New York Federal Criminal Practice Blog
April 19, 2009

SDNY Judge Addresses Disclosure of Interview Memoranda Prepared by Company's Outside Counsel

What defense lawyers in corporate fraud prosecutions wouldn’t want to get their hands on the treasure trove of materials prepared in an internal investigation by the company’s outside counsel – especially memoranda memorializing in-depth interviews with un-counseled employees before they’ve had a chance to groom their stories?  But not having the government’s bargaining power, the defense must resort to the woefully inadequate discovery devices available in criminal cases – Fed.R.Crim.P. 16 and 17, Jencks Act, Brady, Giglio, etc. The potential and limitations of these devices in seeking corporate counsel’s interview memoranda are explored in United States v. Treacy, 2009 WL 812033 (S.D.N.Y. March 24, 2009).  The case is notable both for the reason why SDNY Judge Rakoff granted the motion to quash the defendant’s subpoena, and, more importantly, for the disclosures he required or encouraged as the issue was being litigated. 


Treacy had subpoenaed certain interview memoranda from Akin, Gump, a law-firm that had conducted an investigation on behalf of Monster’s board of directors into the company’s stock option grants.  Akin moved to quash, citing attorney-client and work product privileges.  Treacy countered that these privileges had been waived by Akin’s (1) furnishing certain other interview memoranda to the government that related to the same subject matter, or (2) making oral presentations to the government of certain statements made by some of these witnesses, as well as, more generally, its overall findings.  The government had turned over to the defense any interview memoranda that were in its possession. 


No Waiver:  The court rejected the claim that the disclosure of a handful of interview memoranda to the Government automatically results in a general waiver of attorney client and work product privileges over different memoranda that were not provided to the Government.  This was not a situation where “the privilege was being used as both a ‘sword and a shield’ by [Akin’s] choosing which memoranda it disclosed to the Government,” since Akin was “not a party to the action and seeks no advantage against its adversary” (applying both common law precedent and the recently-enacted Fed.R.Evid. 502(a)).

In Camera Review: The court also rejected the claim that Akin’s broad, thematic presentations to the government of its conclusions “amounted to a summary of the totality of the statements made by each witness,” but not before the court had reached that conclusion by reviewing the government’s notes of the presentations in camera. 

Memoranda/Notes Disclosed: The court did, however, order Akin to turn over the memorandum relating to another witness’s interview, where Akin had given the government a detailed oral recitation of the interview.  It also exerted some gentle pressure on the government to turn over snippets of its notes of notes meetings with Akin in which certain statements of other interviewees were briefly quoted or paraphrased because they “arguably could qualify as “Brady,” “Giglio,” or Jencks Act material.” 


The holding in this case is far less useful than what is buried in the analysis: the government’s concession that interview memoranda in its possession should be turned over immediately (although, arguably, they might have been withheld until trial as Jencks Act material); the fact that the district court reviewed the government’s notes and the memoranda themselves in camera in order to determine if any should be turned over to the defense; the court order to Akin to turn over a memo it had orally disclosed to the government, and the court’s observation that encouraged the government to turn over notes of information provided about other interviews.  Essentially, at least with regard to interview memoranda prepared by company counsel, the defense should get its hands on whatever was physically or orally provided to the government. 

The court’s reason for not finding a general waiver here is also interesting.  Judge Rakoff found that Akin was not a party to the proceeding who was using the privilege to gain an unfair advantage.  While, this may be true here, many of us have witnessed a level of cooperation between the government and company counsel in some cases that it is hard to distinguish between the two.  Moreover, companies often have an interest in seeing the perpetrators of the fraud convicted, so they can chalk the alleged misconduct down to bad apples, not systemic abuses.   

Notably, the case doesn’t address whether, quite apart from the waiver issue, the interview memoranda are independently discoverable under Rule 17 as material to the defense and not discoverable elsewhere.  This argument was rejected in United States v. Ferguson, 2007 WL 2815068 (D.Conn. September 26, 2007), which held (applying the Nixon standard) that interview memos with potential impeachment material were not discoverable under Rule 17.  But in light of the less stringent standard proposed by Judge Scheindlin for Rule 17 subpoenas to third parties in United States v. Tucker, this issue is ripe for revisiting. 

See Archives for all posts since September 2007.