## Facts

- Drummond Company, Inc., an Alabama coal company operating in Colombia, sued Conrad & Scherer, LLP (C&S) and its partner Terrence Collingsworth for defamation based on statements linking Drummond to Colombian paramilitary violence and murders.
- Collingsworth and C&S had represented Colombian plaintiffs in Alien Tort Statute and related litigation against Drummond.
- In discovery in the defamation case, Collingsworth and C&S asserted attorney-client privilege and work-product protection over communications and materials connected to their Colombian litigation and witness dealings.
- A central dispute concerned payments to Colombian paramilitary witnesses whose statements had been used against Drummond; defendants initially represented that only one such witness was paid.
- After a third-party subpoena produced an email indicating additional payments, defendants later admitted that three paramilitary witnesses also received payments.
- Drummond argued the concealment of payments and false discovery responses supported a prima facie showing that privileged communications and work product were used to further fraud or other wrongdoing, triggering the crime-fraud exception.
- The district court held the crime-fraud exception could apply even if the alleged wrongdoer was the attorney or law firm rather than the client, and that an attorney’s intent could be imputed to the firm under agency principles.
- The district court ordered a Special Master to review contested materials document-by-document to determine whether each item furthered, or was closely related to, the alleged crime or fraud.
- The district court certified its order for interlocutory appeal under 28 U.S.C. § 1292(b), and defendants appealed.

## Issues

1. Whether the crime-fraud exception to attorney-client privilege and work-product protection applies when the alleged crime or fraud is committed by the attorney or law firm, rather than the client.
2. Whether an individual attorney’s criminal or fraudulent intent may be imputed to the attorney’s law firm for purposes of applying the crime-fraud exception.
3. Whether the district court used the correct standard in directing document-by-document review for communications that furthered, or were “closely related to,” the alleged crime or fraud.

## Decision

- The Eleventh Circuit affirmed the interlocutory discovery order.
- The court held the crime-fraud exception is not limited to client misconduct and can apply where the attorney or law firm is the actor.
- The court held an attorney’s wrongful intent may be imputed to the law firm under ordinary agency principles when the conduct occurred within the scope of the attorney’s work for the firm.
- The court approved the district court’s document-by-document review instruction requiring a determination whether each item reflected communications used to further a crime or fraud or was closely related to it.
- The court concluded the district court had a sufficient basis to proceed with Special Master review under the governing Eleventh Circuit framework.

## Legal Principles

- Attorney-client privilege and work-product protection do not apply to communications or materials used to further a crime or fraud.
- The crime-fraud exception may be invoked upon a prima facie showing of crime or fraud and a showing that the relevant communications were in furtherance of, or closely related to, that wrongdoing.
- The exception applies regardless of whether the alleged wrongdoer is the client or the attorney; the functional inquiry is whether protected materials were used to further misconduct.
- A law firm may be subject to the exception based on an attorney’s conduct and intent when imputable to the firm under standard agency rules.
- Courts may require document-by-document review (including through a special master) to determine whether each item satisfies the “in furtherance of” or “closely related to” requirement.

## Conclusion

The Eleventh Circuit upheld a discovery order permitting crime-fraud review of privileged and work-product materials in a defamation suit, holding that attorney or law firm wrongdoing can trigger the exception and that an attorney’s intent may be imputed to the firm, with applicability determined through document-specific analysis.


Drummond Co. v. Conrad & Scherer, LLP, 885 F.3d 1324 (11th Cir. 2018)