After Filip—the lay of the land

In light of the updated guidelines offered by the Department of Justice regarding corporate investigations, specifically as it relates to attorney-client privilege, the Section of Business Law, Center for Professional Responsibility and the Center for CLE recently held a teleconference that brought together experts in the field of business and securities law, including chief of staff to the deputy attorney general, John Roth.

The recent changes presented by Deputy Attorney General Mark Filip in Aug. replace the guidelines outlined in the McNulty Memorandum and its predecessor the Holder Memorandum.

Roth laid out the most recent changes—which he characterized as changes to the U.S. Attorneys’ Manual rather than as the Filip Memorandum. Specific changes to corporate cooperation in an investigation include:

1. Credit for cooperation would be based upon disclosure of relevant facts. Credit would not hinge on whether those facts came from protected versus non-protected materials, e.g., there would be neither credit nor penalty for disclosing facts covered under attorney-client privilege.
2. The government would be forbidden from requesting material known as "category 2" information, such as corporate non-factual attorney-client privilege communications. The two exemptions to this would be in the use of "advice of counsel defense" and in the crime fraud exception.
3. The department prohibits prosecutors from assessing whether a corporation had advanced legal payments to employees, officers or directors. The narrow exception to this is that—when combined with other circumstances—it might indicate a criminal obstruction of justice.
4. Federal prosecutors may no longer take into consideration whether corporations have entered into joint defense agreements in evaluating whether to give a corporation cooperation credit.
5. Under the specific factor relating to cooperation, prosecutors could not take into consideration whether a corporation has disciplined its employees.

Panelist Stanley Keller, with Edwards Angell Palmer & Dodge LLP, followed up Roth’s remarks by offering his appreciation for the efforts and updated guidance under the Filip paper, but reiterated the ABA’s concern about the erosion of the attorney-client privilege and continued belief that legislation is necessary. This is true, said Keller, because the updated policy relates only the Department of Justice and not to other governmental bodies, such as the Securities and Exchange Commission, and that the recourse remedies available to companies are unclear under the Justice guidelines.

Scott L. Fredericksen, partner with Foley & Lardner LLP, also served as panelist during the teleconference, "Handling Investigations under the New DOJ Policy on Investigation of Companies." Dixie Johnson, corporate partner resident in Fried Frank’s Washington, D.C. office, served as moderator.

For a portion of the materials distributed in conjunction with the CLE, please click here.

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