The long saga of the legal challenge by Carl Ferrer, CEO of Backpage, to a subpoena issued by the Senate’s Permanent Subcommittee on Investigations (“PSI”) appears to have reached a conclusion.  A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit this week dismissed the case as moot and additionally vacated a series of prior rulings by the district court in the case.  The D.C. Circuit’s ruling effectively wipes the slate clean, erasing a district court action that seemed to open the door to a rare adjudication of Congress’s ability to compel the production of documents covered by the attorney-client privilege, while possibly making it significantly more difficult for individuals and companies to assert the privilege before Congress.

Although it may come as a surprise to many observers, including experienced litigation attorneys, both the Senate and House maintain that they are not required to respect the attorney-client privilege or the related attorney work product doctrine.  Congressional lawyers contend that such privileges are judicial, common law privileges that do not bind legislatures.  Congress’s position is rooted in the Constitution’s separation of powers and the inherent legislative authority to conduct investigations.

Congressional investigators often use this dynamic as a source of leverage over corporations and others from whom they seek to obtain documents or testimony.  Although it is relatively rare for a committee actually to compel production of privileged documents, it does happen.  For example, Congress did so in a high profile case involving Bank of America some years ago.  Over the years, Congress, corporations, and the courts have managed to steer clear of opportunities to test Congress’s position that it need not respect the attorney-client privilege, and there has never been a definitive court ruling on the topic, even though Congress has staked out this position for more than a century.

In Ferrer’s case, the company withheld attorney-client privileged documents, as well as other documents, but PSI contended that the company had not explicitly asserted the attorney-client privilege until relatively late in the process.  The district court agreed and held that Backpage had waived its ability to object based on the attorney-client privilege, and it ordered the company to produce documents.  PSI’s arguments, however, opened potentially dangerous ground for Congress.  In finding that Ferrer had waived the privilege, the court’s ruling seemed to suggest that such a privilege existed before Congress.  After all, how could Ferrer have waived something that did not exist?

During the weeks and months that the litigation and appeal developed, PSI completed its investigation, issued a final report, and held its final hearing in January 2017.  In the D.C. Circuit, PSI informed the court that it would not certify its continued interest in enforcing the subpoena, which was required in this instance because a new Congress convened in January, and it advanced the mootness argument, perhaps in recognition of the risk associated with an appellate ruling on the attorney-client privilege before Congress.  Although Ferrer, with the support of various amici, continued to press the appeal, the Court determined that the case was moot because PSI no longer was seeking to compel production of documents.  The Court then went one step further and actually vacated the decisions of the district court below, so that the lower court’s decisions will not have precedential value in future cases involving congressional investigations.

This outcome essentially restores the status quo ante, in which congressional investigation committees and those under investigation will bargain around Congress’s position on the attorney-client privilege without any real guidance from a controlling court decision.  Given the dramatic impact that would have been felt if the Backpage case had led to a ruling on the applicability of attorney-client privilege in congressional investigations, it is not altogether surprising that PSI in the end sought to avert a ruling by the court on the issue, and that the D.C. Circuit was very willing to oblige.

Photo of Robert Kelner Robert Kelner

Robert Kelner is the chair of Covington’s nationally recognized Election and Political Law Practice Group.  He counsels clients on the full range of political law compliance matters, and defends clients in civil and criminal law enforcement investigations concerning political activity. He also leads

Robert Kelner is the chair of Covington’s nationally recognized Election and Political Law Practice Group.  He counsels clients on the full range of political law compliance matters, and defends clients in civil and criminal law enforcement investigations concerning political activity. He also leads the firm’s prominent congressional investigations practice.

Rob’s political law compliance practice covers federal and state campaign finance, lobbying disclosure, pay to play, and government ethics laws. His expertise includes the Federal Election Campaign Act, Lobbying Disclosure Act, Ethics in Government Act, Foreign Agents Registration Act, and Foreign Corrupt Practices Act.

He is also a leading authority on the arcane rules governing political contributions and marketing activities by registered investment advisers and municipal securities dealers.

Rob’s political law clients include numerous multinational corporations, many of which are household names.  He counsels major banks, hedge funds, private equity funds, trade associations, PACs, political party committees, candidates, lobbying firms, and politically active high-net-worth individuals. He has represented the Republican National Committee, National Republican Congressional Committee, and National Republican Senatorial Committee.  He also advises Presidential political appointees on the complex vetting and confirmation process.

As a partner in the firm’s White Collar Defense & Investigations practice group, Rob regularly defends clients in congressional investigations before virtually every major congressional investigation committee.  He also defends corporations and others in investigations by the Federal Election Commission, the Public Integrity Section of the U.S. Department of Justice, federal Offices of Inspector General, and the House & Senate Ethics Committees.  He has prepared many CEOs and corporate executives for testimony before congressional investigation panels. He regularly leads the Practicing Law Institute’s training program on congressional investigations for in-house lawyers.  In addition, he is frequently retained to lead internal investigations and compliance reviews for major corporate clients concerning lobbying and campaign finance law issues.

Rob has appeared as a commentator on political law matters on The PBS News Hour, CNBC, Fox News, and NPR, and he has been quoted in the New York Times, Washington Post, Wall Street Journal, Associated Press, Legal Times, Roll Call, The Hill, Politico, USA Today, Financial Times, and other publications.

Rob is Chairman of Covington’s Professional Responsibility Committee and a General Counsel of the firm.  He also currently serves as Chairman of the District of Columbia Bar’s Legislative Practice Committee, and he previously was appointed by the President of the American Bar Association to serve on the ABA’s Standing Committee on Election Law.

Photo of Brian D. Smith Brian D. Smith

Brian Smith assists clients with challenging public policy matters that combine legal and political risks and opportunities.

Brian represents companies and individuals facing high-profile and high-risk congressional investigations and hearings, and other criminal, civil, and internal investigations that present legal, political, and public…

Brian Smith assists clients with challenging public policy matters that combine legal and political risks and opportunities.

Brian represents companies and individuals facing high-profile and high-risk congressional investigations and hearings, and other criminal, civil, and internal investigations that present legal, political, and public relations risks. He assists companies and executives responding to formal and informal inquiries from Congress and executive branch agencies for documents, information, and testimony. He has extensive experience preparing CEOs and other senior executives to testify before challenging congressional oversight hearings.

Brian develops and executes government relations initiatives for clients seeking actions by Congress and the executive branch. He has led strategic efforts resulting in legislation enacted by Congress and official actions and public engagement at the most senior levels of the U.S. government. He has significant experience in legislative drafting and has prepared multiple bills enacted by Congress and legislation passed in nearly every state legislature.

Prior to joining Covington, Brian served in the White House as Assistant to the Special Counsel to President Clinton. He handled matters related to the White House’s response to investigations, including four independent counsel investigations, a Justice Department task force investigation, two major oversight investigations by the House of Representatives and the Senate, and several other congressional oversight investigations.

Brian is a Professorial Lecturer in Law at the George Washington University Law School.