F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
June 19, 2006
U N IT E D ST A T E S C O U R T O F A PP E A L S Elisabeth A. Shumaker
Clerk of Court
T E N T H C IR C U IT
In re: Q W E ST C OM M U N IC ATIONS
INTERNATIONAL INC., Securities
Litigation,
Petitioner. No. 06-1070
NEW ENGLAND HEALTH CARE
EM PLO Y EES PEN SIO N FU N D ;
C LIFFO RD M O SH ER ; TEJIN D AR
SIN G H ; SA T PA L SIN G H ,
Real-Parties-in-Interest,
and
ASSOCIATION OF CO RPORA TE
C OU N SEL; C HA M B ER OF
CO M M ERCE O F THE UN ITED
STA TES O F A M ER IC A,
Amici Curiae.
O N PE T IT IO N FO R W R IT O F M A N D A M U S T O TH E
U N IT E D ST A TE S D IST R IC T C O U R T FO R T H E
D IST R IC T O F C O L O R A D O
(D .C . N o. 01-C V -1451-R EB -C BS)
D avid R . B oyd, B oies, Schiller & Flexner, LLP, W ashington, D.C., (Jonathan D .
Schiller, Alfred P. Levitt, Kenneth F. Rossman IV, Boies, Schiller & Flexner,
LLP, W ashington, D.C.; Terrence C. Gill, Sherman & Howard LLC, Denver,
Colorado, with him on the brief), for Petitioner.
Joseph D. Daley, Lerach Coughlin Stoia Geller Rudman & Robbins, LLP,
San D iego, C alifornia, (Eric A lan Isaacson, M ichael J. Dowd, Spencer A.
Burkholz, Thomas E. Egler, X. Jay Alvarez, Lerach Coughlin Stoia Geller
Rudman & Robbins, LLP, San Diego, California; Robert J. Dyer, III, Kip B.
Shuman, Jeffrey A. Berens, Dyer & Shuman, LLP, Denver, Colorado, with him
on the briefs), for Real-Parties-in-Interest.
W illiam J. Leone, U nited States Attorney, Denver, Colorado; Catherine Y.
Hancock, M ichael S. Rabb, Appellate Staff, United States Department of Justice,
W ashington, D.C., on the brief for the United States Department of Justice.
Susan H ackett, A ssociation of C orporate Counsel; Robin S. Conrad, Amar D.
Sarwal, National Chamber Litigation Center, Inc.; W . Stephen Cannon, Todd
Anderson, Jean Kim, Constantine Cannon, P.C., W ashington, D.C., on the brief
for Amici Curiae.
Before H E N R Y , M U R PH Y , and H A R T Z, Circuit Judges.
M U R PH Y , Circuit Judge.
In this mandamus action, Qwest Communications International, Inc.
(Qwest), presents an issue of first impression in this circuit, namely, whether
Qwest w aived the attorney-client privilege and work-product doctrine, as to
third-party civil litigants, by releasing privileged materials to federal agencies in
the course of the agencies’ investigation of Qwest. Qwest urges us to adopt a rule
of “selective waiver” or “limited waiver” which would allow production of
attorney-client privileged and work-product documents to the United States
Department of Justice (DOJ) and the Securities and Exchange Commission (SEC)
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without waiver of further protection for those materials. On the record before us,
we hold that the district court did not abuse its discretion in declining to apply
selective w aiver. Thus, we DENY the petition for a writ of mandamus.
I. B ackground an d D istrict C ourt Proceedings
In early 2002, the SEC began investigating Qwest’s business practices.
In the summer of 2002, Qwest learned that the DOJ, through the United States
Attorney’s Office for the District of Colorado, had also comm enced a criminal
investigation of Qwest. During these investigations, Qwest produced to the
agencies over 220,000 pages of documents protected by the attorney-client
privilege and the work-product doctrine (the W aiver Documents). Qwest chose
not to produce another 390,000 pages of privileged documents to the agencies.
The production of the W aiver Documents was pursuant to subpoena and
pursuant to written confidentiality agreements between Qwest and each agency. 1
In relevant part, these agreements stated that Qwest did not intend to waive the
attorney-client privilege or work-product protection. The SEC agreed to
“maintain the confidentiality of the [W aiver D ocuments] pursuant to this
Agreement and . . . not disclose them to any third party, except to the extent that
1
At oral argument Qwest disclaimed any argument that its production of the
W aiver Documents to the agencies was involuntary. Thus, we take it as settled
that Qwest’s production of the W aiver Documents was voluntary, and we do not
address the effect of the subpoenas. W e commend Qwest for its candor, which
allows us to focus on material issues rather than extraneous matters.
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the Staff determines that disclosure is otherwise required by law or would be in
furtherance of the Commission’s discharge of its duties and responsibilities.”
Pet’r Br., Ex. B at 1. Similarly, the DOJ agreed to maintain the W aiver
Documents’ confidentiality and not disclose them to third parties, “except to the
extent that DOJ determines that disclosure is otherwise required by law or would
be in furtherance of DOJ’s discharge of its duties and responsibilities.” Id., Ex. C
at 1. In addition, Qwest agreed that the DOJ could share the W aiver Documents
with other state, local, and federal agencies, and that it could “make direct or
derivative use of the [W aiver Documents] in any proceeding and its
investigation.” Id. at 1-2. In other agreements with the DOJ, Qwest agreed that
the agency could
make full use of any information it obtains under this agreement in
any lawful manner in furtherance of its investigation, including,
without limitation, analyses, interviews, grand jury proceedings,
court proceedings, consultation with and support of other federal,
state or local agencies, consultations with experts or potential
experts, and the selection and/or retention of testifying experts.
DOJ Resp. Br., Ex. 3 at 1; see also id. Ex. 4 at 3 (same); id. Ex. 5 (same) at 1-2.
Even prior to the initiation of the federal investigations, plaintiffs had filed
civil cases against Qwest that involved many of the same issues as the
investigations. M ore such actions were filed after the federal investigations
began. Several of the cases were filed in the United States District Court for the
District of Colorado, and many were consolidated into a federal securities action
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designated In re Qwest Communications International, Inc. Securities Litigation,
Case No. 1:01-CV-01451 REB-CBS (the Securities Case). The Real Parties in
Interest before us (the Plaintiffs) are the lead plaintiffs in the Securities Case.
In the course of the Securities Case, Qwest produced millions of pages of
documents to the Plaintiffs, but it did not produce the W aiver Documents. It
argued the W aiver Documents remained privileged despite Q west’s production to
the agencies. After the Plaintiffs moved to compel production of the W aiver
Documents, the magistrate judge concluded Qwest had waived the attorney-client
privilege and work-product protection by producing the W aiver Documents to the
agencies and ordered Qwest to produce the W aiver D ocuments to the Plaintiffs.
Qwest objected. The district court refused to overrule the magistrate judge’s
order compelling production and ordered Qwest to produce the W aiver
Documents. The district court also ordered Qwest to produce certain reports
prepared by its counsel Boies, Schiller & Flexner LLP (collectively, the BSF
Report), redacted of attorney opinion work product.
Qwest filed a motion to reconsider the order to produce the W aiver
Documents and to certify an interlocutory appeal. Granting the motion in part, the
district court clarified its order to specify that Qwest could redact attorney
opinion work product from the W aiver Documents, as well as from the BSF
Report, before producing them to the Plaintiffs. The court, however, declined to
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certify an interlocutory appeal of the waiver issue. Consequently, Qwest filed a
petition for a writ of mandamus in this court. At Qwest’s request, the district
court stayed its order to produce pending our mandamus decision.
Neither the directive to redact the BSF R eport nor the order to disclose the
redacted version have been challenged in this proceeding. M oreover, the parties
have not challenged the order to redact attorney opinion work product from the
W aiver Documents. Thus, there is no issue concerning opinion work product
before us, and our decision is not directed to waiver of opinion work product. For
purposes of clarity, we also note that this decision involves no issues of
inadvertent disclosure, see, e.g., Genentech, Inc. v. United States Int’l Trade
Comm’n, 122 F.3d 1409, 1417 (Fed. Cir. 1997), disclosure to a non-adverse party,
see In re M & L Bus. M ach. Co., 161 B.R. 689, 696 (D. Colo. 1993), or disclosure
under a confidentiality agreement that prohibits further disclosures without the
express agreement of the privilege holder.
II. A nalysis
A . M andam us
W e must first decide whether it is appropriate for us to entertain Q west’s
petition for an extraordinary writ. “The Supreme Court has required that a party
seeking mandamus demonstrate that he has no other adequate means of relief and
that his right to the w rit is ‘clear and indisputable.’” Barclaysamerican Corp. v.
