CEO Failed to Prove Attorney-Client Privilege, Court Finds

3rd Circuit ruling reminds GCs to notify employees that the company's lawyers don't represent them personally.

See the online exclusive, "Upjohn's Importance."

In 1999, U.K.-based industrial materials company Morgan Crucible faced accusations of involvement in an international price-fixing scheme in the carbon products industry. During the federal antitrust investigation, Winthrop, Stimson, Putnam & Roberts (now Pillsbury Winthrop Shaw Pittman) represented Morgan Crucible. CEO Ian Norris spoke candidly with Winthrop attorney Sutton Keany, thinking attorney-client privilege protected his conversations.

In his appeal, Norris strove to prove Keany did indeed represent him. He relied on the aforementioned e-mail as well as various internal memos. But the 3rd Circuit determined that Norris failed to meet the burden of establishing representation and attorney-client privilege based on the five-factor test established in in re Bevill, Bresler & Schulman Asset Management Corp. That test says a party must show he approached counsel for the purpose of seeking legal advice; a party must demonstrate that when he approached counsel he made it clear that he was seeking legal advice as an individual rather than the representative capacity; a party must demonstrate that counsel saw fit to communicate with the client in the clients’ individual capacities, knowing that possible conflicts could arise; a party must prove that his conversations with counsel were confidential; and a party must show that the substance of his conversations with counsel did not concern matters within the company or the general affairs of the company.

“Norris wasn’t able to satisfy the first few prongs of Bevill,” says Duane Morris Partner Marco Gonzalez. “His argument was too vague and ambiguous. The judge says it wasn’t enough. The message to corporate lawyers is early on in the case, executives and attorneys should do certain things to prevent this confusion from happening.”

Contributing Author

Juliette Fairley

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.