GIBSON, Chief Judge.
This appeal presents sensitive and far-reaching issues regarding the extent to which an attorney's "opinion work product" is immune from discovery under Fed.R.Civ.P. 26(b)(3).
In 1969, the Government filed a three-count civil action against Pfizer Inc., Bristol Myers Company, American Cyanamid Company, Olin Corporation, Squibb Corporation and The Upjohn Company. In Count I, the Government is seeking to cancel Pfizer's tetracycline patent on the grounds that it was procured fraudulently. Count II is a common law action of deceit which seeks to hold Pfizer, Cyanamid and Bristol liable for overcharges in excess of $203 million sustained by the Government on direct and federally financed purchases of broad spectrum antibiotics.
A skeletal history of this case will aid in placing the legal issues in perspective. In the early 1950's, product patent applications for the broad spectrum antibiotic drug tetracycline were filed by Pfizer, Cyanamid and Bristol. Because of these competing applications, the Patent Office declared "interference" between Pfizer and Cyanamid. This interference proceeding was settled when the parties executed a cross-licensing agreement in which Cyanamid conceded priority to Pfizer's tetracycline application and received a license from Pfizer to market tetracycline. In exchange, Pfizer received a license to use two of Cyanamid's crucial patents in the production of tetracycline.
In September 1954, before a patent had been issued on tetracycline, Bristol began producing tetracycline and marketing it in dosage form under its brand name. Cyanamid filed an action against Bristol which charged Bristol with infringing Cyanamid's patents in the production of tetracycline. This Cyanamid-Bristol litigation was settled when Cyanamid granted Bristol a license to use the Cyanamid patents in the manufacture of tetracycline.
In October 1954, the Patent Examiner ruled that Pfizer could not patent tetracycline because it lacked novelty. Eventually, however, the Patent Examiner reversed his decision and, in January 1955, issued the patent to Pfizer. On the day the tetracycline patent was issued, Pfizer commenced a lawsuit against Bristol, Squibb and Upjohn, charging defendants with infringing Pfizer's patent. Immediately thereafter, Bristol, Squibb and Upjohn filed an action to secure a declaratory judgment that they were not infringing the Pfizer patent. In 1956, these actions were settled when Pfizer granted licenses to Bristol to produce and sell tetracycline, with royalties paid to Pfizer. In addition, Pfizer issued licenses to Squibb and Upjohn which allowed them to purchase and sell tetracycline, with Pfizer receiving royalties on their net sales.
The Government has long viewed defendants' roles in the patenting and marketing of tetracycline with suspicion. The Government believes that Pfizer, Cyanamid and Bristol committed fraud on the Patent Office by suppressing relevant information and filing false and misleading statements in regard to the tetracycline patent applications. The fraud was committed, the Government argues, in order to assure that Pfizer would receive the tetracycline patent and allow Cyanamid and Bristol to share in the monopoly benefits of tetracycline through licensing agreements. The defendants are also accused of violating federal antitrust laws by conspiring to monopolize the tetracycline market. Essentially, the Government argues that the defendants, with full knowledge that the Pfizer tetracycline patent was invalid and unenforceable, settled the various patent interference and infringement proceedings in order to perpetuate their monopoly control over the drug tetracycline. These arguments of the Government were partially successful in a Federal Trade Commission action against, inter alia, Pfizer, Cyanamid and Bristol,
a. The Government's Discovery Motions.
Since the institution of this action, the parties have engaged in prolonged and hotly contested discovery proceedings. The primary point of contention between the parties stems from an attempt by the Government to review the files of the three law firms that have represented either Cyanamid or Bristol for the past several years. The law firm of Donovan Leisure Newton & Irvine (Donovan Leisure) has represented Cyanamid since approximately 1939, primarily in antitrust litigation. The firm of Winthrop, Stimson, Putnam & Roberts (Winthrop) and the patent law firm of Fish & Neave served as legal counsel to Bristol in the Federal Trade Commission and criminal proceedings, and presently represent Bristol in this civil litigation.
Early in 1971, the Government filed motions seeking to discover legal documents and internal memoranda that were prepared by these law firms on behalf of Bristol or Cyanamid from 1946 to 1956.
In order to expedite the discovery proceedings, the District Court appointed a panel of three masters to review the numerous documents submitted by the parties and to make preliminary rulings on the Government's discovery motions. In 1971, the law firms of Donovan Leisure, Winthrop and Fish & Neave afforded the masters access to all legal files except those containing strictly internal documents that had not been seen by their clients. Temporarily acquiescing to this limitation on the scope of their search, the masters reviewed the files and withdrew a substantial number of documents.
b. The Masters' 1973 Opinions Interpreting Rule 26(b)(3).