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Kane, 746 F.2d 653, 654 (10th Cir. 1984) (quoting Allied Chem. Corp. v. Daiflon,
Inc., 449 U.S. 33, 35 (1980) (per curiam)).
In a mandamus action in which petitioner seeks to have discovery
orders involving a claim of privilege reviewed, we have held that
review is appropriate w hen: (1) disclosure of the allegedly
privileged or confidential information renders impossible any
meaningful appellate review of the claim of privilege or
confidentiality; and (2) the disclosure involves questions of
substantial importance to the administration of justice.
Id. at 654-55 (quotations omitted).
Citing Boughton v. Cotter Corp., 10 F.3d 746 (10th Cir. 1993), the
Plaintiffs first contend Qwest has adequate appellate remedies, in that the district
court’s order can be reviewed on direct appeal after final judgment. In Boughton,
a company sought to bring an interlocutory appeal of an order to produce
allegedly privileged documents. In considering whether other avenues of relief
might be appropriate, this court held that it could not grant the defendant
mandamus relief because the district court’s order requiring production would be
correctable on appeal. Id. at 751. Qwest replies that production would negate the
value of the attorney-client privilege and work-product protection. Qwest further
submits that appellate review after judgment would be meaningless because there
are numerous other cases pending across the country in which coordinated
discovery agreements would require it to disclose the W aiver Documents to other
plaintiffs if it discloses them to the Plaintiffs in the Securities Case.
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In Barclaysamerican, this court held that “[i]n most cases disclosure makes
meaningful review impossible because after disclosure whatever privilege
attaches w ould be worthless.” 746 F.2d at 655 (quotation omitted); see also
United States v. West, 672 F.2d 796, 799 (10th Cir. 1982) (“W hether disclosure is
limited to a motion or granted in the course of the trial, the privilege is still
rendered worthless. Any subsequent review , even after limited disclosure, would
be for naught, because the damage w ould already be accomplished. Thus,
appellate review of the claim would be meaningless.”). Boughton did not address
this principle. In this case, however, given the litigation pending outside this
court’s jurisdiction, normal appellate review could not return the parties to the
status quo by ordering the return of any documents this court might determine
were improperly ordered produced. As in Barclaysamerican and West, review
after production would essentially be meaningless in terms of protecting the
W aiver D ocuments.
The Plaintiffs also argue Qwest does not raise an issue of substantial
importance to the administration of justice, and this case is instead merely
a discovery dispute between private litigants. See Barclaysamerican, 746 F.2d
at 655. To the contrary, it appears the issue of selective waiver is of considerable
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public interest. 2 In addition, in advocating the adoption of selective w aiver,
Qwest primarily relies on the interests of law enforcement in ensuring voluntary
cooperation of companies subject to investigation. To the extent this matter
requires us to consider applying selective waiver, then, it presents an issue of
substantial importance to the administration of justice.
Finally, other circuit courts considering selective waiver have decided it
was appropriate to do so in the context of a petition for a writ of mandamus.
See In re Steinhardt Partners, L.P., 9 F.3d 230, 233 (2d Cir. 1993); Westinghouse
Elec. Corp. v. Republic of the Phil., 951 F.2d 1414, 1422 (3d Cir. 1991);
In re Chrysler M otors Corp., 860 F.2d 844, 845 (8th Cir. 1988); Diversified
Indus., Inc. v. M eredith, 572 F.2d 596, 607 (8th Cir. 1977) (en banc). Noting that
the question remained open in the circuit, that the district courts of the circuit and
other circuit courts had split, and the consequence that the privilege w ould be lost
if review awaited final judgment, the Second Circuit went so far as to state,
“[t]his dispute presents one of the very rare circumstances permitting the use of
2
Indicia of public interest in selective waiver include numerous
comm entaries and articles, the filing of the amicus brief in this action, a recent
oversight hearing by a House subcommittee, and recent developments before the
United States Sentencing Commission and the Advisory Committee on Evidence
Rules to the Committee on Rules of Practice and Procedure of the Judicial
Conference of the United States (the Advisory Committee). The actions of
Congress, the Sentencing Commission, and the Advisory Committee are discussed
below .
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mandamus to review a district court order.” Steinhardt Partners, 9 F.3d at 233.
For these reasons, this court addresses the merits of Qwest’s petition.
The issuance of the writ rests within the court’s discretion. Kerr v. United
States Dist. Court, 426 U.S. 394, 403 (1976). This court considers five
nonconclusive factors to assist in determining whether to grant mandamus relief:
(1) w hether the party has alternative means to secure relief; (2) whether the party
will be damaged “in a way not correctable on appeal”; (3) whether “the district
court’s order constitutes an abuse of discretion”; (4) whether the order “represents
an often repeated error and manifests a persistent disregard of federal rules”; and
(5) whether the order raises “new and important problems or issues of law of the
first impression.” Pacificare of Okla., Inc. v. Burrage, 59 F.3d 151, 153
(10th Cir. 1995). W e have held that “[t]he right to the writ is clear and
indisputable w hen the petitioner can show a judicial usurpation of power or a
clear abuse of discretion.” West, 672 F.2d at 799; see also Frontier Ref., Inc. v .
Gorman-Rupp Co., 136 F.3d 695, 699 (10th Cir. 1998) (holding that a district
court’s order compelling discovery is reviewed for abuse of discretion, legal
questions are reviewed de novo and factual determinations for clear error). W hen
the district court errs in deciding a legal issue, it necessarily abuses its discretion.
See Koon v. United States, 518 U.S. 81, 100 (1996).
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B. The A ttorney-C lient Privilege and W ork-Product D octrine
Federal Rule of Evidence 501 provides that privileges in federal-question
cases generally are “governed by the principles of the common law as they may be
interpreted by the courts of the United States in the light of reason and
experience.” The Advisory Committee Notes state that the rule “reflect[s] the
view that the recognition of a privilege based on a confidential relationship and
other privileges should be determined on a case-by-case basis.” 3
The Supreme Court has cautioned that “[t]estimonial exclusionary rules and
privileges contravene the fundamental principle that the public . . . has a right to
every man’s evidence.” Trammel v. United States, 445 U.S. 40, 50 (1980)
(quotations omitted). The Court further has cautioned that such rules and
privileges “must be strictly construed and accepted ‘only to the very limited
extent that permitting a refusal to testify or excluding relevant evidence has a
public good transcending the normally predominant principle of utilizing all
3
Technically the work-product doctrine is distinguishable from the
testimonial “true” privileges. See 1 Edward J. Imwinkelried, The New Wigm ore:
Evidentiary Privileges § 1.3.11 (Richard D. Friedman ed., 2002). The
work-product doctrine is embodied in Fed. R. Civ. P. 26(b)(3). It is therefore
excepted from Rule 501, which applies except where “otherwise required . . . in
rules prescribed by the Supreme Court pursuant to statutory authority.” The
principles of Hickman v. Taylor, 329 U.S. 495 (1947), continue to govern the
application of Rule 26(b)(3). Edna Selan Epstein, The Attorney-Client Privilege
and the Work-Product Doctrine 479-81 (4th ed. 2001). Given that our analysis
focuses on the common law, the fact that the work-product doctrine is not a true
privilege is not material in this case.
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rational means for ascertaining truth.’” Id. (quoting Elkins v. United States,
364 U.S. 206, 234 (1960) (Frankfurter, J., dissenting)). “[A]lthough Rule 501
manifests a congressional desire not to freeze the law of privilege but rather to
provide the courts with flexibility to develop rules of privilege on a case-by-case
basis, we are disinclined to exercise this authority expansively.” Univ. of Pa. v.
EEO C, 493 U.S. 182, 189 (1990) (citation and quotation omitted).
1. A ttorney-C lient Privilege
The attorney-client privilege is “the oldest of the privileges for confidential
comm unications known to the common law.” Upjohn Co. v. United States,
449 U.S. 383, 389 (1981). “Its purpose is to encourage full and frank
comm unication between attorneys and their clients and thereby promote broader
public interests in the observance of law and administration of justice.” Id.
The privilege serves the client’s need for legal advice, but it also serves the
attorney’s need to receive complete information in order to give the proper
advice. See id. at 390; see also 8 John Henry W igmore, Evidence § 2291 (John T.
M cNaughton rev. 1961); Edna Selan Epstein, The Attorney-Client Privilege and
the Work-Product Doctrine 3 (4th ed. 2001). Under the common law, a critical
component of the privilege “is whether the communication between the client and
the attorney is made in confidence of the relationship and under circumstances
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from which it may reasonably be assumed that the communication will remain in
confidence.” United States v. Lopez, 777 F.2d 543, 552 (10th Cir. 1985).
