Commercial Litigation and Arbitration

Filing Documents under Seal with Complaint Waives Attorney-Client Privilege and Work Product Protection — Extent of Waiver

From U.S. ex rel. Schweitzer v. Oce, N.V., 2008 U.S. Dist. LEXIS 108119 (D.D.C. Sept. 15, 2008):

Stated succinctly, the question before the Court is whether filing documents under seal along with one's complaint waives the attorney-client and work product privileges. It appears that no court in this Circuit has yet addressed this particular question. Yet courts in other Circuits have considered a similar one: whether filing privileged documents as exhibits to a dispositive motion — vice a complaint — accomplishes waiver. See In re Perrigo Co., 128 F.3d 430 (6th Cir. 1997); Joy v. North, 692 F.2d 880 (2d Cir. 1982).

In Perrigo, a corporation had moved to dismiss a shareholder derivative action pursuant to a Michigan statute; the statute authorized dismissal on the recommendation of a majority of disinterested, independent directors…. With the assistance of counsel, Perrigo's lone disinterested, independent director had prepared a report summarizing the findings of his investigation into the plaintiffs' allegations, and Perrigo filed this report under seal as an exhibit to its motion…. On a petition for writ of mandamus, the Sixth Circuit Court of Appeals approved the district court's holding that Perrigo had waived the attorney-client and work product privileges as to the shareholder plaintiffs, who would need access to the sealed report to contest Perrigo's motion…. But it also determined that Perrigo had not waived these privileges as to the general public merely by filing its report in the district court….

By contrast, in Joy, the Second Circuit Court of Appeals declared that "the submission of materials to a court in order to obtain summary judgment utterly precludes the assertion of the attorney-client privilege or work-product immunity." ... There, as in Perrigo, a corporation filed a privileged report as a sealed exhibit to its motion to dismiss a derivative action…. After affording the shareholder plaintiffs some discovery — but not access to the report — the district court granted summary judgment for the corporation. Id. In an opinion that also addressed the merits, the Court of Appeals reversed the district court's order sealing the report…. It observed that "[a]n 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." ... Consequently, the court held that "a motion for judgment based on [privileged materials] waives the privilege." ... In subsequent decisions, the Court of Appeals has clarified that waiver occurs only if the privileged materials' contents are placed "at issue." See Lugosch v. Pyramid Co., 435 F.3d 110, 125 (2d Cir. 2006) (remanding for determination whether sealed documents filed with summary judgment motion were privileged and if so, whether defendants had waived the privilege(s) by placing documents' contents at issue); see also United States v. Amodeo, 44 F.3d 141, 145 (2d Cir. 1995) ("We think that the mere filing of a paper or document with the court is insufficient to render that paper . . . subject to the right of public access.").

Notably, while the Perrigo and Joy courts disagreed as to whether the filer had waived its privileges as to the public at large, both courts found waiver as to the opposing party. Yet because these cases and their progeny reflect a fundamentally different approach to waiver than that adopted by our Court of Appeals, they offer only limited guidance here.

In this Circuit, "short of court-compelled disclosure, or other equally extraordinary circumstances, [courts should] not distinguish between varying degrees of 'voluntariness' in waivers of the attorney-client privilege." In re Sealed Case, 877 F.2d 976, 980 (D.C. Cir. 1989) (citation omitted). ***In Cobell v. Norton, 213 F.R.D. 69 (2003), this Court applied the Court of Appeals' bright-line rule but found no waiver where defendants surrendered privileged materials to a special master. ... The special master had "obtained these [privileged] memoranda under the authority vested in him by an order of this Court," which this Court analogized to "the receipt of documents by the Court for in camera review." ... The central issue, this Court reasoned, was "whether the disclosure . . . to the [special master] was judicially compelled." ... Given that disclosure had occurred pursuant to a court order, the Court found that disclosure had been compelled, and thus that the defendants had not voluntarily waived their privilege….

Here, the bright-line rule in Sealed Case dictates an outcome very different from that in Cobell: no compulsion whatever is evident on this record. Under the FCA, a qui tam relator must provide the government with "[a] copy of the complaint and written disclosure of substantially all material evidence and information the person possesses," and his "complaint shall be filed in camera" with the district court. 31 U.S.C. § 3730(b)(2) (2008). Thus, the statute compelled relators to turn over the complaint, confidential disclosure statement, and sealed exhibits to the government, but it obliged them to file only their complaint with the Court. At no time did this Court direct or even encourage relators to file their confidential disclosure statement and supporting materials on the docket. Rather, relators voluntarily elected to file these additional materials. Absent any statutory or judicial compulsion, this disclosure must be construed as a voluntary waiver of any privilege that might otherwise have protected the materials disclosed. See In re Sealed Case, 877 F.2d at 980. Cf. Fox v. Taylor Diving & Salvage Co., 694 F.2d 1349, 1356 (5th Cir. 1983) (work product immunity waived when attorney voluntarily discloses the protected information to the court).

Documents filed on a court's docket presumptively reside in the public domain. Johnson v. Greater Southeast Cmty. Hosp. Corp., 951 F.2d 1268, 1277 (D.C. Cir. 1991). While a party in litigation may in some circumstances file privileged attorney-client communications or work product without forfeiting those privileges, to preserve them, he must assert the applicable privilege(s) from the outset and must yield the materials only at the court's direction. See, e.g., Cobell, 213 F.R.D. at 75; Shields, 864 F.2d at 382; Transamerica Computer Co., 573 F.2d at 648-51. Here, relators' filing of the allegedly privileged materials on the Court's docket, without any privilege assertion and absent any external compulsion, was inconsistent with the bedrock principle that a privilege "must be jealously guarded . . . lest it be waived." See In re Sealed Case, 877 F.2d at 980. Relators did originally file these materials under seal, but in this Court's calculus, this minimal precaution does not counterbalance their imprudence in filing the materials at all. They insist their amended complaint, alone, satisfies the Federal Rules' pleading requirements…. Thus, relators acknowledge they had no need to file additional materials. To the extent they intended the confidential disclosure statement and sealed exhibits to offer evidentiary support for their claims, this showing — made long before discovery could be expected to commence — was highly premature.

The Court concludes that by filing the confidential disclosure statement and exhibits along with their complaint, relators voluntarily waived any privileges that might have attached to these documents.

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