On June 1, 1973, the masters rendered two decisions delineating the scope of work product immunity afforded the law firms' documents under Fed.R.Civ.P. 26(b)(3). In the first opinion, which dealt with documents not containing the mental impressions or opinions of the attorneys, the masters considered the issue of whether the work product privilege protects documents prepared in anticipation of previous, terminated litigation. They ruled that the work product privilege generally protects only those "documents prepared in anticipation of litigation in the case with regard to which the protection of [Rule 26(b)(3)] is involved." (Citation omitted.) If the documents were prepared in anticipation of terminated litigation, they are protected only
The second opinion of the masters discussed the discovery of documents that embodied the opinions or thought processes of the attorneys, denoted here as "opinion work product." The masters rejected the arguments of the law firms that opinion work product is absolutely immune from discovery under Rule 26(b)(3). Rather, they adopted a rule allowing discovery of the law firms' opinion work product upon a showing of substantial need and an inability to obtain without undue hardship the substantial equivalent of the material by other means. Based upon their ruling that "no special protection" attaches to these documents, the masters ordered the documents to be turned over to them for in camera inspection.
c. The Masters' 1976 "Opinion Work Product" Opinion.
Despite these rulings, the law firms adamantly refused to surrender their internal opinion work product to the masters. Finally, after the District Court issued subpoenas to the law firms,
The masters resolved this conflict by adhering to the standards established in their previous decisions, expressly rejecting Duplan as "wrongly decided". Implicitly acknowledging the problem of disregarding Duplan, the masters constructed four categories of documents, of which only the first two are relevant to this appeal:
Of the 41 documents that are central to this appeal, the masters placed two in Category One and 39 in Category Two. When counsel refused to turn over these documents to the District Court, the firms and one member of each firm
In determining whether the work product privilege extends to documents prepared in anticipation of previous, terminated litigation, we must look to the policies underlying the work product doctrine and attempt to define the intended scope of the doctrine. Our discussion must necessarily commence with Hickman v. Taylor, 329 U.S. 495, 67 S.Ct. 385, 91 L.Ed. 451 (1947), which, although it does not explicitly resolve the issue, establishes the analytical framework within which we must operate.
In Hickman, the Supreme Court undertook the difficult task of reconciling the competing interests of liberalized discovery and the privacy of attorneys' files.
Based upon these postulates, the Court concluded that certain "relevant and non-privileged facts", 329 U.S. at 511, 67 S.Ct. 385, not containing the attorney's mental impressions, may be discovered from an attorney's files if the person seeking production carries the burden of showing that there are "adequate reasons", 329 U.S. at 512, 67 S.Ct. 385, or some "necessity or justification", 329 U.S. at 510, 67 S.Ct. 385, for invading the attorney's privacy. However, the Court did not clearly specify the quantum of proof necessary to carry that burden. Rule 26(b)(3), which codifies Hickman and its progeny, 8 C. Wright & A. Miller, Federal Practice and Procedure § 2023, at 193 (1970) was adopted by the Supreme Court in 1970. The rule establishes a qualified immunity for ordinary work product — that which does not contain the mental impressions, conclusions or opinions of the attorney. Such work product is discoverable only upon a showing of substantial need and an inability to secure the substantial equivalent of the items through alternate means without undue hardship. Rule 26(b)(3) provides special protection for an attorney's opinion work product.
In view of the Hickman rationale and the policies of Rule 26(b)(3), we conclude that the work product privilege applies to documents prepared in anticipation of terminated litigation.
An ancillary issue is whether the work product documents prepared in the terminated litigation are protected from discovery only if they discuss issues that are closely related to the issues in the pending
Our conclusion that the work product privilege extends to documents prepared in previous, unrelated litigation will not make attorneys' files impregnable. As to ordinary work product, a litigant can secure access to these documents by establishing the relevance of the requested documents, Fed.R.Civ.P. 26(b)(1), and by satisfying the substantial need and undue hardship requirements of Rule 26(b)(3). In our view, Hickman simply dictates that an attorney's work product, whenever prepared, is entitled at a minimum to this qualified privilege.
We must now delineate the scope of protection afforded an attorney's opinion work product under Rule 26(b)(3).
