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Counsel representing corporate clients frequently pledge cooperation when confronted with an investigation by the U.S. Department of Justice (\u201cDOJ\u201d or the \u201cDepartment\u201d). DOJ has adopted policies designed to award companies that provide cooperation, which includes, for example, conducting an internal investigation, sharing relevant facts, and identifying bad actors within the company. In the course of dialogue with counsel representing a corporation, DOJ may ask that counsel refrain from speaking with or interviewing certain employees: \u201cFor the employees, we would prefer to speak with them before your firm interviews them. We would prefer that you not contact them. That will not be a problem, will it?\u201d
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This question has come to be known as a \u201cdeconfliction\u201d request. Deconfliction is the practice of a company\u2019s counsel deferring certain investigative steps \u2013 most commonly, interviews of company employees \u2013 for some period of time until the government has had an opportunity to interview them. The government may prefer this so it has the first chance to speak with a witness, under the assumption that prior contact with the company\u2019s counsel may taint an employee\u2019s recollection or slant the facts in some fashion.
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But deconfliction requests can run afoul of corporate Constitutional rights, and in particular, a corporation\u2019s Sixth Amendment right to counsel. For that reason, the Department would be well-served to reevaluate its policy toward such requests.<\/p>\n\n\n\n
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A. Current DOJ Policy and Practice<\/strong><\/p>\n\n\n\n Cooperation with DOJ, of course, is a mitigating factor by which a corporation can gain credit in a case that otherwise is appropriate for prosecution. USDOJ, Justice Manual (formerly, U.S. Attorney\u2019s Manual) \u00a7 9-28.700 (incorporating Memorandum from Mark Filip, Deputy Attorney General to Heads of Department Components and United States Attorneys (Aug. 28, 2008) (the \u201cFilip Memorandum\u201d)). Cooperation includesthe timely and voluntary disclosure of all facts relevant to the wrongdoing at issue and making company officers and employees possessing relevant information available for interview. Justice Manual\u00a7 9-47.120-3(b). Across its prosecuting units and matters, \u201cdeconfliction\u201d is one factor the Department may consider in appropriate cases in evaluating whether and how much credit a company will receive for cooperation. Justice Manual \u00a7 9-47.000-4. In FCPA cases, in fact, deconfliction of witness interviews and deferral of other investigative steps \u201cwill be required for a company to receive maximum credit for full cooperation . . . .\u201d Justice Manual\u00a7 9-47.120-3(b) (incorporating terms of FCPA Pilot Program, made permanent Nov. 29, 2017). Companies in FCPA matters will remain eligible for some<\/em> cooperation credit provided they meet the criteria of Justice Manual 9-28.700 (which covers deconfliction generally, not limited to FCPA matters), but \u201cthe credit generally will be markedly less than full cooperation . . . .\u201d Justice Manual \u00a7 9-47.120-4. Against this formal policy backdrop, anecdotal evidence suggests deconfliction requests have become increasingly common in recent years. See <\/em>Adam Dobrik, \u201cDOJ \u2018deconfliction\u2019 requests creating tension,\u201d Global Investigations Review (Sept. 15, 2017); William F. Johnson, \u201cDOJ\u2019s Increasing Involvement in Internal Investigations,\u201d New York Law Journal (Jul. 5, 2017); Lanny A. Breuer and Mark T. Finucane, \u201cDOJ \u2018Deconfliction\u2019 Requests: Considerations and Concerns,\u201d Law360.com (Mar. 1, 2017). This is true across many subject matter areas (e.g.<\/em>, securities, FCPA, money laundering). And this is despite the fact that certain DOJ officials and other commentators have opined that deconflictions requests should be used sparingly. See, e.g.<\/em>, Roger Hamilton-Martin, \u201cLeslie Caldwell: \u2018deconfliction\u2019 requests should be rare,\u201d Global Investigations Review (Apr. 28, 2016). Business entities, like individuals, have a Sixth Amendment right to counsel. United States v. Rad-O-Lite of Philadelphia, Inc.<\/em> 612 F.2d 740, 743 (3d Cir. 1979) (holding that \u201cthe guarantee of effective assistance of counsel applies to corporate defendants\u201d); United States v. Unimex, Inc.<\/em>, 994 F.2d 546, 549 (9th Cir. 1993) (reversing a corporation\u2019s conviction for conspiracy and money laundering because it was denied its right to counsel under the Sixth Amendment). In many states and under prevailing DOJ practice, one aspect of the company\u2019s right to counsel is that any government request to speak with a current company employee should be routed through company counsel, and counsel has a right to be present at the government\u2019s interview of the employee. This is also a feature of the represented party rule in many state rules of practice. See, e.g.<\/em>, Cal. Rules Prof. Conduct 2-100(b)(1) (2018); NY Rules Prof. Conduct 4.2 cmt. 7 (2009); DC Rules Prof. Conduct 4.2 cmt. 3 (2007); accord<\/em> Model Rules of Prof\u2019l Conduct 4.2 (Am. Bar Ass\u2019n 1983). A core rationale for this rule is that employee statements can be attributed to the company as admissions, and accordingly the company is a represented party even if the employee is not represented individually. A company\u2019s right to counsel and counsel\u2019s need to do his or her job often (if not always) require that counsel interview employee witnesses in the course of investigating the facts and advising a company on how to handle a government investigation. Typically, counsel will want to do so before the government interviews the employee. Doing so beforehand is valuable in order to prevent surprises, to ensure the employee understands his or her obligations with respect to and the parameters for a government interview (e.g.