## Facts

- Institutional customers of a government-securities dealer suffered major losses after the dealer collapsed and sued the dealer’s outside auditor for federal securities and related state-law violations.
- The auditor filed third-party claims against the dealer’s former general partners and attorneys, including the dealer’s general counsel, seeking contribution/indemnity based on alleged advice and conduct that purportedly contributed to the losses.
- The general counsel sought to defend himself by offering testimony and documents reflecting confidential communications with the dealer and its partners.
- The dealer’s bankruptcy trustee (and a partner) asserted the attorney–client privilege on behalf of the dealer and objected to disclosure.
- The matter came before a magistrate judge as a discovery/privilege dispute focused on the procedure for evaluating the counsel’s request to use privileged materials.

## Issues

1. Whether a former corporate lawyer sued over conduct in the representation may disclose otherwise privileged client communications in his defense, and under what limits.
2. What showing of necessity is required before permitting disclosure under a self-defense theory.
3. Whether the court should require in camera review of the disputed materials to balance privilege protection against the lawyer’s asserted need to defend.

## Decision

- The court declined to find a blanket waiver of the corporate attorney–client privilege or to grant the lawyer broad permission to disclose privileged communications.
- The court required the lawyer to submit the disputed documents (and proposed areas of testimony) for in camera review.
- The court ordered the lawyer to provide an affidavit explaining, item by item (or by defined categories), why the privileged material was necessary to his defense.
- The court reserved decisions on any disclosure (including any limitations, redactions, or protective measures) until after the in camera assessment.

## Legal Principles

- The attorney–client privilege belongs to the client (including a corporate client acting through its trustee in bankruptcy) and cannot be unilaterally waived by former counsel.
- A lawyer accused of wrongdoing arising from the representation may, in limited circumstances, rely on privileged communications to the extent reasonably necessary to defend against the accusations.
- Any self-defense-based disclosure must be narrowly confined to what is necessary; generalized or wholesale disclosure is improper.
- In camera review and a particularized necessity showing are appropriate safeguards to resolve disputes where a lawyer seeks to use privileged client communications in self-defense.

## Conclusion

The court protected the corporate client’s privilege while allowing a potential, tightly limited self-defense use of privileged material by requiring an in camera submission and a detailed necessity affidavit before authorizing any disclosure.


First Fed. Sav. & Loan Ass’n of Pittsburgh v. Oppenheim, Appel, Dixon & Co., 110 F.R.D. 557 (S.D.N.Y. 1986)