Concept
Waiver of Work Product
Work product, privilege, and protective orders
Waiver of Work Product
Work-product protection can end in two ways. A requester can break through it under Rule 26(b)(3)(A), which bars discovery of documents and tangible things “prepared in anticipation of litigation or for trial by or for another party or its representative” unless the requester “has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means.”1 Or the holder can give the protection away. The rule’s text does not describe that second route, so courts have drawn its limits themselves.
Those limits differ from the limits on waiving the attorney-client privilege, because the two doctrines protect different things. The privilege protects the attorney-client relationship by safeguarding confidential communications; work product protects the adversary process by insulating a lawyer’s litigation preparation from discovery.2 Voluntary disclosure therefore waives the privilege, because it is inconsistent with a confidential relationship, yet it does not necessarily waive work product, because it does not necessarily undercut the adversary process.3 Every waiver problem in this section reduces to one inquiry: who received the material, and could that recipient use it against the holder?
Three questions organize what follows. Did the holder give the material to an adversary, or to a conduit that carries it to one? If the recipient was an outside auditor or an ally, did the handoff still put the material within an opponent’s reach? And once a court finds waiver, how far does it extend? Two matters sit outside those questions. The holder must first have asserted its claim in a form that lets others “assess the applicability of the privilege or protection,” and one court found that a party defending an accident investigation as work product had not met that burden under Rule 26(b)(5).4 And a disclosure made by mistake in discovery follows its own procedure under Rule 26(b)(5)(B): the producing party may notify the receiving party of the claim and its basis, and the receiving party must then promptly return, sequester, or destroy the information and may not use or disclose it until the claim is resolved.5 The next section covers that procedure. This one covers disclosures the holder meant to make.
Disclosure to an Adversary
A holder forfeits work-product protection when it discloses the material in a way that is inconsistent with keeping it secret from the opposing party. The D.C. Circuit stated the test in United States v. Deloitte LLP: disclosure to a third party waives protection if “such disclosure, under the circumstances, is inconsistent with the maintenance of secrecy from the disclosing party’s adversary.” Under that standard, the voluntary disclosure of attorney work product to an adversary, or to a conduit to an adversary, waives work-product protection.6
A pleading shows the principle in its plainest form. Lawyers draft complaints, answers, interrogatories, motions, and supporting affidavits knowing that the other parties will receive them, and no one has seriously suggested that an answer could be hidden from view under the work-product label.7 A holder who voluntarily hands the adversary a paper from its lawyer’s own file stands where the author of a pleading stands, and it cannot keep from the adversary what it chose to give it.
A promise from the adversary to keep the papers from everyone else does not restore what the disclosure gave up. The test asks whether the disclosure is consistent with secrecy from the adversary, and the promise leaves the adversary holding the material. re Sunrise Securities Litigation applied that reasoning to a law firm that gave documents to the lawyers for a party adverse to it under an agreement barring third-party access, and the court held that the disclosure waived protection for the documents turned over.8
The conduit is the hardest of these recipients to spot, because it is not a party at all. The inquiry follows the material to where it is going, so a handoff that will reach the adversary counts as a handoff to the adversary.9
The adversary rule meets its sharpest test when a company gives its lawyers’ findings to a government agency during an investigation and then faces a private plaintiff who wants the same findings. Protection that survives against some adversaries and not others is called selective waiver. In In re Qwest Communications International Inc., the Tenth Circuit found almost unanimous rejection of selective waiver among the circuits, with only the Eighth Circuit having adopted a limited waiver in circumstances like those before the court.10 Because the Tenth Circuit declined to adopt it, disclosure to the SEC and the Department of Justice waived both the privilege and work-product protection for the documents disclosed.11 The Eighth Circuit’s decision in Diversified Industries is the exception. It held that giving privileged material to the SEC in a separate, nonpublic investigation produced only a limited waiver, because a contrary holding might thwart the developing practice of corporations hiring independent outside counsel to investigate and advise in order to protect stockholders and customers.12
Most courts decline that trade. A company that gives its findings to one adversary has chosen to do so for its own benefit, and letting it keep the same findings from the next adversary would let it use disclosure as a sword and protection as a shield, the unfairness the sword-and-shield principle exists to prevent.13
A party can also waive by agreeing to give its opponents what would otherwise be protected. In re Intel Corp. Microprocessor Antitrust Litigation arose after Intel agreed to discovery of custodian information bearing on its preservation efforts and then asserted work product over the Paragraph 8 Summaries of that information. The special master held that Intel could not “mask its agreed to discovery of custodian information” by asserting work product over the fact work product at the heart of its preservation position.14 Intel also could point to nothing in the meet-and-confer process showing that the parties had agreed to let it preserve a claim of privilege or work-product protection for those summaries.15 A party that agrees to give opponents such information should therefore record a reservation of its protection in the agreement, because a disclosure made without one is judged by what was handed over.
