Source: http://attorneyclientprivilege.mcguirewoods.com/chapter.aspx?ch=30
Timestamp: 2019-04-21 12:41:28+00:00

Document:
"Does Releasing an Internal Investigation Report Always Trigger a Subject Matter Privilege Waiver?"
One might think that a corporation or government entity would always trigger a subject matter privilege waiver by disclosing an internal investigation report. But subject matter waiver risks have been receding.
In Hawa v. Coatesville Area School District, Civ. A. No. 15-4828, 2016 U.S. Dist. LEXIS 122912 (E.D. Pa. Sept. 12, 2016), defendant school district released its investigation report into racist text messaging among administrators. Not surprisingly, plaintiffs claimed a waiver, and sought all related documents and privileged communications. The court rejected plaintiffs' efforts, noting that "[t]he 'central element' in determining whether a partial waiver exists is the question of fairness." Id. at *6 (citation omitted). The court noted that plaintiffs "have not argued that [defendant] has made any strategic use of the Report in this litigation, that it relies on the Attorneys' investigation as a form of defense in this action or that it has 'made factual assertions, the truth of which can only be assessed by examination of the privileged communications.'" Id. at *7 (citation omitted). The court also concluded that plaintiffs could obtain "non-privileged materials the Attorneys collected in their investigation . . . through ordinary discovery addressed to the materials' original sources." Id. at *7-8.
Some courts might find that such a release constitutes an effort to gain some advantage in the "court of public opinion," but cases like this continue the trend toward courts' rejection of broad subject matter waivers.
"Trump-Related Circuit Court Decision Includes Troubling Waiver Analysis"
Because historical facts do not deserve privilege protection, disclosing those facts does not trigger a privilege waiver. Thus, disclosing historical facts to the government should not waive the disclosing client's privilege protection for communications with her lawyer about those facts.
But some decisions take a different, troubling, approach. In In re Grand Jury Investigation, Misc. A. No. 17-2336 (BAH), 2017 U.S. Dist. LEXIS 186420 (D.D.C. Oct. 2, 2017), the court ordered former Trump campaign manager Paul Manafort's lawyer to testify before a grand jury. In addition to applying the crime-fraud exception, the court held that the lawyer waived her clients' privilege protection by making representations about historical facts in submissions to the DOJ. The court noted that the lawyer's submissions "made specific factual representations to DOJ that are unlikely to have originated from sources other than [Manafort and a colleague], and, in large part, were explicitly attributed to one or both [of their] recollections." Id. at *32. The court relied on this unsurprising circumstance in holding that the representations "impliedly waived the privilege as to [the clients'] communications with [their lawyer] to the extent that these communications related to the . . . Submissions' contents." Id.
A lawyer's disclosure of historical facts should not strip away privilege protection from the lawyer's communications with her client about those facts.
"Drawing the Line Between Waiver and Non-Waiver: Part III"
The last two Privilege Points described decisions in which courts found a subject matter waiver when (1) a business executive described his future intended conduct, explicitly attributing it to his lawyers' advice (Siras Partners LLC v. Activity Kuafu Hudson Yards LLC, No. 650868/2015, 2017 NY Slip Op. 31216(U) (N.Y. Sup. Ct. June 5, 2017)); and (2) a business executive described his past conduct, explicitly attributing it to a lawyer's earlier sexual harassment investigation and report (Smith v. Ergo Solutions, LLC, Civ. A. No. 14-382 (JDB), 2017 U.S. Dist. LEXIS 94337 (D.D.C. June 20, 2017)). Both courts' subject matter waiver conclusions seem out of the mainstream.