Because confidentiality is key to the privilege, “[t]he attorney-client
privilege is lost if the client discloses the substance of an otherwise privileged
comm unication to a third party.” United States v. Ryans, 903 F.2d 731, 741 n.13
(10th Cir. 1990). This court has stated, “the confidentiality of communications
covered by the privilege must be jealously guarded by the holder of the privilege
lest it be w aived. The courts will grant no greater protection to those w ho assert
the privilege than their own precautions warrant.” Id. (quotation and alteration
omitted). This court has also held that “[c]ourts need not allow the claim of
attorney-client privilege when the party claiming the privilege is attempting to
utilize the privilege in a manner that is not consistent with the privilege.” United
States v. Bernard, 877 F.2d 1463, 1465 (10th Cir. 1989). “A ny voluntary
disclosure by the client is inconsistent with the attorney-client relationship and
waives the privilege.” Id.
2. W ork-Product D octrine
In Hickman v. Taylor, the source of the work-product doctrine, plaintiffs
sought the production of certain w itness statements collected by defendants’
attorney and memoranda concerning the attorney’s interviews of other w itnesses.
329 U.S. 495, 499-500 (1947). The Court held that plaintiffs had made no
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showing of need for the materials or justification for securing them from
defendants’ counsel. The requests thus “[fell] outside the arena of discovery and
contravene[d] the public policy underlying the orderly prosecution and defense of
legal claims. Not even the most liberal of discovery theories can justify
unwarranted inquiries into the files and the mental impressions of an attorney.”
Id. at 510. “In performing his various duties . . . it is essential that a lawyer w ork
with a certain degree of privacy, free from unnecessary intrusion by opposing
parties and their counsel.” Id.
The work-product doctrine subsequently was incorporated into
Fed. R. Civ. P. 26(b)(3), which provides:
[A] party may obtain discovery of documents and tangible things
otherwise discoverable under subdivision (b)(1) of this rule and
prepared in anticipation of litigation or for trial by or for another . . .
party’s representative . . . only upon a showing that the party seeking
discovery has substantial need of the materials in the preparation of
the party’s case and that the party is unable w ithout undue hardship
to obtain the substantial equivalent of the materials by other means.
In ordering discovery of such materials when the required showing
has been made, the court shall protect against disclosure of the
mental impressions, conclusions, opinions, or legal theories of an
attorney or other representative of a party concerning the litigation.
Thus, the doctrine is interpreted under both the rule and Hickman. See Epstein
at 479-81. “At its core, the work-product doctrine shelters the mental processes
of the attorney, providing a privileged area within which he can analyze and
prepare his client’s case.” United States v. Nobles, 422 U.S. 225, 238 (1975). It
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“is an intensely practical [doctrine], grounded in the realities of the litigation in
our adversary system.” Id.
W ork product can be opinion work product, which some courts have held to
be absolutely privileged, or non-opinion work product, i.e., fact work product,
which may be discoverable under appropriate circumstances. See Frontier Ref.,
136 F.3d at 704 n.12; see also Hickman, 329 U.S. at 511-12 (noting that, upon
presentation of adequate reasons, non-privileged, relevant facts included in an
attorney’s files may be subject to discovery); Fed. R. Civ. P. 26(b)(3) (providing
special protection for opinion work product). The protection provided by the
work-product doctrine is not absolute, and it may be waived. See Nobles,
422 U.S. at 239. This court has indicated that production of work-product
material during discovery waives a work-product objection. Grace United
M ethodist Church v. City of Cheyenne, 427 F.3d 775, 801-02 (10th Cir. 2005);
see also Foster v. Hill (In re Foster), 188 F.3d 1259, 1272 (10th Cir. 1999)
(indicating that the work-product doctrine is affected when a disclosure is to an
adversary).
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C . C ase Law on Selective W aiver
In light of this precedent, Qwest will have waived the attorney-client
privilege and work-product protection for the W aiver Documents by disclosing
them to the SEC and the DOJ, unless this court adopts a selective waiver rule.
This court has not yet considered the concept of selective waiver. Our review of
the opinions of other circuits, however, indicates there is almost unanimous
rejection of selective waiver. Only the Eighth Circuit has adopted selective
waiver in circumstances applicable to Qwest.
1. A ttorney-C lient Privilege
a. C ircuit A dopting Selective W aiver
The Eighth Circuit created the concept of selective waiver in Diversified
Industries, 572 F.2d at 611. There, a company defending a civil proceeding
sought to protect a memorandum and a report prepared by its counsel that it had
previously produced to the SEC in response to an agency subpoena. Id. at 599.
The court’s discussion of selective waiver is but a single paragraph:
W e finally address the issue of whether D iversified waived its
attorney-client privilege with respect to the privileged material by
voluntarily surrendering it to the SEC pursuant to an agency
subpoena. As D iversified disclosed these documents in a separate
and nonpublic SEC investigation, we conclude that only a limited
waiver of the privilege occurred. To hold otherwise may have the
effect of thwarting the developing procedure of corporations to
employ independent outside counsel to investigate and advise them in
order to protect stockholders, potential stockholders and customers.
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Id. at 611 (citations omitted).
b. C ircuits R ejecting Selective W aiver
M ost circuits have rejected selective waiver of the attorney-client privilege.
The D .C. Circuit was the first circuit to consider the issue after Diversified. In
Permian Corp. v. United States, the Department of Energy requested documents
from the SEC, which had obtained them from the company. 665 F.2d 1214,
1216-17 (D.C. Cir. 1981). After considering the privilege’s purpose of protecting
the attorney-client relationship by shielding confidential comm unications, the
court held that the company had “destroyed the confidential status of the seven
attorney-client communications by permitting their disclosure to the SEC staff.”
Id. at 1219. It found the proposal of selective waiver “wholly unpersuasive.” Id.
at 1220.
First, we cannot see how the availability of a “limited waiver” would
serve the interests underlying the common law privilege for
confidential communications betw een attorney and client. . . .
Voluntary cooperation with government investigations may be a
laudable activity, but it is hard to understand how such conduct
improves the attorney-client relationship. If the client feels the need
to keep his communications with his attorney confidential, he is free
to do so under the traditional rule by consistently asserting the
privilege, even when the discovery request comes from a “friendly”
agency.
Id. at 1220-21. The court continued, “[t]he client cannot be permitted to pick and
choose among his opponents, waiving the privilege for some and resurrecting the
claim of confidentiality to obstruct others, or to invoke the privilege as to
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com munications w hose confidentiality he has already compromised for his own
benefit.” Id. at 1221. “W e believe that the attorney-client privilege should be
available only at the traditional price: a litigant who wishes to assert
confidentiality must maintain genuine confidentiality.” Id. at 1222. The D.C.
Circuit reiterated its position in In re Subpoenas Duces Tecum, 738 F.2d 1367,
1370 (D.C. Cir. 1984).
Using similar reasoning, the First, Second, Third, and Fourth Circuits all
have joined the D .C. Circuit in rejecting selective w aiver. See United States v.
M ass. Inst. of Tech., 129 F.3d 681, 686 (1st Cir. 1997) (“Anyone who chooses to
disclose a privileged document to a third party, or does so pursuant to a prior
agreement or understanding, has an incentive to do so, whether for gain or to
avoid disadvantage. It would be perfectly possible to carve out some of those
disclosures and say that, although the disclosure itself is not necessary to foster
attorney-client communications, neither does it forfeit the privilege. W ith rare
exceptions, courts have been unwilling to start down this path–which has no
logical terminus–and we join in this reluctance.”); Westinghouse, 951 F.2d
at 1425 (“[S]elective waiver does not serve the purpose of encouraging full
disclosure to one’s attorney in order to obtain informed legal assistance; it merely
encourages voluntary disclosure to government agencies, thereby extending the
privilege beyond its intended purpose.”); In re M artin M arietta Corp., 856 F.2d
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619, 623-24 (4th Cir. 1988) (“The Fourth Circuit has not embraced the concept of
limited waiver of the attorney-client privilege.”); In re John Doe Corp., 675 F.2d
482, 489 (2d Cir. 1982) (“A claim that a need for confidentiality must be
respected in order to facilitate the seeking and rendering of informed legal advice
is not consistent with selective disclosure when the claimant decides that the
confidential materials can be put to other beneficial purposes.”).
