COURT OF CHANCERY

OF THE

SAM GLASSCOCK III

VICE CHANCELLOR

STATE OF DELAWARE COURT OF CHANCERY COURTHOUSE

34 THE CIRCLE

GEORGETOWN, DELAWARE 19947

Date Submitted: March 11, 2020

Date Decided: June 15, 2020

Ned Weinberger, Esq.

Mark Richardson, Esq.

Thomas Curry, Esq.

LABATON SUCHAROW LLP

300 Delaware Ave., Suite 1340

Wilmington, Delaware 19801

Rudolf Koch, Esq.

Kevin M. Gallagher, Esq.

RICHARDS, LAYTON & FINGER, P.A.

One Rodney Square

920 North King Street

Wilmington, Delaware 19801

RE: In re Straight Path Communications Inc. Consolidated Stockholder 

Litigation, C.A. No: 2017-0486-SG

Dear Counsel:

Before me is the Plaintiffs’ Motion to compel. The Plaintiffs seek thirty-one 

(31) documents previously produced by Defendant IDT Corporation (“IDT”) to the 

Federal Communications Commission (“FCC”) in 2016 in connection with an 

investigation pertinent to this Action.1 IDT agreed to produce to the Plaintiffs here 

all 14,000 documents produced to the FCC subject to a privilege review, and after 

such privilege review, IDT withheld only the thirty-one documents at issue here as 

 

1 Pls.’ Reply in Further Support of their Mot. to Compel Disc. from Def. IDT Corp., D.I. 257, Ex. 

36, IDT Log Entries Reflecting Communications Produced to the FCC.
2

attorney-client privileged. The Plaintiffs do not contend the documents were not 

privileged when created. They argue, however, that any privilege was waived by 

disclosure to a third party, the FCC, in the investigation referred to above. IDT bears 

the burden of proving that the documents at issue are privileged.2 I find they have 

not done so here, and accordingly order production of the documents in question. I 

note that to the extent the Plaintiffs bear the burden to show waiver, they have done 

so here.

The attorney-client privilege is an exception to the broad rule that relevant 

documents are discoverable in litigation.3 The privilege is meant to preserve a 

bedrock principle of our system of jurisprudence; that for that system to operate 

justly a lawyer and her client must be able to communicate freely, without the threat 

of disclosure of those communications, even when relevant to issues in litigation.4 

 

2 Glassman v. Crossfit, Inc., 2012 WL 4859125, at *2 (Del. Ch. Oct. 12, 2012) (citing Mayer v. 

Mayer, 602 A.2d 68, 72 (Del. 1992)) (“[T]he party asserting a privilege bears the burden of proving 

that the material in question is privileged.”).

3 Riggs Nat. Bank of Washington, D.C. v. Zimmer, 355 A.2d 709, 713 (Del. Ch. 1976) (“[C]ourts 

have noted that the [attorney-client] privilege is an exception to the usual rules requiring full 

disclosure and its scope can be limited where circumstances so justify.”); Frank v. Engle, 1998 

WL 155553, at *2 (Del. Ch. Mar. 30, 1998) (“The second limitation upon Rule 26’s liberal policy 

is the right of the responding party to protect relevant documents, if the circumstances allow the 

responding party to raise an affirmative defense such as attorney-client privilege . . . . A party who 

successfully asserts attorney-client privilege can deny the other party access to otherwise relevant 

documents.”).

4

In re Kennedy, 442 A.2d 79, 91 (Del. 1982) (“The purpose of the privilege is to foster the 

confidence of a client and to permit him to communicate freely with his attorney, without fear, 

while seeking legal advice.”); In re Fuqua Indus., Inc., 2002 WL 991666, at *2 (Del. Ch. May 2, 

2002) (quoting Zirn v. VLI Corp., 621 A.2d 773, 781 (Del. 1993) (“The purpose of the attorneyclient privilege is ‘to encourage full and frank communication between clients and their 

attorneys.’”).
3

That principle does not obtain however, where the holder of the privilege, the client, 

has chosen to share the communication with a third party.5 Because that sharing 

vitiates the integrity of confidential attorney-client communication, it is generally

held that the disclosing client has manifested an intent to waive the privilege 

thereby.

