Cadwalader Loses Work Product and Privilege Claims for 51 Internal Investigation Witness Interview Memoranda: Part I

July 19, 2017

Cadwalader Wickersham & Taft lawyers conducted an internal corporate investigation into allegations of self-dealing at Washington Metropolitan Area Transit Authority (WMATA). When a private plaintiff sued WMATA and several individuals, WMATA claimed work product and privilege protection for Cadwalader’s 51 witness interview memoranda – but lost both claims. Banneker Ventures, LLC v. Graham, Civ. A. No. 13-391 (RMC), 2017 U.S. Dist. LEXIS 74155 (D.D.C. May 16, 2017).

Assessing the work product claim, the court acknowledged a Cadwalader lawyer’s declaration that she “‘was aware of the possibility [of] litigation'” and that the memoranda “were ‘intended to be internal work product for use by the Cadwalader legal team.'” Id. at *10 (internal citation omitted). However, the court rejected the work product claim, pointing to (1) internal non-privileged WMATA documents about Cadwalader’s retention, “explaining [that it] was engaged ‘to provide general goverance recommendations, and to evaluate the Code of Ethics for Members of the WMATA Board of Directors'” (id. at *12 (internal citation omitted)); (2) internal non-privileged WMATA documents stating that Cadwalader’s investigation “‘reveal[ed] the need for additional examination, clarifying and strengthening of the Standards of Conduct policies'” (id. (alteration in original; internal citation omitted)); (3) deposition testimony indicating “that the investigation conducted by Cadwalader was for internal WMATA business purposes” ( id. at *11); and (4) a two-year lapse between a threatening letter (which the court acknowledged triggered a reasonable anticipation of litigation against WMATA) and Cadwalader’s retention. The court ultimately concluded that “the contemporaneous statements made by WMATA regarding the investigation do not indicate that the investigation was conducted as a result of anticipated litigation,” and that the “evidence presented supports a finding that absent any anticipated litigation, WMATA would have conducted the same investigation to evaluate its business practices.” Id. at *14-15.

Corporations and their lawyers should assure that everyone understands an internal investigation’s primary motivating purpose, and reflects that motivating purpose in non-privileged contemporaneous documents. Next week’s Privilege Point will focus on the privilege issue.