The most recent circuit to reject selective waiver of the attorney-client
privilege is the Sixth Circuit, which issued a comprehensive opinion in In re
Columbia/HCA Healthcare Corp. Billing Practices Litigation, 293 F.3d 289
(6th Cir. 2002). As in this case, civil plaintiffs in Columbia/HCA Healthcare
sought documents the company already had provided to the DOJ and other
government agencies. Id. at 292-93. The court reviewed the available case law ,
which it characterized as falling into three categories: “selective waiver is
permissible; selective waiver is not permissible in any situation; and selective
waiver is permissible in situations where the Government agrees to a
confidentiality order.” Id. at 295 (citations omitted). It concluded, “after due
consideration, we reject the concept of selective waiver, in any of its various
forms.” Id. at 302. “First, the uninhibited approach adopted out of wholecloth by
the Diversified court has little, if any, relation to fostering frank communication
between a client and his or her attorney.” Id. (footnote omitted). “Secondly, any
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form of selective waiver, even that which stems from a confidentiality agreement,
transforms the attorney-client privilege into ‘merely another brush on an
attorney’s palette, utilized and manipulated to gain tactical or strategic
advantage.’” Id. (quoting Steinhardt Partners, 9 F.3d at 235). Although
recognizing “[t]here is considerable appeal, and justification, for permitting
selective waiver when the initial disclosure is to an investigating arm of the
Government,” the court stated there is “no logical terminus” and that private
litigants serve a valuable purpose as private attorneys general which should not be
thwarted by imposition of selective waiver. Id. at 303 (quotation omitted).
In dissent, Judge Boggs stated that “[a]s the harms of selective disclosure
are not altogether clear, the benefits of the increased information to the
government should prevail.” Id. at 311. He characterized the court’s choice as:
[N]ot one whether or not to release privileged information to private
parties that has already been disclosed to the government, but rather
one to create incentives that permit voluntary disclosures to the
government at all. In the run of cases, either the government gets the
disclosure made palatable because of the exception, or neither the
government nor any private party becomes privy to the privileged
material.
Id. at 312 (Boggs, J., dissenting). Because of the greater importance of
governmental investigations, the fact that “increased access to privileged
information increases the absolute efficacy of government investigations,” and the
fact that “the government has no other means to secure otherwise privileged
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information,” id. at 311, Judge Boggs “would have resolved this open question by
holding that there is a government investigation exception to the third-party
waiver rule,” id. at 308.
c. O ther Illustrative C ases
In a case involving an asserted waiver of the law enforcement privilege, the
Seventh Circuit did not foreclose adopting selective waiver. In Dellwood Farms,
Inc. v. Cargill, Inc., the government played certain tapes for corporate defense
counsel to persuade the company to plead guilty. 128 F.3d 1122, 1124 (7th Cir.
1997). The plaintiffs in ensuing civil litigation against the company argued the
government had waived its law enforcement privilege by playing the tapes. Id.
Any release to the plaintiffs would make the tapes available to individuals who
were the targets of then-uncompleted grand jury investigations. Id. The court
adopted the government’s selective waiver theory in the circumstances of that
case, holding that “[s]ince there is no indication either that the government was
acting in bad faith or that the plaintiffs in the present suits were hurt–and, to
repeat, the government is not trying to take advantage of an adversary–interfering
with a criminal investigation would be an excessive punishment.” Id. at 1127.
The court specifically noted, though, that it might find waiver (or, more
accurately, forfeiture) if there were “conduct that warranted declaring a
forfeiture.” Id.
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The Federal Circuit rejected selective waiver in a case involving an entirely
different means of waiving attorney-client and work-product protection, namely,
the careless disclosure of inadequately screened materials directly to the
adversary. See Genentech, Inc. v. United States Int’l Trade Comm’n, 122 F.3d
1409, 1417 (Fed. Cir. 1997) (“A small number of courts have recognized, in
circumstances not present here, a limited waiver that enables the attorney-client
privilege to survive certain breaches of confidentiality. This court, however, has
never recognized such a limited waiver. M oreover, Genentech has presented no
compelling arguments as to why we should apply such a limited waiver theory in
this case.” (citations omitted)).
In contrast is In re M & L Business M achine Co., where the district court
applied selective w aiver of the attorney-client privilege w here disclosures w ere
protected by a confidentiality agreement. 161 B.R. 689 (D. Colo. 1993). There, a
bank sought a protective order for its counsel’s letters and memoranda that it had
previously provided to the United States Attorney to assist in an investigation of
one of the bank’s clients, M & L Business M achines Co. Id. at 691-92. “The
Bank’s cooperation was expressly made subject to the requirement that any
information provided under the Letter Agreement be treated as privileged, subject
to protection under Fed. R. Crim. P. 16(a)(2) and not be disseminated except as
required under federal law or the rules of criminal procedure.” Id. at 691. The
-22-
trustee of M & L then sought production of the materials. After reviewing
Diversified, Permian, and other selective waiver cases, the district court stated,
“while I am w ary of extending evidentiary privileges, in the unique circumstances
of this case, the policies upon which the above decisions w ere based lead me to
conclude that the Bank has not waived the attorney-client privilege as to the
Letters and M emoranda.” Id. at 696. Specifically, the court’s decision rested on:
(1) the “substantial steps” the bank took to ensure the confidentiality of the
materials disclosed; (2) the fact that there was “no evidence that the B ank’s
cooperation with the U.S. Attorney was for the purpose of obtaining some benefit
for itself”; and (3) the fact that “the Bank does not seek to protect the privilege in
an investigatory or law enforcement proceeding brought by another federal
regulatory agency,” but in bankruptcy adversary proceedings “akin to one brought
by a civil litigant.” Id.
2. W ork-Product D octrine
a. C ircuits A dopting Selective W aiver
Only one circuit has specifically adopted selective waiver in the
work-product arena. The Fourth Circuit has approved using selective waiver in
relation to opinion work product. In M artin M arietta, the court concluded the
company had made testimonial use of non-opinion work product by disclosing it
to the government, and that the waiver w as comprehensive. 856 F.2d at 625.
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Noting that opinion work product generally receives greater protection from the
courts, however, and that Federal Rule of Civil Procedure 26(b)(3) “suggests
especial protection for opinion work product,” the court declined to hold that the
company had waived work-product protection for opinion work product. Id. at
626.
In Permian, the D.C. Circuit upheld the district court’s finding that the
work-product doctrine had not been waived as to the majority of documents.
665 F.2d at 1222. This ruling, however, contains no analysis and may have been
the product of the clearly erroneous standard of review applied in that case.
M oreover, the D.C. Circuit has since rejected selective waiver of work-product
protection in other circumstances, as discussed below.
b. C ircuits R ejecting Selective W aiver
Interestingly, the circuit that created selective waiver for attorney-client
privilege rejected it in the context of non-opinion work product. In Chrysler
M otors, the company had produced a computer tape to its adversaries in civil
litigation under a non-w aiver/confidentiality agreement. 860 F.2d at 845. W hen
the United States Attorney sought production of the computer tape from the
plaintiffs, the company protested. Id. The Eighth Circuit determined that the tape
was not opinion work product. Id. at 846. It then held that “Chrysler waived any
work product protection by voluntarily disclosing the computer tape to its
-24-
adversaries, the class action plaintiffs, during the due diligence phase of the
settlement negotiations.” Id. The company’s requirement that the plaintiffs enter
into the non-waiver/confidentiality agreement was irrelevant; the crucial fact was
that the computer tape had not been kept confidential. Id. at 847.
As discussed above, the Fourth Circuit applied selective waiver to protect
opinion work product, but it declined to apply it to protect non-opinion work
product. See Martin M arietta Corp., 856 F.2d at 623. The First Circuit has also
rejected selective waiver for non-opinion work product, stating “it would take
better reason than we have to depart from the prevailing rule that disclosure to an
adversary, real or potential, forfeits work product protection.” M ass. Inst. of
Tech., 129 F.3d at 687.
The Third Circuit held that, while work-product protection may be retained
where a disclosure furthers the goals underlying the doctrine:
W hen a party discloses protected materials to a government agency
investigating allegations against it, it uses those materials to forestall
prosecution (if the charges are unfounded) or to obtain lenient
treatment (in the case of w ell-founded allegations). These
objectives, however rational, are foreign to the objectives underlying
the work-product doctrine. M oreover, an exception for disclosures to
government agencies is not necessary to further the doctrine’s
purposes; attorneys are still free to prepare their cases without fear of
disclosure to an adversary as long as they and their clients refrain
from making such disclosures themselves.
Westinghouse, 951 F.2d at 1429.
