Congressional Investigations Law Blog

Given the shift in political control of the House that will occur in January 2011, companies and individuals will be eager to know how congressional oversight might change. With a Republican majority in the House, Rep. Darrell Issa (R-CA) will become the Chair of the House Oversight and Government Reform Committee, which has the broadest jurisdiction of any House committee. On September 22, 2010, Mr. Issa released a Blueprint of Oversight of the Executive Branch. The "Blueprint" also foreshadows some oversight of the private sector. Oversight, to some degree will respond to news events of the day, and Mr. Issa might not follow the "Blueprint" to a tee, but it does provide some insight into what his committee might investigate.

At the October 22, 2010 FDLI panel discussion on congressional investigations, Josh Levy described unique features to congressional investigations. The first set of those features are here. The second set of those features unique to congressional investigations are:

1. The avenues for legal battles can be dark and narrow. The Speech or Debate Clause - after the Supreme Court's 1976 decision in Eastland - makes it highly difficult for a recipient of a congressional subpoena to challenge that subpoena in court short of a contempt proceeding, particularly when the recipient is not in the government. That means pharmaceutical companies, device manufacturers, and hospitals (among others) likely will be unable to challenge the legitimacy or appropriateness of a congressional subpoena in court. And risking contempt is not advice any of us are likely to render.

That said, your client undoubtedly will have obligations and confidential material that must be maintained. Committees and their staffs will not always value those obligations the way your client does, and it is incumbent on the lawyer to work out a path to protect those obligations and confidences.

For example, your clients will take their non-disclosure agreements with third parties seriously. But my experience is that congressional staff often does not. As outside counsel, you must be careful to make certain your client does not violate or breach such agreements, which may not include exceptions for congressional subpoenas. Temporizing matters with congressional staff to perfect a waiver often is necessary. Beyond that, litigation might be an option.

2. Given the narrow alleyways for legal battles, the more effective room to work with the committees and their staff is through reasonability and fairness. No Member wants to be embarrassed or come off sounding unreasonable or unfair, although many will have different thresholds and standards for each. Likewise, staff members and committee counsel will have a certain standard of reasonability and fairness that should reflect that of their employers, but does not in all cases.

As counsel, maintaining credibility with the committee staff is critical. Perceptions of what is fair and reasonable, under the circumstances, are likely to vary Member to Member, staff member to staff member, and committee to committee.

3. Investigations can linger, but they are temporary. With exceptions, congressional investigations will begin and end, but your client's litigation exposure might continue. For that reason, it is important to protect your client's privileged and confidential material. Courts are split on the extent to which attorneys must protect privileged materials before a congressional committee without waiving that privilege. Lawyers in private practice are best advised to do more rather than less to prevent a waiver.

• For example, some courts have found that producing privileged documents to a congressional committee waives the privilege, even if the most senior congressional staff members inform counsel that the Chair has rejected counsel's assertion of privilege.

• Those courts have ruled that before counsel can produce otherwise privileged material to the congressional committee and later continue to assert that privilege in other proceedings, the Committee Chair and/or the Committee as a whole must first reject counsel's assertions of privilege.

• This high standard for preserving waiver before a congressional committee should not be followed by the courts. But as a matter of practice before a congressional committee, attorneys and clients would be wise to follow this high standard.

Conclusion
As with privilege, trade secrets, and other areas of exposure for your client, you want to make sure not to panic. Even while the bright lights of Congress are turned on your client, the lights will eventually turn off, and when they do, the Congressman will have gotten his headline, but your client's other litigation will still be there. For that reason, it is important to keep your client's objectives clear and ahead of you - whether they relate to litigation exposure or other considerations.

On October 22, 2010, the Food & Drug Law Institute ("FDLI") sponsored a panel on Congressional Investigations and invited SMM partner, Joshua A. Levy, to speak. The first half of Joshua Levy's brief prepared remarks from that panel discussion are here:

In the landscape of legal proceedings, congressional investigations are unique animals. Their distinct features are important for the private practitioner and the Hill staffer to keep in mind. For example:

1. There are no clear winners and losers in congressional investigations as there can be in litigation. From the perspective of the attorney in private practice representing an individual or a corporation that has been asked to respond to a congressional committee inquiry, the aim is to do no harm to the client - or, in other unavoidable cases, to do the least amount of harm possible to the client under the circumstances.

2. The potential harms are many, in a congressional investigation. For example, at the most severe end of the spectrum, criminal investigations could result from a congressional investigation. In addition, recommendations can be made to debar a business from working with the government; shareholder value can drop; reputational harm can result from a congressional investigation; trade secrets and other proprietary information can be compromised; and privileges can be waived.

3. There are risks for the congressional committee and its members, too. On the one hand, benefits for the Members can be significant, as in the case of Senator Truman whose road to the White House arguably began with his triumphant investigation of the waste, fraud, and abuse in the nation's defense contractor spending, during the run-up to the Second World War. But the common congressional investigation often yields only a day or two of news, and even the smallest investigation can consume significant committee resources - in terms of staff, dollars, energy, and focus. There are even greater downsides - For every Senator Truman, there may be a Senator McCarthy who has lost his decency, or an Iran-Contra Committee check-mated by the superior lawyering of Brendan Sullivan and the performance of Lt. Col. Oliver North.