# Amicus Brief — Upjohn Co. v. United States

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_2171%3A04

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Brief
- **Published:** January 1, 1981
- **Citation:** 449 U.S. 383

## Text

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‘agi Supreme Coun, U. &

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No, 79-886 ORG 21 1979

MICHABL RQPAK, JR, CLERK
In the Supreme Court of the

OCTOBER TERM, 1979

THE UPJOHN COMPANY, ET AL.,
PETITIONERS

V.

UNITED STATES OF AMERICA, ET AL.,
RESPONDENTS

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF
APPEALS FOR THE SIXTH CIRCUIT

MEMORANDUM OF THE AMERICAN BAR
ASSOCIATION AS AMICUS CURIAE

LEONARD S. JANOFSKY, President,
American Bar Association,
1155 East 60th Street,
Chicago, Illinois 60637
(312) 947-4000

LEON JAWORSKI,
KEITH A. JONES,
Fulbright & Jaworski,
1150 Connecticut Avenue, N.W.
Washington, D.C. 20036
(202) 452-6800

TABLE OF CONTENTS

INTEREST OF THE AMERICAN BAR
ASSOCIATION.

ARGUMENT

1. The attorney-client privilege, as applied
to corporate clients, should not be re-
stricted solely to communications made
by members of the corporation’s con-
trol group

2. Anattorney’s work product should be
accorded a qualified privilege against
administrative discovery .

CONCLUSION.

Page

1]

il

TABLE OF AUTHORITIES

CASES

Chirac v. Reinecker, 24 U.S. (11 Wheat. ae
280 (1826) .

City of Philadelphia v. sacialinias Electric
Corp., 210 F.Supp. 483 (E.D. Pa. 1962) .
Connecticut Mutual Life Ins. Co. v. Schaefer,

94 U.S. 457 (1876) .

Diversified Industries, Inc. v. Meredith,
572 F.2d 596 (8th Cir. 1978) (en banc) .

Fisher v. United States, 425 U.S. 391 (1976) .

Harper & Row Publishers, Inc. v. Decker,
423 F.2d 487 (7th Cir. 1970), aff'd by an

equally divided vote, 400 U.S. 348 (1971) .

Hickman v. Taylor, 329 U.S. 495 (1947)

In re Grand Jury Investigation, 599 F.2d
1224 (3d Cir. 1979)

In re Grand Jury Proceedings, 473 F.2d
840 (8th Cir. 1973) . ;

In re Grand Jury Subpoena, 599 F.2d
504 (2d Cir. 1979) .

Natta v. Hogan, 392 F.2d 686 ea
Cir. 1968)

Radiant Burners, Inc. v. American Gas
Ass’n, 320 F.2d 314 (7th Cir.),
cert. denied, 375 U.S. 929 (1963)

Reisman v. Caplan, 375 U.S. 440 (1964) .

United States v. Brown, 478 F.2d 1038
(7th Cir. 1973)

United States v. Louisville & Nashville | R.R.,
236 U.S. 318 (1915)

United States v. Nobles, 422 U.S. 295 (1975) ;

United States v. Wise, 370 U.S. 405 (1962).

Page

iil

TABLE OF AUTHORITIES (continued)

RULES Page
a i Ga x dw os Wo ec Das 10
eh. PURSE sa oe a ek recckY oe ees 3

TREATISE
8 Wigmore, Evidence § 2291 (McNaughton rev.

See Na 5. eo, ee ee eee 4

OTHER

Note, The Attorney and His Client’s sesso
Pe wee hin ae Chen aa cb el es i or ee 8

Note, The Attorney-Client Privilege in the ecm
rate Setting: A Suggested Approach, 69
Mich. L. Rev. 360(1970) ..... oi gh ae

Miller, The Challenge to the Attorney- Client
Privilege, 49 Va. L. Rev. 262(1963) ...... 4

3u the Supreme Count of the United States

OCTOBER TERM, 1979

No. 79-886

THE UPJOHN COMPANY, ET AL.,
PETITIONERS,

Vz

UNITED STATES OF AMERICA, ET AL.,
RESPONDENTS

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF
APPEALS FOR THE SIXTH CIRCUIT

MEMORANDUM OF THE AMERICAN BAR
ASSOCIATION AS AMICUS CURIAE

The American Bar Association, with the consent of the
parties, submits this memorandum amicus curiae in support of
the petition for a writ of certiorari.

