In Re Qwest Communications International Inc.
2006 U.S. App. LEXIS 14937, 450 F.3d 1179, 70 Fed. R. Serv. 492 (2006)
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Rule of Law:
The voluntary disclosure of materials protected by the attorney-client privilege and work-product doctrine to federal agencies during an investigation constitutes a waiver of those protections as to third-party civil litigants. The Tenth Circuit declines to adopt a 'selective waiver' doctrine that would prevent such a waiver, particularly where confidentiality agreements with the agencies do not strictly limit further disclosure.
Facts:
- In early 2002, the Securities and Exchange Commission (SEC) began investigating the business practices of Qwest Communications International, Inc. (Qwest).
- By the summer of 2002, the United States Department of Justice (DOJ) had also commenced a criminal investigation of Qwest.
- During these investigations, Qwest voluntarily produced over 220,000 pages of documents protected by the attorney-client privilege and work-product doctrine to the SEC and DOJ.
- Qwest's production was made pursuant to written confidentiality agreements with both agencies, which stated that Qwest did not intend to waive its privileges.
- The agreements, however, permitted the agencies to disclose the documents if they determined it was required by law or in furtherance of their official duties.
- The agreement with the DOJ specifically allowed it to share the documents with other government agencies and to make 'full use' of the information in grand jury proceedings, court proceedings, and consultations with experts.
- Prior to and during the federal investigations, various private plaintiffs had filed civil securities lawsuits against Qwest involving many of the same issues.
Procedural Posture:
- Private plaintiffs (the Real Parties in Interest) sued Qwest Communications International, Inc. in a consolidated securities action in the United States District Court for the District of Colorado.
- During discovery, the Plaintiffs filed a motion to compel production of documents Qwest had previously disclosed to the SEC and DOJ.
- A magistrate judge granted the Plaintiffs' motion, finding that Qwest had waived any applicable privileges by disclosing the documents to the government.
- Qwest objected to the magistrate judge's ruling, but the district court affirmed the order compelling production.
- Qwest then filed a motion for reconsideration and for certification of an interlocutory appeal.
- The district court denied the motion to certify an interlocutory appeal, prompting Qwest to petition the United States Court of Appeals for the Tenth Circuit for a writ of mandamus to overturn the production order.
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Issue:
Does a company's voluntary disclosure of materials protected by the attorney-client privilege and work-product doctrine to federal agencies during an investigation, pursuant to confidentiality agreements, waive those protections as to third-party civil litigants?
Opinions:
Majority - Murphy, Circuit Judge
Yes, a company's voluntary disclosure of privileged materials to federal agencies during an investigation waives those protections as to other parties. The court rejected the 'selective waiver' doctrine, holding that disclosure to an adversary, even a government agency, destroys the confidentiality required for both the attorney-client privilege and work-product protection. The court surveyed other circuits and found an almost unanimous rejection of selective waiver, reasoning that the doctrine does not serve the underlying purpose of the attorney-client privilege, which is to encourage full and frank communication between attorneys and their clients, not to facilitate strategic disclosures to government agencies. The court reasoned that a party cannot 'pick and choose' among its opponents, waiving the privilege for some while asserting it against others. Furthermore, the confidentiality agreements Qwest entered into with the SEC and DOJ were not sufficient to prevent waiver, as they gave the agencies broad discretion to further disseminate the materials, which they did. The court was unwilling to create what would effectively be a new 'government-investigation privilege' without a clear mandate from common-law consensus or Congress, noting that Qwest itself chose to cooperate despite the overwhelming precedent against selective waiver.
Analysis:
This decision solidifies the Tenth Circuit's alignment with the overwhelming majority of federal circuits that reject the 'selective waiver' doctrine. It establishes that companies under investigation face a stark choice: either maintain the privilege by refusing to disclose protected documents or cooperate by disclosing them and assume the privilege will be waived as to all other adversaries, including civil plaintiffs. The ruling significantly curtails a company's ability to use privileged information as a strategic tool to gain leniency from the government while simultaneously shielding it in parallel civil litigation. The court's reluctance to create a new common-law privilege underscores the judiciary's deference to legislative bodies for such significant policy changes, leaving the door open for Congress or rule-making committees to address the 'culture of waiver' issue.
