Why Is a D.C. Federal Court Analyzing a State "Control Group" Privilege Standard, but the Federal Work Product Rule?: Parts I & II

Part I

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. Part II will address the D.C. court's work product analysis.

Part II

Part I addressed a D.C. federal court's application of the Illinois "control group" privilege standard in a transferred case. In South Capitol Bridgebuilders v. Lexington Insurance Co., Case No. 1:21-cv-1436-RCL, 2022 U.S. Dist. LEXIS 26146 (D.D.C. Feb. 14, 2022), the court: (1) explained that corporate employees were outside privilege protection if they only supplied facts to the decision-makers; and (2) surprisingly held that in-house lawyers were not automatically part of the protected "control group."

The court then turned to work product protection. That separate evidentiary protection comes from a federal rule, and thus does not require a choice of law analysis – so the D.C. court applied the D.C. Circuit's work product standard. Like most but not all courts, the court applied the broader "because of" work product standard – thus extending that protection beyond documents that would be used to "aid or assist in the litigation." But even under that generous standard, "if a document would have been created 'in substantially similar form' regardless of the litigation, work product protection is not available." Id. at *24-25. Among other things, the court pointed to that limitation in holding that the work product doctrine did not protect some of defendant's communications with its law firm Steptoe & Johnson, "because [defendant] nevertheless needed to determine whether the Policy covered [plaintiff]'s claim" – even without the prospect of litigation. Id. at *26-27.

Just as lawyers in Upjohn jurisdictions might have to wrestle with the "control group" privilege standard, lawyers everywhere must understand the forum court's approach to various work product principles.

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