The Continuing Duel Over Thompson, Seaboard and the Culture of Waiver
Senator Specter introduced the Attorney-Client Privilege Protection Act of 2006 (ACPPA) in the Senate yesterday. Thus, the so-called “culture of waiver” created by the Justice Department’s Thompson Memo and the SEC’s Seaboard Releases – both of which in practice have forced corporate privilege waivers and denied employees of fundamental rights – could be about to end.
As noted in this space on November 21, the draft text of that bill includes provisions that effectively rewrite key provisions of the Justice Department’s Thompson Memo and the SEC’s Seaboard Release on the waiver of the attorney-client privilege and other key rights in the name of cooperation. Specifically, the draft bill would preclude federal investigators in either a civil or criminal matter from in any manner requesting a waiver of the attorney-client privilege or work product doctrine.
In addition, the proposed legislation directs that federal investigators not “condition a civil or criminal charging decision relating to a organization, or person affiliated with that organization, on, or use as a factor in . . .” assessing cooperation any valid assertion of privilege, the payment of legal fees for employees, the sharing of information under joint defense agreements or otherwise or the failure to terminate employees for the assertion of constitutional rights. The bill would not preclude a voluntary waiver of privilege.
This proposed legislation seems to echo the comments of Senator Specter at the September Senate hearings on this issue. During those hearings, Senator Specter reportedly told the Justice Department that he would introduce legislation on to preserve these privileges and rights unless the Thompson Memo was redrafted. Deputy Attorney General Paul McNulty, who testified at those hearings, reportedly told senators that the Department would revisit the Memo, although no representation was made that the provisions the private bar finds troubling and claim create the “culture of waiver” would be eliminated.
To date the Justice Department has not amended or redrafted the Thompson Memo. Recent press reports, however, suggest that the Department is reconsidering the Thompson Memo and that changes will be forth coming. Those reports follow a recent speech by Larry Thompson, author of the Memo, noting that it was not intended to be applied in the manner which many claim has created a “culture of waiver.” Similarly, the SEC has not taken any steps to amend the Seaboard Report. SEC Commissioner Paul Atkins did state in a September 2006 speech that waiver should not be considered in assessing cooperation. See Remarks before the Federalist Society, September 21, 2006.
http://www.sec.gov/news/speech/2006/spch092106psa.htm Linda Thomson, SEC Enforcement Director, noted in a recent conversation at the ABA Business Section meetings that waiver is the exception and not typically sought, echoing earlier staff comments. Similar claims by the Justice Department were rejected as not credible by Judge Kaplan in U.S. v. Stein.
In any event, introducing a bill is a long way from having it signed into law. We will just have to wait and see whether the “culture of waiver” is about to end because the bill is pushed through Congress or if the Justice Department and the SEC will finally amend their respective directives, or if the stalemate continues.