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Asserting the Attorney-Client Privilege in FTC Probes

Asserting the Attorney-Client Privilege in FTC Probes

When a company finds itself the subject of an FTC investigation, one of the most important privileges it can assert is attorney-client privilege. This allows for confidential communication between attorney and client that the FTC cannot force them to disclose. However, there are limitations and exceptions to this privilege that companies should understand before asserting it.

What is Attorney-Client Privilege?

Attorney-client privilege protects confidential communications between an attorney and their client made for the purpose of obtaining legal advice. The privilege encourages open and honest communication so the attorney can provide fully informed legal advice. Attorney-client privilege is recognized in the FTC’s Rules of Practice as well as case law and is considered a key aspect of due process in FTC proceedings.

Who Can Assert the Privilege?

Only the client can assert attorney-client privilege, not the attorney. The “client” refers to the company or organization, not individual employees. However, former employees usually cannot assert privilege over communications that occurred during their employment. There are two requirements for asserting privilege:

  1. The person or entity asserting privilege must be/have been a client of the attorney at the time of communication.
  2. The communication must have been with an attorney licensed to practice law.

In-house counsel can be considered attorneys for privilege purposes as long as they are licensed. Outside counsel hired to assist with an FTC investigation would also qualify.

What Types of Communication are Protected?

The communication must meet the following criteria:

  • Made between privileged persons (attorney and client)
  • Made in confidence
  • For the purpose of obtaining or providing legal advice

This includes verbal discussions, written memos, emails, notes taken by attorneys during client meetings, and other correspondence related to legal advice. Facts are not protected, only the advice/analysis provided by counsel. Courts determine privilege on a document-by-document basis.

When Can Privilege be Waived?

There are certain situations where attorney-client privilege can be waived, eliminating confidentiality:

Christine Twomey
Christine Twomey
2024-03-21
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Brendan huisman
Brendan huisman
2024-03-18
Alex Zhik contacted me almost immediately when I reached out to Spodek for a consultation and was able to effectively communicate the path forward/consequences of my legal issue. I immediately agreed to hire Alex for his services and did not regret my choice. He was able to cover my case in court (with 1 day notice) and not only was he able to push my case down, he carefully negotiated a dismissal of the charge altogether. I highly recommend Spodek, and more specifically, Alex Zhik for all of your legal issues. Thanks guys!
Guerline Menard
Guerline Menard
2024-03-18
Thanks again Spodek law firm, particularly Esq Claire Banks who stood right there with us up to the finish line. Attached photos taken right outside of the court building and the smile on our faces represented victory, a breath of fresh air and satisfaction. We are very happy that this is over and we can move on with our lives. Thanks Spodek law 🙏🏼🙏🏼🙏🏼🙏🏼🙌🏼❤️
Keisha Parris
Keisha Parris
2024-03-15
Believe every single review here about Alex Z!! From our initial consultation, it was evident that Alex possessed a profound understanding of criminal law and a fierce dedication to his clients rights. Throughout the entirety of my case, Alex exhibited unparalleled professionalism and unwavering commitment. What sets Alex apart is not only his legal expertise but also his genuine compassion for his clients. He took the time to thoroughly explain my case, alleviating any concerns I had along the way. His exact words were “I’m not worried about it”. His unwavering support and guidance were invaluable throughout the entire process. I am immensely grateful for Alex's exceptional legal representation and wholeheartedly recommend his services to anyone in need of a skilled criminal defense attorney. Alex Z is not just a lawyer; he is a beacon of hope for those navigating the complexities of the legal system. If you find yourself in need of a dedicated and competent legal advocate, look no further than Alex Z.
Taïko Beauty
Taïko Beauty
2024-03-15
I don’t know where to start, I can write a novel about this firm, but one thing I will say is that having my best interest was their main priority since the beginning of my case which was back in Winter 2019. Miss Claire Banks, one of the best Attorneys in the firm represented me very well and was very professional, respectful, and truthful. Not once did she leave me in the dark, in fact she presented all options and routes that could possibly be considered for my case and she reinsured me that no matter what I decided to do, her and the team will have my back and that’s exactly what happened. Not only will I be liberated from this case, also, I will enjoy my freedom and continue to be a mother to my first born son and will have no restrictions with accomplishing my goals in life. Now that’s what I call victory!! I thank the Lord, My mother, Claire, and the Spodek team for standing by me and fighting with me. Words can’t describe how grateful I am to have the opportunity to work with this team. I’m very satisfied, very pleased with their performance, their hard work, and their diligence. Thank you team!
Anthony Williams
Anthony Williams
2024-03-12
Hey, how you guys doing? Good afternoon my name is Anthony Williams I just want to give a great shout out to the team of. Spodek law group. It is such a honor to use them and to use their assistance through this whole case from start to finish. They did everything that they said they was gonna do and if it ever comes down to it, if I ever have to use them again, hands-down they will be the first law office at the top of my list, thank you guys so much. It was a pleasure having you guys by my side so if you guys ever need them, do not hesitate to pick up the phone and give them a call.
Loveth Okpedo
Loveth Okpedo
2024-03-12
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Bee L
Bee L
2024-02-28
Amazing experience with Spodek! Very professional lawyers who take your case seriously. They treated me with respect, were always available, and answered any and all questions. They were able to help me very successfully and removed a huge stress. Highly recommend.
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divesh patel
2024-02-24
I can't recommend Alex Zhik and Spodek Law Firm highly enough for their exceptional legal representation and personal mentorship. From the moment I engaged their services in October 2022, Alex took the time to understand my case thoroughly and provided guidance every step of the way. Alex's dedication to my case went above and beyond my expectations. His expertise, attention to detail, and commitment to achieving the best possible outcome were evident throughout the entire process. He took the time to mentor me, ensuring I understood the legal complexities involved to make informed decisions. Alex is the kind of guy you would want to have a beer with and has made a meaningful impact on me. I also want to acknowledge Todd Spodek, the leader of the firm, who played a crucial role in my case. His leadership and support bolstered the efforts of Alex, and his involvement highlighted the firm's commitment to excellence. Thanks to Alex Zhik and Todd Spodek, I achieved the outcome I desired, and I am incredibly grateful for their professionalism, expertise, and genuine care. If you're in need of legal representation, look no further than this outstanding team.
  • Sharing communications with third parties – This includes anyone outside the attorney-client relationship.
  • Using communications for non-legal business purposes – Courts may rule this waives privilege if it exceeds the scope of legal advice.
  • Disclosing privileged information to government agencies – Either intentionally or by mistake. Precautions must be taken.
  • Raising an advice-of-counsel defense – The company opens itself up to discovery of related communications.