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Finally, the Sixth Circuit concluded that “[m]any of the reasons for
disallowing selective waiver in the attorney-client privilege context also apply to
the work product doctrine. The ability to prepare one’s case in confidence . . .
has little to do with talking to the Government.” Columbia/HCA Healthcare,
293 F.3d at 306. It continued, “[e]ven more than attorney-client privilege w aiver,
waiver of the protections afforded by the work product doctrine is a tactical
litigation decision. . . . [W ]hether or not to ‘show your hand’ is quintessential
litigation strategy.” Id. at 306-07.
c. C ircuits L eaving P ossibility of Selective W aiver O pen
Unlike their treatment of the attorney-client privilege, a few circuits have
rejected selective w aiver of work-product protection in the particular cases before
them, while simultaneously leaving room for applying the doctrine in other
circumstances.
In In Re Sealed Case, the D.C. Circuit rejected work-product protection
against discovery by a grand jury of documents a company had previously made
available to the SEC. 676 F.2d 793, 824 (D .C. Cir. 1982). The record in that
case did not indicate w hether the company had entered into a confidentiality
agreement w ith the SEC. Id. at 820. In rejecting selective w aiver, the court
indicated it was reluctant to supply any such agreement: “[t]he SEC or any other
government agency could expressly agree to any limits on disclosure to other
-26-
agencies consistent with their responsibilities under law. But courts should not
imply such agreements on a categorical basis.” Id. at 824.
Shortly thereafter, in In re Subpoenas Duces Tecum, the D.C. Circuit
applied Sealed Case to reject a claim of selective waiver for work-product
material in circumstances similar to Qwest’s case. 738 F.2d at 1371-72. The
court, however, did not definitively reject the selective waiver doctrine under all
circumstances; rather, the decision rested on three factors: (1) the proposed use
of work-product protection was not consistent with the doctrine’s purpose,
(2) “appellants had no reasonable basis for believing that the disclosed materials
would be kept confidential by the SEC,” and (3) applying waiver “would not
trench on any policy elements now inherent in this [protection].” Id. at 1372.
Noting the company chose to participate in the SEC’s voluntary disclosure
program, the court stated:
That decision was obviously motivated by self-interest. Appellants
now want work product protection for those same disclosures against
different adversaries in suits centering on the very same matters
disclosed to the SEC. It would be unreasonable to suppose that
litigation with these other adversaries was not anticipated at the time
of disclosure to the SEC. It would also be inconsistent and unfair to
allow appellants to select according to their own self-interest to
which adversaries they will allow access to the materials.
Id. The court emphasized that the company had failed to ensure the SEC would in
turn not disclose the materials, stating that companies could protect their
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materials by not disclosing them, “[o]r the company can insist on a promise of
confidentiality before disclosure to the SEC.” Id. at 1375.
Similarly, in Steinhardt Partners, the Second Circuit denied mandamus
relief to defendants claiming work-product protection for a memorandum
previously disclosed to the SEC. 9 F.3d at 230. “Examination of conflicting
authority and of the purposes of the work product doctrine convinces us that
Steinhardt waived any work product protection by voluntarily submitting the
memorandum to the SEC.” Id. at 235. The court, however, continued, “[i]n
denying the petition, we decline to adopt a per se rule that all voluntary
disclosures to the government waive work product protection. Crafting rules
relating to privilege in matters of governmental investigations must be done on a
case-by-case basis.” Id. at 236. It especially noted that a per se rule “would fail
to anticipate situations . . . in which the SEC and the disclosing party have
entered into an explicit agreement that the SEC will maintain the confidentiality
of the disclosed materials.” Id.
These decisions all involved situations in which the parties failed to enter
into a confidentiality agreement before disclosing materials, not circumstances in
which the government agreed to strict confidentiality in exchange for disclosure
of work product. But see Columbia/HCA Healthcare, 293 F.3d at 307 (rejecting
selective waiver for work product, despite existence of confidentiality
-28-
agreement); Westinghouse, 951 F.2d at 1430 (same). As a consequence, it
remains an open question in those circuits whether a stringent confidentiality
agreement limiting further dissemination by the government might support
selective w aiver.
D . N o Selective W aiver In T his C ase
Generally it is the nature of the common law to move slowly and by
accretion; sw ift and massive movements are not impossible, but they are relatively
rare. Justice Cardozo described the common law’s modification process as
“gradual. It goes on inch by inch. Its effects must be measured by decades and
even centuries. Thus measured, they are seen to have behind them the power and
the pressure of the moving glacier.” Benjamin N. Cardozo, The Nature of the
Judicial Process 24 (1921). The common law’s methodology has been identified
as both its strength and its weakness:
[I]ts strength is derived from the manner in which it has been forged
from actual experience by the hammer and anvil of litigation, and . . .
its weakness lies in the fact that law guided by precedent which has
grown out of one type of experience can only slowly and with
difficulty be adapted to new types which the changing scene may
bring.
Harlan F. Stone, The Common Law in the United States, 50 Harv. L. Rev. 4, 7
(1936); see also Richard B. Cappalli, The American Common Law M ethod 15
(1997) (stating that “[t]he accretional nature of the common law is a great
strength”).
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Keeping these precepts in mind, and having considered the purposes behind
the attorney-client privilege and the work-product doctrine as well as the reasoned
opinions of the other circuits, we conclude the record in this case is not sufficient
to justify adoption of a selective waiver doctrine as an exception to the general
rules of waiver upon disclosure of protected material. Qwest advocates a rule that
would preserve the protection of materials disclosed to federal agencies under
agreements which purport to maintain the attorney-client privilege and
work-product protection but do little to limit further disclosure by the
government. The record does not establish a need for a rule of selective waiver to
assure cooperation with law enforcement, to further the purposes of the
attorney-client privilege or work-product doctrine, or to avoid unfairness to the
disclosing party. Rather than a mere exception to the general rules of waiver, one
could argue that Qwest seeks the substantial equivalent of an entirely new
privilege, i.e., a government-investigation privilege. Regardless of
characterization, however, the rule Q west advocates would be a leap, not a
natural, incremental next step in the common law development of privileges and
protections. On this record, “[w]e are unwilling to embark the judiciary on a long
and difficult journey to such an uncertain destination.” Branzburg v. Hayes, 408
U.S. 665, 703 (1972).
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1. C ooperation w ith Law Enforcem ent
Qwest argues selective waiver is necessary to ensure cooperation with
government investigations. Selective waiver may well be a means to encourage
cooperation with law enforcement, an end with unquestioned benefits to the
commonweal. See, e.g., Andrew J. M cNally, Revitalizing Selective Waiver:
Encouraging Voluntary Disclosure of Corporate Wrongdoing by Restricting Third
Party Access to Disclosed M aterials, 35 Seton Hall L. Rev. 823, 825-27 (2005).
The Sixth Circuit majority in Columbia/HCA Healthcare conceded that a selective
waiver rule would further the search for truth, realize considerable investigative
efficiencies, encourage settlements, and possibly increase corporate self-policing.
293 F.3d at 303.
The record before us, however, does not support the contention that
companies will cease cooperating with law enforcement absent protection under
the selective waiver doctrine. M ost telling is Qwest’s disclosure of 220,000
pages of protected materials knowing the Securities Case was pending, in the face
of almost unanimous circuit-court rejection of selective waiver in similar
circumstances, and despite the absence of Tenth Circuit precedent. These actions
undermine its argument that selective w aiver is vitally necessary to ensure
companies’ cooperation in government investigations. See Steinhardt Partners,
9 F.3d at 236 (“The SEC has continued to receive voluntary cooperation from
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subjects of investigations, notwithstanding the rejection of the selective waiver
doctrine by two circuits and public statements from Directors of the Enforcement
Division that the SEC considers voluntary disclosures to be discoverable and
admissible.”); Westinghouse, 951 F.2d at 1426 (“[W]e do not think that a new
privilege is necessary to encourage voluntary cooperation with government
investigations. . . . W e find it significant that W estinghouse chose to cooperate
despite the absence of an established privilege[] protecting disclosures to
government agencies.”); see also Branzburg, 408 U.S. at 693-94 (rejecting
creation of reporters’ privilege and stating “the evidence fails to demonstrate that
there would be a significant constriction of the flow of news to the public if this
Court reaffirms the prior common-law and constitutional rule regarding the
testimonial obligations of newsmen”). The record is equally deficient concerning
whether the DOJ and the SEC may have independently gained access to the
W aiver Documents by invoking other means or theories, such as the crime or
fraud exception to the attorney-client privilege. The D OJ posed this very
possibility in its response to Qwest’s mandamus petition. See DOJ Resp. Br. at 2
n.1.
