Court Opinion

ID: 9490726
Source: CourtListenerOpinion
Date Created: 2023-08-05 13:52:59.729246+00
Date Added: 2024-06-11T17:54:17.121545
License: Public Domain

MOORE, Circuit Judge,
concurring in part and dissenting in part.
I agree that a petition for a writ of mandamus is an appropriate vehicle for obtaining immediate appellate review of a lower court’s order compelling the production of documents claimed to be protected by privilege. *442See 28 U.S.C. § 1651(a); Glenmede Trust Co. v. Thompson, 56 F.3d 476, 482 (3d Cir.1995). In the instant petition, however, Perrigo' has failed to make a convincing case that it has a clear and indisputable entitlement to such extraordinary relief.
As with the majority, I agree that the derivative plaintiff must have access to the Formanek Report to respond meaningfully to Perrigo’s motion to dismiss. Similarly, the district court must have access to the Report to undertake a considered examination of Perrigo’s motion, even assuming that the court’s inquiry under the Michigan Business Corporation Act is limited to ascertaining whether Formanek’s recommendation represents a ‘good faith determination based upon reasonable investigation. See Mich. Comp. Laws Ann. § 450.1495 (West 1990). As explained below, I base these conclusions on Perrigo’s implied waiver of disclosure protections for the Report.
Further, I am not convinced that the Report should remain inaccessible to the public if either party uses any portion of the Report in the ensuing litigation. Though the majority opinion expresses that it is “concerned” about, this central issue in the case, it does not adequately explain how such concern gets translated into law.
I
For the purposes of the instant petition for mandamus, I am willing to assume that the Formanek Report was initially entitled to the protections afforded by the attorney-client privilege and work-product immunity doctrines. These doctrines together serve vital needs in the orderly administration of justice through enriching the dialogue between attorney and client and safeguarding a sound adversary system by enabling attorneys to prepare for litigation sheltered by a certain degree of privacy. See Upjohn Co. v. United States, 449 U.S. 383, 389, 397-98, 101 S.Ct. 677, 682, 686-87, 66 L.Ed.2d 584 (1981); United States v. Nobles, 422 U.S. 225, 236-39, 95 S.Ct. 2160, 2169-71, 45 L.Ed.2d 141 (1975).
I believe, however, that Perrigo cannot claim the protections afforded by either doctrine to prevent disclosure of the Report. Under Michigan law, which governs the attorney-client privilege in this diversity case, see Fed.R.Evid. 501, privileges “can be waived through conduct that would make it unfair for the holder to insist on the privilege thereafter.” Howe v. Detroit Free Press, Inc., 440 Mich. 203, 487 N.W.2d 374, 379 (1992) (footnote omitted). In Howe, the Michigan Supreme Court resolved a claim of implied waiver of a statutory privilege through balancing fairness considerations. The court subscribed to the view that, although beginning with a presumption favoring the preservation of privilege,
[i]n a civil damages action, however, fairness requires that the privilege holder surrender the privilege to the extent that it will weaken, in a meaningful way, the defendant’s ability to- defend. That is, the privilege ends at the point where the defendant can show that the plaintiffs civil claim, and the probable defenses thereto, are enmeshed in important evidence that will be unavailable to the defendant if the privilege prevails. ' ‘
Id. 487 N.W.2d at 382, 383-84 (quoting Greater Newburyport Clamshell Alliance v. Public Serv. Co. of New Hampshire, 838 F.2d 13, 20 (1st Cir.1988)). Thus, under Michigan law, general notions of fairness are central to resolving whether a party has impliedly waived privilege protection. Applying Michigan law to this casé, I believe Perrigo has waived its right to claim a privilege.
