Can A Dissolved Corporation Claim Privilege Protection?

December 11, 2019

Deceased individuals’ privilege protection survives their death, and bankrupt companies can also claim privilege protection under certain circumstances (although it may be owned by a trustee). But as the court in Affiniti Colorado, LLC v. Kissinger & Fellman, P.C., asked, “[d]oes the attorney-client privilege survive [a] corporation’s dissolution?” Not surprisingly, the issue almost always involves documents in the possession of the former corporation’s law firm. Court of Appeals No. 19CA0574, 2019 Colo. App. LEXIS 1370, at *2 (Colo. App. Sept. 12, 2019).

In Affiniti Colorado, plaintiff filed a negligent misrepresentation action against defendant law firm for alleged misrepresentations in an opinion letter the firm sent on behalf of a now-dissolved corporation. The law firm “urge[d] [the court] to follow the well-settled general rule that the privilege survives the death of a natural person.” Id. at *17. But the court rejected that analogy, noting that: (1) corporations’ managers change over time, so there is no assurance that some future manager will not waive their privilege; (2) “corporations do not have friends or family who could be embarrassed or harmed” by post-dissolution disclosure; (3) “unlike an individual, whose estate can be sued civilly, once a corporation is fully dissolved, any suit brought against it must be filed within two years.” Id. at *20. After finding that “no one with the authority to act on behalf of [the dissolved corporation] remains to invoke or waive the privilege,” the court upheld the lower court’s ruling that the dissolved corporation’s former law firm could not successfully assert privilege protection for the now-dissolved corporation’s documents in its files. Id. at *22.

Although the law often treats corporations as if they were “persons,” sometimes the privilege applies in very different ways to such entities.