## Facts

- AOL Time Warner retained outside counsel to conduct an internal investigation into its dealings with PurchasePro, Inc.
- Corporate counsel and AOL’s general counsel interviewed three employees multiple times during the investigation.
- At the interviews, counsel gave warnings that they represented the company, that the communications were privileged, and that the privilege belonged to the company, which could decide to waive it; employees were told they could retain personal counsel.
- After government investigations began, a federal grand jury subpoenaed internal-investigation materials.
- AOL expressly waived its attorney-client privilege and produced materials responsive to the subpoena.
- The employees moved to quash, claiming an individual attorney-client privilege in the interview communications; one employee also relied on a later common-interest (joint-defense) agreement with AOL executed after the interviews.
- The district court denied the motions to quash, concluding the privilege belonged to AOL alone and had been waived; the employees appealed.

## Issues

1. Whether the employees established individual attorney-client relationships with corporate investigating counsel such that the interview communications were protected by the employees’ personal privileges.
2. Whether a later common-interest agreement between an employee and the corporation prevented disclosure of earlier internal-investigation interview communications after the corporation waived privilege.
3. Whether the district court erred in enforcing the grand jury subpoena despite the employees’ privilege objections.

## Decision

- The Fourth Circuit affirmed the order denying the motions to quash and allowing enforcement of the grand jury subpoena.
- The court held the attorney-client privilege for the internal-investigation communications belonged exclusively to AOL, not to the interviewed employees.
- The court held the employee’s later common-interest agreement did not create a separate privilege or block disclosure of pre-agreement interview communications after AOL waived privilege.

## Legal Principles

- The proponent of attorney-client privilege bears the burden to prove an attorney-client relationship and that the communications were confidential and for the purpose of obtaining legal advice.
- In a corporate internal investigation, communications between corporate counsel and employees may be privileged, but the privilege generally belongs to the corporation; the corporation may waive it.
- Clear warnings that counsel represents the corporation and that the corporation controls any privilege weigh strongly against finding a separate attorney-client relationship with the employee.
- A statement that counsel “could” represent an employee if no conflict arises does not, without more, establish actual personal representation.
- The common-interest doctrine preserves existing privileges when privileged information is shared among parties with aligned legal interests; it does not create a new privilege or retroactively transfer privilege ownership for earlier communications.

## Conclusion

The Fourth Circuit enforced a grand jury subpoena for corporate internal-investigation materials because the employees failed to show personal attorney-client relationships with corporate counsel, and a later common-interest agreement could not prevent disclosure of earlier interview communications once the corporation waived its privilege.


In re Grand Jury Subpoena: Under Seal, 415 F.3d 333 (4th Cir. 2005)