The Thompson Memorandum: Attorneys' Fees and Waiver of Corporate Attorney-Client and Work Product Protection

Publication Date: January 2007

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Justice

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Abstract:

Corporations are criminally and civilly liable for the misconduct of their officers and employees committed within the apparent scope of their authority for the benefit of the corporation. Corporations frequently direct their attorneys to conduct internal investigations to determine if the corporation is in compliance with regulatory and other legal requirements. Much of the information gathered in these investigations is protected by the attorney-client privilege and the attorney work product doctrine, unless waived. Once waived, the information is often available to private civil litigants. In addition, most corporations advance their officers and employees attorneys' fees relating to job related litigation.

The Justice Department enjoys prosecutorial discretion to bring criminal charges against a corporation, its culpable officers or employees, or both. In some instances, indictment alone can be catastrophic if not fatal for a corporation. The Thompson Memorandum, since revised as the McNulty Memorandum, described the policy factors to be considered in the exercise of this discretion. Two of the factors explicitly mentioned were whether a corporation had waived its privileges and whether it had cut off the payment of attorneys' fees for its officers and employees.

In United States v. Stein, a federal district court in New York determined that implementation of the policies in the Thompson Memorandum violated the Fifth Amendment right to due process, the Sixth Amendment right to the assistance of counsel, and the Fifth Amendment privilege against self-incrimination.

The Attorney-Client Privilege Protection Act of 2007, S. 186, introduced by Senator Specter, would bar the federal investigators, regulators and prosecutors from demanding that corporations waive their attorney-client or attorney work product protection or from cutting off attorneys' fees for their officers or employees. It would also preclude federal authorities from weighing such conduct when deciding whether to bring criminal charges against a corporation.

This report is available in an abridged version -- stripped of its footnotes, and most of its citations to authority as CRS Report RS22588, The Thompson Memorandum In Short: Attorneys' Fees and Waiver of Corporate Attorney-Client and Work Product Protection, by Charles Doyle.