<\/em>, truthfulness, a foundation of personal knowledge), to assuage employee anxieties about the process, and for many other reasons. Likewise, company counsel would want to be present when the government interviews the employee, in large part because the employee\u2019s statements can be used against the company and counsel has a right to be present when those statements are made. Interviewing the employee first and being present during the interview by the Department, however, can be irreconcilable with a deconfliction request. This places counsel in a very difficult position. Either counsel stands down, remains less informed, lets the government proceed, and risks the employee making unfounded statements that could be attributed to the corporation; or, counsel speaks with witnesses, learns the facts, vets the employee\u2019s knowledge and credibility, and attends the Department\u2019s interview of the employee, but risks losing cooperation credit for the corporate client. Should it be this way? In at least two analogous instances \u2013 where corporate Constitutional or other fundamental rights were at stake \u2013 the government or the judiciary has protected those rights. Most obviously, until 2008, DOJ policy permitted the government to assign cooperation credit to corporate privilege waivers. That policy became the subject of significant practitioner and commentator criticism on grounds that the policy pressured corporations to waive their fundamental right under the Sixth Amendment to seek counsel and maintain privilege over related discussions and work product. See <\/em>Filip Memorandum at 8 (discussing criticism from \u201ca wide range of commentators and members of the American legal community and criminal justice system\u201d). In part based on that criticism, the Department changed the policy on August 28, 2008, by way of the so-called Filip Memorandum, which emphasized the \u201cextremely important function\u201d of attorney-client privilege and work product protections and stated that \u201celigibility for cooperation credit is not predicated upon the waiver of attorney-client privilege or work product protection.\u201d Id.<\/em> That Filip Memorandum dictate remains DOJ policy today, and there is no sign of it changing in future. Prosecuting attorneys now toe the line and take care not to state or even imply that an assertion of privilege will, in their eyes, diminish the value of a company\u2019s cooperation. In another relevant scenario, United States v. Stein<\/em>, the judiciary weighed in, prohibiting the government from conditioning cooperation credit on a company not indemnifying employees for their costs and attorneys\u2019 fees. 435 F. Supp. 2d 330 (S.D.N.Y. 2006), aff\u2019d<\/em>,541 F.3d 130 (2d Cir. 2008). In Stein<\/em>, a company facing a criminal tax investigation adopted a policy which conditioned, capped and then altogether ceased the advancement of legal fees for certain employees who ultimately were criminally indicted. 541 F.3d at 135-36. The U.S. District Court for the Southern District of New York, and later, the U.S. Court of Appeals for the Second Circuit, found that absent government pressure, the company would have continued to pay the employees\u2019 legal fees and expenses without regard to cost. Id. <\/em>The court held that the government\u2019s influence satisfied the Constitutional state action requirement and that the government unjustifiably interfered with the employees\u2019 right to counsel and violated the Sixth Amendment in so doing. Id. <\/em>On that basis, the court dismissed (and later affirmed the dismissal of) the employees\u2019 indictments. Id. <\/em>In response, the government revised its policy, also by way of the Filip Memorandum. Id. <\/em>at 136-37; see also <\/em>Filip Memorandum at 13. The current policy is that, absent use of attorney fee indemnification to obstruct justice, in assessing corporate cooperation, \u201cprosecutors should not take into account whether a corporation is advancing or reimbursing attorneys\u2019 fees or providing counsel to employees\u201d and \u201cprosecutors may not request that a corporation refrain from taking such action.\u201d Justice Manual\u00a7 9-28.730. In short, in two instances similar to deconfliction, the government and the judiciary have recognized that the government must not take steps to chill either a company\u2019s or its employees\u2019 Constitutional rights, and especially not the Sixth Amendment right to counsel. With deconfliction, however, the government thus far has taken a different stance, and deconfliction requests have become commonplace. As noted, the Justice Manual expressly states that deconfliction is one factor in evaluating cooperation credit, and for FCPA cases, it states that deconfliction is required whenever it is requested, for full cooperation credit. There is a clear tension between DOJ\u2019s current deconfliction policies and practices and other Constitutionally protective positions the Department and the judiciary have taken. And there is tension between current deconfliction policies and the Sixth Amendment right to counsel. This tension warrants DOJ reassessment of its deconfliction policies. Alternatively, if challenged, courts may need to weigh in.<\/p>\n\n\n\n Casey O\u2019Neill is a member of Fenwick & West LLP\u2019s White Collar & Regulatory Defense practice and a former federal prosecutor for the U.S. Department of Justice\u2019s Criminal Fraud Section. <\/em><\/p>\n\n\n\n <\/p>\n\n\n\n Brandon Lee is an associate in Fenwick & West LLP\u2019s Litigation Group.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" By Casey O’Neill and Brandon Lee <\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[8,15],"tags":[],"_links":{"self":[{"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/posts\/1070"}],"collection":[{"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/comments?post=1070"}],"version-history":[{"count":3,"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/posts\/1070\/revisions"}],"predecessor-version":[{"id":1118,"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/posts\/1070\/revisions\/1118"}],"wp:attachment":[{"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/media?parent=1070"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/categories?post=1070"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/abtl.org\/northerncalifornia\/wp-json\/wp\/v2\/tags?post=1070"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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B. Corporate Right to Counsel and Related Protections<\/strong><\/p>\n\n\n\n
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C. In Tension with Precedent<\/strong><\/p>\n\n\n\n
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