Courts Analyze the Waiver Effect of Sharing Privileged Documents With the Government (Part 2)

April 9, 2003

Last week’s Privilege Point described a Sixth Circuit decision holding that a company sharing protected documents with the government during a government investigation may not withhold those documents from private plaintiffs who argue that the sharing caused a waiver. Tennessee Laborers Health & Welfare Fund v. Columbia/HCA Healthcare Corp., 293 F.3d 289 (6th Cir. 2002) (also called In re Columbia/HCA Healthcare Corp. Billing Practices Litigation).

A state court decision took the opposite approach. In Saito v. McKesson HBOC, Inc., No. 18553, 2002 Del. Ch. LEXIS 125, at *39 (Del. Ch. Oct. 25, 2002) , McKesson gave the SEC (pursuant to a confidentiality agreement) documents protected by the attorney-client privilege and the work product doctrine. In a later civil case, the court cited public policy reasons for allowing McKesson to withhold the protected materials from private plaintiffs. The court relied on the dissent in Columbia/HCA in citing the societal benefit of corporations cooperating with government investigations. The court also noted that private plaintiffs would not be prejudiced by this more forgiving approach, because “they are in the exact same position they would have been if no disclosure had been made.”

The debate between the Columbia/HCA and the Saito approaches obviously carries enormous consequences for companies facing government investigations, and lawyers representing those companies must be familiar with the possible waiver implications of cooperation with the government. Next week’s Privilege Point will discuss another approach.