Waiver can also result from what a party does at trial. In United States v. Nobles, the defense called its investigator to testify to what three Government witnesses had told him earlier, contradicting their trial testimony, and the Government asked for his report. The Supreme Court held that work-product protection, like the attorney-client privilege, may be waived, and that by offering the investigator’s testimony the defense waived protection for the portions of the report relating to it.16 The Court treated the testimony as going to the credibility of principal witnesses, and so to the heart of the case, and not as mere impeachment.17 The investigator spoke from his report, and a party that offers his account cannot keep from the opponent the document that lets the jury test it. The waiver ran only as far as the testimony. Portions of the report unrelated to those witnesses stayed protected, and Rule 26(b)(3)(B) still requires a court that orders discovery of such material to protect counsel’s mental impressions, conclusions, opinions, or legal theories.18
The first step does the most work, because the same document handed to an ally, to a conduit, and to the plaintiff produces three different answers. Recipients who are neither adversaries nor conduits, such as an outside auditor or a co-party with parallel interests, raise the harder question taken up next.
Disclosure to Auditors and Allies
Giving work product to a third party does not by itself end the protection. The disclosure waives it only when it is inconsistent with secrecy from the holder’s adversary, so the recipient’s relationship to that adversary decides the question.27 Two kinds of recipient fall between the adversary and the stranger: the ally who shares the holder’s side of a dispute, and the outside auditor who must examine the company’s books.
Allies sit on the protected side of the line. Courts have generally held that where the disclosing party and the third party share a common interest, there is no waiver, because “[d]isclosure of work product to a party sharing common interests is not inconsistent with the policy of privacy protection underlying the doctrine.”28 The Seventh Circuit applied the same idea to a single client’s legal team in Menasha Corp. v. U.S. Department of Justice. Work product, it explained, “shields the wrangles within the client’s legal team from the opposing party,” so the federal agencies’ differing positions on a proposed Superfund consent decree did not make them adversaries. The only federal party was the United States, “a single party represented by a single legal representative, the Justice Department.”29
The auditor is the harder case. When the D.C. Circuit decided Deloitte, it knew of no circuit that had resolved whether disclosing work product to an independent auditor waives protection. Most district courts to consider the question had found no waiver, but at least two had found one: Medinol, Ltd. v. Boston Scientific Corp. and In re Diasonics Securities Litigation.30 The majority rule is the one to state, with the contrary decisions acknowledged.
Two formulations of the test appear in the decisions, and they ask the same thing from different directions. Deloitte looks at the recipient’s relationship to the holder’s opponent, and finds waiver when the recipient is an adversary or a conduit to one.31 Merrill Lynch looks at the effect of the disclosure, and finds waiver generally only if it “substantially increases the opportunity for potential adversaries to obtain the information.”32 A recipient who is not an adversary and will not pass the material to one leaves that opportunity where it was, so the two formulations usually agree.
When a company shows an auditor its lawyers’ litigation analysis, the business purpose of the exchange does not by itself end the protection. A document created because of anticipated litigation, which tends to reveal counsel’s mental impressions, conclusions, opinions, or theories, does not lose work-product protection merely because it is intended to assist in making a business decision influenced by the likely outcome of the litigation. A document created because of anticipated litigation, and not prepared in substantially similar form but for it, falls within Rule 26(b)(3).33 The auditor cases therefore start from protected material and ask only whether the handoff waived it.
