It's A Privilege

The United States Court of Appeals for the District of Columbia Circuit upheld a corporate attorney-client privilege claim

In 2008, a patent negotiation occurred between Boehringer (the name brand with the patent) and Barr (the generic seeking to challenge the patent). Ultimately, the parties reached a reverse payment settlement.

The Federal Trade Commission pays close attention to reverse payment settlements to ensure that they do not run afoul of antitrust law. In 2009, the Commission began investigating the Boehringer-Barr settlement. During the investigation, the Commission subpoenaed documents from Boehringer. Boehringer claimed that the subpoenaed documents were created by Boehringer employees for Boehringer’s general counsel, Marla Persky, at her request. The documents allowed Persky to analyze and navigate the treacherous antitrust issues surrounding reverse payment settlements. Other documents reflected communications between Persky and Boehringer executives regarding the possible settlement. Boehringer asserted attorney-client privilege over the documents.

The court analyzed the purpose of the communication

In this case, the question therefore is whether obtaining or providing legal advice was one of the significant purposes of the communications at issue. The answer is yes.

The relevant communications consist primarily of the transmission of factual information from Boehringer’s employees to the general counsel, at the general counsel’s request, for the purpose of assisting the general counsel in formulating her legal advice regarding a possible settlement. Other communications were between the general counsel and the corporation’s executives regarding the settlement. All of those communications are protected by the attorney-client privilege because one of the significant purposes of the communications was “obtaining or providing legal advice” – namely, settlement and antitrust advice.

As to business purpose

To be sure, the communications at issue here also served a business purpose. The decision whether and at what price to settle ultimately was a business decision as well as a legal
decision for Boehringer. But as we stated in Kellogg, what matters is whether obtaining or providing legal advice was one of the significant purposes of the attorney-client communications. Here, as the District Court correctly concluded, one of the significant purposes of these communications was to obtain or provide legal advice. It follows that Boehringer’s general counsel was acting as an attorney and that the communications are privileged.

Circuit Judge (and my former Georgetown neighbor) Pillard concurs with a warning

I agree with the opinion of the court as far as it goes. I write separately to emphasize why the spare elegance of the court’s opinion should not be mistaken for an expansion of the attorney-client privilege recognized in our prior precedents: In short, the district court engaged extensively with the disputed documents and the bases for the privilege claims, and followed certain truncated procedures only with the parties’ consent.

(Mike Frisch)