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United States v. Carroll G. Bernard

Court of Appeals for the Tenth Circuit
1989 U.S. App. LEXIS 7756, 877 F.2d 1463, 1989 WL 59340 (1989)
ELI5:

Rule of Law:

A client waives the attorney-client privilege by voluntarily disclosing the substance of a confidential communication with an attorney to a third party.


Facts:

  • Mr. Bernard, a bank officer, was involved in a scheme to make illegal nominee loans.
  • Mr. Bernard asked another individual, Mr. Treat, to take out two of these nominee loans.
  • Mr. Treat expressed concern about the legality of the proposed loans.
  • To persuade Mr. Treat that the loans were legal, Mr. Bernard told Treat that he had consulted with his attorney, Mr. Tom Nally, who had verified the legality of such loans.

Procedural Posture:

  • Mr. Bernard was tried before a jury in a U.S. District Court (trial court).
  • During the trial, the government called Mr. Treat as a witness, who testified about his conversation with Mr. Bernard; counsel for Mr. Bernard did not object.
  • The trial court ruled that Mr. Bernard had waived his attorney-client privilege and permitted the government to call his attorney, Mr. Nally, as a witness.
  • The jury convicted Mr. Bernard of sixty-two criminal violations, including conspiracy, bank fraud, and making false entries.
  • Mr. Bernard (appellant) appealed the judgment to the United States Court of Appeals for the Tenth Circuit, arguing the trial court erred in finding he had waived the privilege.

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Issue:

Does a client waive the attorney-client privilege by voluntarily disclosing the purported substance of a confidential communication with his attorney to a third party in an effort to induce that party to act?


Opinions:

Majority - Brorby, J.

Yes. A client waives the attorney-client privilege by voluntarily disclosing a confidential communication to a third party. The privilege is intended to protect confidentiality, and any voluntary disclosure by the client is inconsistent with the attorney-client relationship. Mr. Bernard revealed the purported conversation with his counsel to induce Mr. Treat to participate in the nominee loan scheme. Having used the communication as a sword to convince Mr. Treat, he cannot now use the privilege as a shield to prevent his attorney from testifying about the same communication. A party cannot utilize the privilege in a manner inconsistent with its purpose.



Analysis:

This case reinforces the fundamental principle that the attorney-client privilege belongs to the client and can be waived by the client's own actions. It clarifies that disclosure to a third party, particularly for a strategic purpose like inducing reliance, constitutes a clear waiver of the privilege for that specific communication. This prevents a client from selectively disclosing favorable aspects of legal advice to manipulate others while simultaneously hiding the full context or truth of that advice. The decision serves as a crucial reminder for clients to maintain strict confidentiality regarding legal counsel to avoid inadvertent waiver.

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