Why Is a D.C. Federal Court Analyzing a State “Control Group” Privilege Standard, but the Federal Work Product Rule?: Part I

April 27, 2022

All but a handful of states apply what is called the Upjohn privilege standard – under which the attorney-client privilege can protect a corporation’s lawyer’s communication with any corporate employee who has information the lawyer needs to provide the corporate client legal advice. A few states instead follow the old “control group” privilege standard – which only protects communications with those in a corporation’s upper hierarchy. Choice-of-law rules sometime require courts in Upjohn jurisdictions to apply the rare “control group” standard.

In South Capitol Bridgebuilders v. Lexington Insurance Co., the Northern District of Illinois transferred a case filed there to the D.C. federal court under 28 U.S.C. § 1404(a) – which required the transferee court to “apply the choice-of-law rules that would be applied by the Northern District Court of Illinois.” Case No. 1:21-cv-1436-RCL, 2022 U.S. Dist. LEXIS 26146, at *6-7 (D.D.C. Feb. 14, 2022). The court also noted that “[b]oth parties apply Illinois [control group] law in their filings,” so the D.C. court did too. Id. at *7. Among other things, the D.C. court held that the company waived privilege protection by disclosing privileged communications to employees who were “merely supplying information or the factual bases upon which control group members relied for their decision.” Id. at *10. The court even surprisingly warned that an in-house lawyer’s “title does not, without more, establish that she was part of the control group” – although it is “relevant” to that determination. Id. at *11.

Even lawyers in Upjohn states may be called upon to analyze and apply the narrow “control group” privilege standard. Next week’s Privilege Point will address the D.C. court’s work product analysis.