Before the

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of                 | )  | File No. EB-03-MD-010        |
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| AudioText International, Ltd.,   | )  |                              |
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| Complainant,                     | )  |                              |
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| AT&T Corp.,                      | )  |                              |
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| Defendant.                       | )  |                              |
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+----------------------------------+----+------------------------------+

memorandum opinion and order

Adopted: January 23, 2004 Released: January 27, 2004

By the Chief, Enforcement Bureau:

# introduction

1.  In this Order, we deny the request of defendant AT&T Corporation
    ("AT&T") for confidential treatment and other relief relating to
    eleven pages of documents ("the Subject Documents") that complainant
    AudioText International, Ltd. ("AudioText") included in the appendix
    to the formal complaint that AudioText filed with the Commission
    under section 208(a) of the Communications Act of 1934, as amended
    ("Act").[^1] AT&T seeks confidential treatment of the Subject
    Documents pursuant to sections 0.457 and 0.459 of our rules,[^2] on
    the grounds that they are protected by the attorney-client and
    attorney work product privileges.[^3] AudioText opposes AT&T's
    request.[^4] As explained below, we deny AT&T's requests relating to
    the Subject Documents, because we find that AT&T has waived any
    attorney-client privilege and/or work product protection that may
    have once attached to these documents.

# factual background

## The District Court Litigation

2.  Prior to initiating this proceeding before the Commission, AudioText
    had filed a complaint against AT&T in the United States District
    Court for the Eastern District of Pennsylvania ("the District
    Court") alleging breach of contract and of the covenant of good
    faith and fair dealing. [^5] In the course of that litigation, AT&T
    produced the Subject Documents to AudioText on August 2, 2001 in
    response to AudioText's discovery requests. AT&T's outside counsel,
    Thomas P. Bracaglia, enclosed the Subject Documents in a transmittal
    letter to AudioText's outside counsel, Stephen G. Burns,[^6] and
    advised that "\[a\]dditional documents which are deemed confidential
    and/or privileged will be produced upon receipt of the signed
    Protective Order."[^7]

3.  On August 31, 2001, Mr. Bracaglia sent a letter to Mr. Burns stating
    that certain documents protected by the attorney-client privilege,
    including the Subject Documents, "were inadvertently produced by
    error."[^8] Mr. Bracaglia asked whether AudioText would return the
    documents or whether AT&T would instead need "to file a motion to
    correct this error."[^9] Mr. Burns responded in two letters, both
    dated September 13, 2001, in which he indicated that because
    AudioText lacked information about the authors and recipients of the
    Subject Documents, it could not agree that the documents were
    attorney-client communications.[^10] Mr. Burns invited Mr. Bracaglia
    to call him to discuss the matter further.[^11] Three months passed,
    during which AT&T failed to persuade AudioText to return the Subject
    Documents.

4.  On December 17, 2001, AT&T filed a motion asking the District Court
    to dismiss AudioText's complaint or, in the alternative, to dismiss
    it without prejudice to AudioText's submission of its claims to the
    Commission for disposition pursuant to the primary jurisdiction
    doctrine.[^12] On December 18, 2001, AT&T's in-house counsel,
    Jennifer L. Leuba, sent a letter to AudioText's outside counsel, Mr.
    Burns, noting that the parties "had agreed last week to resolve the
    privilege issues" prior to the deposition of AT&T in-house counsel,
    Andrew Schlafly, which was scheduled for December 21, 2001. [^13]
    Ms. Leuba asked Mr. Burns to let her know "which documents you will
    not return, so that we may file the appropriate motion with the
    Court."[^14] On December 19, 2001, Mr. Kasman informed Ms. Leuba by
    letter that AudioText did not intend to return any of the documents
    that AT&T had requested because AudioText did not believe they were
    privileged.[^15] Mr. Kasman advised AT&T to "take any steps you deem
    appropriate with respect to these documents."[^16]

