"On June 13, 2011, the Supreme Court issued its opinion in United States v. Jicarilla Apache Nation, 564 U.S. ___ (2011), holding that the fiduciary exception to the attorney-client privilege does not apply to the United States government’s administration of Indian trusts. The fiduciary exception to the attorney-client privilege is a common law rule which has developed to permit beneficiaries of a trust to obtain privileged communications where the trustee obtains legal advice related to the exercise of his fiduciary duties in connection with the administration of the trust. In concluding that the fiduciary exception did not apply to compel disclosure of privileged documents by the government to the Indian tribe in the Jicarilla case, the Court considered the scope of the fiduciary exception generally. To support its holding, the Court explained why the government’s role with respect to Indian trusts does not resemble a private trust relationship. Although the ultimate holding has limited application, the Court’s comments regarding the fiduciary exception should be of particular interest to fiduciaries in the context of private trusts and ERISA plan administration and other ERISA fiduciary acts. In addition, while focusing its analysis on the fiduciary exception in the trust context, the Court also cited case law recognizing a fiduciary exception to permit corporate shareholders, in certain limited circumstances, to obtain privileged advice given to corporate management.

The case involved a breach-of-trust action by an Indian tribe against the government for alleged mismanagement of funds held in trust for the tribe. The tribe moved to compel the government to produce documents. The government withheld certain documents from production on the basis of the attorney-client privilege. Federal Rule of Evidence 501 provides that evidentiary privileges “shall be governed by the principles of common law…in the light of reason and experience.” The lower courts held that the common law fiduciary exception to the attorney-client privilege applied to require production. In a 7-1 decision written by Justice Alito, the Supreme Court reversed and held that the fiduciary exception did not apply in this context."

Get the Story:
The U.S. Supreme Court addresses application of the fiduciary exception to the attorney-client privilege in the trust context (Lexology 7/6)
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Supreme Court Decision:
US v. Jicarilla Apache Nation (June 13, 2011)

Oral Argument Transcript:
US v. Jicarilla Apache Nation (April 20, 2011)

Federal Circuit Decision:
In Re United States (December 30, 2009)

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