UPJOHN CO. ET AL. v. UNITED STATES ET AL.
No. 79-886
Supreme Court of the United States
Argued November 5, 1980-Decided January 13, 1981
449 U.S. 383
Daniel M. Gribbon argued the cause and filed briefs for petitioners.
Deputy Solicitor General Wallace argued the cause for respondents. With him on the brief were Solicitor General McCree, Assistant Attorney General Ferguson, Stuart A. Smith, and Robert E. Lindsay.*
*Briefs of amici curiae urging reversal were filed by Leonard S. Janofsky, Leon Jaworski, and Keith A. Jones for the American Bar Association; by Thomas G. Lilly, Alfred F. Belcuore, Paul F. Rothstein, and Ronald L. Carlson for the Federal Bar Association; by Erwin N. Griswold for the American College of Trial Lawyers et al.; by Stanley T. Kaleczyc and J. Bruce Brown for the Chamber of Commerce of the United States; and by Lewis A. Kaplan, James N. Benedict, Brian D. Forrow, John G. Koeltl, Standish Forde Medina, Jr., Renee J. Roberts, and Marvin Wexler for the Committee on Federal Courts et al.
William W. Becker filed a brief for the New England Legal Foundation as amicus curiae.
We granted certiorari in this case to address important questions concerning the scope of the attorney-client privilege in the corporate context and the applicability of the work-product doctrine in proceedings to enforce tax summonses. 445 U. S. 925. With respect to the privilege question the parties and various amici have described our task as one of choosing between two “tests” which have gained adherents in the courts of appeals. We are acutely aware, however, that we sit to decide concrete cases and not abstract propositions of law. We decline to lay down a broad rule or series of rules to govern all conceivable future questions in this area, even were we able to do so. We can and do, however, conclude that the attorney-client privilege protects the communications involved in this case from compelled disclosure and that the work-product doctrine does apply in tax summons enforcement proceedings.
I
Petitioner Upjohn Co. manufactures and sells pharmaceuticals here and abroad. In January 1976 independent accountants conducting an audit of one of Upjohn‘s foreign subsidiaries discovered that the subsidiary made payments to or for the benefit of foreign government officials in order to secure government business. The accountants so informed petitioner Mr. Gerard Thomas, Upjohn‘s Vice President, Secretary, and General Counsel. Thomas is a member of the Michigan and New York Bars, and has been Upjohn‘s General Counsel for 20 years. He consulted with outside counsel and R. T. Parfet, Jr., Upjohn‘s Chairman of the Board. It was decided that the company would conduct an internal investigation of what were termed “questionable payments.” As part of this investigation the attorneys prepared a letter containing a questionnaire which was sent to “All Foreign General and Area Managers” over the Chairman‘s signature. The letter
On March 26, 1976, the company voluntarily submitted a preliminary report to the Securities and Exchange Commission on Form 8-K disclosing certain questionable payments.1 A copy of the report was simultaneously submitted to the Internal Revenue Service, which immediately began an investigation to determine the tax consequences of the payments. Special agents conducting the investigation were given lists by Upjohn of all those interviewed and all who had responded to the questionnaire. On November 23, 1976, the Service issued a summons pursuant to
“All files relative to the investigation conducted under the supervision of Gerard Thomas to identify payments to employees of foreign governments and any political
contributions made by the Upjohn Company or any of its affiliates since January 1, 1971 and to determine whether any funds of the Upjohn Company had been improperly accounted for on the corporate books during the same period. “The records should include but not be limited to written questionnaires sent to managers of the Upjohn Company‘s foreign affiliates, and memorandums or notes of the interviews conducted in the United States and abroad with officers and employees of the Upjohn Company and its subsidiaries.” App. 17a-18a.
The company declined to produce the documents specified in the second paragraph on the grounds that they were protected from disclosure by the attorney-client privilege and constituted the work product of attorneys prepared in anticipation of litigation. On August 31, 1977, the United States filed a petition seeking enforcement of the summons under
II
The Court of Appeals, however, considered the application of the privilege in the corporate context to present a “different problem,” since the client was an inanimate entity and “only the senior management, guiding and integrating the several operations, ... can be said to possess an identity analogous to the corporation as a whole.” 600 F. 2d, at 1226. The first case to articulate the so-called “control group test” adopted by the court below, Philadelphia v. Westinghouse Electric Corp., 210 F. Supp. 483, 485 (ED Pa.), petition for mandamus and prohibition denied sub nom. General Electric Co. v. Kirkpatrick, 312 F. 2d 742 (CA3 1962), cert. denied, 372 U. S. 943 (1963), reflected a similar conceptual approach:
“Keeping in mind that the question is, Is it the corporation which is seeking the lawyer‘s advice when the asserted privileged communication is made?, the most satisfactory solution, I think, is that if the employee making the communication, of whatever rank he may be, is in a position to control or even to take a substantial part in a decision about any action which the corporation may take upon the advice of the attorney, ... then, in effect, he is (or personifies) the corporation when he makes his disclosure to the lawyer and the privilege would apply.” (Emphasis supplied.)