5.  The deposition of Mr. Schlafly was held on December 21, 2001, as
    scheduled.[^17] During the deposition, Ms. Leuba and Mr. Burns
    discussed their dispute concerning the Subject Documents, and Ms.
    Leuba noted that "the parties have not yet briefed the issue of
    privilege, and I think we all assume we may be doing that in the
    near future."[^18] On January 17, 2002, the District Court ordered
    that AudioText may submit its claims to the Commission, and stayed
    all further proceedings in the case pending completion of
    administrative proceedings before the Commission.[^19] AT&T did not
    file a motion to compel the return of the Subject Documents, or
    otherwise notify the District Court of the parties' dispute
    regarding these documents, at any time before or after the District
    Court issued the stay order.

6.  In August 2002, AudioText filed a second complaint in the District
    Court charging that AT&T violated section 201 of the Act and AT&T's
    tariffs by terminating AudioText's services and blocking its
    traffic.[^20] In November 2002, the District Court granted a motion
    by AT&T to consolidate AudioText's two suits, and to stay both cases
    pending referral to the Commission for disposition.[^21]

## The Complaint Proceeding Before The Commission

7.  AudioText filed and served its Complaint before the Commission on
    May 13, 2003 following an unsuccessful effort at pre-complaint
    mediation before Commission staff.[^22] AudioText included the
    Subject Documents in the appendix it filed and served with its
    Complaint, and quoted or divulged information from the Subject
    Documents in several paragraphs of the Complaint.[^23] AT&T did not
    notify the Commission that it considered the Subject Documents to be
    privileged and confidential until May 22, 2003, and only then raised
    the issue in response to an inquiry from Commission staff about
    whether certain documents included in the appendix to the Complaint,
    that were stamped "confidential" or "proprietary," were intended to
    be made publicly available.[^24] In response to this inquiry, AT&T
    made an informal request to staff that the Subject Documents be
    excluded from the public record because they are privileged
    documents.[^25]

8.  At the suggestion of staff, AT&T documented this request in a letter
    to the Commission, which AT&T filed on June 4, 2003.[^26] In that
    letter, AT&T requested confidential treatment of the Subject
    Documents pursuant to sections 0.457 and 0.459 of our rules,[^27] on
    the asserted grounds that the documents were protected by the
    attorney-client and work product privileges.[^28] Two weeks after
    filing its June 4 Letter, AT&T made an additional request to the
    Commission for an order requiring AudioText to return to AT&T all
    copies of the Subject Documents, and precluding AudioText from
    introducing, referencing, and/or relying upon the Subject Documents
    in this proceeding.[^29] This was AT&T's first and only request to
    an adjudicatory entity for an order requiring return of the Subject
    Documents, and it came almost two years after AT&T produced the
    documents. AudioText submitted letters opposing both requests.[^30]

9.  We have excluded the Subject Documents from the public record to
    preserve the status quo pending resolution of AT&T's request. We
    have not, however, ordered AudioText to return the Subject Documents
    to AT&T or precluded AudioText from referencing and/or relying upon
    them.[^31]

# discussion

10. AT&T's request to exclude the Subject Documents from the public
    record rests on sections 0.457 and 0.459 of the Commission's
    rules,[^32] which implement the Freedom of Information Act
    ("FOIA").[^33] Under FOIA, the Commission must disclose reasonably
    described agency records requested by any person, unless the records
    contain information that fits within one of the nine exemptions from
    disclosure provided in the Act.[^34] Section 0.457(d) of the
    Commission's rules, which implements FOIA Exemption 4, provides that
    records not routinely available for public inspection include
    "\[t\]rade secrets and commercial or financial information obtained
    from any person and privileged or confidential."[^35] Section
    0.459(a) provides that any person submitting information or
    materials to the Commission may request that such information not be
    made routinely available for public inspection.