Although the Michigan Supreme Court failed to provide explicit guidelines explaining which interests courts 'should look to in balancing fairness considerations in determining waiver of privilege, the Howe decision, as well as Clamshell, the case providing the basis for the Howe decision, clearly indicate several important factors. The Michigan Supreme Court in Howe began its analysis by noting that the Michigan Court Rules provide for broad discovery in .civil cases. See Howe, 487 N.W.2d at 383. The court also emphasized the trial judge’s finding that the privileged report sought by the defendants was relevant to their defense. See id. 487 N.W.2d at 383-84; see also Clamshell, 838 F.2d at 22 (“[Djefendants should demon*443strate that the material to be discovered is relevant to them ease.”). Similarly, the district judge in the Perrigo derivative suit concluded that the Formanek Report is extremely relevant to the plaintiffs ability to respond to Perrigo’s motion to dismiss pursuant to Mich. Comp. Laws Ann. § 450.1495. See Kearney v. Jandernoa, 934 F.Supp. 863, 866 (W.D.Mich.1996) (concluding that “the report will probably be the best evidence of Mr. Formanek’s good faith and the adequacy of his investigation, or lack thereof’). Perrigo itself has acknowledged the Report’s importance to its motion, stating that “the Independent Director submitted a 198-page Report to the Board that explains in detail his findings and conclusions that maintenance of the derivative claims would not be in Perrigo’s best interests.”' Mot. to Dismiss at 8-9 (emphasis added).
In addition to focusing on the relevance of the privileged information, the Michigan Supreme Court in Howe concluded .that the defendants’ ability to defend against plaintiffs’ claim would be “seriously undermined by plaintiffs’ assertion of privilege.” Howe, 487 N.W.2d at 384. In Perrigo’s case, the district court made a similar finding, concluding that the derivative plaintiff “would be unable to properly respond to Perrigo’s March 26, 1996, motion and the supporting evidence without access to the Report.” Mem. Op. and Order of March 14, 1997 at 3. In light of the extreme importance and relevance of the Formanek Report, fairness considerations tilt the balance in favor of finding that Perrigo impliedly waived its privilege protection.
Perrigo’s affirmative injection of the Formanek Report into the litigation further tilts the balance in favor of finding a waiver. “When [a party’s] conduct touches a certain point of disclosure, fairness requires that his privilege shall cease whether he intended that result or not.” People v. Houston, 448 Mich. 312, 532 N.W.2d 508, 516 (1995) (quoting 8 Wigmore, Evidence (McNaughton rev.) § 2327, pp. 636-38). The Howe decision echoes these sentiments by indicating that the following three conditions are among the important considerations in resolving whether a party has waived its privilege protection:
(1) Assertion of the privilege was a result of some affirmative act, such as filing suit, by the asserting party;
(2) Through this affirmative act, the asserting party put the protected information at issue by making it relevant to the case; and
(3) Application of the privilege would have denied the opposing party access to information vital to his defense.
Howe, 487 N.W.2d at 381(quoting Hearn v. Rhay, 68 F.R.D. 574, 581 (E.D.Wash.1975)).1 Perrigo’s actions clearly satisfy these three conditions.
By moving to dismiss on the basis .of the' disinterested independent director’s reasonable investigation and conclusion that the maintenance of the suit is not in the best interests of the corporation, see Mich. Comp. Laws. Ann. § 450.1495 (West 1990), Perrigo has itself made the Formanek Report particularly relevant and probative to its motion. Despite acknowledging the Report’s singular importance to its motion, Perrigo did not submit the actual Report. Perrigo thus superficially tries to rely solely on the Report’s bottom line while at the same time evading exposure of its 198 pages, which contain the real ammunition behind Perrigo’s motion. Such selective disclosure creates an aura of unfairness and is generally disfavored. See, e.g., United States v. Bilzerian, 926 F.2d 1285, 1292 (2d Cir.) (“A defendant may not use the [attorney-client] privilege to prejudice his opponent’s case or to disclose some selected communications for self-serving purposes.”), cert. denied, 502 U.S. 813, 112 S.Ct. 63, 116 L.Ed.2d 39 (1991); Houston, 532 N.W.2d at 516 (“[A party] cannot be allowed, after disclosing as much as he pleases, to withhold the remainder.”) (quoting 8 Wig-more, Evidence (McNaughton rev.) § 2327, pp. 636-38). The corporation’s claim of enti*444tlement to dismissal is enmeshed in the Report itself. It is the Report that might, in the., end, permit Perrigo to dismiss the suit because the Report, not its conclusions, details the disinterested independent director’s good faith and reasonable investigation. Perrigo has therefore effectively placed the substance of the Report into issue in the litigation.