6

 There are exceptions to this rule, however.

Both the Plaintiffs and IDT rely heavily on this Court’s rationale of Saito v. 

McKesson HBOC, Inc.

7

 Saito was an action by a stockholder to obtain books and 

records of McKesson Corporation (“McKesson”), under 8 Del. C. § 220.

8

 

McKesson attempted to withhold four groups of documents, one of which was 

documents produced by McKesson to the Securities and Exchange Commission 

(“SEC”) in connection with an investigation regarding downward revisions of 

financial information.9 Most of these documents were not disclosed to the SEC until 

a confidentiality agreement was signed with the SEC—McKesson asserted work 

 

5

In re Quest Software Inc. S’holders Litig., 2013 WL 3356034, at *4 (Del. Ch. July 3, 2013) (“In 

most instances, a party waives the attorney-client privilege by communicating privileged 

information to a third party.”).

6 Baxter Int’l, Inc. v. Rhone-Poulenc Rorer, Inc., 2004 WL 2158051, at *4 (Del. Ch. Sept. 17, 

2004) (“In order for a communication to be privileged, it must be confidential . . . . When the 

client makes a communication with the intention or expectation that it will be revealed to another 

person who is not necessary for the rendition of the legal services or communication, this element 

of confidentiality is lacking.”).

7

2002 WL 31657622 (Del. Ch. Nov. 13, 2002).

8

Id. at *1.

9

Id. at *1–2.
4

product privilege as to all of the documents in the group, and attorney-client 

privilege as to four of them.10

Similar to the Plaintiffs’ position here, the plaintiff in Saito contended that 

production of otherwise-protected documents to the SEC constituted a waiver of 

such protection.

11

 The bulk of Saito’s analysis concerning the documents produced 

to the SEC regarded the work product doctrine. The Court in Saito held that work 

product privilege was not waived as to those documents disclosed under a 

confidentiality agreement with the SEC. The court reasoned that where the 

production was for a limited purpose and was secure from further disclosure outside 

of the purpose, via a confidentiality agreement, the rationale for the privilege 

survived and no general waiver resulted.

12

 McKesson retained a reasonable 

expectation of privacy as to such documents because it “reasonably believed that its 

disclosures would remain confidential.”13 Importantly, Saito held that “[w]hen 

attorneys secure a confidentiality agreement before sharing their work product with 

the SEC, as [McKesson’s] attorneys did, those attorneys can reasonably assume that 

the SEC would not reveal those confidential disclosures to other adversaries.”

14 But, 

the court found, McKesson had no reasonable expectation of privacy as to those 

 

10 Id. at *2.

11 Id.

12 Id. at *6–7. 

13 Id. at *7. Saito referred to the disclosure as a “selective waiver.” Id. at *11.

14 Id.
5

documents that were shown to the SEC before the confidentiality agreement was 

entered. Accordingly, with respect to that subset of documents McKesson had 

waived work product privilege.15

I note that IDT in this action does not allege work product protection, as 

McKesson did in Saito with respect to the documents discussed above. As to 

documents over which McKesson claimed attorney client privilege—as IDT does 

here—Saito’s analysis focused on a single document, because the others were 

protected by the work product doctrine, and the court did not need to apply a

privilege analysis for such documents.

16

 The sole document not otherwise protected 

by the work product doctrine was disclosed to the SEC prior to the entry of a 

confidentiality agreement; thus McKesson had “manifested its intent for the 

document not to remain confidential” and consequently had waived its attorneyclient privilege as to this document.17

 In other words, none of the documents at issue

in Saito for which McKesson invoked only attorney-client privilege had been 

produced to the SEC under a confidentiality agreement. Accordingly, the Saito court 

did not reach the question of whether the privilege was preserved with respect to 

such documents, as was the case for work product.

