Court Overrules Extreme Decision Regarding Intra-Corporate Waiver

September 1, 2004

General waiver principles recognize that corporate clients and their lawyers risk waiving the privilege if they share privileged communications even within a corporation, beyond those with a “need to know.” On January 8, 2003, a magistrate judge in the Southern District of New York found that a company had waived the privilege by allowing its executive vice president to attend meetings on topics for which the executive vice president had no responsibility.

Although it took over 18 months, the district judge has reversed that extreme finding. In Ashkinazi v. Sapir, No. 02 CV 0002 (RCC), 2004 U.S. Dist. LEXIS 14523, at *6 (S.D.N.Y. July 27, 2004), the district court analyzed the matter only briefly, and seemed to adopt a per se test that members of corporate management are never “third parties” for waiver purposes.

Although lawyers should be relieved by this reversal, they should nevertheless be vigilant about their clients sharing privileged communications beyond those with a “need to know” even within the same corporation.