11. AT&T advances two principal arguments in favor of withholding the
    Subject Documents from the public record. First, AT&T argues that
    AudioText should not have included the Subject Documents in its
    Complaint to the Commission, because AT&T had asserted a claim of
    privilege with respect to these documents and notified AudioText
    that the documents had been produced inadvertently in the District
    Court litigation.[^36] AT&T contends that "\[i\]t is contrary to the
    basic tenets of FOIA to take information that is otherwise private
    and unavailable to the public," such as the Subject Documents, and
    "place that information in the public domain by capitalizing on an
    inadvertent mistake made by" AT&T's counsel.[^37] AT&T asserts that
    the Subject Documents should be excluded from the record "\[o\]n
    this ground alone," and that the traditional tests governing
    application of FOIA Exemption 4 are inapplicable.[^38]

12. Second, AT&T argues that even if AT&T is required to make a showing
    that the Subject Documents are excludable from the public record
    under FOIA Exemption 4, [^39] the Bureau should conclude that the
    Subject Documents qualify for protection under that exemption.[^40]
    AT&T contends that the Subject Doctrines are protected under
    Exemption 4 because they are "commercial" documents, in that they
    involve attorney-client communications with respect to AT&T's
    ability to suspend service to a business customer, and are both
    "privileged" and "confidential."[^41]

13. Regarding AT&T's first argument, we reject AT&T's suggestion that
    AudioText's allegedly improper submission of the Subject Documents
    to the Commission relieves AT&T of its obligation to satisfy the
    standards for excluding material from the public record under FOIA
    exemption 4. We have no authority to exclude the Subject Documents
    from the public record under FOIA Exemption 4 without a showing that
    the Documents qualify as "trade secrets" or "commercial or financial
    information" that is "privileged or confidential" within the meaning
    of FOIA Exemption 4 and section 0.457(d) of our rules.[^42]

14. We also reject AT&T's second argument, which attempts to show that
    the Subject Documents are protected under Exemption 4 on the ground
    that they are "commercial" materials that are both "privileged" and
    "confidential." As discussed below, even assuming, *arguendo*, that
    the Subject Documents are commercial documents that were subject to
    the attorney-client and work product privileges before AT&T produced
    them to AudioText in August 2001, and even assuming such production
    was inadvertent, we find that AT&T waived any privilege or
    confidentiality relating to these materials by failing to take
    reasonable action in the District Court to secure their return. The
    Subject Documents thus do not qualify for protection under FOIA
    Exemption 4, because they lost whatever confidentiality or privilege
    that may have once attached to them, before AudioText ever filed the
    Subject Documents with the Commission.

15. Courts have widely recognized in cases involving inadvertent or
    involuntary production of privileged materials that the privilege
    holder waives the privilege where he "fails to pursue all reasonable
    means of preserving the confidentiality of the privileged
    matter."[^43] The law of the Third Circuit, which AT&T urges us to
    apply in this case,[^44] provides a case on point. In *Grand
    Jury*,[^45] the court held that a party waived the work-product
    privilege when he waited three and a half months before filing a
    motion to compel the return of a file that had been inadvertently
    produced to his adversary.[^46] Because the involuntary disclosure
    was made directly to the party's adversary, who refused requests for
    return of the file, the court in *Grand* *Jury* found that judicial
    enforcement of the privilege was the "only remedy" that would have
    foreclosed the adversary's use of the documents.[^47] "Without such
    judicial vindication," the court held that the adversary "was free
    to continue to utilize the documents, thereby negating their
    confidential character."[^48] The court observed that

> \[A\] reasonable person would not only inform his or her adversary of
> the breach of the privilege, but also would seek a judicial
> determination of the controversy if his or her adversary took an
> opposing stance. Merely asserting the privilege to an adversary is not
> sufficient to protect the privilege in these circumstances inasmuch as
> the adversary has possession of the materials claimed to be privileged
> and thus can make use of them.[^49]

