Attorney-Client Privilege — Waiver via Disclosure in SEC Filing

Does reporting a reserve figure waive privilege or work product protection for underlying documents? The defendant oil company in In re BP Prods. No. Am., 2006 Tex. App. LEXIS 9008 (Oct. 13, 2006) reported in an SEC filing that it had reserved $700 million to resolve claims for injury and death arising out of an explosion at a refinery. The reserve figure was computed by an in-house attorney. Plaintiffs served a document request for all documentation underlying the reserve figure on the grounds, first, that it was not privileged and, second, if it was, publication of the reserve figure in the SEC filing waived the privilege. The court rejected both claims. First, it found that the documents were not only privileged but entitled to work product protection, as core (opinion) work product. Second, the court found that there had been no waiver. It did not provide so much an affirmative analysis as a distinction — that privilege would have been waived had the documents been disclosed to auditors, but they were not. With respect to auditors in this context, the real issue may be work product protection. There is case law holding that even sharing work product with auditors in connection with the SEC disclosure of reserve figures does not effect a waiver of work product protection, although some cases distinguish between aggregate reserves and individual case reserves. Note also that if Proposed Fed.R.Evid. 502 dealing with waiver of privilege and work product protection is adopted, the question of waiver in these circumstances — as to both privilege and work product — will change substantially. Presumably this would become a Rule 502(a) rather than a 502(c) analysis.

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