In a January 2 opinion denying leave for interlocutory review of his decision of November 30, 2007 (see our post of December 14, 2007), Chancellor Chandler stressed the limitations of the privilege waiver analysis of his prior opinion. Some lawyers — and the defense counsel seeking interlocutory review — expressed concern that the November 30 opinion doomed any meaningful privilege for communications between special board committees and their counsel. In the new opinion, Ryan v. Gifford, 2008 Del. Ch. LEXIS 2 (Del. Ch. Jan. 2, 2008), the Chancellor emphasized:

1. That the waiver analysis was an alternative holding because his November 30 decision was equally driven by Garner v. Wolfinbarger.

2. The November 30 Opinion does not apply to the work product of Zapata Special Litigation Committees or other committees vested with the full power of the board to act on particular matters.

3. Waiver was an inescapable conclusion under the facts presented, given the disclosures made to counsel for the directors under investigation and those directors’ use of the information for their personal benefit (to defend litigation), as opposed to exercise of their fiduciary responsibilities. (“Maxim appears to fail to appreciate the difference between compliance with fiduciary duties and doing so while maintaining a privilege. In any event, the only thing that directors cannot do under the decision is receive purportedly privileged material while acting in their personal (as compared to fiduciary) capacity and still maintain the privilege.”)

The Chancellor summarized his reasoning as follows:

Maxim also appears to argue that the November 30 decision decided a "substantial issue" because it will affect Delaware corporate customs and long-standing principles of good corporate governance. Not only are such dire consequences exaggerated, but fears thereof are also misplaced. The decision was the result only of the application of well-settled precedent to a set of particular and specific facts.... [T]he relevant factual circumstances here include the receipt of purportedly privileged information by the director defendants in their individual capacities from the Special Committee. The decision would not apply to a situation (unlike that presented in this case) in which board members are found to be acting in their fiduciary capacity, where their personal lawyers are not present, and where the board members do not use the privileged information to exculpate themselves. Similarly, the decision would not affect the privileges of a Special Litigation Committee formed under Zapata, or any other kind of committee that (unlike the Special Committee here) has the power to take actions without approval of other board members.