9th Circuit Invites Additional Briefing on Former Broadcom Exec's Privilege Claim

9th Circuit Invites Additional Briefing on Former Broadcom Exec's Privilege Claim - 9-2-2009 , Class Action News, Class Action, Securities News, shareholder class action, claim, litigation, securities action, common stock'>

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9th Circuit Invites Additional Briefing on Former Broadcom Exec's Privilege Claim
Amanda Bronstad

The National Law Journal. September 2, 2009
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EXCERPT: A federal appeals panel on Tuesday invited outside parties to weigh in regarding whether William Ruehle, the former chief financial officer of Broadcom Corp., should have assumed that statements he made to company lawyers during an internal investigation into stock options backdating were protected by the attorney-client privilege. Following oral arguments in the 9th Circuit's courthouse in Pasadena, Calif., a three-judge panel concluded that the issue was important enough to warrant additional input from parties including the American Bar Association. "This case raises several major issues obviously that are fairly new in our law," Judge Ronald M. Gould said. Los Angeles U.S. District Judge Cormac J. Carney ruled in April that Ruehle "reasonably believed" that his statements to Irell & Manella attorneys Ken Heitz and Dan Lefler were protected. Carney referred the law firm to the State Bar of California for possible disciplinary proceedings on the ground that the failure to warn Ruehle about a potential conflict of interest in representing both him and Broadcom rose to the level of "ethical misconduct." The government appealed that ruling, and on Tuesday argued that the privilege didn't apply because Ruehle knew that Irell & Manella would turn over information from the 2006 meeting to outside auditors at Ernst & Young and eventually to company shareholders. "When he sat at the meeting, he knew factual information was going to Ernst & Young," said U.S. Attorney Daniel B. Levin of Los Angeles. In its briefs, the government argued that Carney applied the wrong legal standard. The controlling precedent, it argued, was In re Bevill, Bresler & Schulman Asset Management Corp., 805 F. 2d 120 (3d Cir. 1986), in which the 3d Circuit ruled that corporate officers cannot assert the attorney-client privilege as individuals after a corporation has waived its privilege.

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