Brief Fact Summary. The Petitioner, Upjohn Co. (Petitioner), conducted an internal audit and investigation that revealed alleged illegal payments made to foreign officials in exchange for business. Petitioner volunteered notice of such actions to the Internal Revenue Service (IRS), who issued a summons for information collected by Petitioner, including internal questionnaires sent to managerial employees. Petitioner maintained those documents were protected by the attorney-client privilege and attorney work product.
Synopsis of Rule of Law. In the corporate context, attorney-client privilege extends to lower level employees, not just to those in control of the corporation. The work-product doctrine protects oral statements made to attorneys, which necessitates a showing of undue hardship on the part of the party-opponent who seeks that information.
Issue. Whether the attorney-client privilege in the corporate context extends to employees not within the “control group” of the corporation.
Whether the IRS had shown sufficient necessity and justification to overcome the work-product doctrine.
Held. Judgment of the Court of Appeals reversed and remanded.
The attorney-client privilege protects the communications in this case from compelled disclosure.
The work-product doctrine applies in tax summons enforcement proceedings where a strong showing of necessity must be shown to compel discovery of work product.
Discussion. The attorney-client privilege applies to corporations, not just to the “control group” rather, it extends to lower level employees as well, since their actions as well may involve the corporation in legal difficulties. The attorney-client privilege only protects disclosure of communications. It does not protect disclosure of the underlying facts by those who communicated with the attorney. In this case, the Petitioner gave to the IRS a list of those employees to whom the questionnaire was given and those who answered. The IRS was free to question the employees who communicated with Thomas and outside counsel.
The court shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation. The notes and memoranda that the IRS sought in this case were work product based on oral statements. This required the IRS to show necessity and undue hardship in obtaining the information it sought, a burden that the Supreme Court of the United States (Supreme Court) held was not met.