54_Upjohn Co. v.

United States

449 U.S. 383

1981

Topic: Attorney-Client Privilege

Doctrine:

In the corporate context, attorney-client privilege extends to lower level employees, not just to
those in control of the corporation. The work-product doctrine protects oral statements made to
attorneys, which necessitates a showing of undue hardship on the part of the party-opponent who
seeks that information.
Facts:
1. Petitioner, an international pharmaceutical company discovered through an independent
audit that one of its foreign subsidiaries might have made payments to foreign government
officials in order to secure government business.
2. Gerard Thomas, Petitioner’s General Counsel, was notified and he consulted with outside
counsel as well as Petitioner’s Chairman, all of whom decided an internal investigation as
to “questionable payments” was necessary.
3. As a result, questionnaires were sent to all foreign and area managers inquiring as to
information regarding any such payments. This procedure of collecting information had
been deemed “highly confidential.”
4. Petitioner voluntarily sent a preliminary report to the Securities and Exchange Commission
(SEC) and the IRS.
5. The IRS began an investigation and was given lists by Petitioner of all those who were
interviewed and all whom had responded to the questionnaire.
6. The IRS then sought production of all files relative to the investigation conducted under
Gerard Thomas’ supervision.
7. The requested production included, but was not limited to the written questionnaires and
memoranda or notes of interviews conducted in the US and abroad of officers and
employees of Petitioner and its subsidiaries.
8. Petitioner refused, citing attorney-client privilege and attorney work product in anticipation
of trial.
9. The Respondent, the United States (Respondent), filed a petition seeking enforcement of
the summons in the United States District Court for the Western District of Michigan,
which was granted.
10. Petitioner then appealed to the Court of Appeals for the Sixth Circuit which rejected the
District Court’s finding of waiver of the attorney-client privilege, but agreed that the
privilege did not apply to the communications made by officers and agents not responsible
for directing Upjohn’s actions in response to legal advice.
11. The Appellate Court remanded to the District Court to determine who was within the
control group.

Issue:
Whether the attorney-client privilege in the corporate context extends to employees not within the
“control group” of the corporation.

Held:

Yes.

The attorney-client privilege applies to corporations, not just to the “control group” rather,
it extends to lower level employees as well, since their actions as well may involve the corporation
in legal difficulties. The attorney-client privilege only protects disclosure of communications. It
does not protect disclosure of the underlying facts by those who communicated with the attorney.

In this case, the Petitioner gave to the IRS a list of those employees to whom the
questionnaire was given and those who answered. The IRS was free to question the employees
who communicated with Thomas and outside counsel. The court shall protect against disclosure
of the mental impressions, conclusions, opinions, or legal theories of an attorney or other
representative of a party concerning the litigation. The notes and memoranda that the IRS sought
in this case were work product based on oral statements. This required the IRS to show necessity
and undue hardship in obtaining the information it sought, a burden that the Supreme Court of the
United States (Supreme Court) held was not met.