Attorney-Client Privilege Waived Where Privileged Material Provided to Agency with Confidentiality Agreement
By Colin A. Walker

The Tenth Circuit Court of Appeals on June 19, 2006, held that the attorney-client and work-product privileges were waived when a party disclosed privileged information to government agencies in the course of an investigation, even with a confidentiality agreement that specifically stated the party was not waiving the privileges. See In re Qwest Communications International Inc., 450 F.3d 1179 (10th Cir. 2006).

The attorney-client privilege protects the confidentiality of communications between an attorney and client made during the course of legal representation. The work-product privilege provides that materials prepared in anticipation of litigation cannot be obtained by other parties except under very limited circumstances. Both can be waived by, among other things, disclosure of privileged material to third parties.

In this case, Qwest agreed to produce documents containing information covered by the attorney-client and work-product privileges to the Department of Justice and Securities and Exchange Commission in connection with an investigation. Qwest and the investigating agencies entered into a confidentiality agreement, which specifically stated that Qwest was not waiving the privileges, but allowed the agencies to disclose the information to other state, local, or federal agencies, as required by law, or “in furtherance of the discharge of their duties.”

In the mean time, a number of private plaintiffs had sued Qwest for alleged securities violations. Arguing that Qwest had waived the privileges by producing the documents to the agencies, the plaintiffs sought to obtain the documents though discovery. Qwest asserted that it had only “selectively” waived the privileges and that its waiver only applied to the agencies, not to other parties, such as the plaintiffs. The Tenth Circuit rejected the doctrine of “selective waiver” and upheld the trial court's order requiring Qwest to produce the information to the plaintiffs.

Quoting the D.C. Circuit, the court held that a litigant should not be permitted to “pick and choose among his opponents, waiving the privilege for some and resurrecting the claim of confidentiality to obstruct others.” The court also cited Supreme Court rulings that the privileges should be expanded only with caution.

The court rejected Qwest's argument that permitting selective waiver would encourage parties to cooperate with investigating government agencies, suggesting that Qwest was really advocating a “new privilege” for information provided to investigating agencies. It held that adopting such a new privilege was for Congress, not the court, but also pointed out that both Congress and the SEC had declined to adopt selective waiver with regard to the Securities and Exchange Act.

Though the court did not hold that confidentiality agreements were “irrelevant,” as other circuits have, it concluded that Qwest's confidentiality agreement “does not support selective waiver” because it allowed widespread disclosure at the discretion of the agencies.

This case calls into serious question an earlier District of Colorado case, In re M & L Business Machine Co., 161 B.R. 689 (D.Colo. 1993), which permitted selective waiver where a bank produced privileged information, under the auspices of a confidentiality agreement, to the U.S. Attorney, which was investigating one of the bank's customers.

The court specifically declined to address two related issues, inadvertent disclosure of privileged information and “opinion” work-product, which involves an attorney's legal opinions, as opposed to “fact” work-product.

Although the court appeared to qualify its rejection of the doctrine by repeatedly stating, “the record in this case does not justify adoption of the selective waiver doctrine,” parties within the jurisdiction of the Tenth Circuit (Colorado, Kansas, New Mexico, Oklahoma, Utah, and Wyoming) should not rely on the selective waiver doctrine.

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ALL RIGHTS RESERVED.

Comments or inquiries may be directed to:
Colin A. Walker.