In Re Qwest Communications International Inc.

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.

-23-
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

-27-
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”).

-29-
 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

-31-
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

-32-
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.

-33-
 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.

-37-
 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

-39-
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).

-40-
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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