concurring ing them. and federal courts.

d al The Court properly relies on a [

any in part and concurring in the judg-ment. variety of factors in concluding that 2*.er-  !

• the communications now before us I join in Parts I and III of the are privileged. See ante, at 394-395, ,

• • opinion of the Court and in the judg. 66 L Ed 2d, at 594-595. Because of W ment. As to Part II, I agree fully the great importance of the issue, m with the Court's rejection of the so- my view the Court should make l

called " control group" test, its rea, c] ear now that, as sons for doing so, and its ultimate this general ate holding that the communications r.t '

issue are privileged. As the Cuart rule, a communication is privileged i he states. however, "if the purpose of at least when, as here, an employee hnd the attorney <lient privilege is to be or former employee speaks at the i

ces-served, the attorney and client must direction of the management with ,

s of or lag-be able to predict with some degree an attorney regardmg conduct j of certainty whether particular dis- proposed conduct within the scope of tial cussions will be protected." Ante, at employment. The attorney must be

• In-393, 66 L Ed 2d, at 593. For this one authorized by the managemerJ.

N* very reason, I~believe that we should to inquire into the subject and must articulate a standard that will gov- be seeking information to assist N

era similar cases and afford guld. counsel in performing any of the ance to corporations, counsel advis- following functions: (a) evaluating 599

.- . J '* *l $ x.- n a .. n , _ _ . _ _ ,

m -.

es l

. .i ..s N' I, gli' :-

d}-

u saUv o g;d@!

]il;

(

w-6 U.S. SUPREME COURT REPORTS 66 L Ed 2d

? , o;d ,,

whether the employee's conduct has reach all facets of the privilege does ,

I j if' t19 t, bound or would bind the corpora- not mean that we should neglect our  ;

/

i.! j jj,jh tion; (b) assessing the legal conse- duty to provide guidance in a case

.w i: quences, if any, of that conduct; or that squarely presents the question h+i.l.i.fj.')

2/ (c) formulating appropriate legal re- in a traditional adversary context.

'? sponses to actions that have been or Indeed, because Federal Rule of Evi.

(t 3 k'.;;;a.:e  ; i , j may be taken by others with regard dence 501 provides that the law of

' .r"; to that conduct. See, e.g., Diversified privileges "shall be governed by the

!f Q '(;%lj.1; Industries, Inc. v Meredith, 572 F2d principles of the common law as 596, 609 (CA81978) (en banc); Har- they may be interpreted by the

.fal-per & Row Publishers,Inc. v Decker, cour:s of the United States in the "1 J

• hb -,  ! I'

, ;c.s .j 423 F2d 487, 491-492 (CA7 1970), light of reason and experience," this yg(;g:

4.r %q .

l l

afd by an equally divided Coun,400 Court has a special duty to clar2fy US 348,27 L Ed 2d 433,91 S Ct 479, aspects of the law of privileges prop.

1971 CCH Trade Cases !73430 (1971); Duplan Corp. v Deering Mil- i7 F  ! i O'M,3 I liken, Inc., 397 F Supp 1146,1163-94s Us 4o41 y-grp. before us. Simply asserting that d,4p' 1165 (SC 1974). Other communica- this failure "may to some slight ex-I,l { L, g l g.o ,  ;

tsons between employees and cow tent undermine desirable certainty" rate counsel may mdeed be pnvi- ante, at 396, 66 L Ed 2d, at 595, n  ?"; j leged--as the petit 2oners and several neither minimizes the consequences a m 2et have suggested m their p of continuing uncehainty and confu-7;;,g,3,7 g.. l posed formulations -but the need sion nor harmoni:es the inherent c' I for certainty does not compel us now . dissonance of ahowledging that T

to prescribe all the details of the E  ?;.! privilege in this case. ""C'.rtainty while dech,amg to clar-ify at within the frame of issues

• 4 <,.

Nevertheless, to say we should not presented.

[.4

.% v c i

I M$.- ,

• See Brief for Peddocen 21-23, and n 25; lege of Trial Lawyers; and 33 law Firms as Brief for Amenes.n Bar Anoc.adon as Amir.'.s Amici Curiae 9-10, and n 5.

"'yg, l Curiae 5 4, and n 2; Brief for American Col-e.

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