United States v. LeCroy
2004 WL 2914210, 348 F. Supp. 2d 375 (2005)
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Rule of Law:
A party to a joint defense agreement (JDA) waives the privilege for future communications by proceeding with interviews after another party to the JDA explicitly states its intent to disclose notes from those interviews to the government, thereby modifying the JDA by conduct.
Facts:
- J.P. Morgan Chase (“JPMC”) and two of its employees, Charles LeCroy and Anthony C. Snell, received grand jury subpoenas in connection with an investigation into alleged wire fraud.
- JPMC's internal counsel, Scott Campbell, conducted preliminary interviews with LeCroy and Snell in their capacity as JPMC employees.
- Recognizing a potential conflict, JPMC advised LeCroy and Snell to retain individual counsel, which they did, and JPMC agreed to pay their legal fees.
- A verbal Joint Defense Agreement (JDA) was formed between counsel for JPMC, LeCroy, and Snell to share information under the cloak of privilege.
- In January 2004, JPMC's counsel informed lawyers for LeCroy and Snell that JPMC would turn over notes of any future interviews to the government if the government insisted.
- Despite their lawyers' objections that JPMC could not unilaterally waive the JDA's protections, LeCroy and Snell, fully advised of JPMC's position, proceeded to be interviewed by JPMC counsel in January 2004.
- LeCroy and Snell were interviewed again by JPMC counsel in March 2004 without their individual lawyers present.
- JPMC subsequently produced the notes and memoranda from the January and March 2004 interviews to the government pursuant to its grand jury subpoena.
Procedural Posture:
- During a grand jury investigation, the government issued subpoenas to JPMC, LeCroy, and Snell.
- JPMC turned over notes of interviews with LeCroy and Snell, who asserted that the notes were protected by privilege under a joint defense agreement.
- The government filed a motion in the U.S. District Court for the Eastern District of Pennsylvania for a hearing to resolve the defendants' claims of privilege.
- The district court held a hearing on the motion, which included testimony taken both in open court and in camera.
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Issue:
Do communications made by parties during interviews conducted under a joint defense agreement (JDA) remain privileged after one party to the JDA prospectively announces its intent to disclose notes from those interviews to the government if requested?
Opinions:
Majority - Baylson, District Judge.
No. Communications made during interviews do not remain privileged when the participants proceed with the interviews after being clearly warned that notes from those communications may be turned over to the government, as their conduct constitutes a knowing and voluntary waiver of the JDA's protections for those specific communications. Although a JDA generally prevents one party from unilaterally waiving the privilege for past communications, it can be modified prospectively. Here, JPMC announced its intention to cooperate with the government by potentially turning over future interview notes. By choosing to proceed with the interviews with full knowledge of this condition, LeCroy and Snell, by their conduct, agreed to a modification or partial waiver of the JDA. They had the option to refuse the interviews but instead made a knowing and intelligent decision to participate, thereby waiving the JDA's protections for the statements made in those specific interviews. Public policy supports this outcome, as the grand jury has a right to every person's evidence, and a party to a JDA must be free to prospectively withdraw and cooperate with an investigation.
Analysis:
This decision clarifies that joint defense agreements are not static and can be modified by the subsequent conduct of the parties. It establishes that a party's explicit, prospective warning that it will disclose future communications can alter the terms of a JDA if the other parties proceed with those communications, even over their lawyers' legal objections. The case serves as a crucial warning for practitioners and clients that participating in communications after such a warning will likely be treated as a waiver of privilege for those communications. This ruling prioritizes a party's ability to cooperate with a government investigation and the grand jury's broad access to evidence over a rigid, unalterable application of JDA confidentiality.