INTEREST OF THE AMERICAN BAR
ASSOCIATION

The petition for a writ of certiorari raises two issues of
peculiar significance to lawyers: (1) the scope of the attorney-
client privilege as applied to communications made to a lawyer
by the officers and employees of a corporate client; and (2) the
extent to which a lawyer’s work product on behalf of a client
may be subject to administrative discovery. Issues of confiden-

1

2

tiality such as these go to the heart of the relationship between
lawyer and client, and they bear importantly upon the lawyer’s
role in the administration of justice. Continued uncertainty
with respect to these issues will impede the efforts of lawyers to
provide responsible, effective representation and to give the
informed guidance necessary to ensure compliance with the law.
It therefore is of central concern to the organized bar, and to
the legal profession generally, that the questions presented in
the petition be given prompt, authoritative resolution and that
they be decided with the views, needs, and responsibilities of
the profession in mind.

ARGUMENT

1. The attorney-client privilege, as applied to corporate
clients, should not be restricted solely to communications made
by members of the corporation’s control group. The court of
appeals in this case held that the attorney-client privilege, as it
applies to corporate clients,’ protects only communications
made by those relatively senior corporate executives who decide
how the corporation will act in response to the advice of
counsel. In so holding, the court emphasized and enlarged a
continuing conflict among the circuits. Two other courts of
appeals previously had endorsed the “control group” test
adopted by the court below. See Jn re Grand Jury Investigation,
599 F.2d 1224, 1237 (3d Cir. 1979); Natta v. Hogan, 392 F.2d
686, 692 (10th Cir. 1968).? On the other hand, two courts of

‘It has long been understood that the attorney-client privilege applies
to corporate clients. See Radiant Burners, Inc. v. American Gas Ass’n, 320
F.2d 314, 323 (7th Cir.), cert. denied, 375 U.S. 929 (1963). See also,
e.g., United States v. Louisville & Nashville R.R., 236 U.S. 318, 336
(1915).

?Under the “control group” test, the attorney-client privilege extends
only to communications between counsel and corporate officers or
employees who have “the authority to control, or substantially participate
in, a decision regarding action to be taken on the advice of a lawyer or is
an authorized member of a group that has such power.’ Natta v. Hogan,
392 F.2d at 692. See also City of Philadelphia v. Westinghouse Electric
Corp., 210 F. Supp. 483, 485 (E.D. Pa. 1962).

3

appeals have rejected that test, adopting instead a less restrictive
view of the attorney-client privilege. See Diversified Industries,
Inc. v. Meredith, 572 F.2d 596, 609 (8th Cir. 1978) (en banc);
Harper & Row Publishers, Inc. v. Decker, 423 F.2d 487, 491-92
(7th Cir. 1970), aff'd by an equally divided vote, 400 U.S. 348
(1971).3

The very existence of a conflict, which results in litigants in
different circuits being subjected to different rules, is of course
sufficient cause for review of this case on certiorari. Sup. Ct. R.
19(1)(b). The conflict represented by this case, moreover,
stands in special need of resolution, for corporations with
nationwide activities at present are left with no adequate means
of determining in advance whether communications that offi-
cers and employees make to counsel will be afforded the
protection of the attorney-client privilege. Furthermore, as this
Court recognized in granting certiorari in Harper & Row,
correct delineation of the scope of the attorney-client privilege
as applied to corporate clients also is a matter of manifest
public importance affecting both the legal apts and the
administration of justice.

In addition, amicus submits that this case was decided
incorrectly by the court of appeals. The purpose of the
attorney-client privilege “‘is to encourage clients to make full
disclosure to their attorneys.”’ Fisher v. United States, 425 U.S.
391, 403 (1976). See also Radiant Burners, Inc. vy. American
Gas Ass'n, 320 F.2d at 322. Such full disclosure obviously is in
the interest of both lawyer and client. The competent attorney
cannot render sound legal advice or provide effective representa-

3Under the “subject matter” test adopted in Harper & Row, “an
employee of a corporation, though not a member of its control group, is
sufficiently identified with the corporation so that his communication to
the corporation’s attorney is privileged where the employee makes the
communication at the direction of his superiors in the corporation and
where the subject matter upon which the attorney’s advice is sought by
the corporation and dealt with in the communication is the performance
by the employee of the duties of his employment.” Harper & Row
Publishers, Inc. v. Decker, 423 F.2d at 491-92. The Eighth Circuit in
Diversified Industries adopted a “modified Harper & Row test.” Diversi-
fied industries, Inc. v. Meredith, 572 F.2d at 608.