In Hickman, there was an attempt to discover the oral statements made to an attorney by witnesses which, at the time of the discovery request, were in the form of the attorney's "mental impressions or memoranda." 329 U.S. at 512, 67 S.Ct. 385. In a statement that adumbrated the standard embodied in Rule 26(b)(3), the Court concluded: "If there should be a rare situation justifying production of these matters, petitioner's case is not of that type." 329 U.S. at 513, 67 S.Ct. at 395. Based upon the Court's discussion in Hickman, the mental impressions and opinions of attorneys have been "steadfastly safeguarded against disclosure." Advisory Committee's Notes to Rule 26(b)(3), reprinted in 48 F.R.D. 487, 502 (1970).
It is clear that opinion work product is entitled to substantially greater protection than ordinary work product. Therefore, unlike`ordinary work product, opinion work product can not be discovered upon a showing of substantial need and an inability to secure the substantial equivalent of the materials by alternate means without undue hardship. See Fed.R.Civ.P. 26(b)(3). In our view, opinion work product enjoys a nearly absolute immunity and can be discovered only in very rare and extraordinary circumstances. See Hickman v. Taylor, supra. Our unwillingness to recognize an absolute immunity for opinion work product stems from the concern that there may be rare situations, yet unencountered by this court, where weighty considerations of public policy and a proper administration of justice would militate against the non-discovery of an attorney's mental impressions.
The Government argues that this is a proper case in which to formulate one of the rare exceptions to the opinion work product rule. Drawing an analogy to the attorney-client privilege, the Government argues that documents containing opinion work product should not be immune if they were prepared in perpetuation of a client's criminal or fraudulent activities. According to the Government, there has been a prima facie showing that the law firms' clients, Cyanamid and Bristol, were engaged in committing fraud on the Patent Office and violating federal antitrust law when they sought the advice of the law firms. Therefore, it is argued, the opinion work product of the law firms is not protected by Rule 26(b)(3).
The purpose of the attorney-client privilege is to encourage clients to make a full disclosure of all favorable and unfavorable facts to their legal counsel. Fisher v. United States, 425 U.S. 391, 403, 96 S.Ct. 1569, 48 L.Ed.2d 39 (1976). A client who, for example, has committed a crime should be allowed to advise his attorney of all relevant, even inculpatory facts without the fear that his attorney may be subsequently required to disclose the substance of the confidential communication and, thereby, prejudice the client's case. But the client, who is the direct beneficiary of the attorney-client privilege, Schwimmer v. United States, 232 F.2d 855, 863 (8th Cir.), cert. denied, 352 U.S. 833, 77 S.Ct. 48, 1 L.Ed.2d 52 (1956), can not be permitted to abuse the privilege. The reasons for the privilege "all cease to operate at a certain point, namely where the desired [legal] advice refers not to prior wrongdoing, but to future wrongdoing." 8 Wigmore on Evidence § 2298, at 573 (McNaughton Rev. 1969). (Emphasis in original.) From this principle, which was recognized at common law, has emerged the exception that the attorney-client privilege is lost if the client consults an attorney for advice that will assist the client in carrying out a contemplated illegal or fraudulent scheme. Clark v. United States, 289 U.S. 1, 15, 53 S.Ct. 465, 77 L.Ed. 993 (1933); Pfizer Inc. v. Lord, 456 F.2d 545, 548 (8th Cir. 1972); C. McCormick, Law of Evidence § 95 (Cleary ed. 1972); J. Gardner, The Crime or Fraud Exception to the Attorney-Client Privilege, 47 A.B.A.J. 708 (1961). To invoke this exception, there must be a prima facie showing that the client was engaged or planned to engage in illegal or fraudulent activity when he sought the legal advice. See Clark v. United States, supra, 289 U.S. at 15, 53 S.Ct. 465; United States v. Bob, 106 F.2d 37, 40 (2d Cir.), cert. denied, 308 U.S. 589, 60 S.Ct. 115, 84 L.Ed. 493 (1939).
Although "the attorney-client privilege and the work product doctrine spring from the same common law origin", In re Grand Jury Proceedings, 473 F.2d 840, 844 (8th Cir. 1973), the work product doctrine under contemporary law "is distinct from and broader than the attorney-client privilege." United States v. Nobles, 422 U.S. 225, 238 n. 11, 95 S.Ct. 2160, 2170, 45 L.Ed.2d 141 (1975); see In re Grand Jury Proceedings, supra at 845. The items protected by the work product doctrine are not confined to attorney-client confidential communications. Rule 26(b)(3) extends protection to all "documents and tangible things" that are prepared in anticipation of litigation or for trial. Included in this amorphous category are trial preparation documents that contain the fruits of the attorney's investigative endeavors and any compendium of relevant evidence prepared by the attorney. Also protected by Rule 26(b)(3) are the attorney's mental impressions, opinions and legal theories.
