Third Circuit Upholds Permitting Testimony Of Outside Corporate Counsel Against Former CEO

Author:Mr George Niespolo, Frederick R. Ball, Marco A. Gonzalez Jr. and Daniel R. Walworth
Profession:Duane Morris LLP

In a case that highlights the significance of clarifying the scope of outside corporate counsel's representation of individual employees, the Third Circuit—in an unpublished opinion in United States v. Norris1—upheld introducing the testimony of former counsel to the Morgan Crucible Company ("Morgan" or the "Company") against Morgan's former CEO, Ian Norris. In Norris, the corporation expressly and voluntarily waived its attorney-client privilege; and despite correspondence from counsel suggesting otherwise, the CEO was unable to establish that corporate counsel also represented him in his individual capacity.

Although the Third Circuit's unpublished opinion in Norris provides only a perfunctory analysis, the facts adduced in the district court reveal a dispute that might have been averted if counsel and the Company had more clearly described the scope of counsel's representation.

Background of Prosecution

Norris was charged with—and with the testimony of Morgan's former outside counsel, was convicted of—corruptly persuading, and attempting and conspiring to corruptly persuade, others with an intent to influence their testimony in grand jury proceedings.2 The prosecution arose from a grand jury investigation of an international price-fixing conspiracy involving Morgan. The grand jury price-fixing investigation led, in turn, to a plan to obstruct the grand jury's investigation by tampering with witnesses; providing false information to the government; and concealing or destroying documents relevant to the grand jury investigation. Norris, Morgan's CEO, was at the center of that plot. After receipt of a subpoena, Norris organized the destruction of files and documents evidencing or reflecting price-fixing meetings and agreements with competitors. Morgan's CEO also directed false summaries of meetings Morgan had with competitors ("scripts") to be distributed to individuals who had knowledge of those price-fixing meetings.

Counsel's Testimony

The district court permitted Morgan's corporate counsel to testify (upon waiver of privilege by Morgan) that:

In interviews with counsel, Norris and his subordinates all told counsel the same agreed-upon story about their price-fixing meetings, and encouraged counsel to pass along the false information to investigators; Norris and another officer authorized counsel to provide the "scripts" to the government; Counsel, without request of the government and with Morgan's permission, passed those "scripts" along to the government; and Counsel was not told that the scripts...

To continue reading