4

tion unless he has thorough knowledge of all relevant facts,
including both the actions his client has taken and the
information upon which his client acted. These facts can best,
and in most instances only, be learned directly from the client.
“If such communications were required to be made the subject
of examination and publication, such enactment would be a
practical prohibition upon professional advice and assistance.”
United States v. Louisville & Nashville R.R., 236 U.S. at 336.
See also Connecticut Mutual Life Ins. Co. v. Schaefer, 94 U.S.
457, 458 (1876). Consequently, this Court has long understood
that “it is indispensable for the purposes of private justice,”
Chirac v. Reinecker, 24 U.S. (11 Wheat.) 280, 294 (1826), that
“the apprehension of compelled disclosure by the legal advisers
. . . be removed.” 8 Wigmore, Evidence § 2291 at 545
(McNaughton rev. 1961).

The full disclosure promoted by the attorney-client privilege
also serves the larger societal interest of “encourag[ing]
adherence to the law.”’ Miller, The Challenges to the Attorney-
Client Privilege, 49 Va. L. Rev. 262, 270 (1963). This is
especially true with regard to corporate clients. If disclosures
may be made in confidence, counsel is better able to investigate
allegations of wrongdoing within the corporation, determine the
legal implications of past actions, and advise on how to avoid
future violations.

The narrow compass given to the attorney-client privilege by
the court of appeals below frustrates the privilege’s central
purpose of encouraging full disclosure to counsel. The “control
group” test adopted by the court of appeals directly inhibits
disclosure by exposing to discovery the very communications
that counsel would find to be of greatest assistance. “In
practice, [the “‘control group” test] results in protecting only
communications of top level executives which fails to take into
account the realities of corporate life.’ Diversified Industries,
Inc. v. Meredith, 572 F.2d at 608. A corporation’s senior
executives rarely will be in the best position to inform counsel
concerning specific factual details on which legal issues may
turn. First-hand knowledge of the relevant facts usually is
possessed by middle-level executives or operating personnel.

These are the employees from whom counsel must acquire the

5

information upon which his advice will be based, yet the
“control group” test discourages the corporation from asking
them to make a full disclosure.

Moreover, as a practical matter much of corporate counsel’s
day-to-day legal advice is rendered to employees considerably
below the level of senior management. This is so for at least two
reasons. First, it is more efficient, and more effective, to give
legal advice directly to those whose conduct is to be guided
thereby, and that frequently means operating personnel far
removed from the boardroom. Second, “ ‘middle management
executives who probably do not qualify for inclusion in the

control group .. . have responsibilities for making recommenda-
tions which are ratified verbatim by the higher echelon
management... .” In fact, middle management may include the

parties whose statements most need protection because these
men frequently are the real decision makers.” Note, The
Attorney-Client Privilege in the Corporate Setting: A Suggested
Approach, 69 Mich. L. Rev. 360, 373 (1970). To inhibit
disclosures by and communications with middle management
and operating personnel therefore strikes at the very heart of
the relationship between corporate counsel and his client.

The “control group” test operates indirectly as well as
directly to inhibit full disclosure of relevant facts to counsel.
“From the lawyer’s viewpoint, the underlying policy of assuring
a client that his communications will remain confidential will be
served only if the lawyer is able to predict, with reasonable
reliability, that a particular communication will be held by a
court to be privileged.” /d. at 375. But the consequence of the
‘control group”’ test is that each time an attorney is asked for
advice by a corporate client, he must first inquire into the
position, status, and responsibility of the corporate employee
making the request in order to determine whether the employee
is within the requisite control group. The answer may not
always be clear; the employee may have some authority but not
necessarily enough.* And a determination made when the