Further, if selective waiver were as essential to government operations as
Qwest claims, it would seem the agencies would support Qwest’s position. At the
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court’s request, the DOJ responded to Qwest’s petition. 4 Rather than urging the
adoption of selective w aiver, though, it carefully took no position on the parties’
dispute. Additionally, the DOJ declined an invitation to participate in oral
argument. It would appear, then, that the government’s interest is not as Qwest
portrays it. 5
2. C onfidentiality A greem ents
Qwest also contends the key point distinguishing this case from the
majority of the cases rejecting selective waiver is the fact that Qwest entered into
confidentiality agreements with the agencies prior to disclosing the W aiver
Documents. Some courts have held or indicated that the existence of a
confidentiality agreement is irrelevant to a waiver of privileges. See, e.g.,
Columbia/HCA Healthcare, 293 F.3d at 303; Chrysler M otors Corp., 860 F.2d at
847. Others, however, have indicated that the existence of a confidentiality
agreement may justify adopting selective waiver. See, e.g., Steinhardt Partners,
9 F.3d at 236; M & L Bus. M ach. Co., 161 B.R. at 696.
4
The court’s order did not address the SEC. Unlike Association of
Corporate Counsel and the Chamber of Commerce of the United States of
America, the SEC did not file an amicus brief in this action.
5
Qwest’s confidentiality agreements provided that the agencies would not
assert that production of the W aiver Documents constituted a w aiver, as to a third
party, of the attorney-client privilege, the work-product doctrine, or any other
applicable privilege. See Pet’r Br., Ex. B at 2; id. Ex. C at 2. This restriction,
however, does not prohibit the agencies from arguing in favor of a theory of
selective waiver.
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The record does not support reliance on the Qwest agreements with the
SEC and the DOJ to justify selective waiver. The agreements do little to restrict
the agencies’ use of the materials they received from Qwest. The agencies are
permitted to use the W aiver Documents as required by law and in furtherance of
the discharge of their obligations. The DOJ is specifically permitted to share the
W aiver Documents with other agencies, federal, state, and local, and make use of
them in proceedings and investigations. In its brief, the DOJ illustrates just how
far some of the documents may have traveled, stating that, at a minimum, W aiver
Documents have been introduced into evidence in a criminal trial, produced as
discovery in three separate criminal proceedings, and used as exhibits to SEC
investigative testimony. The DOJ also informs us it was not required to
“segregate material obtained from Qwest, file it under seal, keep records of its
use, or otherwise deal with the information in any special way,” and it had made
no effort to determine what information had been disseminated to third parties.
DOJ Resp. Br. at 6.
The record does not indicate whether Qwest negotiated or could have
negotiated for more protection for the W aiver Documents, or whether, as it
asserted at oral argument, seeking further restrictions w ould have so diluted its
cooperation to render it valueless. Be that as it may, the confidentiality
agreements gave the agencies broad discretion to use the W aiver Documents as
-34-
they saw fit, and any restrictions on their use were loose in practice. As Qwest
has conceded, it is unknown how many or which of the W aiver Documents the
agencies have used or disclosed, how those uses or disclosures occurred, who
might have had access to the W aiver Documents, and the extent of continuing
disclosures. It is therefore not inappropriate to conclude that some undetermined
number of W aiver Documents have been widely disseminated and have thus
become public information.
At oral argument, Qwest essentially conceded that those widely distributed
W aiver Documents have lost any protection they once enjoyed. In so conceding,
Qwest is effectively advocating a rule that would place control of its
attorney-client privilege and work-product protection in the hands of the agencies.
Under this rule, the agencies would determine which documents w ould remain
privileged or protected by limitation on further dissemination. The concession
highlights a further record deficiency: the nature and severity of the burden
placed upon the district court to sort through all 220,000 pages of W aiver
Documents to determine what use the government made of each document, and
whether any further disclosure had vitiated an otherwise applicable privilege or
protection.
In short, Qwest’s confidentiality agreements do not support adoption of
selective w aiver.
-35-
3. Purpose of Protections
The Supreme Court has required caution in the arena of testimonial
privileges: “these exceptions to the demand for every man’s evidence are not
lightly created nor expansively construed, for they are in derogation of the search
for truth.” United States v. Nixon, 418 U.S. 683, 710 (1974). Because exceptions
to the waiver rules necessarily broaden the reach of the privilege or protection,
selective waiver must be viewed with caution. If the suggested exception
advances the purpose of the privilege or protection, that exception should be
viewed more favorably.
The generally recognized exceptions already in place tend to serve the
purposes of the particular privilege or protection. W hen disclosure is necessary to
accomplish the consultation or assist with the representation, as in the case of an
interpreter, translator, or secretary, an exception to waiver preserves the privilege.
See Mass. Inst. of Tech., 129 F.3d at 684; Westinghouse, 951 F.2d at 1424.
Similarly, when the disclosure is to a party with a common interest, the “joint
defense” or “common interest” doctrine provides an exception to w aiver because
disclosure advances the representation of the party and the attorney’s preparation
of the case. See W estinghouse, 951 F.2d at 1424; see also Grand Jury
Proceedings v. United States, 156 F.3d 1038, 1042-43 (10th Cir. 1998) (stating
that establishing joint-defense privilege requires showing “(1) the documents
-36-
were made in the course of a joint-defense effort; and (2) the documents were
designed to further that effort”).
The record in this case does not indicate that the proposed exception would
promote the purposes of the attorney-client privilege or work-product doctrine. 6
Rather than promoting exchange between attorney and client, selective waiver
could have the opposite effect of inhibiting such communication. If officers and
employees know their employer could disclose privileged information to the
government without risking a further waiver of the attorney-client privilege, they
may well choose not to engage the attorney or do so guardedly. Such reticence
and caution could be heightened where, as here, further disclosures by the
government mean that the information may be disclosed to countless others.
M oreover, the purpose of the work-product doctrine is to enable counsel to
prepare a case in privacy. As other circuits have indicated, selective waiver does
little to further this purpose and in some cases, may instead encourage counsel to
conduct investigations with an eye toward pleasing the government. See
Columbia/HCA Healthcare, 293 F.3d at 306; Westinghouse, 951 F.2d at 1429-30;
Steinhardt Partners, 9 F.3d at 235.
6
Among the authorities advocating the adoption of selective w aiver,
including Diversified, Judge Boggs’ dissent in Columbia/HCA Healthcare, and
the SEC’s position expressed in amicus briefs filed in other cases, none of their
rationales appear to be premised on the purposes underlying the attorney-client
privilege and work-product doctrine.
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4. U nfairness to the Parties
Qwest argues that adopting selective waiver w ould avoid unfairness to
Qwest while visiting no unfairness on the Plaintiffs. If companies do not have the
assurance of protection, Qwest theorizes, they simply will not release privileged
documents to federal authorities. Thus, civil plaintiffs w ill not have access to
them anyway. See Columbia/HCA Healthcare, 293 F.3d at 312 (Boggs, J.,
dissenting) (“[T]he choice presented in this case is not one whether or not to
release privileged information to private parties that has already been disclosed to
the government, but rather one to create incentives that permit voluntary
disclosures to the government at all.”); Westinghouse, 951 F.2d at 1426 n.13
(“[I]n our view, when a client discloses privileged information to a government
agency, the private litigant in subsequent proceedings is no worse off than it
would have been had the disclosure to the agency not occurred.”). Allowing
Qwest to choose who among its opponents would be privy to the W aiver
Documents is far from a universally accepted perspective of fairness. See
Permian Corp., 665 F.2d at 1221; John Doe Corp., 675 F.2d at 489.
As discussed above, the record is silent on whether selective waiver truly is
necessary to achieve cooperation. Qwest’s fairness argument nevertheless rests
on that very foundation. It is difficult to understand how a rejection of selective
waiver will work an unfairness on Qwest when Qwest disclosed the W aiver
-38-
Documents in the face of the known threat from Plaintiffs, the absence of Tenth
Circuit precedent, and a dearth of favorable circuit authority. It hedged its bets
by choosing to release 220,000 pages of documents but to retain another 390,000
pages of privileged documents. Qwest perceived an obvious benefit from its
disclosures but did so while w eighing the risk of w aiver.
In sum, the record does not support application of selective w aiver as a
matter of fairness.
5. C ase Law
As a review of federal circuit case law has indicated, there is but one
circuit that has applied the selective waiver doctrine to attorney-client material.
All other circuits addressing the matter have refused to apply the doctrine. In the
context of non-opinion work product, no circuit has adopted selective waiver and
five circuits have rejected the doctrine. Some circuits have expressly not
precluded the application of selective waiver but have limited that possibility to
cases where the initial disclosure was not to an adversary or was accomplished
under a confidentiality agreement strictly limiting further dissemination by the
government. Here, Qwest disclosed to adversaries under agreements w hich did
not realistically control further dissemination.
