Michael W. Mitchell, left, and Edward Roche, right, of Smith Anderson in Raleigh, North Carolina.

A recent decision of the U.S. Court of Appeals for the Fourth Circuit underscores the importance of the attorney-client privilege. In a case titled In re: Search Warrant Issued June 13, 2019, a law firm identified only as the "Law Firm" fought to protect the attorney-client privilege on behalf of its clients. The Fourth Circuit, recognizing that the privilege is a fundamental facet of effective legal representation, showed its willingness to scrupulously guard that privilege.

The attorney-client privilege protects confidential communications between an attorney and client. It has existed since the 16th Century, and is based on the recognition that attorneys will be able to give sound legal advice only if fully informed by the client. The privilege makes sure clients feel free to communicate fully and frankly with their attorneys without fear of disclosure. The privilege belongs to the client. That means the client, and only the client, can choose to waive the privilege and share communications with third parties. The attorney, however, is empowered to raise claims of attorney-client privilege on the client's behalf, and is ethically required to protect the client's privilege.

Although the attorney-client privilege is subject to certain limited exceptions, it generally enjoys strong protection in the courts. As a result, it helps create the circumstances for an attorney to provide effective representation to a client.

Background to the 'In re: Search Warrant' Case

Federal prosecutors believed that one of the partners in the Law Firm, referred to in the opinion as "Lawyer A," was illegally obstructing the government's investigation of one of his clients, "Client A." Prosecutors sought to obtain materials from the attorney about his client, including materials that would usually be privileged. The prosecution argued that protection had been waived based on the "crime-fraud exception." Under that exception, disclosure may be required where the legal advice is being used in furtherance of ongoing or future activity that is illegal or fraudulent.

The government obtained a search warrant to obtain materials from Lawyer A relating to his representation of Client A. In connection with the issuance of the search warrant, and without any representative of Client A or Lawyer A present, a federal magistrate judge authorized a "Filter Team" to review Lawyer A's materials under the "Filter Team Practices and Procedures" approved by the government.

The Filter Team consisted of federal prosecutors and their staff members, along with IRS and DEA agents, and forensic examiners. Those individuals were not involved in the investigations of Lawyer A and Client A. Under the Practices and Procedures, the Filter Team would sort through Lawyer A's documents. The Filter Team would send to prosecutors any documents it determined to be non-privileged. If there were disagreements between the Filter Team and Lawyer A over whether certain documents were privileged, those documents would be submitted to the court for resolution.

Members of the Filter Team then executed the search warrant. They conducted a six-hour search of the Law Firm's offices and seized voluminous documents, including all of Lawyer A's emails. The Law Firm requested that the Filter Team postpone its examination of the documents so that the Law Firm could conduct its own privilege review or the district court could examine the documents, but the government ignored the request.

The Law Firm asked the district court to restrain the Filter Team's actions, arguing that the authorization of the Filter Team—and the protocol governing its actions—were illegal. Given the urgency of the situation, the Law Firm requested emergency relief, including a preliminary injunction. A preliminary injunction is an interim remedy that preserves the status quo while a court decides the merits of the case, preventing harm that would arise in the meantime. The district court denied the request for a preliminary injunction, however, and the Law Firm appealed.

The Fourth Circuit's Decision

The Fourth Circuit reversed the district court's denial of a preliminary injunction. The decision meant that a preliminary injunction would be entered to restrain the Filter Team's actions and protect the Law Firm from the Filter Team's intrusion on the Law Firm's clients' attorney-client privilege. To obtain a preliminary injunction, a party must show, among other things, that it would suffer harm that is "irreparable" without the injunction. Harm is irreparable when a court cannot later fix it by awarding damages or awarding some other form of relief—i.e., the only way to remedy the harm is to stop it from occurring in the first place. A party must also show that it is likely to succeed on the merits of the case. The Fourth Circuit ruled that the Law Firm had satisfied those standards.

The Fourth Circuit reasoned that the Law Firm would suffer irreparable harm if not granted a preliminary injunction. Less than 1% of the seized emails were to or from Client A or mentioned Client A's last name. Of the remaining 99%, many contained privileged communications and attorney work product concerning the Law Firm's other clients. The government could therefore come upon other clients' privileged materials. The Fourth Circuit reasoned that the broad-ranging search could also chill communications with other clients. Because the attorney-client privilege is an essential ingredient of effective representation, the Filter Team's intrusion would inhibit the Law Firm's ability to represent other clients.

Next, the Fourth Circuit determined that the Law Firm was likely to succeed on the merits of its claim. The court identified three separate legal flaws with the use of the Filter Team and its Practices and Procedures. First, only judges may resolve disputes over attorney-client privilege.  That task had been improperly delegated here to the members of the Filter Team, who were part of the executive branch. This was unconstitutional, and it risked privileged documents erroneously being provided to prosecutors.

Second, the magistrate judge had authorized the Filter Team and its Practices and Procedures based only on representations from the government. Neither the Law Firm, nor Lawyer A, nor Client A had participated in the proceedings. This was procedurally improper, and it left the magistrate judge with an incomplete picture of the circumstances and the interests at stake.

Third, the Fourth Circuit determined that the magistrate judge authorized the Filter Team and its Practices and Procedures without taking adequate account of the foundational principles that protect attorney-client relationships. The attorney-client privilege is so important that the magistrate judge should have thoroughly considered it before allowing federal agents and prosecutors to rummage through the Law Firm's materials.

Takeaways from the 'In re: Search Warrant' Decision

The Fourth Circuit's decision shows a strong judicial interest in protecting the attorney-client privilege. The court highlighted the importance of this protection for effective attorney-client relationships and a willingness to safeguard it when it is at risk. The court's decision reaffirms that it is a privilege worth fighting for.

The case also teaches that time is almost always of the essence when privilege is concerned. Had the Law Firm delayed seeking emergency relief, many client confidences could have been lost. With its swift action, the Law Firm was able to protect its clients' privileged materials. Also, although the preliminary injunction is technically only an interim remedy, obtaining a preliminary injunction in a case like this puts the party in a strong position going forward. The Fourth Circuit thoroughly analyzed the merits of the case and decided that the Law Firm was likely to succeed, sending a strong signal to the government that it would likely lose if it continued to advocate for the use of the Filter Team. In practice, the preliminary injunction also prevents the Filter Team from moving forward until the litigation is resolved, which could take some time. If the government wants to continue the investigation in the meantime, it will need to do so in a way that does not violate the principles of privilege set out in the Fourth Circuit's opinion.

The case is also a reminder of the importance of protecting privileges not just in litigation, but also whenever clients are communicating with attorneys. Clients should take steps not to disclose confidential information to anyone outside the attorney-client relationship, because it can result in a waiver of the privilege. A standard engagement letter should advise clients to do their part to safeguard the privilege as well. Clients should speak to their attorney about other best practices for preserving and protecting the attorney-client privilege.

 

Michael W. Mitchell is a trial and appellate lawyer with Smith Anderson in Raleigh, North Carolina. He is co-chair of the firm's Business Litigation team, as well as the Intellectual Property Litigation practice. Edward Roche is an attorney in the firm's Litigation practice group.