Tuesday, June 27, 2006

Judge Kaplan's Decision - KPMG

If one were ranking decisions by the quality of the writing, Hon. Lewis Kaplan's decision would be very high on the list, as it ranks in quality with those authored by Learned Hand.  From the opening passage that states -

"Those who commit crimes - regardless of whether they wear white or blue collars - must be brought to justice.  The government, however, has let its zeal get in the way of its judgment.  It has violated the Constitution it is sworn to defend."

To the detailed footnotes, like seen in footnote 13 -

"Mr. Thompson was quoted in the press as having defended pressuring companies to cut off payment of defense costs for their employees on the ground that "they [the employees] don’t need fancy legal representation" if they do not believe that they acted with criminal intent. Laurie P. Cohen, In the Crossfire: Prosecutors’ Tough New Tactics Turn Firms Against Employees, WALL. ST. J., June 4, 2004, A1. Naturally, the Court does not consider it in deciding this matter, as it is not in evidence. It notes, however, that such a view, whether held by Mr. Thompson or anyone else, would be misguided, to say the least.

"The innocent need able legal representation in criminal matters perhaps even more than the guilty. In addition, defense costs in investigations and prosecutions arising out of complex business environments often are far greater than in less complex criminal matters. Counsel with the skills, business sophistication, and resources that are important to able representation in such matters often are more expensive than those in less complex criminal matters. Moreover, the need to review and analyze frequently voluminous documentary evidence increases the amount of attorney time required for, and thus the cost of, a competent defense. Thus, even the innocent need substantial resources to minimize the chance of an unjust indictment and conviction.

This decision is a masterpiece.  The interesting question now will be whether the Thompson Memo survives in light of this decision.  Here my answer is yes.  Prosecutors need cooperation.  Prosecutors also need corporations to have compliance programs that will assist in diminishing fraudulent conduct.  Having cooperation and compliance programs, however, is a far cry from seeking to waive the attorney-client privilege or asking a corporation to waive attorney fees that were contractually agreed upon prior to the government investigation or indictment. 

The defendants in this case will eventually enter pleas or go to trial.  And if convicted they will be sentenced.  But this decision will make the eventual verdict fairer, and for that we should all thank Judge Lewis Kaplan.



Defense Counsel, Investigations, Judicial Opinions, Privileges, Prosecutions | Permalink

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Tracked on Jul 10, 2006 5:51:44 PM


God Bless Judge Kaplan. This is really an important issue. As noted in the Supreme Court's decision in Upjohn, the attorney-client privilege results in more lawful activity because people are not afraid to discuss difficult issues with the corporation's attorneys. If people stop talking to corporate counsel for advise, you can assume that more people will violate the law because they will not know what the law is. While I do not think that the Thompson Memo was created with a bent on destroying the attorney-client privilege, the application of the Memo's principles have, in effect, resulted in such a destruction. I know attorneys who now advise thier clients that it would be best if they assumed that the privilege will be waived in the event of a federal prosecution.

Posted by: Walsh | Jun 29, 2006 8:10:08 AM

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