In Siras Partners, the executive's disclosure was in a non-judicial setting. Most courts hold that non-judicial disclosures do not trigger subject matter waivers. In re von Bulow, 828 F. 2d 94, 102 (2d Cir. 1987) ("the extrajudicial disclosure of an attorney-client communication – one not subsequently used by the client in a judicial proceeding to his adversary's prejudice – does not waive the privilege as to the undisclosed portions of the communication"). Federal Rule of Evidence 502 adopts the same narrow approach. In Smith, the executive testified in a deposition about his lawyer's advice. Many if not most courts hold that such deposition testimony does not trigger a subject matter waiver, as long as the deponent disclaims any intent to later rely on the testimony to gain some litigation advantage. The legislative history of Rule 502 explains that subject matter waivers are "limited to situations in which a party intentionally puts protected information into the litigation in a selective, misleading and unfair manner" to "mislead the fact finder to the disadvantage of the other party." Fed. R. Evid. 502 advisory committee’s note, subdiv. (a); 154 Cong. Rec. H7817, H7819 (daily ed. Sept. 8, 2008).
Corporations and their executives should not count on courts properly applying the subject matter waiver doctrine. Instead, they should seek to avoid ever waiving privilege protection, thus eliminating the risk that courts will stretch the waiver too far.
"Drawing the Line Between Waiver and Non-Waiver: Part II"
Last week's Privilege Point described a New York court's predictable waiver conclusion based on a client's description of his intended future conduct -- explicitly attributed to lawyers' advice. Siras Partners LLC v. Activity Kuafu Hudson Yards LLC, No. 650868/2015, 2017 NY Slip Op. 31216(U) (N.Y. Sup. Ct. June 5, 2017). Another court dealt with a similar situation about two weeks later.
In Smith v. Ergo Solutions, LLC, Civ. A. No. 14-382 (JDB), 2017 U.S. Dist. LEXIS 94337 (D.D.C. June 20, 2017), Title VII plaintiffs sought to discover an outside lawyer’s report produced after that lawyer investigated an earlier sexual harassment claim against defendant's managing partner. The court found that the report deserved privilege protection, but that the managing partner waived that protection in deposition testimony describing the report's recommendations and his compliance with them. As the court put it, "[b]y discussing [the investigating lawyer's] specific recommendations – that [the managing partner] stay away from [the company] for six months, pay a $10,000 fine, and see a therapist – [he] revealed [the lawyer's] key conclusions and thus disclosed the 'gist' of the report." Id. at *11-12. Based on this waiver, the court ordered the report produced.
Most courts are more forgiving when considering the waiver implications of fast-paced deposition testimony. But the managing partner defendant presumably could have avoided a waiver risk by declining to testify about the report's recommendations – and instead simply describing what he did after the company received the report. Corporations' lawyers should educate their clients' executives and employees about the dispositive distinction between (1) describing the companies' or their own past actions or future intended actions (without attributing them to lawyers' advice), and (2) disclosing privileged communications' content. The former does not waive anything, while the latter waives privilege protection and may trigger a subject matter waiver. Next week's Privilege Point discusses subject matter waiver issues.
"Cadwalader Loses Work Product and Privilege Claims for 51 Internal Investigation Witness Interview Memoranda: Part II"
Last week's Privilege Point explained that Cadwalader Wickersham & Taft's client Washington Metropolitan Transit Authority (WMATA) lost a work product claim for 51 witness interviews the firm prepared during its internal investigation into self-dealing at WMATA. Banneker Ventures, LLC v. Graham, Civ. A. No. 13-391 (RMC), 2017 U.S. Dist. LEXIS 74155 (D.D.C. May 16, 2017).
Unlike the court's focus on the investigation's primary business motivation in rejecting the work product claim, the court's privilege analysis found that WMATA waived its privilege protection. The court noted that WMATA publicly released the final Cadwalader report -- which "disclosed counsel's legal and factual conclusions," and "cite[d] extensively to the interview memoranda throughout the entirety of the document." Id. at *18-19. The court acknowledged a Cadwalader lawyer's declaration that the interview memoranda references "were intended only for use by Cadwalader" -- but noted that "WMATA failed to remove the references . . . from the version of the [Cadwalader] Report that was made available to the public." Id. at *19 n.1. The court also noted that WMATA "has also used the [Cadwalader] Report to its advantage in this litigation" – by "us[ing] the [Cadwalader] Report and facts disclosed in that report to support its claims and defenses." Id. at *19. The court therefore found a subject matter waiver, and ordered WMATA to produce all of Cadwalader's 51 witness interview memoranda except the portions which (1) "contain subjects not covered by the [Cadwalader] Report," and (2) "material and other comments, if any, as to a lawyer's mental impressions." Id. at *20.
