California Appellate Court Rules Privilege Not Waived in Coercive Federal Investigation

The 4th District Court of Appeals for California ruled that the trial court correctly held that defendants’ cooperation with federal agencies did not waive attorney-client and work product privileges in Regents of the University of California v. Superior Court, 81 Cal.Rptr.3d 186 (2008). In this case, energy suppliers were asked by a federal Corporate Fraud Task Force to disclose privileged materials as part of an investigation. The Task Force policy considered cooperation a factor in decisions on indictment. Plaintiffs in the following antitrust suit sought the disclosed materials, arguing the defendants had waived privilege in their disclosure to the Task Force.

Adding to the growing number of cases addressing coerced disclosure to federal government agencies, this opinion states the “coercion the government used here [was] more powerful than a court order” because  “defendants…had no means of asserting the privileges without incurring the severe consequences threatened by the government agencies”.

Regents of the University of California v Superior Court