We have been examining the role attorney-client privileged information played in Sanford Wadler’s trial victory over his former employer, Bio-Rad. Bio-Rad engaged in actions the court concluded were express waivers of attorney-client privilege under federal law, allowing Wadler to use privileged communications to make his case.
The district court addressed whether the waiver extended beyond Bio-Rad’s specific disclosures. Disclosure of privileged communications does not automatically result in a broad subjectmatter waiver. Subject matter waiver occurs only if (1) the waiver is intentional; (2) the disclosed and undisclosed communications or information concern the same subject matter; and (3) they ought in fairness to be considered together. Fed. R. Evid. 502(a).
Subject matter waiver is reserved for unusual situations where fairness requires a further disclosure of related, protected information to prevent selective and misleading presentation of evidence to the disadvantage of an adversary. Advisory Committee Notes to Fed.R. Evid. 502. Subject matter waivers typically arise only where a party has attempted to assert the privileged information as a sword and a shield. IGT v. Alliance Gaming Corp., 2006 WL 8071393 (D. Nev. Sept. 28, 2006)
Bio-Rad relied on In re General Motors LLC Ignition Switch Litigation, 80 F. Supp. 3d 521 (S.D.N.Y. 2015) to argue it could rely on the conclusions of outside counsel without waiving attorney-client privilege on the underlying communications. In General Motors the court held the disclosure of facts from an investigative report in a government proceeding did not defeat attorney-client privilege, because privilege does not extend to information but only communications. Id. at 528. However, in that case the client did not use the investigative report offensively, or make an unfair selective or misleading presentation. Id. at 533.
In its purported reasons for terminating Wadler, and in its presentations to government agencies, Bio-Rad broadly accused Wadler of misconduct and incompetence. Bio-Rad alleged Wadler failed to establish proper measures to ensure Foreign Corrupt Practices Act compliance; took unreasonable actions regarding various Bio-Rad regulatory filings; and made an unauthorized settlement offer. These positions gave rise to an implied waiver of communications relevant to these allegations. Unlike the situation in General Motors, Bio-Rad did not merely state conclusions — it also described the underlying investigation by outside counsel in great detail. Bio-Rad planned to use the conclusions of outside counsel offensively to defeat Wadler’s retaliation claim, and to preclude Wadler from presenting related communications to rebut this evidence. The court concluded it would be unfair to prevent Wadler from introducing related privileged and confidential communications to show that Bio-Rad’s concerns were a pretext.
Bio-Rad’s use of its privileged communications resulted in a broad waiver of issues Wadler communicated to Bio-Rad; of communications between outside counsel and Wadler; and communications between outside counsel and Bio-Rad about Wadler. As a practical matter, the waiver extended to anything Wadler reasonably believed necessary to show he had an objectively reasonable belief that Bio-Rad was violating the FCPA.
Next month: the primacy of federal legislation over claims of attorney-client privilege.
About the Author:
Jennifer Becker is certified by the State Bar of California, Board of Legal Specialization in Legal Malpractice, and is chair of BASF’s Legal Malpractice Section. She is a partner at Long & Levit, and the Editor-in-Chief of Long & Levit’s Lawyers and Judges Blog, www.longlevit.com/blog/, which is searchable by topic and case name.