The only conclusion from the federal case law is that the federal circuits
have not expanded either the attorney-client privilege under Federal Rule of
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Evidence 501 or the non-opinion work-product doctrine under Fed. R. Civ. P.
26(b)(3) or Hickman v. Taylor by applying selective w aiver.
A review of state appellate decisions yields substantially the same
conclusion. 7 See McKesson Corp. v. Green, 610 S.E.2d 54, 56 (Ga. 2005)
(rejecting selective w aiver of work-product protection where materials were
disclosed to government, despite confidentiality agreement); M cKesson HBOC,
Inc. v. Superior Court, 9 Cal. Rptr. 3d 812, 819, 821 (Cal. Ct. App. 2004)
(rejecting selective waiver of attorney-client privilege and work-product
protection where materials were disclosed to government, despite confidentiality
agreement); State v. Thom pson, 306 N.W .2d 841, 843 (M inn. 1981) (finding “no
occasion” to apply selective waiver and suppress testimony where the
attorney-client privilege w as waived through disclosure of investigation reports,
notes, and statements to attorney-general and grand jury); but see Danielson v.
Superior Court, 754 P.2d 1145 (Ariz. Ct. App. 1988) (adopting selective waiver
of physician-patient privilege under the particular circumstances of that case). It
is clear then that the common law of attorney-client privilege and the
7
The Supreme Court has “observed that the policy decisions of the States
bear on the question whether federal courts should [ ] amend the coverage of an
existing [privilege].” Jaffee v. Redmond, 518 U.S. 1, 12-13 (1996); see also
Trammel v. United States, 445 U.S. 40, 48-50 (1980); United States v. Gillock,
445 U.S. 360, 368 (1980).
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work-product doctrine in both state and federal courts has not embraced the
doctrine of selective w aiver.
6. N ew Privilege
W hile Qwest has disavowed any intention of seeking to create a new
privilege for materials surrendered in a government investigation, that does not
necessarily foreclose the subject. There is a principled position that the breadth
of the selective waiver doctrine advocated by Qwest is the substantial equivalent
of a new privilege. Qwest justifies its proposed new rule on a policy of
cooperation with government investigations. It does not ground its advocacy on
the purposes underlying the attorney-client privilege. At least one court has
indicated that such justification is suggestive of a new privilege, rather than gloss
on an ancient one. See Westinghouse, 951 F.2d at 1425.
M ore often than not, the Supreme Court has declined to recognize new
privileges. In Branzburg, for example, the Court rejected a proposed journalists’
privilege against being compelled to testify before a grand jury. 408 U.S. at 667.
In reaching its decision, the Court noted the proposed privilege was not
recognized at common law, id. at 685; some states had adopted it, but the majority
had not, and that no federal statute had adopted it, id. at 689; the evidence did not
support the dire consequences the privilege’s proponents predicted, id. at 693;
even if the record had supported the need for the privilege, the public interest of
-41-
pursuing and punishing criminal behavior would outweigh the interest in possible
future news stories, id. at 695; and there were daunting logistical difficulties in
implementing the proposed privilege, id. at 703-04. The Court suggested other
government bodies, such as Congress or the state legislatures and courts, could
consider implementing the proposed privilege. Id. at 706.
In other cases, the Court has refused to adopt privileges for peer review
materials, see Univ. of Pa., 493 U.S. at 189; for state legislators in federal
criminal proceedings, see United States v. Gillock, 445 U.S. 360, 374 (1980); for
the editorial processes of the media in defamation action, see Herbert v. Lando,
441 U.S. 153, 175 (1979); for the President to refuse to produce materials in a
criminal proceeding, see Nixon, 418 U.S. at 713; and for legislative aides to
refuse to testify before a grand jury about actions not related to legislative
activities, see Gravel v. United States, 408 U.S. 606, 627 (1972); see also Rubin
v. United States, 525 U.S. 990, 119 S. Ct. 461, 464 (1998) (Breyer, J., dissenting
from denial of certiorari in case in which the appellate court rejected a privilege
for Secret Service agents for information learned while protecting the President).
A notable exception to this trend is Jaffee v. Redmond, where the C ourt
recognized a federal psychotherapist-patient privilege under Rule 501. 518 U.S.
1, 9-15 (1996). Noting that the possibility of disclosure might impede successful
treatment, it concluded the privilege promoted the important public interest in the
-42-
treatment of mental and emotional problems. Id. at 11. The Court weighed the
significant benefits of the rule with the “modest” evidentiary detriment, finding
that in the absence of the privilege, much of the evidence that would otherwise be
discoverable would not come into existence. Id. at 11-12. Importantly, though, it
also relied upon a consensus of “reason and experience” reflected in the adoption
of a psychotherapist privilege, in some form, in all fifty states and the District of
Columbia. Id. at 12 & n.11, 13. In addition, it noted that a psychotherapist
privilege was among the nine privileges originally proposed to be included in the
Federal Rules of Evidence. Id. at 14-15.
In this case, there are no grounds to buck the trend of declining to create a
new privilege. There is no groundswell in the state legislatures for a privilege for
materials produced in a government investigation. 8 Nor was such a privilege
8
It does not appear that any state has implemented, by statute or rule, a
general government-investigation privilege, and this type of privilege does not
appear in the Uniform Rules of Evidence (Uniform Rules). The closest
equivalents recognized in the states appear to be a privilege for reports required
to be made by law, which has been adopted by only a small minority of states,
see Alaska R. Evid. 502; Haw. Rev. Stat. § 626-1, R. 502; Nev. Rev. Stat.
§ 49.025; N.M . R. Rev. Rule 11-502; Tex. R. Evid. 502; W is. Stat. § 905.02, and
self-critical analysis privileges recognized for specified situations in a minority of
states, see, e.g., Alaska Stat. § 09.25.450 (environmental audit); Colo. Rev. Stat. §
13-25-126.5 (environmental audit); 215 Ill. Comp. Stat. 5/155.35 (insurance
compliance); Kan. Stat. Ann. § 60-3351 (insurance compliance); id. § 60-3333
(environmental audit); M iss. C ode Ann. § 49-2-71 (environmental audit); N.D.
Cent. Code §§ 6-13-02 to 6-13-04 (financial institutions); id. §§ 26.1-51-02 to
26.1-51-04 (insurance compliance); Or. Rev. Stat. § 731.761 (insurance
(continued...)
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among the nine originally proposed for inclusion in the Federal Rules of
Evidence. Further, the Supreme Court has indicated it is “especially reluctant to
recognize a privilege in an area where it appears that Congress has considered the
relevant competing concerns but has not provided the privilege itself.” Univ. of
8
(...continued)
compliance); Tex. Rev. Civ. Stat. Ann., art. 4447cc, § 5 (Vernon) (environmental
audit); Utah R. Evid. 508 (environmental audit). Neither of these privileges is
included in the Uniform Rules.
Notably, the Uniform Rules are hostile to both the creation of new comm on
law privileges, see Unif. R. Evid. 501 (limiting the creation of privileges to
constitution, statute, or state supreme court rule), and the idea of selective w aiver,
see Unif. R. Evid. 510 (stating that a privilege is waived if a privilege holder
“voluntarily discloses or consents to disclosure of any significant part of the
privileged matter”). A majority of states have adopted forms of Uniform Rules
501 and/or 510. See Uniform Rules of Evidence Locator,
http://www.law.cornell.edu/uniform/evidence.html (last visited M ay 31, 2006)
(identifying states that have adopted the Uniform Rules).
In addition, our research indicates that where state legislatures have
adopted selective waiver theories, they have done so not in the general law
enforcement context, but in particularized circumstances not present here. See,
e.g., Cal. Gov’t Code § 13954(h) (disclosures to verify claims on victims’
compensation fund); Conn. Gen. Stat. § 19a-127o(f) (health providers’ submission
of patient safety work product to patient safety organization); Fla. Stat.
§ 633.175(6) (insurance company providing information to State Fire M arshal);
La. Rev. Stat. Ann. § 40:31.66(D) (state Parkinson’s Disease Registry); Neb. Rev.
Stat. § 44-1107(5)(f) (examinations under Viatical Settlements Act); Ohio Rev.
Code Ann. § 1753.38(A ) (risk-based capital plans, reports and information).
M ost commonly, state legislatures have allowed selective waiver in connection
with environmental self-audits, see, e.g., Alaska Stat. § 09.25.455(b); Kan. Stat.
Ann. § 60-3334(c); Tex. Rev. Civ. Stat. Ann., art. 4447cc, § 6(b) (Vernon), and
reports to insurance commissioners, see, e.g., Ind. Code § 27-1-15.6-15(e)(4); Ky.
