Commercial Litigation and Arbitration

Work Product — Subject Matter Waiver Effected by Issuing Press Release Based on Discussions with Prosecutors That Were Otherwise Protected as Work Product

From E.I. duPont de Nemours & Co. v. Kolon Indus., 2010 U.S. Dist. LEXIS 77075 (E.D. Va. July 30, 2010):

***DuPont alleges that Kolon stole its secret processes and technologies for manufacturing Kevlar, and that Kolon has improved its product line based on this trade secret theft. ***

The Court recently issued a Memorandum Opinion, E.I. Du Pont de Nemours and Co. v. Kolon Industries, Inc., No. 3:09CV58, 2010 WL 1489966 (E.D. Va. Apr. 13, 2010), holding that work product protection was not waived by DuPont's sharing of documents with federal law enforcement agencies that were investigating alleged trade secret theft by Kolon and by Michael Mitchell, a former DuPont employee who was recently convicted of trade secret theft and sentenced to 18 months in prison. *** Kolon, however, asserts that recent developments require revisitation of the issue of privilege waiver in a new and different context.

On March 18, 2010, DuPont's general counsel, Thomas Sager, issued a press release about Mitchell's conviction. The press release asserted, in pertinent part, that "[t]he FBI investigation has revealed that, in August 2008, three Kolon managers flew to Richmond, the location of our global Kevlar® technology and business headquarters, expressly for the purpose of obtaining confidential DuPont process technology." ***

Sager testified that the press release was based on written and oral communications with two in-house lawyers for DuPont, Michael Clarke and James Shomper, as well as head of corporate security, Raymond Mislock. Additionally, DuPont submitted a declaration from Clarke that he, not Sager, drafted the sentence in the press release regarding Kolon's express purpose in visiting Richmond. It appears that Sager had no independent input into the text statement, but rather signed off on the work of a trusted deputy.

Kolon asserts that the statement must have come from communications between DuPont and the Government, over which DuPont has asserted work-product and attorney-client privilege. ***

Kolon contends that, by making offensive, testimonial use of the information contained in these communications, DuPont has waived any claim of privilege, not just as to the underlying communications, but also as to all communications on the subject of the Government investigation into Kolon and Mitchell. Kolon asserts its substantial need for the communications, the importance and relevance of which are evidenced by their incorporation into DuPont's Complaint. ***

As the Court recently concluded, by sharing information privately with an interested Government agency, DuPont did not waive the work product protection, so long as the Government is not in a position adversarial to the disclosing party, and so long as the disclosing party maintains a reasonable expectation that the Government will not further disclose the information. *** However, public disclosure of information, particularly when the disclosing party voluntarily broadcasts the information in media channels, is quite different; it destroys any expectation of privacy for the disclosed information. ***

When a party discloses information that had been confidential before the disclosure, the privilege is waived not only to that communication, but also "as to the subject matter of the disclosure." *** Of course, defining the "subject matter," and thus the scope of the waiver, is a critically important aspect of the waiver analysis because "subject matter waiver does not open up the possibility of a fishing expedition of all confidential communications during the course of [an attorney's] representation." ***

However, it is settled that, "when a party reveals part of a privileged communication to gain an advantage in litigation, the party waives the attorney-client privilege as to all other communications relating to the same subject matter. Selective disclosure for tactical purposes waives the privilege." *** "Selective disclosure occurs not only when a party reveals part of one privileged communication, but also when a party reveals one beneficial communication but fails to reveal another, less helpful, communication on the same matter." *** The same principles apply to the waiver of work product protection. **

That said, the Fourth Circuit treats waiver of opinion work product differently from both fact work product and attorney-client privileged communications.***

Although fact work product and attorney-client privilege may be waived through disclosure of but one document on the subject, "waiver of the opinion work-product protection [is] limited to the documents actually disclosed." In re Mut. Funds Inv. Litig., 251 F.R.D. 185, 187 (D. Md. 2008). When protected opinion work product is commingled with fact work product that must be disclosed under subject matter waiver, the proper method of preventing disclosure of opinion work product is for the Court to review the material and redact the legal theories and mental impressions from the otherwise discoverable materials. Martin Marietta, 856 F.2d at 626. ***

[T]he record refutes the contention that the sentence at issue was based only on the four public documents from the Mitchell criminal case. The *** burden rests with DuPont, the party asserting privilege, to prove all elements necessary to invoke the work product privilege, including that privileged information was not revealed. ***[C]onsidering the record as a whole, it is more likely than not that the statement about Kolon's purpose was based on some work product and on the Mitchell case documents. And, to the extent that any communications from the FBI to DuPont address Kolon's purpose in arranging for, and attending, the meeting at the Doubletree Inn on August 26, the substance of such communication most assuredly was revealed in the press release. Thus, on this record it is appropriate to conclude that, by making the statement at issue in the press release, DuPont has waived the work product protection respecting the factual basis for the statement in the press release.

To define the scope of the subject matter waiver, it is necessary to keep in mind that the controversial sentence in the press release revealed that DuPont had knowledge about Kolon's purpose in traveling to Richmond for that meeting that DuPont had learned from the FBI investigation. Thus, any communications (in DuPont's possession) from the FBI to DuPont containing factual information concerning Kolon's purpose in arranging for or attending the meeting that may have been protected as fact work product under the work product doctrine before the press release cannot be shielded now because DuPont chose to broadcast the substance of those communications to the public. ***”[A] party can't selectively chose which portions of a document to release to the public and which portions it wishes to assert [the attorney client] privilege [and work product protection]." ***

In sum, DuPont has sought to make affirmative use of the once protected information by making the statement in the press release. The publication and dissemination of that information waives the protection.***

However, the waiver extends only to "the subject matter revealed." *** A party cannot artificially expand the scope of the subject matter to create a waiver that is broader than that of the disclosure that waives the protection. *** Thus, the scope of the waiver is measured by the substance of the protected information that has been publicly disclosed. Here, the disclosure in the press release is a limited one. It pertains to one meeting and to the purpose for that meeting.

A disclosure of that information does not support a finding that DuPont has waived work product protection to all communications in DuPont's possession relating to the Government's investigation of Mitchell and Kolon. *** Indeed, to accept Kolon's proposed scope would be to issue a fishing license far beyond the proper scope of DuPont's waiver, and, in the process, it would eviscerate the principle that the scope of the waiver is confined to the substance that was published. Without a constraint of this nature, any waiver of work product would effectively reach all of a lawyer's work in a case and would not be a "subject matter" waiver. ***

The fact work product on this subject matter (as previously defined) must be produced under familiar principles of waiver jurisprudence. However, a waiver of opinion work product is more limited.

Opinion work product, which enjoys near absolute immunity from discovery, may require disclosure under the subject matter waiver doctrine "in extreme circumstances."***[C]ounsel's conduct in expressing opinion in the press release was not the sort of extraordinary circumstance that warrants the piercing of counsel's opinion. To hold otherwise would be to invite a waiver of opinion work product every time a press release is issued by a litigant, or, as Kolon would have it, a complaint is filed in court. And, it would trench impermissibly on the near inviolate protection given opinion work product under the controlling law of this circuit.

[Footnote 4] The issuance of a press release is a common, not an extraordinary, circumstance in business, industry, Government and the professions.

Note that the opinion does not make a distinction between an extrajudicial disclosure and one made in the course of a litigation to gain a litigation advantage.

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