Managing Investigations – The Ostrich Approach Does Not Work
Managing investigations or investigators is never easy. Litigating is never easy either. But, it does not have to be as hard as Uber recently made it which included inflaming a judge as well as garnering it bad press.
Last year when Uber got smacked with an anti-trust lawsuit, Uber retained an investigative firm to look into the background of the plaintiff and his lawyer, as any savvy litigant would do. The investigators came up with a ruse to get scoop on the plaintiff and his attorney. The investigator told the plaintiff, a fella who fancies himself to be a conservationist, that he was working on a report to profile the plaintiff as a leader in the conservation field. As for the plaintiff’s lawyer, the investigator used a similar tactic by telling the lawyer and his friends and family that the investigator was asking about the lawyer for a report on talented labor lawyers.
The investigator then advised Uber that the plaintiff is very protective of his career and reputation in the environmental field and that this may be an Achilles heel for Uber to exploit, particularly if the plaintiff’s attorney was using the plaintiff for his own purposes in pursuing the suit.
SUpposedly, during depositions, Uber officials told plaintiff attorneys that they did not know how the investigative firm developed this sort of information. This was a strange response for a couple of reasons.
First, when the lawsuit was initially filed Uber’s general counsel emailed Uber’s security officer and asked him to “find out a little more about the plaintiff.” This kicked off the investigation because Uber’s security officer followed through on the general counsel’s request by retaining the investigative firm.
Uber’s security officer advised the investigative firm that the investigation had to be confidential without attribution to Uber.
Then in January 2016, according to media reports, plaintiff’s lawyers asked Uber’s lawyers whether they had retained investigators to look into their backgrounds since both the plaintiff and his lawyer had learned that their friends and family were getting calls about them. In an email Uber’s lawyers told plaintiff’s counsel that they did not know anything about the investigative firm and it was not behind the calls from the investigator.
When the plaintiff complained about these contradictions to the hard-charging judge, claiming that Uber’s actions were “fraudulent”, the judge sort of agreed and ordered Uber to turn the investigative materials over to the plaintiffs despite Uber’s plea that the materials were protected by attorney-client privilege. The judge did not buy Uber’s claim that the materials were attorney-client protected.
The judge ruled that if the purpose of the investigation was for Uber to gather information on persons who may pose a safety risks to Uber’s CEO, as Uber claimed, the investigative materials are not protected by the attorney-client privilege since it was not done to provide legal advice to Uber.
Going a step further, the judge found that there was a reasonable basis to suspect the investigators were involved in fraud. As a result, communications about the investigation are not protected by attorney-client privilege. The judge also opined that Uber was at risk of perverting the justice process. The judge then ordered the investigative documents be turned over to the plaintiffs. Court Order to Uber to Turn Over the Documents LA Times Article Reuters
So now, as I pen this, Uber is supposed to give the investigative materials it gathered to the plaintiff. And the plaintiff awaits the judge’s ruling on his request to bar Uber from further investigations and to pay his legal bills for being forced down this rabbit hole by Uber. WSJ
So – how does this situation inform on handling an investigation – either for internal purposes or for litigation purposes?
First, there is nothing wrong with gathering the scoop on those suing your company or their lawyers. But you can’t have investigators or anyone else for that matter, gathering the scoop through artifice and deceit.
Second, what can cause trouble in an investigation is allowing investigators to work without specific guidance. When you decide to hire an investigator, you need to be sure they have been given clear and direct guidance about what they can do, what they cannot do, and what you want them to investigate. Any engagement letter should reflect that.
Third, if you want your investigation to be protected by the attorney-client privilege, you have to take the necessary steps to assure it merits protection. The investigation has to be done for the purpose of providing legal advice and not some other reason. For example, like the judge in this case found, investigating someone to see if they are a threat to your CEO – is not legal advice so there is no attorney-client privilege to protect.
On the other hand, investigating a plaintiff as part of your litigation strategy – is legal advice so the investigation must be protected as attorney-client communications. When the investigation is done for the purpose of providing legal advice, a lawyer has to oversee and manage the investigation to protect that privilege. The lawyer needs to be on the emails. As for emails, in the course of an investigation, many sensitive topics may arise which are best handled in person or over the phone so people don’t misconstrue emails.
Fourth, even with specific guidance and boundaries, a lawyer should check in on the investigators regularly to make sure they are sticking with the plan. Also, the lawyer should be there to help investigators formulate new plans since in any investigation the landscape changes rapidly and new plans are always needed.
Finally, you must always provide accurate information to the court and to opposing counsel. You cannot be in the scenario where employees or investigators are put in a position where they either do not know the facts and therefore, lie by omission; or, know the facts and lie to protect someone or some institution.
You can do this by identifying a single point of contact, usually an attorney, to understand what everyone involved in the investigation or litigation is doing. Also, have someone manage the documents and the flow of information, that includes emails.
Although investigations and litigation can indeed be hard they don’t have to be so hard that you get raked over the coals by the judge and called out in the media. You can’t just hire an investigator, stick your head in the sand, and what for the investigative report. The investigation needs to be managed.