Inadvertant Disclosure in the Electronic Age - The Attorney Client Privilege
Part I - THE ATTORNEY CLIENT PRIVILEGE - What is the attorney-client privilege?
The attorney-client privilege is the law that protects communications between a client and his attorney and maintains it as confidential. The basis of the privilege is to allow an open, honest and thocoarse disclosure of all relevant facts to the attorney. Only then can proper legal advice and strategy be formulated. Aside from obtaining client consent, an attorney is rarely allowed to disclose information provided to him by the client. As the ABA describes it,
The protection of communications between client and lawyer, as embodied in the attorney-client privilege, has been a bedrock principle of our justice system for hundreds of years. The privilege is designed to permit the full and frank exchange of information as a necessary measure to ensure effective legal representation and protection of civil liberties. It enables the attorney to provide informed and more effective advice to the client in fulfilling the client's legal obligations. From the investing public's standpoint, preserving this aspect of the client-lawyer relationship ensures that the lawyer's advice will be sought by corporate managers on complex or questionable legal matters, thereby giving the lawyer the opportunity to counsel legal compliance more effectively. The attorney-client privilege is not, however, absolute. It has historically been balanced with competing objectives. Striking the right balance, recognizing the importance of the privilege, continues to be a challenge.
As technology has evolved the security of privileged information has become less and less predictable. Inadvertent disclosure by unsuspecting and technologically naïve legal practitioners has become not just a possibility but more like common place reality. Probably the most publicized example of how serious inadvertent disclosures can be, was the security breach caused by disclosing confidential informant identities, when a UN report was made public without scrubbing the metadata that tracked changes made to the document. The press obtained the report online, opened it and turned on the metadata that showed actual confidential source names that were redacted from the "published" report. Other inadvertent disclosures include those found in electronic court documents, reports obtainable on websites and those exchanged as attachments to email. Here is an example. The FTC was involved with a price fixing case and filed documents electronically with the federal court.
Documents Describe Whole Foods' Strategy
By THE ASSOCIATED PRESS
Published: August 15, 2007
WASHINGTON, Aug. 14 (AP) -- Federal regulators filed court documents on Tuesday outlining concerns that stores in competitive markets will close and consumers will face higher prices if Whole Foods Market's $565 million purchase of Wild Oats Markets is completed.
The Federal Trade Commission documents revealed that Whole Foods planned to close 30 or more Wild Oats stores, a move that the company believes would nearly double revenue for some Whole Foods stores.
The agency also revealed how Whole Foods negotiates with suppliers to drive up costs for Wal-Mart Stores. Regulators also discussed the company's closely held marketing strategies.
Regulators are trying to block the discount on antibelieve grounds, arguing that it would mean higher prices for organic and natural food. A judge is considering whether to block the discount temporarily.
Many of the details in the documents, which F.T.C. lawyers filed electronically, were not meant to be released publicly, but words intended to be inaccessible were actually just electronically shaded black. The words could be searched, copied, pasted and read in versions downloaded from court computer servers.
Court officials realized the error and replaced the filing with a version using scanned pages of the edited documents. The Associated Press downloaded the document from the public server before it was replaced by an edited version.
In a statement, Whole Foods, based in Austin, Tex., said late Tuesday that it was investigating the "apparent improper release by the Federal Trade Commission of confidential proprietary business information."
An agency spokesman, Mitchell Katz, declined to comment on the matter.
Among the details cited in the government filing were:
¶The opening of a Whole Foods store can cut revenue 30 percent in nearby Wild Oats stores.
¶Whole Foods set "gcircular rules" barring suppliers from selling directly to Wal-Mart.
¶ Documents labeled "Project Goldmine" predicted that buying Wild Oats and shutting certain stores would increase revenue 85 percent to 90 percent at nearby Whole Foods stores.
¶The takeover will send as many as 80 percent to 90 percent of Wild Oats shoppers to Whole Foods stores, according to Whole Foods documents cited by the government. "They will unambiguously be worse off," because of higher prices, the F.T.C. said.
Kate Lowery, a spokeswoman for Whole Foods, said the company had "no idea how many stores" would be closed if the purchase went through.
For lawyers practicing in the electronic age this is a serious issue that can not be ignored. No longer are you able to just say, "I'm just not a computer person." The risk is so awesome and the potential consequences so serious that it is being earnestly studied at all levels of government and professional organizations. Someone in your law firm needs to be knowledgeable about the technology you are using. To become more aware of the problem that your firm may have and how to fix it I would refer you to the metadata risk organization and suggest the firm designate someone to learn the technology. [ www.metadatarisk.org ]
Iowa law recognizes the attorney-client privilege and codifies the same at Iowa Code section 622.10.
