Page 17 - American College of Trial Lawyers Federal Criminal Procedure Committee 2020 Update: Recommended Practices for Companies and Their Counsel in Conducting Internal Investigations

defining the scope of the investigation, the Independent Committee should provide Investigatory
Counsel at the outset with a mandate to examine only specific allegations or explicitly defined
issues. Investigatory Counsel may reassess with the Independent Committee whether any additional
allegations or issues (e.g., red flags) uncovered during the originally scoped investigation should
form the basis for an expanded or separate investigation by Investigatory Counsel, other investigatory
counsel, or by regular company counsel. 42

The Independent Committee and Investigatory Counsel should also agree upon
specific reporting procedures and protocols for documenting the investigation (for example, the
designation of all communications with legends such as “ATTORNEY-CLIENT PRIVILEGED” and,
when applicable, “ATTORNEY WORK PRODUCT”). The goal at the outset should be frequent
updating by oral reporting. Careful consideration should be given to the extent to which written
reports should be rendered, if at all, during or at the conclusion of the investigation. There is
43
typically limited utility and great risk in creating interim written reports of investigation. Such
interim reports run the risk of creating confusion and credibility issues, as well as potential unfairness
to officers or employees who are the subjects of the investigation if facts discovered in the latter part
of the investigation are inconsistent with preliminary factual determinations or interim substantive
findings.

The Board, in consultation with the Independent Committee, should also determine
whether and to what extent Investigatory Counsel may waive the company’s attorney-client privilege
or its own work-product protections in its dealings with the government or other third parties. This
44
is one of the most important and complicated questions the company and Investigatory Counsel will
face in connection with the investigation. The Board and the Independent Committee must decide
who, on behalf of the company, will ultimately decide the privilege-waiver questions, including
consideration of including this responsibility in the Board resolution giving the Independent
Committee oversight of the internal investigation. The Independent Committee should not give
Investigatory Counsel the authority to make such waiver decisions without prior full deliberation by
the Independent Committee and, if appropriate and so arranged, also by the Board. 45

42 The engagement letter for Investigatory Counsel should make clear that Investigatory Counsel’s work product, data, document
collection and analysis belong to the Independent Committee and the company, not to Investigatory Counsel, and should be returned to the
Independent Committee and company upon completion of the investigation for possible use by the company in its defense of possible third-
party or government claims.
43 A further discussion on the format for Investigatory Counsel’s final report can be found later in this paper in Section IV.
44 See In Re Pacific Pictures Corp., 679 F.3d 1121 (9th Cir. 2012) (holding that turning over to the government internal
investigative documents pursuant to a confidentiality agreement constituted a waiver of the attorney-client and work product privileges,
and rejecting the doctrine of “selected waiver”); Mir v. L-3 Commc’ns Integrated Sys., L.P., 315 F.R.D. 460 (N.D. Tex. 2016) (voluntary
disclosure of internal documents to the OFCCP, pursuant to an express confidentiality agreement, was a waiver of work-product protection
because the OFCCP was a “potential adversary”); and In re Qwest Commc’ns Internat’l, Inc., Sec. Litig., 450 F.3d 1179 (10th Cir. 2006)
(holding that a company’s turning over to the SEC and DOJ of internal investigative documents, pursuant to a confidentiality agreement,
constituted a waiver of the attorney-client and work product privileges, and rejecting the doctrine of “selective waiver” or “limited waiver”).
See also U.S. v. Reyes. 2006 U.S. Dist. Lexis 94456 (N.D. Cal. Dec. 22, 2006) (holding that investigating counsel’s oral report to DOJ and
SEC summarizing otherwise privileged internal investigation interviews created a waiver, and rejecting the concept of “selective waiver”).
45 We note the possibility that Investigatory Counsel may unintentionally induce an inadvertent waiver of the corporate attorney-
client privilege if there are communications by company’s officers or Board members directly with Investigatory Counsel rather than
through the Independent Committee. See Ryan I, 2007 WL 4259557 at *3; see generally Gregory P. Joseph, “Privilege Developments I,”
The National Law Journal, Feb. 11, 2008. However, the confines of this paper do not allow for analysis and recommendations with respect
to this circumstance.

 11 