16. In this case, as in *Grand Jury*, the holder of the alleged
    privilege, AT&T, failed to take reasonable steps to retrieve the
    inadvertently produced Subject Documents. The record indicates that
    three months after AudioText told AT&T's counsel on September 13,
    2001 that AudioText could not agree that the Subject Documents were
    attorney-client communications,[^50] AT&T had failed to obtain the
    return of the Subject Documents, either by agreement or by
    requesting court intervention.[^51] Moreover, after AudioText
    informed AT&T, in its letter of December 19, 2001, that AudioText
    did not intend to return the Subject Documents,[^52] AT&T again took
    no action to obtain relief from the District Court. Indeed, although
    AT&T's counsel informed AudioText's counsel on August 31, 2001, and
    again on December 18, 2001, that AT&T would file a motion with the
    District Court if AudioText did not return the Subject Documents,
    AT&T never did so.[^53]

17. AT&T's suggestion that it was prevented from filing such a motion to
    compel by the District Court's decision to stay the litigation is
    wholly unpersuasive.[^54] First, AT&T was the party who filed the
    Motion to Dismiss that resulted in the District Court decision to
    stay the action. If filing the Motion to Dismiss jeopardized AT&T's
    ability to protect the privilege and confidentiality of the Subject
    Documents, AT&T has only itself to blame. Second, the District Court
    order staying the litigation was issued on January 17, 2002 --
    nearly a month after AudioText informed AT&T that it did not intend
    to return the Subject Documents. AT&T has not explained why it did
    not file a motion to compel return of the Subject Documents *before*
    the stay order issued.[^55] Nor has AT&T explained why it did not
    ask the District Court to lift the stay, once it issued, for the
    limited purpose of addressing AT&T's request for return of the
    Subject Documents.[^56] The testimony of AT&T's outside counsel, Mr.
    Bracaglia, indicates that AT&T intended to ask the court to compel
    return of the Subject Documents *only if* the District Court did not
    dismiss or stay the case.[^57] This testimony, and AT&T's failure to
    seek court intervention, suggest that AT&T was willing to leave the
    Subject Documents in the hands of its adversary, AudioText, as long
    as the District Court action was dismissed or stayed. Based on this
    record, we cannot conclude that AT&T "pursue\[d\] all reasonable
    means of preserving the confidentiality" of the Subject
    Documents."[^58]

18. AT&T's reliance on case law holding that inadvertent production of
    privileged documents does not, as a matter of law, result in a
    waiver of the privilege is unavailing.[^59] AT&T cites cases from
    Pennsylvania setting forth five factors that courts consider in
    determining whether inadvertent disclosure waives the attorney
    client privilege, and attempts to show that these factors support
    the conclusion that no waiver occurred here.[^60] To the extent
    these arguments had merit, AT&T should have presented them to the
    District Court, as AT&T repeatedly told AudioText it would do. At
    this point, after AudioText has been in possession of the Subject
    Documents for two years, has thoroughly analyzed and digested the
    documents, and included them in its pleadings, the confidentiality
    of the Subject Documents has been completely destroyed, and no order
    from this agency can restore it.[^61]

19. For all of these reasons, we conclude that AT&T has failed to show
    that the Subject Documents are confidential or privileged. Thus, we
    deny AT&T's request that the Subject Documents be excluded from the
    public record under sections 0.457 and 0.459 of the Commission's
    rules. We also deny AT&T's further request for an order requiring
    AudioText to return to AT&T all copies of the Subject Documents, and
    precluding AudioText from relying upon the documents in this
    proceeding. AT&T has failed to cite any authority permitting the
    Commission to order a party to return documents produced in the
    District Court litigation and, in any event, we see no basis to
    require AudioText to return the Subject Documents, or to refrain
    from relying upon them, in view of our finding that the Subject
    Documents have lost any privilege or confidentiality that may have
    once attached to them.

# ordering clauses 

20. ACCORDINGLY, IT IS ORDERED, pursuant to sections 1, 4(i), 4(j), and
    208 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151,
    154(i), 154(j), 208, sections 0.457 and 0.459 of the Commission's
    rules, 47 C.F.R. §§ 0.457 and 0.459, and the authority delegated in
    sections 0.111 and 0.311 of the Commission's rules, 47 C.F.R. §§
    0.111, 0.311, that AT&T's requests for confidential treatment of the
    Subject Documents and for an order requiring AudioText to return to
    AT&T all copies of the Subject Documents, and precluding AudioText
    from introducing, referencing, and/or relying upon the document in
    this proceeding, are DENIED.