Fairness considerations also require an assessment of the importance of the privilege to its holder. See Howe, 487 N.W.2d at 383 (stating that “plaintiffs are entitled to stand by their claim of statutory privilege and have their interests carefully weighed against those of the defendants”); Clamshell, 838 F.2d at 20 (“The court should ... balane[e] the importance of the privilege asserted against the defending party’s need for the information to construct its most effective defense.”). The courts have long recognized that protecting the private dialogue between clients and their attorneys encourages full and frank communications between clients and their attorneys, thereby promoting sound legal advice and advocacy. See, e.g., Upjohn, 449 U.S. at 389, 101 S.Ct. at 682. Removing the -cloak of confidentiality afforded the Formanek Report may hinder future communications between the independent directors and attorneys reviewing whether a derivative action is in the corporation’s interest. However, no one has compelled Perrigo to forego its privilege. Perrigo may freely amend its motion to dismiss to lessen the need for the Report, or it may forego its motion entirely should disclosure of the Report prove too damaging. Cf. Clamshell, 838 F.2d at 21 (“[Plaintiffs are not being compelled to forego their privilege. Having control of their lawsuit, they can always drop the case if disclosure of.the privileged information is too high a price, ... [or] they could amend their complaint to lessen the defendants’ need for the privileged information.”). I therefore believe the privilege afforded Perrigo and the Report carries relatively little weight when balanced against the considerations favoring disclosure of the Report, according to the Michigan waiver standard.
Having examined the competing interests of the parties with respect to the Formanek Report, I believe fairness considerations require the conclusion that Perrigo has surrendered the attorney-client privilege.2 The Report’s relevance and its singular importance to Perrigo’s motion as shown by Perrigo’s reliance on the Report demonstrates that Perrigo’s motion to dismiss, “and the probable defenses thereto, are enmeshed in important evidence that will be unavailable to the [derivative plaintiff] if the privilege prevails.” Howe, 487 N.W.2d at 383-84 (quoting Clamshell, 838 F.2d at 20). A similar waiver was found in Harding v. Dana Transport, Inc., 914 F.Supp. 1084, 1096 (D.N.J.1996), where an employer relied upon the reasonable investigation by its attorney as a defense to employer liability for a hostile work environment sexual discrimination case arising under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq., and state law. As under Michigan law, fairness was a central element to the court’s determination of waiver in Harding. See id. at 1092. Because there the investigation itself provided a defense to liability, fairness dictated that the employer be deemed to have waived disclosure protections for all documents produced in the investigation. See Harding, 914 F.Supp. at 1096. Similar fairness concerns arise in this case, for Perrigo stands in a comparable position to the employer in Harding. .Given that fairness is a central component of Michigan’s waiver law, I would hold that . Perrigo impliedly surrendered any attorney-client privilege protection for the Report when Perrigo relied upon the investigation and conclusions embodied in the Report in seeking dismissal of the derivative action.