Companies under FTC investigation must be very careful not to inadvertently waive privilege. Once waived, there is no getting it back.

Best Practices for Maintaining Privilege

Here are some best practices companies should follow:

  • Clearly mark privileged communications as “Attorney-Client Privileged”
  • Segregate privileged documents to avoid accidental disclosure
  • Limit sharing of privileged communications within the company
  • Create privilege logs detailing any privileged documents withheld
  • Get written confidentiality agreements before disclosing anything to third parties
  • Scrub any documents given to the FTC for privileged information

Having clear policies and procedures around privilege are key to avoiding waiver. Companies should work closely with counsel to assert and maintain privilege appropriately.

Responding to FTC Requests for Privileged Information

The FTC will often request documents and communications from a company that may be subject to attorney-client privilege. The company can object and refuse to provide privileged material, but it must clearly explain the specific grounds for privilege on a document-by-document basis. Blanket assertions of privilege will be challenged by the FTC and can lead to waiver if the court finds them unjustified.

If privileged documents are accidentally disclosed, the company can request their return by the FTC. However, the FTC may argue the disclosure waived privilege, in which case the court will decide the status of the documents. It is best for companies to avoid disclosing anything potentially privileged in response to FTC requests.

Challenging FTC Access to Privileged Information

If the FTC obtains privileged information through other means, such as employee interviews, companies can challenge their ability to use it. In Upjohn Co. v. United States, the Supreme Court ruled companies can prevent their attorneys from being compelled to disclose privileged information. FTC lawyers are also bound by confidentiality rules prohibiting them from viewing privileged materials inadvertently disclosed during an investigation.

That said, the FTC maintains that privileged information already in its possession can still be used, even if improperly obtained. The company would have to convince a court to both suppress the evidence and disqualify FTC lawyers exposed to it. This is difficult given the high burden of proof.

Weighing the Pros and Cons of Asserting Privilege

While protecting confidentiality is usually advisable, asserting privilege has potential downsides companies should consider:

  • May draw FTC suspicions if used excessively/improperly
  • Can limit company’s access to its own communications if litigation occurs
  • FTC may seek privileged information from other sources
  • Delays investigation process
  • Risk of waiver if privilege claims challenged

Companies should work with experienced counsel to determine if privilege assertions are worthwhile or could backfire in specific situations.

Takeaways for Asserting Privilege in FTC Probes

Here are some key takeaways for companies asserting attorney-client privilege during an FTC investigation:

  • Understand the requirements – Who can assert privilege, what communications qualify, and how privilege can be waived.
  • Implement privilege best practices – Marking documents, limiting access, creating privilege logs, etc.
  • Object properly to FTC requests – Clearly explain grounds for privilege without blanket assertions.
  • Get confidentiality agreements – Before disclosing anything to third parties like consultants.
  • Work closely with counsel – Weigh risks/benefits of asserting privilege in each specific situation.
  • Avoid privilege pitfalls – Like sharing privileged info internally too loosely or producing privileged documents accidentally.

Asserting privilege comes with hazards like drawing FTC suspicions or having privilege claims challenged. The key is working with experienced counsel to invoke privilege carefully, deliberately, and only when truly justified. Companies should focus on explaining their privilege assertions reasonably without appearing resistant or obstructionist. With proper preparation and prudence, attorney-client privilege can provide critical protections in an FTC investigation.

Citations

[1] Corporate Client-Attorney Privilege – UMKC School of Law

[2] ‘What’s Up, John?’: A Refresher on the ‘Upjohn’ Standard – Babst Calland

[3] Employee’s Written Statements and Corporate Privilege – Andrew Scrabtree

[4] scramblis.html – GitHub

[5] CodaLab Vocabulary List

[6] Hugging Face Vocabulary List

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