Attorney-Client Privilege — Counsel to Special Committee of Board — Waiver

Chancellor William B. Chandler III of the Delaware Court of Chancery ruled in Ryan v. Gifford, 2007 WL 4259557 (Del. Ch. Nov. 30, 2007), that the attorney-client privilege between a Special Committee of a Board of Directors and its outside counsel was waived by presentation of counsel’s report to the full Board. The Court held that the waiver extended to all communications between counsel and the Special Committee related to counsel’s investigation and report, in addition to encompassing the presentation made by the Special Committee to the Board.

The Special Committee in Ryan was not a Special Litigation Committee endowed with the full power of the Board to act under Zapata. That, however, appears to be irrelevant to the analysis. Moreover, the Chancellor considered the doctrine of Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970), and Sealy Mattress Co. of N.J., Inc. v. Sealy, Inc., 1987 WL 12500 (Del. Ch. June 19, 1987), to be applicable and satisfied.

The Court also ordered counsel’s non-verbatim interview notes to be produced for in camera inspection to determine whether they were producible over work product objections. The lone question concerning discoverability appears to be whether the notes reflect opinion work product.

Thanks to Koji F. Fukumura, Esq., of San Diego for calling this case to my attention very shortly after it was issued.

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