Recent Decisions Raise Critical Concerns and Uncertainty for AI Use in Legal Matters

Two recent federal court rulings have highlighted risks to privilege protection when using public AI platforms. In United States v. Heppner, Judge Jed S. Rakoff of the Southern District of New York held that communications between a criminal defendant and a publicly available AI platform were not protected by either attorney-client privilege or work product doctrine. In Warner v. Gilbarco, Inc., however, Magistrate Judge Anthony P. Patti of the Eastern District of Michigan reached a different conclusion, denying a motion to compel production of a pro se plaintiff’s AI-related litigation materials on work product grounds. These cases illustrate that the legal landscape surrounding privilege protections for AI-generated materials remains unsettled.

The Heppner Case

In Heppner, criminal defendant Bradley Heppner was charged with securities fraud following alleged misconduct as an executive of a publicly traded company. After receiving a grand jury subpoena and being identified as a target, Heppner – without counsel’s direction – used a public AI platform to prepare reports outlining defense strategy and potential legal arguments.

The Government moved to compel production of these documents. Heppner’s counsel asserted privilege, arguing the documents were created for communicating with counsel. The court disagreed with Heppner’s arguments on both attorney-client privilege and work product doctrine and granted the motion in full.

Attorney-Client Privilege

Attorney-client privilege protects communications that are (1) between a client and their attorney, (2) that are intended to be, and in fact were, kept confidential, and (3) were made for the purpose of obtaining or providing legal advice. The court found the AI documents failed at least two of these required elements. First, communications with AI platforms are not communications with attorneys – the court noted that all recognized privileges require “a trusting human relationship” with “a licensed professional who owes fiduciary duties.” Second, the communications were not confidential because the AI platform’s privacy policy permits data collection, model training, and third-party disclosure, meaning Heppner had “no reasonable expectation of confidentiality.” Third, because counsel did not direct Heppner’s AI use and the platform denies providing legal advice, the communications were not privileged. Non-privileged communications do not become privileged merely by being shared with counsel afterward, the court ruled.

Work Product Doctrine

The court also rejected protection for the documents as attorney work product because Heppner prepared the AI documents “on his own volition” rather than at counsel’s direction. Although the documents may have affected counsel’s strategy going forward, they did not reflect counsel’s strategy when created. The Second Circuit has “repeatedly stressed that the purpose of the doctrine is to protect lawyers’ mental processes.”

The Warner Decision

In Warner v. Gilbarco, however, Magistrate Judge Patti reached a different conclusion. When defendants sought to compel a pro se plaintiff’s AI-related litigation materials, the court denied the motion, holding the documents were protected work product under Federal Rule of Civil Procedure 26(b)(3)(A).

The Warner court rejected the argument that using a public AI platform waived work product protection, distinguishing between attorney-client privilege waiver and work product waiver. With regard to attorney-client privilege, the court noted that while voluntary disclosure to a third person who is not one’s attorney will generally show waiver of attorney-client privilege, AI platforms are tools, not persons. The court further noted that, regardless of its effect on attorney-client privilege, voluntary disclosure to third persons “should not suffice in itself for waiver of the work product privilege.”

The court characterized defendants’ motion as seeking the plaintiff’s “internal analysis and mental impressions – i.e., her thought process,” and noted that accepting defendants’ theory “would nullify work-product protection in nearly every modern drafting environment.” These divergent approaches highlight substantial uncertainty in this developing area of law.

Recommendations for Preserving Privilege

In light of these rulings, we recommend that clients and counsel take the following steps to protect privilege when using AI tools:

1. Avoid inputting privileged or sensitive information into public AI platforms. Information shared with publicly available AI services should be treated as non-confidential. Do not input attorney-client communications, legal strategy, or work product.
2. Use enterprise or private AI deployments with contractual confidentiality protections, data isolation, and prohibitions on data retention, training, and third-party disclosure.
3. Ensure AI use is directed by counsel. The Heppner court suggested the analysis might differ had counsel directed the client’s AI use, allowing the AI to function “in a manner akin to a highly trained professional who may act as a lawyer’s agent.”
4. Review AI platform privacy policies before using any AI tool in connection with legal matters to understand how inputs are collected, stored, used, and disclosed.
5. Document the purpose and direction of AI use. Contemporaneous documentation of counsel’s direction may help support privilege claims.
6. Update internal policies and training to ensure employees understand the privilege risks associated with using AI platforms for legal purposes.

Conclusion

The Heppner decision and Warner order illustrate that the legal landscape surrounding privilege protections for AI-generated materials remains unsettled. As Judge Rakoff observed, “AI’s novelty does not mean that its use is not subject to longstanding legal principles.” Until courts provide more definitive guidance, we encourage clients to adopt a conservative approach and contact counsel with questions about implementing these recommendations.

If you have questions concerning the legal landscape surrounding protections for AI-generated materials or need assistance navigating the nuances of AI, please contact David Wheeler, Josh Hanson or your Neal Gerber Eisenberg attorney.

The content above is based on information current at the time of its publication and may not reflect the most recent developments or guidance. Neal, Gerber & Eisenberg LLP provides this content for general informational purposes only. It does not constitute legal advice, and does not create an attorney-client relationship. You should seek advice from professional advisers with respect to your particular circumstances.