21. IT IS FURTHER ORDERED, pursuant to section 0.459(g) of the
    Commission's rules, 47 C.F.R. §0.459(g), that AT&T may, within five
    working days, file an application for review of this Order by the
    Commission.

FEDERAL COMMUNICATIONS COMMISSION

David H. Solomon

> Chief, Enforcement Bureau

[^1]: 47 U.S.C. § 208. *See* Formal Complaint, File No. EB-03-MD-010
    (filed May 13, 2003) ("Complaint"). The Complaint alleges that AT&T
    violated sections 203(c)(3) and section 201(a) of the Act by
    engaging in conduct that was not authorized by AT&T's governing
    tariffs. Citations to the appendix to the Complaint appear in the
    form ("Complaint App. at \_\_").

[^2]: 47 C.F.R. §§ 0.457 and 0.459.

[^3]: *See* Letter from Jennifer L. Leuba, Counsel for AT&T to Marlene
    H. Dortch, Secretary, Federal Communications Commission, File No.
    EB-03-MD-010 (filed June 4, 2003) ("June 4, 2003 Letter"). The
    Subject Documents appear at the following pages of the appendix to
    the Complaint: Complaint App. at 270-271; 277-79; 281; 282; 303-06;
    307-08. *See* June 4, 2003 Letter at 5-7. *See also* Letter from
    Jennifer L. Leuba, Counsel for AT&T to Marlene H. Dortch, Secretary,
    Federal Communications Commission, File No. EB-03-MD-010 (filed June
    18, 2003) ("June 18, 2003 Letter") at 10. AT&T has described the
    eleven pages of Subject Documents as consisting of "emails written
    to and/or from AT&T in-house attorneys, on the subject of AT&T's
    legal right to suspend services to AudioText . . .;" a "facsimile
    from an AT&T sales executive, transmitting fact information to
    Sharon Gans, an AT&T in-house litigator, for the purpose of
    receiving legal advice, and in anticipation of litigation";
    "handwritten notes of Ms. Gans, reflecting internal, privileged
    communications with AT&T clients on the subject of suspension;" and
    "a draft of an AT&T tariff, prepared by, and in consultation with,
    AT&T in-house attorneys." June 4, 2003 Letter at 2.

[^4]: *See* Letter from Russell D. Lucas, Counsel for AudioText, to
    Marlene H. Dortch, Secretary, Federal Communications Commission,
    File No. EB-03-MD-010 (filed June 11, 2003) ("June 11, 2003
    Letter"); Letter from Russell D. Lucas, Counsel for AudioText, to
    Marlene H. Dortch, Secretary, Federal Communications Commission,
    File No. EB-03-MD-010 (filed June 23, 2003) ("June 23, 2003
    Letter").

[^5]: Joint Statement of the Parties, File No. EB-03-MD-010 (filed July
    23, 2003) ("Joint Statement") at 34, ¶ 181.

[^6]: June 11, 2003 Letter, Exhibit 1.

[^7]: June 11, 2003 Letter, Exhibit 1. On October 11, 2001, the District
    Court entered an order adopting an Agreed Protective Order submitted
    by the parties that, *inter alia*, provided for confidential
    treatment of designated information produced in discovery. *See*
    Order and attached Agreed Protective Order, attached as an exhibit
    to June 4, 2003 Letter. The Agreed Protective Order contains no
    language or provision addressing inadvertent production of
    privileged documents.

[^8]: June 11, 2003 Letter, Exhibit 2; June 18 Letter, Declaration of
    Thomas P. Bracaglia ("Bracaglia Decl."), attached as exhibit, at 3,
    ¶ 14.

[^9]: June 11, 2003 Letter, Exhibit 2.

[^10]: June 11, 2003 Letter, Exhibit 3.

[^11]: June 11, 2003 Letter, Exhibit 4.

