Last week's Privilege Point described a decision applying the subject matter waiver doctrine, which relies on fairness notions to prevent litigants from relying on privileged communications as a "sword" while simultaneously using the privilege as a "shield." Does the doctrine apply to statements outside a judicial setting?
In Utesch v. Lannett Co., Civ. A. No. 16-5932, 2020 U.S. Dist. LEXIS 232413 (E.D. Pa. Dec. 10, 2020), securities fraud class action plaintiffs alleged that defendant lied about its law firm Fox Rothschild's investigation into alleged price fixing. Among other things, the court rejected plaintiffs' argument that Lannett triggered a subject matter waiver by: (1) "informing the public, outside the present litigation, that the reported results of the investigation found no wrongdoing," and (2) "stating in various SEC filings that '[b]ased on reviews performed to date by outside counsel, [Lannett] currently believes that it has acted in compliance with all applicable laws and regulations' with respect to its pricing practices." Id. at *33 (alteration in original). The court pointed to a seminal Second Circuit case in explaining that "the extrajudicial disclosure of privileged communications waives privilege only as to the protected information 'actually revealed.'" Id. (citing In re von Bulow, 828 F.2d 94, 103 (2d Cir. 1987)).
Not all courts would be this forgiving. Next week's Privilege Point describes an earlier case taking a frighteningly more expansive view.
Published March 4, 2021.