 

15 Id. at *11.

16 Id. at *12.

17 Id.
6

If I assume here that the Saito rationale applies to attorney-client 

communications,18 nonetheless, I must still find that IDT has waived the protection 

with respect to the documents in question here. In invoking attorney client privilege, 

IDT has asserted that the productions to the FCC were designated as confidential. 

IDT has pointed to a trio of Requests for Confidential Treatment of Submissions (the 

“Requests”) sent to the FCC that appealed to that body to withhold the productions 

from public inspection, specifically in reference to the Freedom of Information 

Act.19 All three Requests state that “[t]he parties . . . respectfully requests that . . . 

the [FCC] withhold from public inspection and afford confidential treatment to 

attached material outlined below.”20 

To the extent that waiver of privilege could be avoided under Saito’s work 

product rationale, there is, to my mind, a significant distinction between the Requests 

cited by IDT and the confidentiality agreement cited by Chancellor Chandler in 

Saito. The confidentiality agreement there was executed amongst McKesson, the 

SEC, and the United States Attorney’s Office for the Northern District of 

California.

21 Saito found that McKesson acted reasonably in “expecting its 

disclosures to the SEC under a confidentiality agreement would not reach the hands 

 

18 Generally, the immunity extended to work product is considered more essential to our system 

of justice than is the attorney-client privilege. Thus, the latter is more readily waived. Id. at *8–

9.

19 Def. IDT Corp.’s Opp’n to Pls.’ Mot. to Compel Disc., D.I. 246, Exs. B–D.

20 Id.

21 Saito, 2002 WL 31657622, at *1.
7

of its other adversaries” and thus had a reasonable expectation of privacy, thwarting 

the production-as-waiver argument.22 But here, I find, IDT did not have an 

analogous expectation of privacy because the documents were not produced to the 

FCC under a confidentiality agreement. Instead, IDT merely requested that the 

documents remain confidential. IDT had no non-disclosure agreements with the 

FCC, and the Requests cited by IDT are insufficient to show that IDT reasonably 

believed that the documents would not be revealed to other adversaries. In other 

words, IDT found it advantageous to disclose the privileged documents to a third 

party, the FCC, despite knowing that they could be disseminated. IDT did not have 

a commitment, let alone an enforceable agreement, with the FCC to keep the 

documents confidential. In that situation, IDT manifested its intent to waive any 

privilege by disclosing the documents to a third party. I assume that IDT desired 

that the thirty-one documents remain confidential, but such desire does not amount 

to the reasonable expectation required to avoid a waiver under Saito, which is an 

exception to the general rubric that outside disclosure vitiates the privilege.

IDT has also cited cases that decline to find a waiver of privilege where 

privileged documents were inadvertently produced.23 However, nothing in the 

record indicates that IDT inadvertently produced the documents, instead IDT has 

 

22 Id. at *6.

23 TCV VI v. TradingScreen Inc., 2015 WL 5674874 (Del. Ch. Sept. 25, 2015); In re Kent Cty. 

Adequate Pub. Facilities Ordinances Litig., 2008 WL 1851790 (Del. Ch. Apr. 18, 2008).
8

simply asserted that “[i]ts inclusion of a small number of privileged documents in 

its voluminous production to the FCC does not waive privilege.”24 I find the cases 

cited by IDT inapposite as to whether privilege was waived by IDT’s purposeful 

production.

Consequently, I grant the Plaintiffs’ Motion to Compel regarding the thirtyone documents produced by IDT to the FCC. 

To the extent the foregoing requires an order to take effect, it is SO 

ORDERED.

Sincerely,

/s/ Sam Glasscock III

Sam Glasscock III

 

24 Def. IDT Corp.’s Opp’n to Pls.’ Mot. to Compel Disc., D.I. 246, at 8.