Waiving Privilege In Government Investigations

The battle in the McKesson HBOC securities litigation over whether providing investigatory reports to the SEC and the DOJ constitutes a waiver of attorney-client privilege continues – now in federal court. Last February, the California Court of Appeal held in a case involving McKesson that providing investigatory reports to government entities was a waiver under California law.

Some of McKesson’s former executives have been indicted by the DOJ and also want access to the reports. A federal district court agreed with the California Court of Appeal that the privilege had been waived, but McKesson wants to prevent the reports from going to the shareholder plaintiffs who have brought cases against it in federal court. McKesson appealed the decision and the SEC is supporting the company’s position. The Recorder has an article (via law.com – free regist. req’d) on the recent hearing before the U.S. Court of Appeals for the Ninth Circuit.

Quote of note: “White-collar practitioners are closely watching the case, U.S. v. Bergonzi, 03-10511, because it highlights the collision of civil and criminal prosecutions in cases of alleged corporate wrongdoing. Companies share internal reports in order to win favor with government investigators. But if those reports end up exposing them to liability in securities fraud suits, they may not be as cooperative on the criminal side.”

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