Posted In: Litigation
Business Litigation Blog: Battle of Tech Titans Involves Reminder About the Importance of Protecting Privilege
on June 14, 2021
The attorney-client privilege is one of the oldest and most important protections in our legal system. By protecting the confidentiality of communications between a client and its attorney, the privilege promotes honesty and open disclosure that is necessary to permit attorneys to provide and clients to obtain fully-informed legal advice. Thus, subject to a few exceptions, communications between an attorney and client are usually exempt from disclosure in litigation and discovery so long as the purpose of the communication was to seek or provide legal advice and the communication carries the appropriate indicators of confidentiality.
This protection is particularly recognized where the attorney involved is “outside” counsel—for example, a law firm that is engaged specifically by the client to provide legal advice or services on a discrete issue. But, where the attorney is “in-house” counsel—that is, an attorney directly employed by the client company—courts treat claims of privilege with heightened scrutiny, often inquiring as to the role of the attorney involved in the communication or the purpose for which the communications were sent. One of the common reasons that courts reject claims of attorney-client privilege involving communications with in-house counsel is where the attorney is merely copied, or “cc’ed,” on an email that discusses mere business issues. This pitfall was recently reiterated by U.S. District Court Judge Yvonne Gonzalez Rogers in the ongoing dispute between Epic Games, Inc. and Apple in the Northern District of California.
In August 2020, Epic—creator of the massively popular Fortnite video game—sued Apple, alleging antitrust violations tied to Apple’s app distribution systems. As that suit progressed into discovery, Apple sought to protect from disclosure certain email threads and documents that were sent to in-house attorneys or for which attorneys were included as “cc” recipients. In a decision issued on April 28, 2021, rejecting Apple’s claim of privilege over these documents, Judge Rogers held that the documents involved “business discussion,” not a request for legal advice, and thus could not be privileged just because an attorney was included on the thread, stating: “This is a clear example of business people including a lawyer in an email chain in the incorrect belief that doing so makes the email privileged. It does not,” and, “This is again an example of adding a lawyer to an email thread in an attempt to create a nonexistence privilege.”
Although issues relating to the attorney-client privilege are subject to a fact-intensive analysis, Judge Rogers’ statements echo the prevailing law that simply including an attorney on emails that pertain to “business” discussions will not transform a non-privileged communication into a privileged one. Similarly, designations of an email as “Confidential” or “Privileged” are likely to draw scrutiny rather than blind trust. Rather, to establish the attorney-client privilege, the communications must demonstrate that the client was seeking legal advice (or at least providing information for the purpose of seeking legal advice) and the recipients of the communication were limited to those persons necessary for that purpose. And, while there might be good reasons for including an attorney on a communication discussing “business” matters, as opposed to requests for “legal” advice, your employees should understand the risks that such a communication may not ultimately be found privileged. (Of course, for complicated commercial transactions or other sensitive matters, separating “business” matters from “legal” not a simple task subject to mechanical tests and precision.)
It remains to be seen whether the disclosure of these documents in the Epic v. Apple battle will have a substantial effect on the result, as closing arguments at trial were conducted earlier at the end of May. But, for clients in all industries, this recent decision is an important reminder of the risks that confidential communications are not always protected from disclosure and that your employees should be careful as to their habit of copying in-house attorneys on every potentially sensitive email thread.
As always, if you have any questions or concerns about privilege and best practices, the attorneys at Brouse McDowell are happy to guide you through those issues.
The Epic/Apple suit is captioned Epic Games, Inc. v. Apple, Inc., Northern District of California case no. 3:20-cv-05640.
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