In re Tyco MDL

2007 DNH 028

• Court: District Court, D. New Hampshire
• Decided: March 7, 2007
• Docket: 02MD1335PB
• Status: Published

Opinion

In re Tyco MDL 02MD1335PB 03/07/07 UNITED STATES DISTRICT COURT DISTRICT OF NEW HAMPSHIRE

In Re Tyco International Ltd. Multidistrict Litigation Case N o . 02-md-1335-PB ALL CASES Opinion N o . 2007 DNH 028

MEMORANDUM AND ORDER

Plaintiffs have moved to compel Tyco International, Ltd. to

produce drafts of two Form 8-K filings and certain underlying

documents. Tyco has responded with a Motion for a Protective

Order covering the same documents.

I. BACKGROUND

On April 3 0 , 2002, Tyco’s Corporate Governance and

Nominating Committee retained Boies Schiller & Flexner, LLP (the

“Boies Firm”) “to represent Tyco in connection with the

Committee’s review and analysis of transactions between and among

Tyco and its subsidiaries and certain of Tyco’s directors and

officers, and any litigation arising from or relating to that

review.” Tyco September 2002 Form 8-K at 3 (Doc. 6 8 7 , Attach.

22). The Boies Firm initially focused its investigation on a $20 million payment that had been made by the company to former Tyco

director, Frank E . Walsh, J r . Tyco subsequently expanded the

scope of the investigation to include the “use of company funds”

and “[Tyco’s] accounting and disclosures.” Id. at 4 . The

company planned to include the results of its investigation in a

Form 8-K to be filed with the Securities and Exchange Commission

(“SEC”) after the Boies Firm finished “the first phase” of its

investigation. Id. Tyco filed a Form 8-K on September 1 0 , 2002 1

and a second Form 8-K on December 3 0 , 2002. The September and

December Forms 8-K have come to be known as the “Boies Reports.”

II. ANALYSIS

Plaintiffs have not challenged Tyco’s assertion that the

documents at issue were protected by the attorney-client

privilege when they were prepared. Instead, it argues that Tyco

waived the privilege by implication when it filed the Reports

with the SEC. I disagree.

1 Securities plaintiffs refer to the September 2002 Form 8- K as having been filed on September 1 8 , 2002. Tyco refers to it as having been filed on September 1 7 , 2002. The Form 8-K that has been filed as an exhibit is dated September 1 0 , 2002. I assume that the September 1 0 , 2002 Form 8-K is the one to which both parties are referring. The First Circuit has provided guidance as to when a

litigant will be deemed to have waived the attorney-client

privilege by implication. In In Re Keeper of the Records (XYZ

Corp.), 348 F.3d 1 6 , 22 (1st Cir. 2003), the court reviewed a

contempt citation against a corporation that had refused to

produce allegedly privileged documents. In rejecting the

government’s argument that the corporation waived its privilege

claim by allowing its attorney to disclose legal advice to third

parties on the same subject, the court held that “the

extrajudicial disclosure of attorney-client communications, not

thereafter used by the client to gain adversarial advantage in

judicial proceedings cannot work an implied waiver of all

confidential communications on the same subject matter.” Id. at

24. The court went on to justify its ruling by explaining that

the reasons that favor a broad subject matter waiver when a

litigant asserts an advice of counsel defense or seeks to elicit

testimony concerning privileged matters during the course of

trial will rarely be present when privileged information is

disclosed in a non-judicial setting.2 Id.

2 The court recognized the possibility that an extrajudicial disclosure might result in an implied waiver of undisclosed information in certain circumstances. Id. at 25 F n . 6. However, plaintiffs have failed to identify any unusual This case is governed by the above-cited precedent. The

Boies Reports were disclosed in SEC filings rather than a

judicial proceeding. Although I have no doubt that Tyco intended

to use the reports for a variety of purposes, including to

evaluate potential claims against its former officers and to

convince regulators and prosecutors to refrain from instituting

proceedings against i t , Tyco’s intention to use the reports for

such purposes does not result in a waiver of the attorney-client

privilege that extends beyond what Tyco actually disclosed.

Accordingly, I reject the Securities plaintiffs’ Motion to Compel

Tyco to produce drafts of the Boies Reports and the underlying

documents.3

circumstances that would justify such a ruling in the present case. 3 My ruling is narrow in scope. I do not determine that the withheld documents are in fact protected by the attorney- client privilege. Nor do I evaluate Tyco’s alternative argument that the withheld documents are protected by the work product privilege. I only determine that Tyco has not waived any privilege claim it might otherwise have by filing the Boies Reports with the SEC. Finally, the parties should bear in mind that information that was not protected by the attorney-client privilege when it was acquired does not become privileged merely because it is later communicated to counsel. To the extent that Tyco has not already done s o , it shall produce privilege logs identifying the draft reports and underlying documents. Any further motions concerning the withheld documents shall be resolved by the Magistrate Judge. III. CONCLUSION

To the extent that the Securities plaintiffs seek an order

compelling Tyco to produce drafts of the Form 8-K filings and

related underlying documents, its Motion to Compel (Doc. N o . 687)

is denied and Tyco’s Motion for a Protective Order (Doc. N o . 710)

is granted.4

SO ORDERED.

/s/Paul Barbadoro Paul Barbadoro United States District Judge

March 7 , 2007

cc: Counsel of Record

4 The Motion to Compel and the Motion for Protective Order also address other issues that were resolved at a hearing on June 1 , 2006. The only other issue raised by the motions that has not been resolved is Tyco’s request to allocate a portion of its document production costs to the plaintiffs. I decline to resolve that issue at the present time. Tyco may renew its request, if necessary, at the end of the case.