United States Securities and Exchange Commission v. Aktiengesellschaft

Background

The SEC sued Volkswagen over securities fraud based on Volkswagen’s failure to disclose its emissions fraud to investors. Before Volkswagen pleaded guilty to three felony counts in a criminal case brought by the Department of Justice, its then-criminal counsel from Jones Day met with the Department of Justice six times in 2016. During those meetings, Jones Day shared findings from its investigation and referred to 274 Volkswagen documents that were described as central to the investigation. Those documents were a small portion of the approximately 6.5 million documents Volkswagen produced during the criminal investigation.

Discovery dispute

In this case, Volkswagen agreed to provide the SEC with all relevant, non-privileged documents that it had produced to the Department of Justice during the 2016 criminal investigation. The SEC also sought to require Volkswagen to identify the documents that Jones Day selected to discuss during the six meetings. Volkswagen asserted attorney work-product protection, which generally protects materials prepared for litigation and, especially, an attorney’s mental impressions and judgments.

Court’s analysis

The court concluded that Jones Day’s selection of documents was protected opinion work product. It reasoned that the lawyers did not randomly choose the documents and that identifying them would indirectly disclose their judgments about what was important to the investigation. The court cited Federal Rule of Civil Procedure 26(b)(3)(B), which protects an attorney’s mental impressions, and described such material as nearly impossible to obtain through discovery.

The SEC argued that the protection should not apply because Jones Day no longer represented Volkswagen in this civil case. The court rejected that argument, explaining that work-product protection from an earlier proceeding can apply when the same party asserts the protection in later litigation, even if its counsel has changed.

The SEC also argued that Volkswagen waived the protection by failing to raise it timely in a separate Freedom of Information Act lawsuit involving the documents produced to the Department of Justice. The court stated that the other court had not, to its knowledge, found waiver and declined to speculate about whether that court might do so or whether such a ruling would apply here. The court therefore found that no waiver had been established.

Disposition

The court stated that it would not compel Volkswagen to identify the documents its criminal counsel chose to highlight during the 2016 meetings because the information was protected opinion work product. The SEC’s request to compel disclosure was denied.