Third Party Disclosure Waives Privilege

The Delaware Court of Chancery has held that a party waived its attorney-client privilege by submitting the documents at issue to the Federal Communication Commission.

The Plaintiffs seek thirty-one (31) documents previously produced by Defendant IDT Corporation (“IDT”) to the Federal Communications Commission (“FCC”) in 2016 in connection with an investigation pertinent to this Action.

The court distinguished an earlier decision

But here, I find, IDT did not have an analogous expectation of privacy because the documents were not produced to the FCC under a confidentiality agreement. Instead, IDT merely requested that the documents remain confidential. IDT had no non-disclosure agreements with the FCC, and the Requests cited by IDT are insufficient to show that IDT reasonably believed that the documents would not be revealed to other adversaries. In other words, IDT found it advantageous to disclose the privileged documents to a third party, the FCC, despite knowing that they could be disseminated. IDT did not have a commitment, let alone an enforceable agreement, with the FCC to keep the documents confidential. In that situation, IDT manifested its intent to waive any privilege by disclosing the documents to a third party. I assume that IDT desired that the thirty-one documents remain confidential, but such desire does not amount to the reasonable expectation required to avoid a waiver under Saito, which is an exception to the general rubric that outside disclosure vitiates the privilege.

IDT has also cited cases that decline to find a waiver of privilege where privileged documents were inadvertently produced. However, nothing in the record indicates that IDT inadvertently produced the documents, instead IDT has imply asserted that “[i]ts inclusion of a small number of privileged documents in its voluminous production to the FCC does not waive privilege.” I find the cases cited by IDT inapposite as to whether privilege was waived by IDT’s purposeful production.

(Mike Frisch)