Court Analyzes a Company’s Agreement to Give the Government an Investigation Report

November 26, 2003

A number of courts have recently addressed the waiver implications of companies giving the government all or a portion of internal corporate investigation reports. Most decisions have taken an unforgiving approach.

In United States v. Bergonzi, 216 F.R.D. 487 (N.D. Cal. 2003), two former executives of HBOC were facing a criminal trial for fraud in connection with the sale of their company to McKesson. They sought the production of an investigation report prepared by Skadden Arps and Price Waterhouse, which had investigated the fraud. Skadden Arps had earlier agreed to provide the report to the SEC and the U.S. Attorney, after being assured that McKesson was not a target of the government criminal inquiry, and after entering into confidentiality agreements with the SEC and the U.S. Attorney’s office. Despite both of these steps, the court found a waiver of both the attorney-client privilege and the work product doctrine. The court noted that (1) McKesson and the government did not share a sufficiently common interest to avoid waiving the work product protection, and (2) the confidentiality agreements were not “unconditional” (because the government could share the information if required by federal law). Id. at 497. Interestingly, the government had joined McKesson in arguing against the criminal defendants’ waiver argument.

Companies hoping to avoid waiving either the attorney-client privilege or the work product doctrine when sharing protected communications or documents with the government cannot find much solace in the recent case law.