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2 Bull. Sec. Corp. Banking & Bus. L. 1 (1963)

handle is hein.journals/txjbus2 and id is 1 raw text is: BTJILE3TTN OF THE SECTION ON CORPORATION, BANKING & BUSINESS LAW VOLUME 2 JANUARY, 1963 NUMBER 1 OUR THANKS TO WARLICK PRESS, INC. As readers of the Bulletin have noticed, the little colophon at the very end of each issue of the Bulletin shows that it was printed by Warlick Press, Inc. of Dallas. Warlick prints our Bulletin for us without charge as a public service to the legal profession. Each issue, we recognize this service and appreciate it, but want to take this opportunity with the beginning of a new year to thank Warlick Press for their contribution to our Section. RECENT DECISIONS Corporations-Right to Assert Privilege for Communications with Counsel. As most are aware, a tremendous foment is taking place in the federal court system and among the profession and its corporate clients, as to the availability to a corporation of the so-called attorney-client privilege. The current problem involves both inside and outside counsel, and turns on Who is a client? It does not concern the question, as to some inside lawyer-executives, of Who is an attorney? for purposes of the privilege. See American Cyanamid Company v. Hercules Powder Company, 211 F. Supp. 85 (D. Del. 1962). The attorney-client privilege is the client's alone and, as a genuine privilege, is absolute when available. It is available only as to a confidential communication, and if that confidence is profaned (i.e., the communication disclosed to third persons other than the attorney and his client), it is lost. It is to be distinguished from the so-called attorney work-product rule which belongs to the attorney (not the client) and is, rather than an absolute privilege, only a strong consideration against the production of an attorney's work to his adversary upon motion, in the absence of proof of very good cause therefor. See Hickman v. Taylor, 329 U.S. 495 (1947); Ceco Steel Products Corp. v. H. K. Porter Co., Inc., 31 F.R.D. 142 (N.D. Ill. 1962). In a recent decision which startled and confounded the profession, Chief Judge Campbell of the United States District Court for the Northern District of Illinois flatly held that there is no such thing as the attorney-client privilege for a corporation. His decision is published in Radiant Burners, Inc. v. American Gas Association, 207 F.Supp. 771 (1962) and, upon rehearing, 209 F.Supp. 321 (1962). The case is considered in detail and criticized in the January 1963 issues of the Harvard Law Review, Vol. 76, page 655, and The Business Lawyer, Vol. 18, page 551. Judge Campbell's decision is based principally on the grounds that: (1) the attorney-client privilege is to be likened to the privilege against self-incrimination, and both are completely personal; like the unavailability of the privilege against self-incrimination to a corporation, the attorney-client privilege is available only to natural persons. (2) The client(s) here, in Judge Campbell's view, are really the stockholders of the corporation rather than the corporation itself. (In an analogous situation, not referred to by the court, the general rejection of this theory has been developed and adhered to: see Bank of the United States v. Deveaux, 5 Cranch 61 (1809), Louisville, C. & C. R. Co. v. Letson, 2 How. 497 (1844), and Marshall v. Baltimore & Ohio R. Co., 16 How 314 (1853).) It follows, says Judge Campbell, that there can be no secrecy (i.e., confidentiality) of communication when so many people are involved. Lacking confidentiality, there can be no privilege. (3) Approaching this confiden- tiality problem from another angle, the court concludes that by the very nature of a corporation, there is no way, theoretically, that destruction of the privilege can be avoided because of disclosure of the communication to third persons. This is so because the corporation must always communicate through its agent, and if the corporation itself is the theoretical client the communication loses its privileged character automatically when such client speaks to its attorney, as it must, through an agent (the corporate employee or officer) and profanes the confidence. (4) Lastly, Judge Campbell assumes in the Radiant Burner case that every written corporate communication would be subject at least to stock- holder inspection and to visitorial powers of the state of incorporation, and therefore enjoy no secrecy. From this denial-by-definition he fortifies his conclusion that the privilege is unavailable to corporations.

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