*The attorney thus is presented with a practical difficulty at the outset.
He may be forced to make an initial investigation into a matter having
little or nothing to do with the legal issue with respect to which his advice

request or communication occurs may not withstand the
passage of time: since the identity of the group empowered to
decide the corporation’s course of action depends not only
upon the nature but also upon the significance of the matter to
be decided, its membership cannot always be known with
certainty at the time facts are marshalled and advice given.
Thus, counsel may not rely with confidence on the availability
of the attorney-client privilege with respect to communications
on matters that may possibly grow in significance over time.°
This uncertainty over the scope of the privilege as applied to
particular communications could discourage even disclosures
that otherwise might later have been recognized as privileged.
The “control group” test confronts counsel with a painful
and unfair dilemma: he must either render advice and provide
representation on the basis of inadequate knowledge of the
facts or obtain such Knowledge at the risk of becoming a
discovery tool for opposing parties. The dangers of proceeding
without a full understanding of the facts are manifest. The
lawyer has an obligation to inquire fully into the corporate
actions and other facts that bear upon the advice he has been
requested to give. Yet, if the “control group” test applied, the
lawyer would need to advise the control group (assuming that it
could be identified) of the hazards of making inquiries that
would fall outside the protection of the attorney-client
privilege. As a consequence, he might be constrained to give
advice without the benefit of full and candid responses to such
inquiries. Such a procedure obviously is undesirable: it is not in
the interest either of the corporation or of society at large for

is sought. He may, in effect, be required to give two layers of advice, one
as to whether the ensuing communications will be privileged and another
on the merits of the legal problem at hand. This can and almost certainly
often will occur in situations requiring immediate legal advice on the
merits.

‘In contrast, the “subject matter” test adopted in Harper & Row
“creates a measure of predictability on which attorneys and corporations
can rely.” Note, The Attorney-Client Privilege in the Corporate Setting: A
Suggested Approach, 69 Mich. L. Rev. at 370.

the corporation to be forced to play blindman’s bluff with the
law.

Furthermore, under the “control group” test the conse-
quences for the lawyer who aggressively presses his inquiries
into the facts can be embarrassing in the extreme. His reward
for diligence, for example, may be that he later is required to
deliver to opposing parties damaging information that causes his
client to lose the action he was hired to win. The lawyer may
even be called to testify against his client. A practice of that
sort would be sadly “demoralizing to the Bar... .” Hickman v.
Taylor, 329 U.S. 495, 516 (1947) (Jackson, J., concurring).

There also is an element of unfairness to middle management
and operating personnel in the “control group” test. An
attorney’s investigation may result in communications by
employees that reveal possible civil or criminal violations that
they may have committed in the course of their employment,
and for which they may be individually liable. See, e.g, United
States v. Wise, 370 U.S. 405 (1962). Under the “control
group” test, the corporation or its counsel could be compelled
to disclose all communications of that nature made by officers
and employees other than senior executives; only communica-
tions made by members of the control group would be insulated
from such compelled disclosure. Thus the “control group” test
unfairly puts different employees on a different legal footing
with respect to the confidentiality of their admissions to
corporate counsel. Moreover, the knowledge that the govern-
ment could compel the corporation or its counsel to disclose
their potentially incriminating communications almost certainly
would dissuade lower-level employees who have information of
questionable activities from revealing such information to
counsel. As a consequence, the “control group” test could
directly frustrate the corporation’s efforts to discover the facts
and acquire the information that it needs in order to put an end
to any unlawful activities and place itself in full compliance
with the law.

The court of appeals below apparently believed that the
restrictive “control group” test was a necessary means of
facilitating discovery by opposing parties. But the denial of

confidentiality to communications between counsel and
lower-level officers and employees cannot be justified on that
ground. Retention of the attorney-client privilege for such
communications does not foreclose opposing parties from
pursuing all conventional avenues of discovery made available
under the federal rules, including questioning the same
corporate personnel. See, e.g., Note, The Attorney and His
Client’s Privileges, 74 Yale L.J. 539, 546-47 (1965). The
attorney-client privilege appropriately fosters and protects the
relationship between lawyer and client, but it does not bar
discovery of the facts.

In summary, the question presented by petitioners concern-
ing the proper scope of the attorney-client privilege is vitally
important in terms of the legal profession and its responsibili-
ties, and this question was wrongly decided by the court below.
Review by this Court plainly is warranted.

2. An attorney’s work product should be accorded a
qualified privilege against administrative discovery. The court of
appeals below held, without analysis or elaboration, that the
work product doctrine does not apply to an administrative
summons issued by the Internal Revenue Service. This holding,
which has obvious implications for other forms of administra-
tive discovery as well, squarely conflicts with the conclusion of
the Seventh Circuit that “the work product doctrine does have
applicability to a proceeding for the enforcement of an Internal
Reveriue summons.”’ United States v. Brown, 478 F.2d 1038,
1041 (7th Cir. 1973). The resulting split of authority creates
different rules for litigants in different jurisdictions and raises
grave doubts about whether an attorney’s work product on
behalf of a corporation with geographically widespread activi-
ties can ever remain confidential.

