Exhibit E 

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U.S. Department of Justice

United States Attorney 

District of Arizona 

 

Mike Piccarreta, Esq. 

Piccarreta Davis Keenan Fidel PC 

2 East Congress Street, Suite 1000 

Tucson, AZ 85701 

VIA EMAIL 

 Re: Your Letter of April 26, 2018

 

Dear Mike: 

 We wish to respond to your April 26, 2018, letter. The letter begins with the 

following statement: “It is my understanding that Carl Ferrer has indicated to the 

government that he is waiving the attorney-client privilege on behalf of himself, Backpage, 

and the other entities he controls. If that is not the case, please let me know.” 

 On this issue, your understanding is not fully accurate. It is true that Mr. Ferrer has 

executed a broad waiver of the corporate attorney-client privilege possessed by 

Backpage.com, LLC and various other Backpage-related entities. Enclosed with this letter is 

a copy of the waiver agreement. However, as you will see, the waiver agreement makes 

clear that Mr. Ferrer has not waived his individual attorney-client privilege, either as to his 

current criminal defense attorneys or to the prior attorneys who represented him on an 

individual basis. 

 Your letter also states that “regardless of whether Mr. Ferrer and the entities he 

controls waive the attorney-client privilege as to themselves, such a waiver or waivers would 

not waive the privilege of other individuals or entities, nor would it waive any privileges held 

jointly by Mr. Ferrer and/or his entities and other individuals or entities, whether in materials 

seized by the government or as to other privileged communications.” 

 Once again, we do not fully agree. On the one hand, it is true that, to the extent Mr. 

Ferrer or any of the Backpage entities entered into a joint defense agreement (“JDA”) with 

others, there may be restrictions on the ability to unilaterally waive JDA-derived privileges. 

For this reason, we have taken steps to avoid the disclosure of any JDA-protected material. 

However, when it comes to communications covered by Backpage’s corporate attorneyclient privilege (or by the corporate attorney-client privilege held by any of Backpage’s 

Two Renaissance Square Main: (602) 514-7500

40 N. Central Ave., Suite 1800 Main Fax: (602) 514-7693

Phoenix, AZ 85004-4408 Direct Fax: (602) 514-7450

 

May 3, 2018 

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May 3, 2018 

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predecessor/related entities), the law makes clear that Mr. Ferrer—as Backpage’s CEO and 

100% owner since 2015—is empowered to waive the corporation’s privilege, as he has done 

here. See generally Commodity Futures Trading Comm’n v. Weintraub, 471 U.S. 343, 349 

(1985) (“[W]hen control of a corporation passes to new management, the authority to assert 

and waive the corporation's attorney-client privilege passes as well. New managers . . . may 

waive the attorney-client privilege with respect to communications made by former officers 

and directors. Displaced managers may not assert the privilege over the wishes of current 

managers, even as to statements that the former might have made to counsel concerning 

matters within the scope of their corporate duties.”). 

 Furthermore, once the corporate privilege has been so waived, it is very difficult for 

an individual corporate employee (such as your client, Mr. Padilla) to prevent the disclosure 

of communications that were previously covered by the privilege. In United States v. Graf, 

610 F.3d 1148 (9th Cir. 2010), the Ninth Circuit addressed this issue in detail, noting that 

“[o]ne of these special problems” that arises in the context of the corporate attorney-client 

privilege “is that corporate officers, directors, and employees who communicate with 

corporate counsel on behalf of the corporation may later attempt to claim a personal 

attorney-client privilege regarding those communications after the corporation has waived its 

own privilege.” Id. at 1156. The Graf court held that a corporation is ordinarily “free to 

obtain information from its officers, employees, and consultants about company matters and 

then control the attorney-client privilege, waiving it when necessary to serve corporate 

interests,” and that an employee may prevent such a disclosure only under limited 

circumstances. Id. at 1160-61 (emphasis added). Specifically, once the corporate privilege 

has been waived, an individual employee may prevent disclosure only by establishing the 

following five factors: “First, they must show they approached counsel for the purpose of 

seeking legal advice. Second, they must demonstrate that when they approached counsel 

they made it clear that they were seeking legal advice in their individual rather than in their 

representative capacities. Third, they must demonstrate that the counsel saw fit to 

communicate with them in their individual capacities, knowing that a possible conflict could 

arise. Fourth, they must prove that their conversations with counsel were confidential. And 

fifth, they must show that the substance of their conversations with counsel did not concern 

matters within the company or the general affairs of the company.” Id. at 1160 (citation 

omitted) (emphasis in original). 

 Here, we have not seen any evidence suggesting these five factors are satisfied. If 

you are aware of any such evidence (such as proof that Mr. Padilla, while working at 

Backpage, had discussions with corporate counsel about purely personal matters unrelated to 

the general affairs of Backpage and made clear he was seeking legal advice in an individual 

capacity), please let us know. 

 Finally, you may also be aware (through your discussions with co-counsel) that 

Backpage has, in the past, voluntarily shared certain privileged materials with third parties. 

Such disclosure provides an independent basis, apart from the written waiver agreement, for 

concluding that the corporate attorney-client privilege has been waived. See, e.g., In re Pac. 

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Pictures Corp., 679 F.3d 1121, 1126-27 (9th Cir. 2012) (“[V]oluntarily disclosing privileged 

documents to third parties will generally destroy the privilege.”). 

KMR/zs 

 Sincerely, 

ELIZABETH A. STRANGE 

First Assistant United States Attorney 

District of Arizona 

 

/s Kevin Rapp 

 KEVIN M. RAPP 

 Assistant U.S. Attorney 

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