Court Rejects Privilege Claim Based on Inadequate Company Affidavit About Employees’ “Need to Know”

April 25, 2012

Many courts find that circulation of privileged communications within a corporation beyond those with a “need to know” either (1) demonstrates the primarily business (rather than legal) nature of the communications, or (2) waives the privilege. For this reason, companies must sometimes provide evidence that a communication’s recipients meet the “need to know” standard.

In Acosta v. Target Corp., No. 05 C 7068, 2012 U.S. Dist. LEXIS 31655, at *27 (N.D. Ill. Mar. 9, 2012), the court noted that defendant Target submitted two declarations identifying the recipients of various withheld emails, “presumably to show that the communications to those persons did not waive privilege because they concerned matters within the scope of the recipient employees’ corporate duties.” The court then pointed out that the declarations did not include all of the recipients – ultimately concluding that the declarations must have left them out “because Target could not explain why they were within the scope of privileged communications – or Target could not be bothered to do so.” Id. The court rejected Target’s privilege claim for those documents.

As a “control group” state, Illinois extends privilege protection only to a corporate lawyer’s communications with upper management. However, the Acosta decision did not rest on Target’s failure to show that the recipients were in the “control group.” Instead, the court pointed to Target’s failure to show that the recipients had a “need to know” – a requirement nearly every state recognizes.