Merrill Lynch & Co. v. Allegheny Energy, Inc. put that question squarely. Allegheny sought two reports that counsel had prepared for Merrill Lynch and argued that giving them to Merrill Lynch’s auditor, Deloitte & Touche, waived any protection.34 Merrill Lynch effectively conceded that the disclosure waived the attorney-client privilege, claimed work-product protection, and accepted that the auditor’s own audit work and its discussions with Merrill Lynch personnel about internal control were discoverable.35 The reports had gone to the auditor on the understanding that counsel had prepared them and that they were privileged, that the auditor would keep them confidential, and that there would be no further disclosure.36 The court identified two points on which courts diverge: whether the “adversary” the work-product doctrine contemplates must be a litigation adversary, and whether a corporation’s auditor is an adversary whose receipt of the material waives protection. It answered no to both and held that the disclosure did not waive work-product protection.37
Even courts that find no waiver have looked at the accountant’s role. One decision found no waiver because the accounting firm was acting as a consultant, not as a “public accountant,” at the relevant time, which suggests that the public role is where a waiver argument stands on its firmest footing.38
The D.C. Circuit reached the same result in Deloitte. The government argued that Dow could not reasonably expect confidentiality from its auditor, given the many ways Deloitte could reveal what it learned. The court answered that the government had neither pointed to any regulatory provision nor posited any specific circumstance under which Deloitte would have to disclose attorney work product like the Dow Documents, and that an independent auditor can fulfill its duties and render an opinion without revealing every piece of information it reviews. Deloitte’s obligations therefore did not make it a conduit to Dow’s adversaries.39 The court also observed that, whatever heightened protection opinion work product enjoys, it “is not triggered unless disclosure creates a real, nonspeculative danger of revealing the lawyer’s thoughts.”40 A route from the auditor to the adversary that exists only in theory is not that kind of danger.
The government’s best counterargument is also the point on which courts divide. An independent auditor, it said, is a “public watchdog” whose ultimate allegiance runs to creditors, stockholders, and the investing public, all of them potential adversaries of the company.41 The same opinion distinguished Arthur Young by what the government sought. The government there wanted not an independent auditor’s “interpretations of the client’s financial statements,” which Arthur Young would permit, but an attorney’s thoughts and opinions developed in anticipation of litigation, which the work-product doctrine forbids.42
The same promise of confidentiality produces opposite results in those two scenes because of who holds the report. The shareholders’ lawyers hold their adversary’s preparation and can use it against it, so a promise about third parties cannot restore secrecy from them. An auditor that has agreed to keep the report confidential is not a party to the litigation, so the agreement describes a recipient that cannot use the material against the holder. An exam stem that sends a counsel-directed report to an outside auditor therefore tests whether the answer separates privilege from work product, since the privilege may be lost while work-product protection survives. Substitute the opposing party, a conduit to it, or a government agency for the auditor, and the result reverses.
Scope of Waiver
The attorney-client privilege and the work-product doctrine are related but distinct, and waiver of one does not necessarily waive the other, as the Federal Circuit stressed in re EchoStar Communications Corp.46 The two doctrines part company most sharply on how far a waiver spreads.
When a party defends its actions by disclosing an attorney-client communication, it waives the privilege for all communications on the same subject matter.47 That waiver normally extends beyond the immediate circumstances: it lasts for all time, for all purposes, for all proceedings, and against everyone who might seek the information, with some dissent in limited circumstances.48 The privilege rests on confidentiality, so a holder who reveals part of a conversation has given up the secrecy that justified the protection, and fairness bars it from keeping back the rest of what bears on the same question.
Work-product waiver is narrower. In EchoStar it reaches only “factual” or “non-opinion” work product concerning the same subject matter as the disclosed work product, not all work product on that subject as a privilege waiver does.49 The court took that measure from the Fourth Circuit’s decision in Martin Marietta, which found an implied waiver “as to all non-opinion work-product on the same subject matter as that disclosed,” citing Nobles.50 Two limits are built in. Opinion work product, which holds counsel’s mental impressions and legal theories, falls outside the subject-matter reach, and the reach itself stops at the same subject.
The narrower reach follows from what each doctrine protects. The privilege protects a confidential relationship, so disclosure undermines it entirely. Work-product immunity promotes a fair and efficient adversarial system by protecting “the attorney’s thought processes and legal recommendations” from the prying eyes of the opponent.51 Handing an opponent one document gives the opponent that document and leaves the lawyer’s other preparation as private as before. The only reason to widen the waiver past the item disclosed is unfairness, and that reason has force only where the holder is using what it disclosed to gain an advantage.