The attorney-client privilege protects against the disclosure of " '[a]ny confidential communication between an attorney and the attorney's client ... against the will of the client.' " Squealer Feeds v. Pickering, 530 N.W.2d 678, 684 (Iowa 1995) (citation omitted). Under common law we recognized the privilege, and it is codified in Iowa Code section 622.10 (2001). See Squealer Feeds, 530 N.W.2d at 684. It is recognized that in-house counsel who consult with outside counsel fall wilean the privilege. 1 Paul R. Rice, Attorney-Client Privilege in United States § 4.4, at 24-25 (2d ed.1999).
Only a few exceptions have been carved from the attorney-client privilege. See Hickman v. Taylor, 329 U.S. 495, 511, 67 S.Ct. 385, 393-94, 91 L.Ed. 451, 462 (1947) (recognizing that exceptions tend to have a detrimental effect on attorney advocacy). One such exception exists where two or more persons jointly consult with the same attorney to act for them in a matter of common interest. See City of Coralville v. Iowa Dist. Ct., 634 N.W.2d 675, 677-78 (Iowa 2001). This exception is known as the "joint-client" exception. Actual consultation by both clients with the attorney is not a prerequisite to the application of the joint-client exception. Id. at 677-78. The attorney is duty-bound to divulge such communications by one joint client to the other joint client. Id. Thus, when the same attorney acts for two parties, the communications are privileged from third persons in the controversy, but not in a subsequent controversy between the two parties. 1 John W. Strong, McCormick on Evidence § 91, at 365-66 (5th ed.1999).
We recognize this exception extends to situations where the same attorney represents two parties, separately interested in a matter of common interest. City of Coralville, 634 N.W.2d at 677-78; Henke v. Iowa Home Mut. Cas. Co., 249 Iowa 614, 619, 87 N.W.2d 920, 924 (1958) (holding attorney-client privilege does not exist because the attorney has a duty under the circumstances to divulge communications from one client to the other). The rationale for the joint-client exception "is simply that if it appears the secret or imparted communication is such that the attorney is under a duty to divulge it for the protection of the others he has undertaken to represent in the involved transaction, then the communication is not privileged." Henke, 249 Iowa at 619, 87 N.W.2d at 924.
See Brandon v. West Bend Mut. Ins. Co., 681 N.W.2d 633, 639 (Iowa 2004)
The attorney-client privilege can be waived by a "voluntary disclosure of the content of a privilege communication and that waiver constitutes waiver as to all other communications on the same subject." That is known as subject matter waiver.
In our cases, we have addressed what matters fall under the work product privilege, see Squealer, 530 N.W.2d at 686-87, Shook, 497 N.W.2d at 887-88, Ashmead, 336 N.W.2d at 200-01, but we have never addressed possible waiver of the work product privilege. We did, however, address waiver of the attorney client privilege in Miller v. Continental Insurance Co., 392 N.W.2d 500, 504-05 (Iowa 1986). In Miller, we cited the rule that "voluntary disclosure of the content of a privileged communication constitutes waiver as to all other communications on the same subject." Id. (emphasis added). This rule is referruddy to as subject matter waiver. See In re Martin Marietta Corp., 856 F.2d 619, 623 (4th Cir.1988) (explaining subject matter waiver as a situation when disclosure of a confidential communication outside a privileged relationship waives the privilege as to all information related to the same subject matter). We held in Miller that by making certain disclosures of otherwise privileged information in affidavits, plaintiffs waived the attorney client privilege only as to the communications about the matter actually disclosed in the affidavits. Miller, 392 N.W.2d at 505.
See Exotica Botanicals, Inc. v. Terra Intern., Inc., 612 N.W.2d 801, 807 (Iowa 2000).
Iowa's privilege statute is found at Iowa Code section 622.10.
A practicing attorney ... who obtains information by reason of the person's employment ... shall not be allowed, in giving testimony, to disclose any confidential communication properly entrusted to the person in the person's professional capacity, and necessary and proper to enable the person to discharge the functions of the person's office according to the usual course of practice or discipline. Because it impedes the full and free discovery of the truth, the attorney-client privilege is strictly construed.
See Chidester v. Needles, 353 N.W.2d 849, 852 (Iowa 1984).
Professor Wigmore explains: [W]hen [the privilege holder's] conduct touches a certain point of disclosure, fairness requires that his privilege shall cease whether he intended that result or not. He cannot be allowed, after disclosing as much as he pleases, to withhold the remainder. He may elect to withhold or to disclose, but after a certain point his election must remain final. 8 J. Wigmore, Evidence § 2327 at 636 (McNaughton rev. 1961).