In the continuing evolution of the law concerning privilege waiver, the D.C. Circuit Court of Appeals has held that where a corporation produced attorney work-product material pursuant to a grand jury subpoena, neither its expectations of confidentiality nor the limited assurances of confidentiality it obtained from the government were sufficient to override the government’s obligations to turn over material necessary for the defense of a criminal defendant. Rejecting the district court’s broad finding of waiver, the D.C. Circuit in United States v. Thompson nonetheless remanded the case back to the district court for a fact-based analysis of which documents were material to the defense.

The issues in Thompson arose out of the federal government’s investigation of the trading practices of various energy companies (collectively “WPC”). WPC had retained an outside law firm to conduct an internal investigation and subsequently received a federal grand jury subpoena, together with subpoenas from other federal agencies. Desiring to cooperate, WPC turned over to government investigators the attorney notes from interviews of company employees, material developed under the supervision of the company’s counsel, and presentations made by its attorneys to the Department of Justice (“DOJ”) for the purpose of influencing its charging decisions. Accompanying the disclosures were statements expressing the company’s desire to keep the material confidential “to the extent possible” in order to preserve any privilege claims.

Although WPC eventually entered into a Deferred Prosecution Agreement with DOJ, several of its former employees, including Scott Thompson, were indicted in connection with their trading activities. Thompson then sought discovery from DOJ, including any information “material to his defense” that was provided to the government by WPC. Both the government and WPC opposed the motion, contending that WPC had preserved the protected status of the material and that the government had agreed to maintain the confidentiality of the material when it received it. The district court, however, granted Thompson’s motion.

On an expedited appeal of the district court’s ruling, the D.C. Circuit considered three factors in determining whether the company had waived its work product protection. The Court first considered whether WPC’s disclosure to the government was inconsistent with the goal of keeping the material secret from an adversary, the so-called “common interest” analysis. The Court held that WPC did not share a common interest with the government, noting that its purpose in producing the material to the government was to secure favorable treatment. Next, the Court considered whether WPC had a reasonable basis to believe that the government would keep the material confidential. Though WPC’s statements to the government expressed that desire, the Court held that the company’s qualified language – in which it sought to keep the material confidential “to the extent possible” – coupled with the fact that the company produced the material pursuant to a grand jury subpoena, demonstrated that the company could not have the expectation that the government would keep the material confidential in violation of any of its legal obligations to a criminal defendant. The third factor required the Court to consider the public policy interests underlying the work product doctrine. The Court concluded that, while the company sought confidentiality, the assurances that it obtained from the government were not sufficiently strong or unqualified to prevent the government’s disclosure of information material to the defense of a criminal action.

Analyzed in that fashion, the issue of whether the company’s disclosures were discoverable by Thompson, a criminal defendant, became an analysis of whether they were material to his defense. The D.C. Circuit therefore remanded the case to the district court for the latter to make that assessment. The full text of the D.C. Circuit’s decision can be found at United States v. Thompson, 562 F.3d 387 (D.C. Cir. 2009).