When to Share Work Product in Government Investigations
Every corporate counsel faces the possibility that some day, the government may seek information from the company in connection with an investigation. Sometimes, the government may be targeting the company itself, or one or more of its executives. Sometimes, though, the government may be investigating a third partypossibly a former employee or a competitorwho is adverse to the company in ongoing or anticipated civil litigation. Real-life examples of this scenario include investigations of persons or companies that are prospective or actual defendants in civil antitrust, fraud, or intellectual property litigation.
In either case, the company may have incentives to share information with the government. When a company is targeted, it may want to show its good faith efforts to root out any wrongdoing, which could facilitate a favorable settlement and avoid an enforcement action or prosecution. When the government is investigating a companys current or prospective litigation adversary, the company may want to cooperate with that investigation to uncover and help stop the adversarys conduct.
In both situations, the company likely will have engaged counseland perhaps other professionals, like forensic accountants, computer forensics experts, or other investigatorsto investigate and develop relevant facts. The fruits of this labor may include document compilations and memoranda or white papers that summarize documents, interviews, or other results of the fact-finding. This work product is protected from discovery, so long as it is prepared in anticipation of litigationmeaning that litigation must be ongoing or reasonably anticipated, and the work product is generated because of the litigation.
However, sometimes the most efficient way to get relevant information to the government is to share work product. This comes with certain risks, the most serious of which is waiver. Indeed, sharing work product risks waiving the protection for not only the specific work product shared, but other work product covering the same subject matter. Not every disclosure causes a waiver, thoughfar from it, actually. In many cases, courts have held that work product can be shared without any waiver occurring.
In this respect, the work product protection differs from the attorney-client privilege, which protects attorney-client communications related to seeking and providing legal advice. The attorney-client privilege is broader than the work product protection, because it covers all communications primarily related to legal advice, even if no litigation is anticipated. But it is also narrower and more fragile, as the disclosure of a privileged communication to anyone outside the attorney-client relationship (with only certain limited exceptions) waives the privilege as to not only that person, but the world.
The work product protection, by contrast, is more robust. In some circumstances, work product can be disclosed outside the attorney-client relationship without waiving the protection.
When work product is disclosed to the government, a key question in determining whether a waiver occurs is whether the government is an adversary. For instance, in In re Martin Marietta Corp. (4th Cir. 1988), the Fourth Circuit held that Martin Mariettas disclosure of work product to the government, in an effort to settle potential criminal charges and debarment proceedings, waived the protection because the government and Martin Marietta were adverse. Other courts similarly have held that disclosing work product to the government when it is adverse (or a potential adversary) waives the protection, at least for the materials disclosed. See, e.g., In re Columbia/HCA Healthcare Corp. Billing Practices Litig. (6th Cir. 2002); United States v. Massachusetts Institute of Technology (1st Cir. 1997); In re Steinhardt Partners, L.P. (2nd Cir. 1993); Westinghouse Elec. Corp. v. Republic of Philippines (3rd Cir. 1991); In re Subpoenas Duces Tecum (D.C. Cir. 1984); In re Royal Ahold N.V. Securities & ERISA Litig. (D. Md. 2005).
The Fourth Circuit in Martin Marietta left open the question of whether a disclosure under less adverse circumstances would cause a waiver. In other cases, courts have upheld the protection for work product shared with the government when it is not adverse.
For example, in United States v. American Telephone & Telegraph Co. (D.C. Cir. 1981), the D.C. Circuit held that MCIs disclosure of work product to the government did not waive the protection when both MCI and the government were litigating antitrust claims against AT&T. The court reasoned that [s]o long as transferor and transferee anticipate litigation against a common adversary on the same issue or issues, they have strong common interests in sharing the fruit of the trial preparation efforts, and the transferee is not at all likely to disclose the work product material to the adversary.
Some courts formulate this issue as whether the disclosure substantially increases the likelihood that the work product will fall into an adversarys hands. When the government is the adversary, that likelihood is 100 percent, so courts generally find that this waives the protectionthe only question is the scope of the waiver. But when the government is friendly (or at least, not adverse), the protection may survive, as it did in United States v. AT&T. See also Permian Corp. v. United States (D.C. Cir. 1981); Costabile v. County of Westchester (S.D.N.Y. 2008); ASARCO, LLC v. Americas Mining Corp. (D. Idaho 2007); Chambers v. Allstate Ins. Co. (S.D. W.Va. 2002); In re Visa Check/MasterMoney Antitrust Litig. (E.D.N.Y. 2000); Wsol v. Fiduciary Management Assocs. Inc. (N.D. Ill. 1999).
So what happens if the court finds a waiver? Two related issues may come into playthe difference between fact and opinion work product, and subject matter waiver.
In simple terms, fact work product is work product that describes or reveals facts gathered or developed in anticipation of litigation. It can be notes or a memorandum summarizing a witness interview, or a white paper describing facts learned from multiple sourcesbut it also can include other materials, like photographs or recordings taken by an investigator retained for the litigation. Fact work product should not be confused with the historical facts themselvesmere historical facts are not work product, so disclosing historical facts alone should not present a waiver risk. Unfortunately, courts are often ambiguous or inconsistent in recognizing and applying this distinction.
Opinion work product, on the other hand, is work product that reveals thought processes, opinions, strategies, or mental impressions. Though often described as material revealing an attorneys thoughts or mental impressions, opinion work product can include thoughts or mental impressions prepared or formulated by any party representative in anticipation of litigation. Opinion work product generally enjoys greater protection, but the protection may be waived if the disclosure puts the work product into (or substantially increases the likelihood that it will reach) an adversarys hands.
The difference between fact and opinion work product can emerge when determining a waivers scope. As the Fourth Circuit held in Martin Marietta, a disclosure of fact work product to an adversary may waive the protection not only as to the materials disclosed, but as to all fact work product on the same subject matter. However, the potential subject matter waiver does not necessarily extend to opinion work product. Because opinion work product enjoys greater protection, it can sometimes survive a disclosure of fact work product to an adversary.
In sum, it is possible to disclose work product to the government without waiving the protection. No disclosure is risk-free, though, and assessing the waiver risk depends on the circumstances and requires analyzing whether the government is a friend or foe, or whether the disclosure increases (and if so, by how much) the likelihood that the work product may fall into an adversarys hands. Complicating the issue is the fact that courts often diverge in their application of the work product doctrine. Courts differ on a variety of issues, including whether opinion work product is absolutely protected, how to determine whether (and if so, to what extent) a work product disclosure increases the likelihood of discovery by an adversary, and whether intangible work product is protected.
It may be possible to mitigate some of the waiver risk by using a confidentiality agreement, if the government will agree to one (though often it will not). Beyond that, a company should limit any work product disclosure to fact work product. Because the purpose of sharing work product with the government is to provide relevant facts, there is almost never a reason to share opinion work product. The waiver risk for opinion work product can be reduced by not sharing it in the first place.
While this article addresses general principles, the work product protectionand the manner in which different courts have applied ithas many nuances that are beyond the articles scope. Company counsel therefore should consult with an expert in this area before making any work product disclosure to the government.
Tom Beshere is a commercial litigator in the Richmond, Virginia, office of McGuireWoods, where he is a counsel in the firm's Business and Securities Litigation Department. He has represented business clients from multiple industries in large and high-profile cases, including trade secret litigation, shareholder derivative suits, corporate governance disputes, deceptive business practice claims, securities and accounting fraud litigation, and contract disputes, several of which have involved parallel or related government investigations.