Delaware Trial Handbook § 15:12. WAIVER OF PRIVILEGE

As a general rule, person holding a privilege against disclosure waives the privilege if that person or a predecessor to that person, while holder of the privilege, voluntarily discloses or consents to disclosure of any significant part of the privileged matter.95 For partial disclosure to constitute an effective waiver of a testimonial privilege, however, the partial disclosure must be such that it places the party seeking the information at a distinct disadvantage due to an inability to examine the full context of the partially disclosed information.95.1  The party who claims the privilege has been waived bears the burden of proof on the issue.95.2  Waiver of any privilege depends on the totality of the circumstances.95.3

A waiver does not occur if the disclosure was itself privileged96 or if disclosure was either made erroneously or made without an opportunity to claim the privilege.97 If the communication was intended to be confidential, the fact that a third party heard or read the communication does not necessarily destroy the privilege.  Instead, the circumstances must be such as to show that the person benefitting from the privilege knowingly acquiesced in the disclosure to the third party.97.1 Courts will consider (1) the reasonableness of the precautions taken to prevent inadvertent disclosure; (2) the time taken to rectify the error; (3) the scope of discovery and extent of disclosure; and (4) the overall fairness, judged against the care or negligence with which the privilege is guarded.97.2

In certain circumstances, courts will uphold the privilege, even when there is disclosure to a third person, where the person making the disclosure regarded that disclosure as confidential and there was an expectation of confidentiality. This exception has been recognized in transactional settings where an investment banker or other financial advisor is present with the lawyer and the client to discuss the proper structuring of a corporate transaction.97.3

Failure by the person holding the privilege to recognize that the privilege exists in his or her favor is not deemed to be a lack of opportunity to claim the privilege. Therefore, a failure to recognize and timely object may result in a waiver of the privilege.98 Such a waiver, however, does not open the door to access to all such privileged communications. The rule of partial disclosure limits the waiver to the subject matter of the disclosed communication. The exact extent of any required disclosure is guided by the purpose behind the particular privilege.99

Under the doctrine of implied waiver, where a party to a lawsuit makes an assertion critical to the prosecution or defense of a case, that party may not block discovery of information directly relevant to that assertion by claiming a privilege.100 The implied waiver doctrine may only be invoked to address issues raised by an opposing party’s actions, and not by the discovering party’s assertions.101  However, this waiver does not apply simply because a party brings a lawsuit in which the privileged communication is relevant. 101.1An important fact in determining whether this ground of waiver applies is whether the party seeking access to the privileged information is disadvantaged because there is no alternative source for the information.101.2 Application of the at-issue exception is guided by considerations of fairness and discouraging use of the attorney-client privilege as a litigation weapon.101.3 Any such waiver is limited to the particular subject matter of the disclosure.101.4

95. D.R.E. 510; Weedon v. State, 647 A.2d 1078, 1081-82 (Del. 1994); Zirn v. VLI Corp., 621 A.2d 773 (Del. 1993); Citadel Holding Corp. v. Roven, 603 A.2d 818, 825 (Del. 1992); Moyer v. Moyer, 602 A.2d 68, 71 n.4 (Del. 1992); Dutton v. State, 452 A.2d 127, 145 (Del. 1982); Reese v. Klair, C.A. No. 7485, slip op. at 11, Hartnett, V.C. (Del. Ch. Feb. 20, 1985).

95.1. Tackett v. State Farm Fire and Casualty Insurance Co., 653 A.2d 254, 260 (Del. 1995) (in context of attorney-client privilege).

95.2. Dervaes v. H.W. Booker Constr. Co., C.A. No. 285, Bifferato, J. (Del. Super. May 28, 1980).

95.3. Eden v. Oblates of St. Francis de Sales, C.A. No. 04C-01-069 CLS, slip op. at 8, Scott, J. (Del. Super. Dec. 14, 2007), app. refused mem., 941 A.2d 1019 (Del. 2008).

96. D.R.E. 510; Weedon v. State, 647 A.2d 1078, 1082 (Del. 1994); State v. Bright, 683 A.2d 1055, 1065 n.17 (Del. Super. 1996).

97. D.R.E. 511.

97.1. Secrest v. State, 679 A.2d 58, 62 (Del. 1996).

97.2. In re Kent County Adequate Public Facilities Ordinances Litigation, C.A. No. 2921-VCN, slip op. at 18, Noble, V.C. (Del. Ch. Apr. 18, 2008).

97.3. 3Com Corp. v. Diamond II Holdings, Inc., C.A. No. 3933-VCN, slip op. at 12-13, Noble, V.C. (Del. Ch. May 31, 2010);Hexion Specialty Chemicals, Inc. v. Huntsman Corp., C.A. No. 3841-VCL, slip op. at 2, Lamb, V.C. (Del. Ch. Aug. 12, 2008); Cede & Co. v. Joule, Inc., C.A. No. 696-N, slip op. at 2, Chandler, C. (Del. Ch. Feb. 7, 2005);  Jedwab v. MGM Grand Hotels, Inc., C.A. No. 8077, Allen, C. (Mar. 20, 1986).

98. D.R.E. 511, comment.

99. Citadel Holding Corp. v. Roven, 603 A.2d 818, 825 (Del. 1992).

100. Alaska Elec. Pension Fund v. Brown, 988 A.2d 412, 419 (Del. 2010);  Tackett v. State Farm Fire and Casualty Insurance Co., 653 A.2d 254, 259-60 (Del. 1995); Sealy Mattress Co. of New Jersey, Inc., v. Sealy, Inc., C.A. No. 8853, slip op. at 14, Jacobs, V.C. (Del. Ch. June 19, 1987); International Business Machines Corp. v. Comdisco, Inc., C.A. No.91.C-07-199, slip op. at 5, Goldstein, J. (Del. Super. Mar. 11, 1992); Eastern Commercial Realty Corp. v. Fusco, C.A. No. 85C-OC-92, slip op. at 6, Gebelein, J. (Del. Super. Apr. 13, 1987), reh’g denied, C.A. No. 85C-OC-92, Gebelein, J. (Del. Super. Aug. 10, 1989).

 101. International Business Machines Corp. v. Comdisco, Inc., C.A. No.91-C-07-199, slip op. at 7, Goldstein, J. (Del. Super. Mar. 11, 1992).

101.1. Hoechst Celanese Corp. v. National Union Fire Ins. Co., 623 A.2d 1118, 1123 (Del. Super. 1992). 

101.2. Princeton Ins. Co. v. Vergano, 883 A.2d 44, 60 (Del. Ch. 2005).

101.3. Sokol Holdings, Inc. v. Dorsey & Whitney, LLP, C.A. No. 3874-VCS, slip op. at 17, Strine, V.C. (Del. Ch. Aug. 5, 2009).

101.4. In re Kent County Adequate Public Facilities Ordinances Litigation, C.A. No. 2921-VCN, slip op. at 15 n.24, Noble, V.C. (Del. Ch. Apr. 18, 2008).

© 2010  David L. Finger