*445Similarly, I believe that such reliance on the Report by Perrigo in its motion to dismiss impliedly waives any work-product immunity protection derived from federal statutory or common law. See Fed.R.Civ.P. 26(b)(3); Hickman v. Taylor, 329 U.S. 495, 67 S.Ct. 385, 91 L.Ed. 451 (1947). Like the attorney-client privilege, work-product immunity may be implicitly waived by, for example, affirmative testimonial use of the work product to advance the claimant’s interests. United States v. Nobles, 422 U.S. 225, 239-40, 95 S.Ct. 2160, 2170-71, 45 L.Ed.2d 141 (1975) (finding waiver where criminal defendant presented investigator as witness); see also 6 Moore’s Federal Practice § 26.70[6][c] at 26-226 (3d ed. 1997) (“A party also impliedly waives work product protection if it places the substance of the documents for which the protection is claimed at issue.”). In Harding, the court found that the company impliedly waived work-product protection when it placed an internal investigation into issue by asserting a Title VII defense based in part upon the company’s reasonable investigation into the plaintiffs’ claims. Harding, 914 F.Supp. at 1099. In that situation, justice demanded that the plaintiffs be permitted to respond to the allegation of reasonable investigation “with a full spectrum of information.” Id. As in Harding, Perago’s affirmative act of moving to dismiss on the basis of Formanek’s investigation and conclusions, which are detailed in his Report, makes it unfair for the corporation thereafter to assert work-product protection for the Report.3
Perrigo protests that it will face a Hob-son’s choice if it is held to have impliedly waivéd disclosure protections — either the corporation moves to dismiss, relies on the Report, and thereby forfeits protections for the Report, or the corporation suffers through potentially unmeritorious litigation but protects the confidentiality of the Report. See Pet. for Mandamus at 38. Perrigo has assumed this risk by moving to dismiss on the basis of Formanek’s investigation and conclusions, and certainly cannot claim to be surprised by such a dilemma. Since a corporation owes a fiduciary duty to its shareholders, other courts have softened a corporation’s right to assert the attorney-client privilege against its shareholders, requiring, upon a showing of good cause, that a corporation disclose corporate records to its shareholders. See Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir.1970), cert. denied, 401 U.S. 974, 91 S.Ct. 1191, 28 L.Ed.2d 323 (1971); Fausek v. White, 965 F.2d 126 (6th Cir.) (extending Gamer beyond shareholder derivative suit), cert. denied sub nom. Selox, Inc. v. Fausek, 506 U.S. 1034, 113 S.Ct. 814, 121 L.Ed.2d 686 (1992). Perrigo’s Board could anticipate from the outset that any report produced by the disinterested independent director would in all likelihood eventually underlie a motion to dismiss and thus become enmeshed in a dispositive court ruling. This, in itself, largely undermines any expectation of perpetual confidentiality.
I recognize that if my position were to prevail, in the future disinterested independent directors in Michigan reviewing whether a derivative litigation is in the corporate interest may not be inclined to produce ex*446tensive written materials.4 Nonetheless, the corporate board will be well-advised to ascertain for itself that the disinterested independent directors acted in good faith and conducted a reasonable investigation. At minimum, the board should seek assurances that the corporation has a legitimate basis for moving to dismiss in compliance with Rule 11 of the Federal Rules of Civil Procedure or its state law equivalent. This evaluation will be best undertaken with all of the requisite facts and supporting documentation before the board.
When examined closely, the view I express today does not erode attorney-client or work-product protections, but rather holds a party accountable when the party attempts to profit unilaterally by relying upon the conclusions of a document without reciting anything contained within its four corners. Once Perrigo moved for dismissal based upon Formanek’s investigation and determination, the company lost its ability to conceal the Report from the derivative plaintiff, the court, and presumably the public; it was as if Perrigo had actually attached the Report to its own court filing.
II
Judicial records are presumptively open to the public. Like the public’s right to monitor the functioning of courts by observing trials, the public has a presumptive right to inspect and copy judicial records. See Nixon v. Warner Communications, Inc., 435 U.S. 589, 597, 98 S.Ct. 1306, 1311, 55 L.Ed.2d 570 (1978); Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 569-73, 100 S.Ct. 2814, 2823-25, 65 L.Ed.2d 973 (1980). The strong presumption of public access to materials used in the adjudicative proe.ess fosters confidence in the administration of justice by assuring that courts are fairly run and that disputes presented for resolution in a public forum are open and understandable to the public. See Brown & Williamson Tobacco Corp. v. FTC, 710 F.2d 1165 (6th Cir.1983), cert. denied, 465 U.S. 1100,104 S.Ct. 1595, 80 L.Ed.2d 127 (1984). There are, of course, limited common-law exceptions to the potent presumption in favor .of maintaining openness to the courtroom and court documents. As explained in Brown & Williamson, the presumption may be overcome by the need to keep order and dignity in the courtroom or by a particularized special need for confidentiality, such as when trade secrets, national security, and certain privacy rights of trial participants or third parties are implicated. Id. at 1179.
