Michael Homer Featured in Massachusetts Lawyers Weekly Article on First Circuit Privilege Waiver Ruling
Dynamis LLP partner Michael B. Homer was recently quoted by Massachusetts Lawyers Weekly in its coverage of the First Circuit’s significant decision in United States v. SpineFrontier, Inc., holding that an executive’s introduction of evidence of the involvement of company counsel does not necessarily waive a corporation’s attorney‑client privilege.
The decision is an important development for companies and executives—particularly in the healthcare and life sciences sectors—who regularly rely on specialized counsel to navigate the federal Anti‑Kickback Statute and other complex regulatory regimes.
This client alert briefly summarizes the ruling and offers practical takeaways for in‑house counsel, compliance officers, and executives.
Case Background: Implied Waiver of Corporate Attorney-Client Privilege
The prosecution at issue was initiated by the U.S. Attorney’s Office for the District of Massachusetts. Federal prosecutors in Boston alleged that a medical device company, SpineFrontier, and two senior executives operated a sham consulting program that funneled millions of dollars to surgeons to induce use of the company’s products in procedures reimbursed by federal healthcare programs.
As the company developed the consulting arrangement, it engaged outside healthcare counsel to provide opinion letters addressing Anti‑Kickback Statute risk. Those letters emphasized that any payments had to be for bona fide services and could not be tied to the volume or value of referrals or business generated.
One executive, Aditya Humad, indicated he intended to raise what the First Circuit labeled an “involvement‑of‑counsel” defense at trial—arguing, in essence, that specialized outside counsel was involved in structuring the consulting program, and that this context spoke to his lack of willful criminal intent.
The district court concluded that by doing so, he would implicitly waive the corporation’s privilege over its communications with outside counsel, and authorized the government to obtain those privileged materials. The company, which had resolved the case before trial, appealed.
The First Circuit’s Ruling: A Major Win for Privilege Protections
The First Circuit’s opinion resolved two issues, both of which are significant:
1. Who can waive a corporation’s privilege?
First, the court held that the existing record was not sufficiently developed to determine whether Humad, on his own, had authority to waive the company’s privilege—that is, whether he effectively functioned as the corporation’s “alter ego.” The panel underscored that the relevant inquiry is not whether multiple executives together represent the company, but whether this particular defendant has that authority in his own right.
The panel remanded to the district court for further factual development to resolve this question.
2. Involvement‑of‑counsel does not automatically trigger waiver.
Second—and more broadly—the court drew an important distinction between:
A limited involvement‑of‑counsel defense, where a defendant argues that the fact of having engaged specialized counsel bears on state of mind; and
A classic advice‑of‑counsel defense, where a defendant affirmatively asserts that counsel blessed the specific conduct at issue.
The First Circuit made clear that not every involvement‑of‑counsel defense results in an implied waiver of the privilege. Federal courts are generally reluctant to find implied waivers unless “principles of logic and fairness” require it.
If a defendant merely argues that he was less likely to intentionally break the law because the company retained experienced healthcare counsel, that argument does not reveal the substance of privileged communications and therefore does not, standing alone, justify piercing the corporation’s privilege. But if a defendant goes further and suggests that counsel specifically approved the challenged conduct, a waiver may well follow.
The panel also emphasized that waiver is a “significant penalty,” and that district courts should first consider less drastic tools—like limiting instructions and rulings under Federal Rules of Evidence 401 and 403—to address any perceived unfairness to the government.
Why This Matters for Healthcare and Other Regulated Industries
As Homer explained to Massachusetts Lawyers Weekly, for companies operating under statutes like the Anti‑Kickback Statute—where willfulness is often the key element—”the fact that a company hired specialized counsel, obtained opinion letters, and even shared [those letters] with providers is powerful context on state of mind.” Homer added that the First Circuit’s decision recognizes that “this context can be significant and appropriate for a jury to hear without automatically giving the government a license to rummage through all privileged communications.”
This ruling has implications far beyond healthcare fraud cases:
Public and private companies: Questions about who can waive the organization’s privilege will frequently arise where an individual executive is prosecuted but the entity is not. The court’s focus on the individual defendant’s actual authority will matter in many such cases.
Any criminal case involving good‑faith defenses: In white‑collar cases more generally, defendants often rely on good‑faith or lack‑of‑willfulness defenses. This opinion helps clarify that referencing the presence of counsel, in a carefully cabined way, does not automatically open the door to a broad privilege waiver.
Practical Takeaways for In‑House Counsel and Executives
Although the contours of the ruling will continue to develop on remand (and possibly in future appeals), several practical lessons already emerge:
1. Be intentional about the role of outside counsel.
Engaging specialized healthcare or regulatory counsel remains critical, both for compliance and for potential future litigation. Companies should clearly define counsel’s role in structuring programs—such as consulting arrangements, joint ventures, and other referral‑sensitive relationships—and ensure that engagement is well documented.
2. Preserve privilege while planning for potential defenses.
From the outset, organizations should consider how privileged advice might intersect with later criminal or civil proceedings. If executives may someday need to reference counsel’s involvement to show good faith, they should think through in advance how to do so without venturing into full‑blown advice‑of‑counsel territory.
3. Clarify who has authority to waive privilege.
Corporate policies and governance documents should be clear about which officers or committees can waive the organization’s attorney‑client privilege, and under what circumstances. That clarity can matter later if an individual defendant seeks to rely on counsel’s involvement.
4. Use “less‑onerous mechanisms” first.
If the government claims prejudice from a limited involvement‑of‑counsel defense, courts should, consistent with the First Circuit’s guidance, consider tools like limiting instructions, tailored evidentiary rulings, and careful jury instructions before ordering wholesale disclosure of privileged files.
5. Reassess compliance programs in light of the decision.
Healthcare providers, device manufacturers, and other entities with physician‑facing programs may wish to revisit their Anti‑Kickback Statute compliance frameworks—both to ensure they reflect current enforcement expectations and to consider how counsel’s involvement is documented.
Conclusion
The First Circuit’s decision in SpineFrontier is a reminder that implied waivers of the attorney‑client privilege should remain the exception, not the rule. Companies should not be punished for doing the right thing—engaging specialized counsel to navigate complex regulatory schemes—by automatically forfeiting their privilege whenever an executive seeks to contextualize his or her state of mind.
At the same time, the opinion underscores how fact‑specific these issues are. The line between “involvement‑of‑counsel” and “advice‑of‑counsel” can be fine, and once crossed, privilege protections may be significantly narrowed.
If you have questions about how this decision may affect your organization’s compliance program, internal investigations, or defense strategy in an ongoing matter, the white‑collar defense and government investigations team at Dynamis LLP, including Michael B. Homer, is available to assist.
This post is for informational purposes only and does not constitute legal advice. You should consult with counsel about your particular situation.