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Upjohn Co. v. United States

Supreme Court of the United States · 1981 · Civil Procedure

attorney-client privilegecorporationssubject matter testdiscoverywork-product doctrinetax summonsesattorney-client privilegecorporate clients

Facts

Upjohn's independent accountants discovered that a foreign subsidiary had made payments to foreign government officials, and the information was reported to Upjohn's general counsel. After consulting with outside counsel and the chairman, counsel directed an internal investigation using confidential questionnaires sent to foreign managers and interviews of officers and employees to determine the nature and extent of the payments and to provide legal advice to the company. Upjohn later disclosed certain questionable payments to the SEC and simultaneously gave the report to the IRS, which began a tax investigation. The IRS then issued a summons seeking, among other things, the questionnaires and attorneys' notes and memoranda of interviews, and Upjohn refused production.

Issue

Whether communications made by corporate employees to corporate counsel during an internal investigation are protected by the attorney-client privilege only if the employees are within the corporation's 'control group.' Whether the work-product doctrine applies in IRS summons enforcement proceedings, and if so, what showing is required to obtain attorneys' notes and memoranda of witness interviews.

Rule

The attorney-client privilege in the corporate context is not confined to communications from employees within a control group. Communications by corporate employees to counsel are privileged when made at the direction of corporate superiors so the corporation can secure legal advice, concerning matters within the scope of the employees' corporate duties, where the employees are aware the questioning is for that legal purpose, and the communications are kept confidential. The privilege protects communications, not underlying facts. The work-product doctrine applies in IRS summons enforcement proceedings, and attorneys' notes and memoranda of oral witness statements that reveal counsel's mental processes cannot be ordered produced merely on a showing of substantial need and inability to obtain the equivalent without undue hardship; a far stronger showing is required.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Granite Harbor Medical Devices, a Delaware corporation with offices in Minneapolis, asks its general counsel to investigate possible export-control violations. At the CEO’s direction, warehouse supervisor Elena Ruiz and shipping clerk Marcus Dunn submit confidential written statements to counsel about shipping practices within their job responsibilities so counsel can advise the company.

In later federal litigation, the opposing party seeks the written statements, arguing neither employee was part of senior management or authorized to decide the company’s legal response. How should the court rule?

Explanation. The majority rejected the control-group limitation. Corporate employee communications may be privileged even when made by lower-level personnel if they are made to counsel acting as counsel, at the direction of corporate superiors, concerning matters within the scope of the employees’ duties, so the corporation can obtain legal advice, and are maintained as confidential.