N.D. Ill. Discusses Circuit Split Re Selective Waiver

Per Lawrence E. Jaffe Pension Plan v. Household Intern., Inc., Slip Copy, 2006 WL 3524016 (N.D.Ill. Dec. 6, 2006):

Plaintiffs argue that Defendants cannot produce privileged material to a governmental agency for their own benefit and then still assert the privilege here. In other words, Plaintiffs ask the court to reject the "selective" or "limited" waiver theory, which provides that a party may disclose documents to a government agency without waiving the privilege as to any other party. As discussed below, the circuit courts are split as to the viability and application of this theory. Some have found that selective waiver is always permissible; some have found that selective waiver is never permissible; and others have found that selective waiver is permissible when the government has signed a confidentiality agreement. The court finds this last approach most persuasive in this case.

1. Courts Allowing Selective Waiver

The Eighth Circuit has adopted the theory of selective waiver in the context of the attorney-client privilege. [See] Diversified Indus.., Inc. v. Meredith, 572 F.2d 596 (8th Cir.1977). . . .

2. Courts Rejecting Selective Waiver

Many other courts have rejected the concept of selective waiver of the attorney-client privilege, finding that "[v]oluntary cooperation with government investigations may be a laudable activity, but it is hard to understand how such conduct improves the attorney-client relationship." Permian Corp. v. United States, 665 F.2d 1214, 1220-21 (D.C.Cir.1981). These courts explain that "[t]he client cannot be permitted to pick and choose among his opponents, waiving the privilege for some and resurrecting the claim of confidentiality to obstruct others, or to invoke the privilege as to communications whose confidentiality he has already compromised for his own benefit." Id. at 1221. See also United States v. Massachusetts Institute of Tech., 129 F.3d 681, 686 (1st Cir.1997) ("Anyone who chooses to disclose a privileged document to a third party, or does so pursuant to a prior agreement or understanding, has an incentive to do so, whether for gain or to avoid disadvantage. It would be perfectly possible to carve out some of those disclosures and say that, although the disclosure itself is not necessary to foster attorney-client communications, neither does it forfeit the privilege. With rare exceptions, courts have been unwilling to start down this path--which has no logical terminus--and we join in this reluctance."); Westinghouse Elec. Corp. v. Republic of Philippines, 951 F.2d 1414, 1425 (3d Cir.1991) ( "[S]elective waiver does not serve the purpose of encouraging full disclosure to one's attorney in order to obtain informed legal assistance; it merely encourages voluntary disclosure to government agencies, thereby extending the privilege beyond its intended purpose."); In re Martin Marietta Corp., 856 F.2d 619, 623-24 (4th Cir.1988) ("The Fourth Circuit has not embraced the concept of limited waiver of the attorney-client privilege.")

The Sixth Circuit has similarly joined the First, Third, Fourth, and D.C. Circuits in rejecting selective waiver. [See] In re Columbia/HCA Healthcare Corp. Billing Practices Litig., 293 F.3d 289 (6th Cir.2002) . . . .

The Seventh Circuit has not yet determined whether it endorses the concept of selective waiver, though courts in this district have not viewed it with particular favor.