Sealing court records, however, is a drastic step, and only the most compelling reasons should ever justify non-disclosure of judicial records. See In re Knoxville News-Sentinel Co., 723 F.2d 470, 476 (6th Cir.1983). “The public has a strong interest in obtaining the information contained in the court record,” including ascertaining what evidence the court relied upon in reaching its decision. Brown & Williamson, 710 F.2d at 1180, 1181. If absolutely necessary, however, trial courts do have the power to seal court records and files when interests of privacy and confidentiality outweigh the public’s presumptively paramount right to know. See Fed.R.Civ.P. 26(c). In' the instant petition, Perrigo has not made a persuasive case that overriding confidentiality concerns should prevent the public from having access to the Formanek Report should it become part of the judicial record.5
*447In Joy v. North, 692 F.2d 880 (2d Cir. 1982), cert. denied sub nom. Citytrust v. Joy, 460 U.S. 1051, 103 S.Ct. 1498, 75 L.Ed.2d 930 (1983), the Second Circuit held that the report of a special litigation committee recommending termination (and settlement as to some defendants) of a shareholder derivative suit was improperly placed under seal by the trial court. Rather than just being used in discovery, the report played an essential role in the corporation’s moving for summary judgment: “An adjudication is a formal act of government, the basis of which should, absent exceptional circumstances, be subject to public scrutiny. We simply do not understand the argument that derivative actions may be routinely dismissed on the basis of secret documents.” Id. at 893. The Second Circuit went even further and required the company to disclose not only the report, portions of which had been produced under a protective order, but also “all underlying data.” Id. “To the extent that communications arguably protected by the attorney-client privilege may be involved in that data, a motion for judgment based on the report waives the privilege.” Id. (footnote omitted). Similarly, materials communicated from independent counsel to the committee were not entitled to work-product immunity protection, “since the papers may be part of the basis for the committee’s recommendations.” Id. at 894.
While I understand that the statutory inquiry and burdens at issue in Joy differ considerably from Michigan’s framework, I firmly believe that the fundamental- principles enunciated by the Second Circuit apply with equal force.in Perrigo’s situation.. Confidence in the administration of justice would be severely weakened if a Michigan corporation is able to dismiss a derivative suit on the basis of -mere conclusions of disinterested independent directors who have been allowed to perform their work in secret. See Joy, 692 F.2d at 893.6
The Seventh Circuit has likewise concluded that the strong presumption of public access overcomes a corporation’s interest in confidentiality when a special litigation committee report is submitted in support of a motion to terminate a' derivative action. Matter of *448Continental Illinois Sec. Litig., 732 F.2d 1302 (7th Cir.1984). “[W]hen the report is used in an adjudicative procedure to advance the corporate interest, there is a strong presumption that confidentiality must be surrendered.” Id. at 1315. Two circuits have thus valued public scrutiny of special litigation committee reports as a grave public concern that generally overcomes a corporation’s asserted need to pláce such records under seal.
Because in fairness Perrigo has waived the protections afforded by the attorney-client privilege and the work-product doctrine for the Formanek Report since it constructively brought the Report into issue, on the record currently before this court I see no compelling reason to foreclose public access to the Report if and when it is included by a party in a court record.7 Simply showing that public access would harm the company’s reputation is generally not sufficient to justify sealing a court record. Brown & Williamson, 710 F.2d at 1179. And at this juncture Perrigo has not demonstrated any specific cognizable injury, save that the Picard plaintiffs, like the public at large, will have a right to view the portions of the Report that become part of the judicial record. Should Perrigo claim a need for special protection of specific segments of the Report under the standards articulated in Rule 26(c) and Brown & Williamson, for example if actual trade secrets might be revealed, then the district judge remains free to order particularized protection.
Ill
Because I do not believe that a writ of mandamus should issue under the present circumstances, even if narrowly drawn as the majority suggests solely to set aside the por*449tion of the district court’s order recognizing public access, I therefore dissent from the issuance of the writ.

. Although the court in Howe rejected the Hearn decision’s exclusive reliance on these three factors, the court by no means found these factors irrelevant. Rather, in adopting an approach that emphasizes balancing fairness considerations, the court simply sought to provide "enhanced flexibility beyond the three factors to be considered under Hearn." Howe, 487 N.W.2d at 383 (emphasis added).

