Case Summary
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Securities and Exchange Commission v. Schroeder, 2009 U.S. Dist. LEXIS 39378 (N.D. Cal. Apr. 27, 2009).
A motion to compel production of internal notes and draft memoranda of a non-party law firm generated during preparation of a special committee report on a company’s stock option practices was denied. The law firm documents had not been disclosed outside the law firm, and the defendant executive in the stock option backdating case did not demonstrate that the law firm materials were crucial to his defense.
The retired chief executive officer of a company was named in an SEC enforcement action alleging improper backdating of stock options at the retired CEO’s company. He sought an order compelling the company and its law firm, including individual attorneys at the firm, to produce documents. The company and the law firm, which prepared a report on stock option backdating for a special committee of the company, were not named as parties in the SEC action against the retired CEO. The law firm opposed the retired CEO’s motion for a production order on the ground that the retired CEO already had received pertinent documents from the SEC and on the ground that documents were protected from disclosure by the attorney client privilege and the work product doctrine.
The court held that the law firm did not have to produce notes and draft memoranda used in producing the special committee report. Internal notes of the law firm following interviews of employees of the company and draft memoranda were disclosed only to attorneys within the firm. Also, the retired CEO had not shown that access to the internal law firm materials was crucial to his defense in the SEC action because the executive would in effect use the materials only to cross-check information already provided to him by the SEC. The court separately held that the law firm’s communications with the special committee were protected by the attorney client privilege and that the law firm’s communications with its forensic accounting expert concerned opinion work product that did not have to be disclosed to the retired CEO.
<< Click here to go backThe retired chief executive officer of a company was named in an SEC enforcement action alleging improper backdating of stock options at the retired CEO’s company. He sought an order compelling the company and its law firm, including individual attorneys at the firm, to produce documents. The company and the law firm, which prepared a report on stock option backdating for a special committee of the company, were not named as parties in the SEC action against the retired CEO. The law firm opposed the retired CEO’s motion for a production order on the ground that the retired CEO already had received pertinent documents from the SEC and on the ground that documents were protected from disclosure by the attorney client privilege and the work product doctrine.
The court held that the law firm did not have to produce notes and draft memoranda used in producing the special committee report. Internal notes of the law firm following interviews of employees of the company and draft memoranda were disclosed only to attorneys within the firm. Also, the retired CEO had not shown that access to the internal law firm materials was crucial to his defense in the SEC action because the executive would in effect use the materials only to cross-check information already provided to him by the SEC. The court separately held that the law firm’s communications with the special committee were protected by the attorney client privilege and that the law firm’s communications with its forensic accounting expert concerned opinion work product that did not have to be disclosed to the retired CEO.
