WASHINGTON (March 23, 2020) — The Association of Corporate Counsel (ACC), a global legal association representing more than 45,000 in-house lawyers in 85 countries, has joined the United States Chamber of Commerce in filing an amici curiae brief in RPM International, Inc. vs Securities and Exchange Commission (SEC) before the US Circuit Court for the District of Columbia regarding the admissibility of privileged evidence.
Amici filed on March 19 in support of the petitioner, RPM. The SEC challenged attorney-client privilege and work product protection over interview memoranda prepared by outside counsel retained by RPM’s audit committee to investigate alleged financial reporting failures at RPM. The SEC argues that the investigation was not protected by work product because it was requested by RPM’s auditor, even though the SEC was investigating RPM itself when the audit committee retained Jones Day to conduct the investigation. The SEC further argues that any work product or attorney-client privilege protection was waived when a Jones Day lawyer briefed RPM’s auditor. The trial court judge agreed.
This ruling could have serious repercussions for corporate internal investigations. The attorney-client privilege and work product doctrine play important roles in ensuring that companies can gather information and share it with their advisors in a confidential manner that facilitates effective, timely advice. Upsetting the applicability of these doctrines to internal investigations will affect the ability of lawyers, auditors, and other professional advisors to provide effective counsel to businesses. It will also discourage companies from sharing the factual findings of such investigations with the government. In other words, the court is actively discouraging companies from undertaking the kinds of internal actions that the law otherwise encourages.
“By stripping work product protection from a company under active government investigation, the district court’s ruling sets a dangerous precedent, said Mary Blatch, director of advocacy at ACC. “Such a decision would discourage companies from investigating potential wrongdoing out of fear that they will have to turn over all documents related to the investigation to the government.
“The ruling further hurts relations between a company’s lawyers and its auditors. Auditors often rely on lawyers to disclose the factual information they need to assess a company’s financial position.”
About ACC: The Association of Corporate Counsel (ACC) is a global legal association that promotes the common professional and business interests of in-house counsel who work for corporations, associations and other organizations through information, education, networking, and advocacy. With more than 45,000 members in 85 countries employed by over 10,000 organizations, ACC connects its members to the people and resources necessary for both personal and professional growth. By in-house counsel, for in-house counsel.® For more information, visit www.acc.com and follow ACC on Twitter: @ACCinhouse.