Argument recap: The attorney-client privilege and government-administered trusts

CHRISTA CULVER APR 26, 2011 12:00 PM

On Wednesday, the Court heard argument in United States v. Jicarilla Apache Nation (No. 10-382), a case that could have profound implications for litigation between the federal government and Native American tribes.  The Jicarilla Apache Nation argues that it is entitled to documents that might otherwise be protected by the attorney-client privilege because of the fiduciary exception to the privilege in the context of trustee-beneficiary relationships.  The government counters that its unique status as a sovereign makes any such fiduciary exception inapplicable.

 

Arguing for the government, Assistant to the Solicitor General Pratik Shah seemed to receive the most push-back on his use of the word “trust” to describe the government’s relationship with the Jicarilla Apache Nation, as well as on the apparent lack of any countervailing harm to the government that might counsel against allowing it to invoke the fiduciary exception in this context.  Justice Sotomayor appeared particularly concerned with the government’s use of “trust” terminology:  she observed that “all of the statutes relating to these funds use the word trust.  Not one statute defines trust and says in any way this is not a fiduciary relationship.”  Shah responded by referring to the Court’s decision in United States v. Mitchell, 445 U.S. 535 (1980), in which the Court indicated that “Congress’s use of the term ‘trust’ does not imply the full gamut of common law fiduciary obligations.”  When Justice Sotomayor raised this issue again, Shah articulated a broader response, noting the imprecise use of the word “trust” in a wide variety of contexts (such as law enforcement, health care, and property law) and contending that  “this Court and Congress ha[ve] recognized that ‘trust’ can mean a lot of different things.”

 

Justices Breyer, Kennedy, Alito, and Sotomayor each raised the question of what, if any, countervailing governmental interest or harm would justify the abrogation of the fiduciary exception here.  Initially, Shah cited only “budgetary constraints that the United States must take into consideration as a sovereign.”  When asked by Justice Ginsburg, however, whether “shielding government actors” might be one such countervailing interest, Shah agreed that although the government’s own conception of the harm at issue might be more “nebulous,” the importance of shielding government actors was indeed a “chilling concern.”  Justice Scalia also pointed out that, outside of the context of the fiduciary exception, private litigants need not provide evidence of some countervailing interest or to invoke the attorney-client privilege.

 

In contrast, the principal point of contention during the oral argument of Steven Gordon, representing respondent Jicarilla Apache Nation, seemed to be the Court’s perception that the distinction between advice pertaining solely to management of the trust (which, according to Gordon, would have to be disclosed) and advice relating to liability (which, according to Gordon, would not) was untenable.  Chief Justice Roberts and Justice Scalia appeared to believe that such a distinction was “artificial.”  Furthermore, both Chief Justice Roberts and Justice Kennedy expressed concern over the policy implications of this proposed distinction, with the Chief Justice suggesting that it would result in “bland, mushy, hedging advice to a trustee” because of the prospect that the advice would be shared with the beneficiary.  Justice Kennedy seemed more concerned with the likelihood that the rule would essentially eviscerate any opportunity for a trustee to receive preventative advice regarding liability, which he deemed “one of the most important kinds of advice an attorney can give.”

 

In his rebuttal, Shah re-emphasized that the fiduciary exception should not apply because the rationale supporting the common law exception is not applicable against the government.  And he again highlighted that when, as here, the trustee (rather than the trust itself) “is paying for the legal advice” in question, “that’s going to be a significant consideration as to whether the beneficiary can get” the privileged documents resulting from that legal advice.

 

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