Courts sometimes must determine if a client’s agent acts within the “magic circle” of those entitled to privilege protection. If an agent falls outside the privilege, (1) the agent’s communication with the client or lawyer will not deserve privilege protection, (2) the agent’s presence during an otherwise privileged communication will destroy the protection, and (3) disclosing privileged communications to the agent will waive the protection. Although previous Privilege Points have noted courts’ expansion of the “functional equivalent” doctrine (treating non-employees as employees for privilege purposes if they are the “functional equivalent” of employees), most courts continue to take a very narrow view of other client agents.
In In re Application Pursuant to 28 U.S.C. § 1782, No. M19-70, 2008 U.S. Dist. LEXIS 30617 (S.D.N.Y. Mar. 31, 2008), Judge John Keenan of the Southern District of New York discussed the role of an agent who participated in (or received copies of) communications between a Cleary Gottlieb lawyer and one of the firm’s clients in connection with an art purchase. The Cleary Gottlieb lawyer had copied the agent on some e‑mails to the client. Cleary Gottlieb actually represented the agent in arguing that she was within the scope of the privilege, because she had acted as an intermediary between Cleary Gottlieb and its client. The court rejected Cleary Gottlieb’s argument, explaining that “regardless of how Levy’s [the agent’s] position is defined, she did not play an indispensable role in facilitating attorney-client communications between [the client] Studio Capital and Cleary.” Id. at *13. Acknowledging that the agent “may have provided some help to Cleary in classifying certain factual issues,” the court relied on an earlier Southern District decision in noting that “‘where the third party’s presence is merely “useful” but not “necessary,” the privilege is lost.'” Id. at *13, *14 (citation omitted).
Lawyers should remember what happened to Cleary Gottlieb ‑‑ and never copy a client’s agent unless that agent plays an “indispensable role” in facilitating communications with the clients. Next week’s Privilege Point will describe what happened to a Skadden Arps lawyer.