In re Pacific Pictures Corp.

United States Court of Appeals, Ninth Circuit
679 F.3d 1121 (2012)

ELI5:

Rule of Law:

The voluntary disclosure of attorney-client privileged communications to the federal government constitutes a waiver of that privilege to all other third parties.

Facts:

Jerome Siegel and Joe Shuster, the creators of Superman, ceded their intellectual property rights to D.C. Comics in 1937.
Marc Toberoff, an attorney and producer, began representing the Siegel and Shuster Heirs to litigate over Superman royalties and formed a joint venture with them.
An attorney employed by Toberoff for approximately three months allegedly stole documents from the Siegel and Shuster files.
By June 2006, this former employee sent the stolen documents, along with a cover letter outlining Toberoff's alleged plans, to executives at D.C. Comics.
A few months after the documents were sent to D.C. Comics, Toberoff reported the incident to the Federal Bureau of Investigation.
Toberoff later solicited a grand jury subpoena from the U.S. Attorney's Office for the documents.
In response to the subpoena he requested, Toberoff voluntarily produced unredacted, privileged documents to the U.S. Attorney's Office, relying on a letter stating the government would not provide the documents to non-governmental third parties unless required by law.

Procedural Posture:

D.C. Comics filed a lawsuit in federal district court against Toberoff and the Heirs (collectively, the 'Petitioners'), alleging interference with contractual relationships.
D.C. Comics requested production of documents that Toberoff had voluntarily disclosed to the U.S. Attorney's Office, arguing any privilege was waived.
A magistrate judge in the district court granted the request, ruling that the disclosure waived the attorney-client privilege.
The magistrate judge stayed the order to allow Petitioners to seek review.
The district court denied review of the magistrate's order.
Petitioners sought a writ of mandamus from the U.S. Court of Appeals for the Ninth Circuit to overturn the magistrate's discovery order.

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Issue:

Does a party's voluntary disclosure of attorney-client privileged documents to the federal government waive the attorney-client privilege as to other third parties?

Opinions:

Majority - O'Scannlain, J.

Yes, a party's voluntary disclosure of attorney-client privileged documents to the federal government waives that privilege as to other third parties. The Ninth Circuit joins the overwhelming majority of other circuits in rejecting the doctrine of 'selective waiver.' The purpose of the attorney-client privilege is to encourage full and frank communication between attorneys and their clients, not to encourage voluntary disclosures to the government. Adopting a selective waiver doctrine would not serve this underlying purpose; instead, it would improperly create a new privilege, a function best left to Congress, which has largely declined to enact such a protection. Furthermore, a confidentiality agreement with the government does not prevent waiver because it only protects the parties' expectations and does not serve the privilege's public ends. The disclosure here was voluntary, not compelled, as Toberoff solicited the subpoena and made no attempt to assert the privilege or redact documents before complying.

Analysis:

This decision aligns the Ninth Circuit with the majority of federal circuits by rejecting the 'selective waiver' doctrine. It establishes a clear, bright-line rule that disclosing privileged materials to the government during an investigation forfeits the privilege as to all other adversaries, including civil litigants. This holding forecloses a strategy where parties could cooperate with government investigators while simultaneously shielding the same information in parallel civil litigation. The ruling emphasizes that the privilege's purpose is to protect the attorney-client relationship, not to facilitate tactical disclosures to third parties, and that any expansion of privilege is a legislative, not judicial, function.

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