Whether there is an implied crime or fraud exception to the work product doctrine of Rule 26(b)(3) is presently an unresolved question.
If there is a crime or fraud exception to the work product privilege that would justify discovery of opinion work product, the party seeking discovery has the burden of proving at least two elements. It must be established that (1) the client was engaged in or planning a criminal or fraudulent scheme when he sought the advice of counsel to further the scheme and (2) the documents containing the attorney's opinion work product must bear a close relationship to the client's existing or future scheme to commit a crime or fraud. Applying these standards to the present case we conclude that, if there is a fraud or crime exception to the work product doctrine, the Government has not established its entitlement to the law firms' opinion work product on this basis.
a. Documents Prepared by Winthrop and Fish & Neave on Behalf of Bristol.
These documents are not discoverable because the Government has not made a prima facie showing that Bristol was engaged in or planning a crime or fraud when the legal advice of Winthrop and Fish & Neave was sought. In a previous appeal arising out of this litigation, we ruled that there was no prima facie showing that Bristol had violated federal anti-trust laws. Pfizer Inc. v. Lord, 456 F.2d 545, 550 (8th Cir. 1972). We find no evidence in the record that would justify a modification of that ruling.
In 1973, the masters found that Bristol had failed to provide the Patent Office with relevant information and, thus, there was prima facie evidence that Bristol committed fraud on the Patent Office. In our view, this conclusion lacks evidentiary support. When Bristol and other pharmaceutical companies were charged with violating the Federal Trade Commission Act, there was a plenary hearing before the FTC and Bristol was absolved of any wrongdoing before the Patent Office. American Cyanamid Co., 63 F.T.C. 1747 (1963); see West Virginia v. Chas. Pfizer & Co., 314 F.Supp. 710, 716 (D.C. 1970).
b. Documents Prepared by Donovan Leisure on Behalf of Cyanamid.
The Government has failed to make a prima facie showing that Cyanamid has violated federal antitrust laws. In two trials on the merits, the evidence relied on by the Government was found insufficient to support an antitrust violation against Cyanamid. North Carolina v. Chas. Pfizer & Co., 384 F.Supp. 265 (E.D.N.C. 1974), aff'd, 537
However, as we ruled in Pfizer Inc. v. Lord, supra at 550-51, there has been a prima facie showing that Cyanamid committed fraud on the Patent Office. Therefore, assuming there may be a fraud or crime exception, these opinion work product documents would be discoverable only if they bore a close relationship to Cyanamid's fraud on the Patent Office. In order to expedite these discovery proceedings, we have reviewed the Donovan Leisure documents and find no such relationship. Donovan Leisure was retained by Cyanamid as an antitrust counsel and was involved only tangentially with Cyanamid's Patent Office proceedings. Because the Donovan Leisure opinion work product is unrelated to any fraud Cyanamid was committing or planned to commit on the Patent Office, it is not discoverable.
In summary, we hold that (1) the work product privilege extends to documents prepared in anticipation of terminated, unrelated litigation; (2) opinion work product enjoys a nearly absolute immunity and only in rare situations can it be discovered; and (3) if there is a crime or fraud exception to the work product privilege, the Government has failed to establish that it is entitled to discovery of these documents under that exception.
Therefore, the documents prepared by Donovan Leisure in its representation of Cyanamid are not discoverable and the orders of contempt against Donovan Leisure and Samuel Murphy are reversed. The 17 documents prepared by Bristol's legal counsel and placed in the masters' Category Two are not discoverable under the standards formulated in this opinion. However, as we have held,
Remanded for further proceedings consistent with this opinion. Costs assessed against appellee.
As used throughout this opinion, the phrase "opinion work product" describes those documents containing "the mental impressions, conclusions, opinions, or legal theories of an attorney * * *." Any work product documents that do not fit into this category will be referred to as "ordinary work product."
This rule would have rendered opinion work product absolutely immune from discovery. However, the Supreme court did not adopt the amendment, choosing instead to resolve the work product controversy in the Hickman case. See 4 Moore's Federal Practice ¶ 26.63 (2d ed. 1976).