Rev. Stat. Ann. § 304.47-055(4); S.C. Code Ann. § 38-43-55(G)(4); Vt. Stat. Ann.
tit. 8, § 4813m(f)(4); W ash. Rev. Code §§ 48.02.065(4), (6).
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Pa., 493 U.S. at 189. In 1984, Congress rejected a SEC-proposed amendment to
the Securities and Exchange Act of 1934 that would have established a selective
waiver rule. See W estinghouse, 951 F.2d at 1425 (citing 16 Sec. Reg. & L. Rep.
461 (M ar. 2, 1984)). M ore recently, the SEC withdrew a proposed regulation
implementing selective waiver in light of questions about its authority to adopt
such a regulation under the Sarbanes Oxley Act. See SEC Release Nos. 33-8185,
34-47276, Implementation of Standards of Professional Conduct for Attorneys,
68 Fed. Reg. 6296, 6312 (Feb. 6, 2003) (explaining withdraw al of 17 C.F.R. Part
205.3(e)(3)). All of these factors counsel against establishing a new government-
investigation privilege and correspondingly counsel against adopting Qwest’s
proposed rule regardless of w hether it be characterized as a new privilege or a
new rule governing waiver.
7. C ulture of W aiver
Amici curiae, Association of Corporate Counsel and the Chamber of
Commerce of the United States of America, support Qwest’s position by
suggesting their employers and members, respectively, now litigate in a “culture
of waiver” instituted by federal prosecutors. They argue that companies facing
federal investigations do not choose to waive their privileges; under current
enforcement standards, companies cannot risk being labeled as uncooperative; and
cooperation, as defined by federal officials, requires producing privileged
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documents. 9 Amici state that “the demand for privilege waivers by the
government as a pre-requisite to fair treatment by prosecutors is now routine.”
Amici Br. at 10. They urge the court “to note with disapproval this culture of
waiver as a matter of policy that should be reversed.” Id. at 8.
Amici’s position is supported by commentators. See, e.g., Ronald C.
M inkoff, A Leak in the Dike: Expanding the Doctrine of Waiver of the
Attorney-Client Privilege, 154 PLI/NY 165, 178 (2005); see also Kathryn
Keneally, New Life for Selective Waiver, 30 Champion 42 (2006). It is not,
however, supported by the record. Aside from the anecdotal material serving as
the foundation for the purported “culture of waiver,” the record is silent regarding
9
The DOJ’s enforcement position stems from certain DOJ memoranda. The
1999 “Holder M emorandum” written by Deputy Attorney General Eric Holder
directed federal prosecutors to consider the company’s willingness to waive
privileges in evaluating cooperation. The currently controlling memorandum is
the January 20, 2003 “Thompson M emorandum” authored by Deputy Attorney
General Larry D. Thompson. On October 21, 2005, Acting Deputy Attorney
General Robert D. M cCallum, Jr. issued a memorandum supplementing the
Thompson M emorandum that directs United States Attorneys to establish a
written waiver review process prosecutors must follow in seeking privilege
waivers.
The SEC’s position is encapsulated in the “Seaboard Report,” Securities
Exchange Act of 1934 Release No. 44969 (Oct. 23, 2001). That report listed a
company’s desire to provide information as one of the criteria for assessing
cooperation, and it noted that such a desire may cause companies to waive the
attorney-client privilege, work-product doctrine, or other applicable privileges.
“In this regard, the Commission does not view a company’s waiver of a privilege
as an end in itself, but only as a means (where necessary) to provide relevant and
sometimes critical information to the Commission staff.” Id. at n.3.
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its existence, significance, and longevity. M ore specifically, the record is silent
about Qwest’s particular dealings with the agencies and whether it experienced
the tactics deplored by amici. Even though common sense and human nature
suggest there is some level of pressure for companies to satisfy the government by
disclosing as much as possible, including even privileged and protected material,
this court cannot rely on such a sparse record to recognize a new doctrine of
selective w aiver or to create a new privilege for government investigations.
A similar argument has been unsympathetically received by at least one
other circuit. The Second Circuit stated:
W hether characterized as forcing a party in between a Scylla and
Charybdis, a rock and a hard place, or some other tired but equally
evocative metaphoric cliché, the “Hobson’s choice” argument is
unpersuasive given the facts of this case. An allegation that a party
facing a federal investigation and the prospect of a civil fraud suit
must make difficult choices is insufficient justification for carving a
substantial exception to the waiver doctrine.
Steinhardt Partners, 9 F.3d at 236. In Branzburg, the Supreme Court found
similar arguments about changing policies and practices insufficient to support
the creation of a journalist’s privilege:
It is said that currently press subpoenas have multiplied, that mutual
distrust and tension between press and officialdom have increased,
that reporting styles have changed, and that there is now more need
for confidential sources . . . . These developments, even if true, are
treacherous grounds for a far-reaching interpretation of the First
Amendment fastening a nationwide rule on courts, grand juries, and
prosecuting officials everywhere.
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408 U.S. at 699 (footnote omitted).
At least to the degree exhorted by amici, “the culture of waiver” appears to
be of relatively recent vintage. W hether the pressures facing corporations in
federal investigations present a hardened, entrenched problem suitable for
comm on-law intervention or merely a passing phenomenon that may soon be
addressed in other venues is unclear. For example, certain language in
Application Note 12 to Sentencing Guideline § 8C2.5 can be read to tie
cooperation to a waiver of applicable privileges. The Sentencing Commission,
however, recently promulgated an amendment deleting that language because “the
sentence at issue could be misinterpreted to encourage waivers.” Sentencing
Guidelines for the United States Courts, 71 Fed. Reg. 28063, 28073 (M ay 1,
2006). This amendment will take effect on November 1, 2006 unless Congress
intervenes. Id. at 28063. Congress also appears concerned about these issues;
the House Judiciary Committee’s Subcommittee on Crime, Terrorism, and
Homeland Security recently took oral testimony at an oversight hearing on
corporate privilege waivers. White Collar Enforcement (Part I): Attorney-Client
Privilege and Corporate Waivers: Oversight Hearing Before the H. Comm. on the
Judiciary, Subcom m . on C rim e, Terrorism and Homeland Security, 109th Cong.
D193 (M ar. 7, 2006). Finally, the Advisory Committee on Evidence Rules
recently voted to recommend publication of a proposed Rule 502, providing for
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selective waiver to the Committee on Rules of Practice and Procedure (the
Standing Committee) of the Judicial Conference of the United States. The
Standing Committee is expected to take up the issue at its June 2006 meeting.
Rule 501 places responsibility for development of the common law of
testimonial privilege on the federal courts. Each decision along the path of the
common law is directed by the discrete, underlying facts developed in the record.
As decisions accrue, the process is facilitated by the accumulation of experience,
but it remains dependent on the factual foundation of each constituent decision.
Legislative and rule-making processes, however, are not confined by the same
gradual, brick-by-brick progression. Legislatures and rule-making bodies are
endowed with tools to marshal evidence, facts, and experience from numerous and
diverse sources that can support more dramatic and immediate creation of new
rules or modifications of old rules. Cf. In re Subpoena Duces Tecum, 738 F.2d at
1375 (“If a change is to be made because it is thought that such voluntary
disclosure programs are so important that they deserve special treatment, that is a
policy matter for the Congress, or perhaps through the SEC (through a
regulation). Courts are not the appropriate forum–for one thing, courts do not
know enough–to decide on policy grounds to treat those programs (or others like
them) in an exceptional way.”); see also Branzburg, 408 U .S. at 706 (“Congress
has freedom to determine w hether a statutory new sman’s privilege is necessary
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and desirable and to fashion standards and rules as narrow or broad as deemed
necessary to deal with the evil discerned and, equally important, to refashion
those rules as experience from time to time may dictate.”).
W hether a rule-making or legislative venue is appropriate to address the
issues raised by Qwest and amici is a question for the Standing Committee and
Congress. The rule-making and legislative processes, however, need not proceed
wholly independent of the common law. The accumulated experience of federal
comm on law in the area of attorney-client privilege and work-product protection
is but another source for the legislative and rule-making bodies to draw on to
inform their deliberations concerning the need for and parameters of selective
waiver or a new privilege.
III. C onclusion
For the reasons discussed above, the record in this case does not justify
adoption of selective waiver. Consequently, the district court did not abuse its
discretion in ordering Qwest to produce the W aiver D ocuments to the Plaintiffs.
Qwest has not shown a clear and indisputable right to a writ of mandamus, and
therefore its petition is D EN IED .
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In Re Qwest Communications International Inc.
Court: Court of Appeals for the Tenth Circuit
Date filed: 2006-06-19
Citations: 450 F.3d 1179
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