For an ordinary disclosure, then, the measure is the items handed over. The Eighth Circuit stated the limit in Pittman v. Frazer: a party that discloses documents intending that an opposing party may see them cannot later claim work-product protection for those documents, but disclosure of some documents does not destroy protection for other documents of the same character.52
Pittman and EchoStar fit together once the question becomes what the holder did with the material. A party that merely produces documents asks the fact-finder to accept nothing that rests on what it keeps hidden, so the waiver stops at the documents. The party in EchoStar defended its conduct by pointing to counsel’s advice,53 and the court worried about a litigant using that advice as a sword by disclosing the favorable portion and as a shield by withholding the rest.54 Where the shield would distort the inquiry, the waiver extends to non-opinion work product on the same subject. The item disclosed is the floor of a waiver, and non-opinion material on the same subject is its ceiling, reached when the holder puts the subject in play. Nobles shows the same boundary at trial: the investigator’s testimony waived protection for the portions of his report relating to the witnesses he described, and no more.55
The Federal Circuit sorted a lawyer’s file in an advice-of-counsel setting into three groups, and the sorting shows where the ceiling falls:
- Opinion letters and memoranda communicated to the client lose their protection, because they are evidence of a non-privileged, relevant fact: what the client was told.56
- Opinion work product never communicated to the client stays protected and receives the highest protection, so counsel’s own analysis and debate over what advice to give fall outside the waiver.57
- Documents that refer to a communication with the client without having been communicated themselves, such as a lawyer’s e-mail to an associate describing a phone call with the client, are discoverable, but any uncommunicated legal analysis in them must be redacted, with in camera review if needed.58
Uncommunicated opinion work product stays protected for reasons that follow from the sword-and-shield concern itself. A litigant is unlikely to use a pure mental impression or legal theory as both sword and shield in a way that distorts fact-finding, so shielding it from the broad repercussions of subject-matter waiver strengthens the adversary process. A legal opinion that never reached the client also says little about what the client knew, and whatever value it has is outweighed by the policies behind the doctrine.59 The court acknowledged that the line between factual and opinion work product is not always distinct, especially where an attorney’s opinion may itself be factual work product, and it directed courts facing that blur to balance the policy against sword-and-shield tactics with the policy of protecting work product.60
In re Intel shows the same split inside one set of interview materials. The special master concluded that Intel’s waiver covered non-core work product but not core work product: “with respect to core work-product the answer is no, and with respect to non-core work-product, the answer is yes.”61 After an exhaustive in camera review, the special master found that the interview materials contained both kinds and that the core was not so intertwined with fact information that the whole had to be treated as core, because the facts could be easily separated from it.62 Interview materials often fall on the fact side for a reason one court gave: an interview that “encourage[s] a fairly wide-ranging disclosure” is more likely to yield fact work product than opinion work product, because documents generated in response to a general investigation might not reveal a lawyer’s focus.63
A waiver of documents does not reach facts, which a requester could always seek. Rule 26(b)(3) protects documents and tangible things and does not bar discovery of facts a party learned from documents that are not themselves discoverable, while Hickman v. Taylor continues to protect intangible work product, including counsel’s thoughts and recollections, which is often eligible for the special protection given opinion work product.64
Rule 26(b)(3) sets two tiers of protection. Ordinary work product prepared in anticipation of litigation is discoverable only on a showing of need and hardship, and “core” or “opinion” work product, the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative, is generally afforded near absolute protection.65 A waiver that reaches only some material leaves the rest in whichever tier it started, and Rule 26(b)(3)(B) directs a court that does order discovery to protect against disclosure of mental impressions, conclusions, opinions, or legal theories.66 In Intel the waiver took the facts and left counsel’s evaluation of them, which is where that rule already draws its line.
Answers on this topic tend to err in one of two opposite ways. One imports the privilege rule and says that disclosing one document waives everything on the subject, including counsel’s opinions, which overstates the waiver. The other treats a disclosure as affecting nothing beyond its own pages even when the holder has used the material to support its case, which understates it. The sound answer starts with the items disclosed, asks whether the holder is using them in a way that makes selective disclosure unfair, and stops at non-opinion material on the same subject.