Thread by @RosenfeldM

1/ Getting lots of DM questions about attorney privilege / work product regarding the #Ripple judge decision to allow the release of 3 legal memos to Ripple purportedly analyzing whether XRP was a security (memos not released until Feb 19).

2/ Whether legal advice is privileged/work product that is protected is not a uniform analysis. For federal cases, the law of the circuit in which the case sits applies. While most federal cases are consistent in this area, there are tons of nuances.

3/ What is pretty consistent across all decisions is that the protection can be lost if the advice goes beyond what I call the “privilege circle” - that means to employees and directors of a company.

In some circuits, consultants are not in that circle. For example, if I provide legal advice to a board and the company’s auditor attends, that advice is not protected.

Or if the catering staff starts to bring in lunch while I give advice to the board, it is not protected. The circle must not be broken.

Others not in circle - board observers

And when advice is in writing, like a memo or email, the danger is that someone in the circle forwards it on to someone outside the circle - which breaks the protection (Ripple executives apparently did this)

The breaking of the protection is not limited to just the one communication. Anything on the subject matter in the communication no longer becomes privileged. So all emails and conversations with legal counsel on the topics become fair game.

Litigators know this - corporate and securities lawyers are not as well-versed in this area. It is important to understand and make sure your client understands.

And it is a great annual topic to do an update to a board about to keep best practices refreshed

Also - entering into a confidentiality agreement with someone - like a board observer- does not bring them into that privilege circle.

What does this mean for the Ripple case? They shared memos outside the privilege circle (reportedly to potential buyers of XRP presale). Broke privilege circle. Memos will be released on February 18. But also…..

The subject matter is now not protected. All correspondence with legal counsel — any legal counsel not just ones who wrote memos — is not protected. Including conversations.

And what it means for Ripple’s fair notice argument does not seem great - depends on what memos and all other legal advice on the topic was. Although Judge back in a May 2021 ruling seemed to indicate she believed legal advice didn’t matter in the Fair Notice defense

My hope for #cryptolaw is that Ripple lawyers were fighting release of the memos because of the broad implications of having the privilege / work product protection busted and that the fight was not because the content would be destructive to the case