Such a view, we think, overlooks the fact that the privilege exists to protect not only the giving of professional advice to those who can act on it but also the giving of information to the lawyer to enable him to give sound and informed advice. See Trammel, supra, at 51; Fisher, supra, at 403. The first step in the resolution of any legal problem is ascertaining the factual background and sifting through the facts
“A lawyer should be fully informed of all the facts of the matter he is handling in order for his client to obtain the full advantage of our legal system. It is for the lawyer in the exercise of his independent professional judgment to separate the relevant and important from the irrelevant and unimportant. The observance of the ethical obligation of a lawyer to hold inviolate the confidences and secrets of his client not only facilitates the full development of facts essential to proper representation of the client but also encourages laymen to seek early legal assistance.”
See also Hickman v. Taylor, 329 U. S. 495, 511 (1947).
In the case of the individual client the provider of information and the person who acts on the lawyer‘s advice are one and the same. In the corporate context, however, it will frequently be employees beyond the control group as defined by the court below—“officers and agents ... responsible for directing [the company‘s] actions in response to legal advice“—who will possess the information needed by the corporation‘s lawyers. Middle-level—and indeed lower-level—employees can, by actions within the scope of their employment, embroil the corporation in serious legal difficulties, and it is only natural that these employees would have the relevant information needed by corporate counsel if he is adequately to advise the client with respect to such actual or potential difficulties. This fact was noted in Diversified Industries, Inc. v. Meredith, 572 F. 2d 596 (CA8 1978) (en banc):
“In a corporation, it may be necessary to glean information relevant to a legal problem from middle management or non-management personnel as well as from top executives. The attorney dealing with a complex legal problem ‘is thus faced with a “Hobson‘s choice“. If he interviews employees not having “the very highest au-
thority“, their communications to him will not be privileged. If, on the other hand, he interviews only those employees with “the very highest authority“, he may find it extremely difficult, if not impossible, to determine what happened.‘” Id., at 608-609 (quoting Weinschel, Corporate Employee Interviews and the Attorney-Client Privilege, 12 B. C. Ind. & Com. L. Rev. 873, 876 (1971)).
The control group test adopted by the court below thus frustrates the very purpose of the privilege by discouraging the communication of relevant information by employees of the client to attorneys seeking to render legal advice to the client corporation. The attorney‘s advice will also frequently be more significant to noncontrol group members than to those who officially sanction the advice, and the control group test makes it more difficult to convey full and frank legal advice to the employees who will put into effect the client corporation‘s policy. See, e. g., Duplan Corp. v. Deering Milliken, Inc., 397 F. Supp. 1146, 1164 (SC 1974) (“After the lawyer forms his or her opinion, it is of no immediate benefit to the Chairman of the Board or the President. It must be given to the corporate personnel who will apply it“).
The narrow scope given the attorney-client privilege by the court below not only makes it difficult for corporate attorneys to formulate sound advice when their client is faced with a specific legal problem but also threatens to limit the valuable efforts of corporate counsel to ensure their client‘s compliance with the law. In light of the vast and complicated array of regulatory legislation confronting the modern corporation, corporations, unlike most individuals, “constantly go to lawyers to find out how to obey the law,” Burnham, The Attorney-Client Privilege in the Corporate Arena, 24 Bus. Law. 901, 913 (1969), particularly since compliance with the law in this area is hardly an instinctive matter, see, e. g., United States v. United States Gypsum Co., 438 U. S. 422, 440-441 (1978) (“the behavior proscribed by the [Sherman] Act is
The Court of Appeals declined to extend the attorney-client privilege beyond the limits of the control group test for fear that doing so would entail severe burdens on discovery and create a broad “zone of silence” over corporate affairs. Application of the attorney-client privilege to communications such as those involved here, however, puts the adversary in no worse position than if the communications had never taken place. The privilege only protects disclosure of communications; it does not protect disclosure of the underlying facts by those who communicated with the attorney:
“[T]he protection of the privilege extends only to communications and not to facts. A fact is one thing and a communication concerning that fact is an entirely differ-
ent thing. The client cannot be compelled to answer the question, ‘What did you say or write to the attorney?’ but may not refuse to disclose any relevant fact within his knowledge merely because he incorporated a statement of such fact into his communication to his attorney.” Philadelphia v. Westinghouse Electric Corp., 205 F. Supp. 830, 831 (ED Pa. 1962).
See also Diversified Industries, 572 F. 2d, at 611; State ex rel. Dudek v. Circuit Court, 34 Wis. 2d 559, 580, 150 N. W. 2d 387, 399 (1967) (“the courts have noted that a party cannot conceal a fact merely by revealing it to his lawyer“). Here the Government was free to question the employees who communicated with Thomas and outside counsel. Upjohn has provided the IRS with a list of such employees, and the IRS has already interviewed some 25 of them. While it would probably be more convenient for the Government to secure the results of petitioner‘s internal investigation by simply subpoenaing the questionnaires and notes taken by petitioner‘s attorneys, such considerations of convenience do not overcome the policies served by the attorney-client privilege. As Justice Jackson noted in his concurring opinion in Hickman v. Taylor, 329 U. S., at 516: “Discovery was hardly intended to enable a learned profession to perform its functions on wits borrowed from the adversary.”
