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UNITED STATES
13 JANUARY 1981 | J. William Hubbs Rehnquist | Attorney-Client Privilege | Sandoval
PETITIONER/S: UPJOHN CO. (UJC), Gerard Thomas - UJCs VP, Secretary, and General Counsel
(for 20 years)
RESPONDENT/S: United States (US) Government
FACT TO BE ESTABLISHED:
EVIDENCE PRESENTED: letters containing questionnaires, notes and memoranda
SUMMARY: The Petitioner, Upjohn Co., conducted an internal audit and investigation that revealed
alleged illegal payments made to foreign officials in exchange for business. Petitioner volunteered
notice of such actions to the Internal Revenue Service (IRS), who issued a summons for information
collected by Petitioner, including internal questionnaires sent to managerial employees. Petitioner
maintained those documents were protected by the attorney-client privilege and attorney work product
doctrine.
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.
ABBREVIATIONS:
UJC: UpJohn Co.
GC: General Counsel
IRS: Internal Revenue Service
EE: Employee
ACP: Attorney-Client Privilege
WPD: Work Product Doctrine
CGT: Control Group Test
FACTS:
1. UJC is a pharmaceutical manufacturing company which sells pharmaceuticals in the US and
abroad. UJC was informed (by independent accountants conducting an audit of one foreign
subsidiary) that one of its foreign subsidiaries had made questionable payments to foreign
government officials to secure government business.
2. An internal investigation was initiated.
UJCs attorneys sent a letter containing a questionnaire to all foreign General and Area
Managers (with Chairmans signature), noting recent disclosures that several American
companies made possibly illegal payments to foreign government officials and that they needed
all the information. The responses were sent to GC.
GC + outside counsel: interviewed recipients of the questionnaire, plus other corporate officers
and EEs.
Based on a report voluntarily submitted by UJC disclosing the payments, the IRS investigate to
determine the tax consequences and issues summons pursuant to 26 U.S.C. Sec. 762 demanding
productions, inter alia, of the questionnaires and memoranda and notes of the interviews, which
UJC refused to do so on grounds that they were protected by ACP, and constituted the work
product of attorneys prepared in anticipation of litigation.
3. US filed a petition in Federal District Court seeking enforcement of summons. They adopted the
Magistrates recommendation that summons should be enforced. The Magistrate concluded that
ACP has been waived and that the Government made sufficient showing of necessity to overcome
the WPD.
CONCURRING OPINION: Chief Justice Warren Burger wrote a concurring opinion in which he
supported the Court's decision, but advocated a clear bright-line that would privilege any employee or
former employee's communications with attorneys, if the attorneys' inquiry was authorized by
management, and was designed to assess legal responses or issues with regard to the employee's
conduct.