"More Courts take a Narrow View of Subject Matter Waivers"
Thanks to common law developments and Federal Rule of Evidence 502, the frightening specter of subject matter waivers now usually only arises when litigants affirmatively rely on privileged communications to gain some litigation advantage.
In In re General Motors LLC Ignition Switch Litigation, Nos. 14-MD-2543 & 14-MC-2543 (JMF), 2015 U.S. Dist. LEXIS 106170 (S.D.N.Y. Aug. 11, 2015), the court handling the GM ignition switch MDL rejected plaintiffs' attempt to depose Jenner & Block partner Anton Valukas about the basis for his widely-publicized report on GM's conduct. The court pointed to GM's pledge not to make offensive use of the Valukas Report at trial, or call Valukas to testify. The court concluded that GM's commitment "undermines" plaintiffs' attempt to explore witnesses' disagreement with Valukas' conclusions. Id. At *1004. One day earlier, another court dealt with a GM trademark issue. In Cue, Inc. v. General Motors LLC, Civ. A. No. 13-12647-IT, 2015 U.S. Dist. LEXIS 104638 (D. Mass. Aug. 10, 2015), plaintiff argued that GM triggered a subject matter waiver by pointing to its lawyer's trademark advice as demonstrating its lack of bad faith. The court "agree[d] that GM's use of that fact would place its counsel's advice at issue," but took GM at its word that the company "did not intend to rely on advice of its counsel" at trial. Id. At *24. The court therefore denied plaintiff's motion to compel disclosure of related privileged communications — "without prejudice to renewal if GM seeks to use the legal department's 'okay' in order to show a lack of bad faith." Id.
Corporations should be relieved that courts are increasing focus on documents and arguments the corporations plan to use at trial — rather than on the disclosure of privileged communication during fast-paced discovery or pretrial pleading skirmishes.
"The Subject Matter Waiver Risk Continues to Recede"
In some situations, disclosure or reliance on privileged communications or protected work product triggers a "subject matter waiver" — requiring the owner's disclosure of additional related communications or work product. Historically, some jurisdictions found a subject matter waiver in many counterintuitive contexts — for instance, based even on litigants' inadvertent production of a protected document.
Many jurisdictions eventually adopted a common law doctrine finding subject matter waivers only upon intentional disclosure in a judicial setting. Recently, Federal Rule of Evidence 502 has limited subject matter waivers to litigants' disclosure or use of protected communications to paint a misleading picture in litigation. Courts are taking these developments to heart. In Mitre Sports International, Ltd. v. Home Box Office, Inc., No. 08 Civ. 9117 (GBD) (HBP), 2015 U.S. Dist. LEXIS 3812, at *3 (S.D.N.Y. Jan. 13, 2015), defendant HBO argued that Mitre triggered a subject matter waiver covering its investigation of possible child labor violations by (1) allowing its Rule 30(b)(6) witness to testify about the investigation, and (2) "attaching the products of its investigation to its complaint" against HBO. The court rejected HBO's argument, holding that (1) the witness's deposition answers and Rule 30(b)(6) designation did not amount to "an attempt by Mitre to use protected information to influence a decision maker" (noting that Mitre had not cited any of the testimony in its summary judgment motion) (id. at *7); and (2) Mitre's "attaching the products of its investigation to its complaint seems to have been done more for public relations reasons than legal reasons" — because "[t]he complaint is not evidence, and Mitre cannot offer it as such." Id. at *13-14.
Corporations should be relieved by the declining threat of subject matter waivers, although they should still avoid the disclosure of, affirmative use of, or reliance on privileged communications or protected work product to gain some advantage in litigation.

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