[^12]: Complaint App. at 402-37; Bracagalia Decl. at 3, ¶ 16; Joint
    Statement at 34, ¶ 186. AT&T's motion was entitled, Motion Of
    Defendant, AT&T Corp., To Dismiss, Or In The Alternative, Motion To
    Dismiss Without Prejudice To Submit This Matter To The Federal
    Communications Commission For Disposition ("Motion to Dismiss").

[^13]: June 11, 2003 Letter, Exhibit 5.

[^14]: June 11, 2003 Letter, Exhibit 5. Ms. Leuba made a similar request
    to Mr. Burns's colleague, Andrew Kasman, that same day. *See* June
    11, 2003 Letter, Exhibit 6.

[^15]: June 11, 2003 Letter, Ex. 7.

[^16]: June 11, 2003 Letter, Ex. 7.

[^17]: Complaint App. at 438.

[^18]: Complaint App. at 454, page 96.

[^19]: Complaint App. at 565-66; Joint Statement at 35, ¶ 191.

[^20]: Complaint App. at 580-86.

[^21]: Complaint App. at 587.

[^22]: *See* Addendum to Complaint at 26-27, ¶¶ 70-74. In its June 11,
    2003 Letter, AudioText argues that a submission that AudioText
    provided to Commission staff during the pre-complaint mediation
    process included quotes from some of the Subject Documents. *Id.* at
    6. According to AudioText, AT&T raised no objection to these
    disclosures. *Id*. AT&T did not dispute this contention in its June
    18 2003 Letter responding to AudioText's arguments.

[^23]: *See* Complaint at ¶¶ 161, 177, 178, 180, 181, 182, 183, 184,
    206, 325, and 328.

[^24]: *See* e-mail communications between Christopher N. Olsen,
    Assistant Chief, Market Disputes Resolution Division, Enforcement
    Bureau, and Jennifer L. Leuba, counsel for AT&T, attached hereto as
    Exhibit 1. AT&T's counsel noted in the June 4, 2003 Letter that she
    had sent AudioText's counsel a letter on May 20, 2003 requesting the
    return of the Subject Documents. *See* June 14, 2003 Letter at 1-2.
    According to AT&T, AudioText refused this request. *Id.*

[^25]: *Id*. AT&T's counsel advised staff that a few of the Subject
    Documents contain both privileged and non-privileged information,
    and offered to provide redacted versions of such documents for
    inclusion in the record. *Id.*

[^26]: June 4, 2003 Letter.

[^27]: 47 C.F.R. §§ 0.457 and 0.459.

[^28]: *See* June 4, 2003 Letter at 1.

[^29]: June 18, 2003 Letter at 6, 10.

[^30]: *See* June 11, 2003 Letter; June 23, 2003 Letter.

[^31]: *See* 47 C.F.R. § 0.459(d)(1)(where the Commission has received a
    request that information submitted to the Commission be withheld
    from public inspection, "the information will be accorded
    confidential treatment. . . until the Commission acts on the
    confidentiality request and all subsequent appeal and stay
    proceedings have been exhausted.")

[^32]: 47 C.F.R. §§ 0.457 and 0.459.

[^33]: 5 U.S.C. § 552.

[^34]: *See* 5 U.S.C. § 552(b).

[^35]: 47 C.F.R. § 0.457(d). *See* [5 U.S.C. §
    552(b)(4)](http://www.westlaw.com/Find/Default.wl?rs=++++1.0&vr=2.0&DB=1000546&DocName=5USCAS552&FindType=L)
    (Exemption 4, stating that the government need not disclose "trade
    secrets and commercial or financial information obtained from a
    person and privileged or confidential.")

[^36]: June 4, 2003 Letter at 2.

[^37]: June 4, 2003 Letter at 2.

[^38]: June 4, 2003 Letter at 2-3 (citing the tests set forth in
    *National Parks and Conservation Ass'n v. Morton*, 498 F.2d 765, 770
    (D.C. Cir. 1974) and *Critical Mass Energy Project v. NRC*, 975 F.2d
    871, 879 (D.C. Cir. 1992 (*en banc*), *cert denied*, 507 U.S. 984
    (1993)).

