Litigating the Crime-Fraud Exception: Chevron Corp. v. Donziger

Obtaining full disclosure of incriminating documents requires patience to build a body of evidence demonstrating probable cause that the crime-fraud exception applies

The two-part test for the crime-fraud exception in most jurisdictions appears deceptively simple. First, the party asserting the exception must demonstrate “probable cause” or “prima facie evidence” that a fraud or crime has been committed, meaning “a prudent person has a reasonable basis to suspect the perpetration or attempted perpetration of a crime or fraud.” Second, the material being sought must be “in furtherance of” the crime or fraud.

As a practical matter, however, there is a lot of discretionary gray area, and courts generally are reluctant to subject lawyers or their communications to discovery. In addition, parties engaged in acts of misconduct serious enough to breach the privilege may well be reluctant to make a complete production of responsive materials. Thus, merely satisfying the basic elements of crime-fraud may not be enough to procure a ruling piercing an attorney’s confidential communications, much less a meaningful production of the documents themselves. As a consequence, parties faced with claims of privilege or work-product asserted by parties or lawyers who appear to have engaged in a crime or fraud need to be prepared to employ a wider range of challenges and to engage in protracted, persistent litigation to obtain discovery.

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William E. Thomson

William E. Thomson is a litigation partner in the Los Angeles office of Gibson, Dunn & Crutcher LLP and a co-chair of the firm’s Transnational...

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Armen Adzhemyan

Armen Adzhemyan is a litigation associate in Gibson Dunn’s Los Angeles office.

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