. The majority's decision to permit the derivative plaintiff access to the Report appears to rest on the carving out of an exception to the attorney-client privilege based on the plaintiff's substantial need for the Report and the undue hardship he would experience were he denied access to the Report. By carving out an exception to the attorney-client privilege, the majority seems to leave the privilege intact with respect to other individuals and the public-at-large. In contrast, I believe Howe requires us to regard Perrigo's reference to and reliance on the Report in its own motion to dismiss as a waiver of its attorney-client privilege. Because Perrigo waived its own privilege, the majority is wrong when it asserts that the plaintiff has the power to waive Perrigo’s privilege by submitting the Report to the court.

. The majority asserts that the Michigan legislature could not have intended to put a corporate defendant on the horns of a dilemma of choosing between "waiving the protection of the Report or withdrawing its motion to dismiss." This argument ignores the basic framework of this case: Perrigo has referred to and relied on the Report in its motion to dismiss. Where a party faces the foreseeable dilemma of relinquishing its privilege because of its own affirmative reliance on confidential material or foregoing a complaint or defense, courts generally have resisted judicially created exceptions to the implied waiver doctrine even where failure to do so may weaken attorney-client communications. See, e.g., Glenmede Trust Co. v. Thompson, 56 F.3d 476 (3rd Cir. 1995) (finding implied waiver where trust company asserted reliance on advice of counsel as an affirmative defense to claim for breach of fiduciary duty); United States v. Bilzerian, 926 F.2d 1285 (2nd Cir.1991) (defendant in securities fraud case impliedly waived attorney-client privilege where he asserted reliance on advice of attorney as a defense). While those facing a dilemma similar to Perrigo's may believe their predicament unfair, allowing one party to refer to and rely on privileged material that is kept secret from the opposing party also is unfair and inhibits the truth-seeking process. In this situation the Michigan legislature would be more likely to emphasize the importance of maintaining fair judicial proceedings, and would not be likely to direct the Michigan courts to abandon the traditional implied waiver doctrine.

. The majority asserts that the Michigan legislature could not have intended to discourage open communication between disinterested independent directors and counsel. Although that may well be true, the majority itself notes that the statute "does not require that the disinterested independent director issue a report with its recommendation, nor does it require that he consult with counsel.”

. The majority argues that the Michigan legislature could not have intended "automatic'public disclosure of the Report upon the filing of a motion to dismiss under the Michigan statute” because to do so may deter frank communications between independent directors and attorneys. To clarify, I do not argue in support of an "automatic public disclosure” of privileged material simply upon the filing of a motion to dismiss. Rather, my position is that if and when the Report is included in the court record, the district court should apply the presumption favoring public access to court records.
While it may be true that the Michigan legislature would be concerned about promoting candor between independent directors and attorneys assisting with internal investigations, the Michigan legislature has an explicit policy favoring *447open judicial proceedings. See Mich. Comp Laws Ann. 600.1420 ("The sitting of every court within this state shall be public....”). Nowhere do the provisions of the Michigan Business Corporation Act mention the importance of the attorney-client privilege held by corporations, let alone indicate that it is essential to fulfillment of the statutory goal of promoting effective monitoring of management by independent directors. I therefore see no reason to assume that the Michigan legislature intended to abandon the compelling public policies furthered by open adjudicative proceedings in favor of the policies served by candid discussions between independent directors and hired counsel. Consequently, unlike the majority, I would adhere to precedent and respect the strong presumption of public access to materials utilized in judicial proceedings. See Nixon, 435 U.S. at 597, 98 S.Ct. at 1311-12; Richmond Newspapers, 448 U.S. at 569-73, 100 S.Ct. at 2823-25. Once the Report is submitted to the district court and becomes part of the trial court record, the public’s presumptive right to inspect and copy judicial records requires that the public have access to the portions of the Report in the trial court record. The potent presumption favoring open access to the courtroom and court documents should not yield to Perrigo’s desire to conceal the Report absent Perrigo demonstrating a compelling reason, such as an actual trade-secret, to set aside the presumption. See Brown & Williamson, 710 F.2d at 1179; In re Knoxville News-Sentinel, 723 F.2d at 476.
