Courts Continue to Debate the Waiver Effect of Disclosing Protected Documents to the Government

October 8, 2008

Most courts find that disclosing privileged communications or work product documents to the government waives both protections. However, an occasional court takes the opposite approach, and most courts have not wrestled with the subject matter waiver implications of such disclosure.

In Regents of the University of California v. Superior Court, 81 Cal. Rptr. 3d 186 (Cal. Ct. App. 2008), the court held that a party disclosing protected documents to the government in an effort to avoid indictment could not be found to have voluntarily disclosed the documents, so the disclosure did not cause a waiver. As in so many other California cases, the court cited a special California statute governing waiver issues. A few weeks earlier, a federal district court found that Deutsche Bank waived both privilege and work product protection by disclosing protected documents to the government in connection with a market timing and late trading investigation — but did not trigger a subject matter waiver. In re Mut. Fund Inv. Litig., 251 F.R.D. 185 (D. Md. 2008). The court cited “the confidentiality agreements that were entered [into by the SEC and other governmental agencies], the unclear state of Fourth Circuit law on the effect of those agreements, the efforts to maintain confidentiality in the face of other subpoenas, and the limited extent (if any) of disclosures that have been made beyond the SEC and the [New York Attorney General’s Office].” Id. at 188.

Although no company litigating outside of California should count on the narrow California approach, courts undoubtedly will continue to debate the subject matter waiver implications of companies disclosing protected documents to the government.