Dissolved LLCs and the
Attorney-Client Privilege
In recent decision from
Mississippi, the court considered whether a dissolved corporation continues to
enjoy an attorney-client privilege. On the facts of this case, it was held that
it did not. United States v. Walters,
2020 WL 1934803 (S.D. Miss. April 21, 2020).
Walters served a subpoena duces
tecum upon Jonell Beller, an attorney with the Baker Donelson law firm seeking
records relating to, amongst others, Prime Care Marketing, LLC and Total Care
Marketing, LLC. The exact relationship between Walters and either of these
business entities was not recited in the decision, although Walters had, in
2015, filed the articles of dissolution with respect to Prime Care Marketing,
LLC.
In response to the subpoena
duces tecum, Beller filed a motion to quash on the basis of privilege, to which
Walters responded that Beller “had no standing to assert the privilege because
it belongs to the clients” and he “has authority to waive the privilege for the
companies.” The court granted the motion to quash, finding that Beller had
standing to assert the privilege and that Bellers had failed to demonstrate, on
behalf of each of the LLCs, that he had authority to waive the privilege. That
ruling led to a motion for reconsideration, which is the subject of this
decision.
On reconsideration, the focus
was upon the extent to which a dissolved corporation (although this case
involved LLCs) enjoys a post-dissolution attorney-client privilege. Drawing a
distinction between natural persons, for whom the privilege does survive death,
the court cited a variety of authorities that stand generally for the
proposition that a business entity, after its dissolution, notwithstanding the
possibility of reinstatement thereafter, does not continue to enjoy an
attorney-client privilege. For example, the court cited TAS Bistriv. Co. v. Cummins, Inc., 2009 WL 3255297 (C.D. Ill. Oct.
7, 2009) for the proposition “absent some compelling reason to the contrary,
the attorney-client privilege does not survive the death of the corporation.”
On that basis, the motion to
reconsider was granted, the quashing of the subpoena was set aside, and Beller
was directed to produce the documents responsive to the subpoena duces tecum.
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