[^39]: 5 U.S.C. § 552(b)(4).

[^40]: June 4, 2003 Letter at 3.

[^41]: June 4, 2003 Letter at 3. AudioText contends that the protections
    of sections 0.457 and 0.459 are not available to AT&T because AT&T
    was not the person who submitted the Subject Documents to the
    Commission. According to AudioText, only persons who have submitted
    materials to the Commission are entitled to request that they be
    withheld from the public record under sections 0.457 and 0.459 of
    our rules. *See* June 11, 2003 Letter at 1-2. AudioText's suggestion
    that *only* the person who has submitted information to the
    Commission may request confidential treatment of the information
    appears to be at odds with section 0.459(i) of our rules, which
    provides that "\[t\]hird party owners of materials submitted to the
    Commission by another party may participate in the proceeding
    resolving the confidentiality of the materials." 47 C.F.R. §
    0.459(i). We need not, however, decide whether AT&T is entitled to
    request that the Subject Documents be withheld from public
    inspection under sections 0.457 and 0.459, even though AT&T itself
    did not submit these materials to the Commission, because we find
    that AT&T has not established that the Subject Documents qualify for
    confidential treatment under those rules, regardless of who
    submitted the Subject Documents to the Commission.

[^42]: 47 C.F.R. § 0.457(d). *See* [5 U.S.C. §
    552(b)(4)](http://www.westlaw.com/Find/Default.wl?rs=++++1.0&vr=2.0&DB=1000546&DocName=5USCAS552&FindType=L).

[^43]: *United States v. de la* *Jara*, 973 F.2d 746, 749-50 (9th Cir.
    1992)(finding that attorney-client privilege was waived where a
    criminal defendant waited six months before seeking the return of a
    privileged letter that the government seized in executing a search
    warrant). *See, e.g.,* *In re Grand Jury (Impounded)*, 138 F.3d 978
    (3d Cir. 1998) (holding that in cases of inadvertent disclosure,
    "the party asserting the work product doctrine must pursue all
    reasonable means to restore the confidentiality of the materials and
    to prevent further disclosures within a reasonable period to
    continue to receive the protection of the privilege"); *SEC v.
    Lavin*, 111 F.3d 921, 929 (D.C. Cir. 1997)(noting that the D.C.
    Circuit "adheres to a strict rule on waiver of privileges," and
    holding that "'the confidentiality of communications covered by
    \[a\] privilege must be jealously guarded by the holder of the
    privilege lest it be waived.'") (citations omitted).

[^44]: June 18, 2003 Letter at 3 and n.1 (arguing that "\[b\]ecause the
    AudioText litigation was pending in Pennsylvania and because the
    inadvertent production of these privileged documents at issue
    occurred in Pennsylvania, the holdings of the Court of Appeals for
    the Third Circuit and the District Courts sitting in Pennsylvania
    should govern the scope of the privilege afforded the documents and
    all issues regarding waiver").

[^45]: 138 F.3d 978 (3d Cir. 1998).

[^46]: Although *Grand Jury* addressed the work-product privilege, in
    analyzing the factors considered in determining whether a waiver
    occurred, the court in *Grand Jury* relied upon decisions concerning
    the attorney-client privilege. 138 F.3d at 981 (citing the holding
    in *United States v. de la Jara*, 973 F.2d at 750).

[^47]: *Id*. at 982.

[^48]: *Id*. at 982.

[^49]: *Grand Jury*, 138 F.3d at 982.

[^50]: June 11, 2003 Letter, Exhibit 3.

[^51]: *See* June 11, 2003 Letter, Exhibits 5, 6.

[^52]: *See* June 11, 2003 Letter, Exhibit 7 at 1(stating that AudioText
    "did not intend to return any of these documents to \[AT&T\]," and
    advising AT&T's counsel to "take any steps you deem appropriate with
    respect to these documents.") .