Needless to say, we decide only the case before us, and do not undertake to draft a set of rules which should govern challenges to investigatory subpoenas. Any such approach would violate the spirit of
III
Our decision that the communications by Upjohn employees to counsel are covered by the attorney-client privilege disposes of the case so far as the responses to the questionnaires and any notes reflecting responses to interview questions are concerned. The summons reaches further, however, and Thomas has testified that his notes and memoranda of interviews go beyond recording responses to his questions. App. 27a-28a, 91a-93a. To the extent that the material subject to the summons is not protected by the attorney-client privilege as disclosing communications between an employee and counsel, we must reach the ruling by the Court of Appeals that the work-product doctrine does not apply to summonses issued under
The Government concedes, wisely, that the Court of Appeals erred and that the work-product doctrine does apply to IRS summonses. Brief for Respondents 16, 48. This doctrine was announced by the Court over 30 years ago in Hickman v. Taylor, 329 U. S. 495 (1947). In that case the Court rejected “an attempt, without purported necessity or justification, to secure written statements, private memoranda and personal recollections prepared or formed by an adverse party‘s counsel in the course of his legal duties.” Id., at 510. The Court noted that “it is essential that a lawyer work with
“much of what is now put down in writing would remain unwritten. An attorney‘s thoughts, heretofore inviolate, would not be his own. Inefficiency, unfairness and sharp practices would inevitably develop in the giving of legal advice and in the preparation of cases for trial. The effect on the legal profession would be demoralizing. And the interests of the clients and the cause of justice would be poorly served.” Id., at 511.
The “strong public policy” underlying the work-product doctrine was reaffirmed recently in United States v. Nobles, 422 U. S. 225, 236-240 (1975), and has been substantially incorporated in
As we stated last Term, the obligation imposed by a tax summons remains “subject to the traditional privileges and limitations.” United States v. Euge, 444 U. S. 707, 714 (1980). Nothing in the language of the IRS summons provisions or their legislative history suggests an intent on the part of Congress to preclude application of the work-product doctrine.
“We do not mean to say that all written materials obtained or prepared by an adversary‘s counsel with an eye toward litigation are necessarily free from discovery in all cases. Where relevant and nonprivileged facts remain hidden in an attorney‘s file and where production of those facts is essential to the preparation of one‘s case, discovery may properly be had. ... And production might be justified where the witnesses are no longer available or can be reached only with difficulty.” 329 U. S., at 511.
The Government stresses that interviewees are scattered across the globe and that Upjohn has forbidden its employees to answer questions it considers irrelevant. The above-quoted language from Hickman, however, did not apply to “oral statements made by witnesses ... whether presently in the form of [the attorney‘s] mental impressions or memoranda.” Id., at 512. As to such material the Court did “not believe that any showing of necessity can be made under the circumstances of this case so as to justify production. ... If there should be a rare situation justifying production of these matters, petitioner‘s case is not of that type.” Id., at 512-513. See also Nobles, supra, at 252-253 (WHITE, J., concurring). Forcing an attorney to disclose notes and memoranda of witnesses’ oral statements is particularly disfavored because it tends to reveal the attorney‘s mental processes, 329 U. S., at 513 (“what he saw fit to write down regarding witnesses’ remarks“); id., at 516-517 (“the statement would be his [the
We do not decide the issue at this time. It is clear that the Magistrate applied the wrong standard when he concluded that the Government had made a sufficient showing of necessity to overcome the protections of the work-product doctrine. The Magistrate applied the “substantial need” and “without undue hardship” standard articulated in the first part of
While we are not prepared at this juncture to say that such material is always protected by the work-product rule, we
Accordingly, the judgment of the Court of Appeals is reversed, and the case remanded for further proceedings.
It is so ordered.
CHIEF JUSTICE BURGER, concurring in part and concurring in the judgment.
I join in Parts I and III of the opinion of the Court and in the judgment. As to Part II, I agree fully with the Court‘s rejection of the so-called “control group” test, its reasons for doing so, and its ultimate holding that the communications at issue are privileged. As the Court states, however, “if the purpose of the attorney-client privilege is to be served, the attorney and client must be able to predict with some degree of certainty whether particular discussions will be protected.” Ante, at 393. For this very reason, I believe that we should articulate a standard that will govern similar cases and afford guidance to corporations, counsel advising them, and federal courts.
The Court properly relies on a variety of factors in concluding that the communications now before us are privileged. See ante, at 394-395. Because of the great importance of the issue, in my view the Court should make clear now that, as a
Nevertheless, to say we should not reach all facets of the privilege does not mean that we should neglect our duty to provide guidance in a case that squarely presents the question in a traditional adversary context. Indeed, because
Notes
“[A] party may obtain discovery of documents and tangible things otherwise discoverable under subdivision (b) (1) of this rule and prepared in anticipation of litigation or for trial by or for another party or by or for that other party‘s representative (including his attorney, consultant, surety, indemnitor, insurer, or agent) only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of his case and that he is unable without undue hardship to obtain the substantial equivalent of the materials by other means. In ordering discovery of such materials when the required showing has been made, the court shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation.”