Attachment of Protected Email to Service Copies of Motion Requesting its Return Constitutes Deliberate Disclosure to Adversaries, Waiving Any Privilege

Kingsway Fin. Servs., Inc. v. Pricewaterhouse-Coopers LLP, 2007 WL 1837133 (S.D.N.Y. June 27, 2007)

In this securities case, the parties had entered into a protective order which provided, among other things, that the inadvertent production of purportedly privileged documents would not operate as a waiver of any applicable privilege.  In August 2006, plaintiff produced an April 25, 2003 email and attached memorandum sent from an executive of plaintiff Kingsway to Kingsway’s counsel as part of a production of electronic documents.  In November 2006, defendant John Dore attached a copy of the April 25, 2003 email to a motion for reconsideration of a decision denying summary judgment in a related action pending in Illinois state court.  Four days later, plaintiff submitted a letter to the District Court for the Southern District of New York requesting the return of all copies of the April 25, 2003 email on the ground that it was protected by the attorney-client privilege and had been produced inadvertently.  Plaintiff filed the December 4, 2006 letter to the court under seal.  However, plaintiff attached a copy of the April 25, 2003 email to the service copies of the December 4, 2006 letter, thereby disclosing the contents of the email and the attachment to the defendants once again.

The court thereafter directed all defendants, including Dore, to return all copies of the disputed email, to destroy any documents disclosing its contents, to use best efforts to retrieve any such documents filed with any court, and to make no use of the email pending further order of the court.

Moving to compel production of the April 25, 2003 email, Dore argued plaintiff’s deliberate distribution of the disputed email to the defendants with the service copies of the December 4, 2006 letter waived any privilege that may have applied.  Plaintiff argued that it did not waive the attorney-client privilege because its initial production of the email was subject to the parties’ non-waiver agreement, and because it had filed all motions concerning the April 25, 2003 email with under seal.  However, plaintiff did not respond to Dore’s assertion that it waived the attorney-client privilege by distributing the April 25, 2003 email with its service copies to the defendants.

The court observed that the attorney-client privilege is not absolute, and “may be waived through, among other things, the voluntary disclosure of a privileged communication to a third party, especially a litigation adversary.”  The court granted Dore’s motion, explaining:

Here, plaintiff has unquestionably waived any attorney-client privilege which may have existed with respect to the 4-25-03 E-Mail.  Plaintiff does not dispute that it disclosed the E-Mail to its adversaries by attaching it to the copies of the December 4, 2006 Letter served on its adversaries.  Nor does plaintiff assert that its attachment of the E-Mail to the service copies was in any way inadvertent.  Indeed, plaintiff’s attachment of the E-Mail to the service copies was evidently deliberate.  In light of these considerations, plaintiff’s disclosure of the 4-25-03 E-Mail constitutes a waiver of the attorney-client privilege.

(Footnotes omitted.)