[^53]: Like the privilege holder in *Grand Jury,* AT&T does not even
    claim that it had "had reason to believe that the adversarial party
    was not making use of" the allegedly privileged material. 138 F.3d
    at 982. The record shows that, at the Schlafly deposition, held in
    December 2001, AT&T's counsel noted that several of the topics on
    which AudioText sought deposition testimony were based on the
    privileged documents that AT&T had asked AudioText to return. *See*
    Complaint App. at 439-40.

[^54]: *See* June 18, 2003 Letter at 2, 5 (arguing that "AT&T had
    intended to file a motion for their return when the matter was
    referred to the Commission" and that "AT&T's efforts to rectify the
    disclosure were not only timely but ongoing and persistent up until
    the time this action was stayed"). *See also* June 4, 2003 Letter at
    1 (arguing that the District Court's Order of January 17, 2002
    "stayed 'all further proceedings,' which, among other things,
    included all motion practice.")

[^55]: Indeed, AT&T could have asked the District Court for expedited
    treatment of such a motion to compel in view of the pendency of the
    Motion to Dismiss, or requested that the court decide the motion to
    compel before ruling on the Motion to Dismiss.

[^56]: AT&T apparently did not regard the January 17, 2002 stay order as
    precluding *all* activity in the District Court litigation, as
    evidenced by its successful motion, in November 2002, to have
    AudioText's second-filed action consolidated with the action that
    was the subject of the January 17, 2002 stay order. *See, supra,* at
    ¶ 6. In addition, the fact that AudioText filed a motion with the
    District Court on January 25, 2002 seeking reconsideration of the
    January 17, 2002 stay order, which the District Court denied in an
    order dated August 21, 2002, provides further evidence that the
    January 17, 2002 stay order did not bar all motion practice in the
    District Court litigation *See* Complaint App. at 567-79.

[^57]: Bracagalia Decl. at 4, ¶ 17(stating that AT&T "intended to file a
    motion to compel return of the documents if its \[Motion to
    Dismiss\] was not been \[sic\] granted.")

[^58]: *United States v. de la* *Jara*, 973 F.2d at 750.

[^59]: *See* June 18, 2003 Letter at 3

[^60]: June 18, 2003 Letter at 3. The five factors are as follows: (1)
    the reasonableness of the precautions taken to prevent inadvertent
    disclosure in view of the extent of the document production; (2) the
    number of inadvertent disclosures; (3) the extent of the disclosure;
    (4) any delay and measures taken to rectify the disclosure; (5)
    whether the overriding interests of justice would or would not be
    served by relieving a party of its error. *Id*. citing *Rotelli v.
    7-Up Bottling Co. of Phila.*, 1995 WL 234171 (E.D. Pa. 1995);
    *Advanced Medical, Inc. v. Arden Medical Services*, Inc., C.A. No.
    87-3059, 1988 WL 76128 (E.D. Pa. July 18, 1988).

[^61]: *See In re Grand Jury Investigation of Ocean Transp*., 604 F.2d
    672, 674-75 (D.C. Cir.), *cert denied*, 444 U.S. 915 (1979) (where
    documents were turned over one year prior to the assertion of
    privilege, and they had already been "copied, digested and analyzed"
    before a motion was filed with the district court, "the disclosure
    \[could not\] be cured simply by a return of the documents" and the
    "privilege ha\[d\] been permanently destroyed); *McGreevy v. CSS
    Industries, Inc*., Fair Empl. Prac. Cas. (BNA) 1644, 1996 WL 412813,
    at \*2 (E.D. Pa. 1996) (disclosure of privileged document was
    already complete, as opposing party had learned its full contents);
    *Advanced* *Medical, Inc.*, 1988 WL 76128, at \*3 (E.D. Pa. 1988)
    (noting that, although a "limited disclosure resulting from glancing
    at an open file drawer or designated documents for copying may not
    justify a finding of waiver when the party does not know the essence
    of the document\'s contents. . . when disclosure is complete, a
    court order cannot restore confidentiality").