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In In re Pacific Pictures Corp., __ F.3d __, 2012 WL 1293534 (Apr. 17, 2012), the Ninth Circuit found a client waived attorney-client privilege in relation to other civil litigation by producing privileged documents to the government in response to a subpoena. The Ninth Circuit rejected the client’s argument that waiver should be limited to the intended recipient (“selective waiver”), and declined to create a new exception to general waiver.
FACTS & HOLDING
A Hollywood producer, Marc Toberoff, approached heirs of the creators of Superman in an effort to secure intellectual property rights away from D.C. Comics. In connection with this effort, Toberoff hired a lawyer, David Michaels. Michaels left after three months and absconded with several documents related to the Superman effort, including some showing Toberoff's "master plan to capture Superman for himself." After leaving, Michaels sent the documents anonymously to D.C. Comics.
Rather than exploiting the documents, D.C. Comics entrusted them to an outside attorney and sought to obtain them through ordinary discovery in a case that was previously pending against Toberoff. Toberoff claimed privilege over the documents and resisted all efforts at discovery. In 2010, Toberoff asked the US Attorney to investigate Michaels. The US Attorney issued a grand jury subpoena seeking documents related to the claim. Toberoff produced documents in response to the subpoena on condition the government would "not provide the… documents… to non-governmental third parties."
D.C. Comics then requested all documents disclosed to the US Attorney. The magistrate judge ordered production, agreeing a party may not selectively waive attorney-client privilege, i.e., a client may not waive as to one third-party recipient but maintain privilege as to other third parties. Toberoff argued that selective waiver should be allowed in order to encourage cooperation with government investigations. Some other circuits, including the Eighth Circuit, allow selective waiver. The Ninth Circuit disagreed, finding government cooperation is not one of the enumerated purposes of the attorney-client privilege or waiver doctrines, and there was no reason to create a new exception to general waiver. The Ninth Circuit also found that the confidentiality agreement between the government and Toberoff was insufficient to avoid waiver. The court reasoned that granting an exception for such agreements would not further the purpose of the attorney-client privilege, to encourage frank communication between client and attorney.
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