Courts Analyze the Waiver Effect of Sharing Privileged Documents With the Government (Part 1)

April 2, 2003

Given the increasing number of government investigations and prosecutions of corporations, it should come as no surprise that courts frequently analyze the waiver implications of a corporation sharing protected documents with the government. As tempting as it is for a corporation to voluntarily share privileged documents with the government to deter prosecution or encourage lenient treatment, lawyers involved in that process should always remember the risks.

In Tennessee Laborers Health & Welfare Fund v. Columbia/HCA Healthcare Corp., 293 F.3d 289 (6th Cir. 2002), the Sixth Circuit held that Columbia had waived the attorney-client privilege and work product protection covering internal coding audits which the company had shared with the federal government during an investigation, even though Columbia had explicitly reserved the right to later claim privilege if a private party sought the audits in later litigation. The court held that Columbia could not now withhold the audits from private plaintiffs.

Although corporations may rationally decide to risk waiver in later litigation by cooperating with the government now, they should do so only after assessing the waiver risks of such cooperation. The next two Privilege Points will describe other recent cases taking different positions.