There is no apparent basis or justification for the rejection of
the work product doctrine in this case. This Court has expressly
stated that evidentiary privileges may be asserted against a
summons issued by the Internal Revenue Service. Reisman v.
Caplan, 375 U.S. 440, 449 (1964). And it is well established
that the applicability of the qualified privilege against disclosure
of an attorney’s work product is not limited, as the court below

apparently believed, solely to actions governed by the Federal
Rules of Civil Procedure: the work product doctrine applies, for
example, in both criminal cases and grand jury proceedings. See,
e.g., United States v. Nobles, 422 U.S. 225, 238 (1975); In re
Grand Jury Subpoena, 599 F.2d 504 (2d Cir. 1979); In re
Grand Jury Proceedings, 473 F.2d 840, 842 (8th Cir. 1973).

The logic of the doctrine extends to administrative proceed-
ings as well. This Court described the basis for the work product
doctrine in Hickman v. Taylor:

Not even the most liberal of discovery theories can
justify unwarranted inquiries into the files and the
mental impressions of an attorney.

Historically, a lawyer is an officer of the court and
is bound to work for the advancement of justice
while faithfully protecting the rightful interests ot his
clients. In performing his various duties, however, it is
essential that a lawyer work with a certain degree of
privacy, free from unnecessary intrusion by opposing
parties and their counsel. Proper preparation of a
client’s case demands that he assemble information,
sift what he considers to be the relevant from the
irrelevant facts, prepare his legal theories and plan his
strategy without undue and needless interference.
That is the historical and the necessary way in which
lawyers act within the framework of our system of
jurisprudence to promote justice and to protect their
client’s interests. This work is reflected, of course, in
interviews, statements, memoranda, correspondence,
briefs, mental impressions, personal beliefs, and
countless other tangible and intangible ways. .. .
Were such materials open to opposing counsel on
mere demand, much of what is now put down in
writing would remain unwritten. An _ attorney’s
thoughts, heretofore inviolate, would not be his own.
Inefficiency, unfairness and sharp practices would
inevitably develop in the giving of legal advice and in
the preparation of cases for trial. The effect on the

10

legal profession would be demoralizing. And the
interests of the clients and the cause of justice would
be poorly served.

329 U.S. at 510-11 (emphasis added). These considerations and
concerns are present whether the discovery sought is civil or
administrative.

Assertion of the work product privilege in administrative
proceedings would not foreclose or significantly curtail the
government’s ability to conduct a searching inquiry into the
pertinent facts. The Internal Revenue Service, for example, has
ample authority to secure information from the corporation, its
employees, and others who may be in possession of records of
transactions or actual knowledge of the facts. Moreover, the
work product doctrine itself establishes only a qualified
privilege that may be overcome by a showing of necessity. See,
e.g., Hickman v. Taylor, 329 U.S. at 511-12; Fed. R. Civ. P.
26(b)(3). Thus, the government’s legitimate interest in knowing
the facts and reviewing the evidence can be given appropriate
recognition within the traditional confines of the work product
doctrine. See United States v. Brown, 478 F.2d at 1041. That
interest does not require or justify wholesale rejection of the
work product doctrine in administrative proceedings.

The novel decision below with respect to the work product
doctrine serves to compound the harshness of the “control
group” test that the court used to limit the attorney-client
privilege. The two holdings together appear to permit the
government to invade, without any showing of necessity,
practically all records maintained by counsel concerning his
confidential investigations into allegations of corporate wrong-
doing. The consequence of thus turning corporate counsel into
an interrogator for the government would be substantially to
discourage the socially beneficial practice of cofporate self-
inquiry. Accordingly, this Court should grant certiorari in order
to review both issues of privilege in this case.

11

CONCLUSION
The petition for a writ of certiorari should be granted.

Respectfully submitted.

LEONARD S. JANOFSKY, President,
American Bar Association,
1155 East 60th Street,
Chicago, Illinois 60637
(312) 947-4000

LEON JAWORSKI,
KEITH A. JONES,
Fulbright & Jaworski,
1150 Connecticut Avenue, N.W.
Washington, D.C. 20036
(202) 452-6800

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_2171%3A04. Public record. Not legal advice.