The majority wrongly begins with a presumption favoring Perrigo, challenging the plaintiffs and the public to overcome this erroneous presumption. Our judicial precedent does not support this scheme. By instructing the district court to “study, examine, interpret, and inspect the Report without making it public property in connection with the disposition of the motion to dismiss,” the majority conceals the record of this case behind a veil of secrecy, thereby threatening to undermine public confidence in our judicial system.

. This court has previously endorsed the Second Circuit's approach in Joy, noting that the court
was responding ... to the natural desire of parties to shield prejudicial information contained in judicial records from competitors and the public. This desire, however, cannot be accommodated by courts without seriously undermining the tradition of an open judicial system. Indeed, common sense tells us that the greater the motivation a corporation has to shield its operations, the greater the public's need to know. In such cases, a court should not seal records unless public access would reveal legitimate trade secrets, a recognized exception to the right of public access to judicial records.
Brown & Williamson, 710 F.2d at 1180.

. The majority asserts that Howe supports its allowing access to the Report by the parties and the court but not by the public. The majority relies on the following language in Howe:
In applying the balancing test, we counsel that a court "should begin its analysis with a presumption in favor of preserving the privilege.” Accordingly, the burden of establishing a waiver under the balancing approach rests on the party seeking discovery. Further, we emphasize that discovery, if allowed, should be narrowly limited to those portions of the privileged material that bear directly on the issues at hand.
Howe, 487 N.W.2d at 383 (citations omitted) (emphasis added by majority). The majority misconstrues this statement. Ráther than permitting a selective waiver with respect to who gains access to the privileged material, the statement simply concerns which portions of the privileged material will be deemed, waived. As the Third Circuit explained,
the word "limited” refers to two distinct types of waivers: selective and partial. Selective waiver permits the client who has disclosed privileged communications to one party to continue asserting the privilege against other parlies. Partial waiver permits a client who has disclosed a portion of privileged communications to continue asserting the privilege as to the remaining portions of the same communications.
Westinghouse Elec. Corp. v. Republic of the Philippines, 951 F.2d 1414, 1423 n. 7 (3rd Cir.1991). The Howe decision simply addresses "partial waiver,” and says nothing about granting "selective waiver,” which shields from public view evidence examined by the court and the parties. Cf. Howe, 487 N.W.2d at 385 (directing that the trial court examine and, "[i]n keeping with our holding that discovery allowed under these circumstances should be narrowly confined,” excise the "portions of the report, if any, which do not bear directly on the issues at hand”). The majority is thus left with no Michigan law supporting its action.
The majority states in footnote 9 that it refrains from deciding whether it would approve of a "selective" waiver in this case. The case that it relies on to support selective waiver. Diversified Indus., Inc. v. Meredith, 572 F.2d 596, 611 (1978) (en banc), has been strenuously criticized. See Westinghouse Elec., 951 F.2d at 1423-29- (3rd Cir.-1991) (arguing that limited or selective waiver fails to serve the interests underlying the attorney-client privilege, and that the privilege should not be converted into a tool for selective disclosure in order to thwart the truth-finding process); Permian Corp. v. United States, 665 F.2d 1214, 1219-21 (D.C.Cir.1981) (rejecting Diversified and selective waiver theory).
Where the balancing of fairness considerations leads to the conclusion that a party has impliedly waived its privilege, the privilege is destroyed. For the reasons explained above, Perrigo has impliedly waived its disclosure protections for the Report. I simply note that Perrigo has not argued that any portion of the Report contains information irrelevant to the derivative litigation; indeed, because the Report presents Formanek's conclusions as to whether maintenance of a derivative suit is in Perrigo's best interests, it would be surprising if any portion of the Report proved irrelevant. Thus, I see no reason why Perrigo's waiver should not apply to the entire Report. Having waived its privilege, Perrigo cannot now assert a claim of privilege in an attempt to prevent disclosure of the Report to the public-at-large.