Southern District of New York Rejects Selective Privilege Waiver
"I conclude that selective waiver is not in the long-term best interests of the government, the adversarial system, or litigants," wrote U.S. District Judge Shira Scheindlin of the Southern District of New York. Judge Scheindlin ordered Credit Suisse Securities (USA) LLC to turn over to private plaintiffs documents that were prepared in an internal investigation and previously revealed to the SEC and U.S. Attorneys.
The company's general counsel began an internal investigation into alleged misconduct concerning the allocation of shares in IPOs, and the company employed outside counsel to interview employees and prepare written summaries of their investigation. Credit Suisse disclosed the documents to the U.S. Attorney and the SEC pursuant to confidentiality agreements. Documents were also discussed with officers of NASDR and disclosed to some former employees in an arbitration proceeding.
The court initially found that the documents did qualify as "fact" work product, which is generally afforded a lower level of protection than "legal" work product. However, the court found that Credit Suisse had waived any privilege.
Judge Scheindlin found the company's claim that it shared "common interests" with the U.S. Attorneys and the SEC to be "baseless," as the government entities were investigating potential wrongdoing and "Credit Suisse disclosed the Memoranda to escape or limit liability." In addition, the mere fact that a confidentiality agreement existed did not establish the disclosures as a selective waiver, and the company showed no special circumstances to negate a waiver finding.
Judge Scheindlin concluded that "[a]ny confidentiality that may have existed between Credit Suisse and its attorneys has been abandoned." According to the court, "[p]rotection of the Memorandum would serve Credit Suisse's strategic purposes, not any societal interest in fostering communications between attorneys and their clients."
In re Initial Public Offering Securities Litigation (Dkt No. 21 MC 92 (SAS))