Circuit Court Reverses Lower Court’s Strict Ruling on Privilege Logs

February 12, 2003

Corporations asserting the attorney-client privilege for intracorporate communications must establish that the communications were not shared beyond those with a “need to know” within the company. One recent District Court decision held that a company had failed to carry its burden of proof, because its privilege log did not demonstrate that each company employee receiving privileged communication met the “need to know” standard.

In Federal Trade Commission v. GlaxoSmithKline, 294 F.3d 141, 147-48 (D.C. Cir. 2002), the Circuit Court reversed this decision. It held that the District Court’s ruling was “overreaching,” and that courts may “reasonably infer” (absent “evidence to the contrary”) that company employees receiving privileged communication needed them to perform their work.

Lawyers representing corporations in litigation should take comfort in this more reasonable standard, but continue to train their clients to share privileged communications only with those company employees who “need to know” the information.