DOJ Revises Policy on Corporate Waivers

January 10, 2007

For the past several years, critics have condemned a Justice Department policy (articulated in what is called the “Thompson Memo”) providing more lenient treatment in connection with criminal investigations to corporations which waive their privilege and work product protections. Although there are no reported cases discussing such prosecutorial abuse, a variety of interest groups and several Senators have sought to change the DOJ policy.

On December 12, 2006, Deputy Attorney General Paul McNulty announced policy changes. Under the new approach, prosecutors may ask corporations to waive their protections only “if there is a legitimate need” — and must seek only the “least intrusive waiver necessary.” (Memorandum from Paul J. McNulty, Deputy Attorney General, to Heads of Dep’t Components & United States Attorneys re: Principles of Fed. Prosecution of Bus. Orgs. at 8, 9 (Dec. 12, 2006)). In such circumstance, prosecutors must first seek purely factual information (which generally does not waive any protection), and only then with written authorization from the pertinent United States Attorney. Prosecutors may seek privileged communications or opinion work product only in “rare circumstances,” and only with the Deputy Attorney General’s written authorization. Id. at 10. This new approach should inhibit any rogue prosecutors from abusive practices. Time will tell if the change reduces the supposed incidents of overreaching, or if it silences the DOJ’s critics.

A potentially more significant change is also working its way through the process. Proposed Federal Rule of Evidence 502 would allow corporations to disclose privileged communications or work product to the federal government — without triggering a waiver that allows the inevitable follow-on private plaintiffs to seek the same materials. The public comment period for that change ends in mid-February, and Rule 502 might become effective at the end of this year.