one was put on notice that the privilege was claimed by Loeb
Rhoades until Mr. Fitzpatrick was deposed by Trustee Holland in
The cases which recognize a limited waiver based on public
policy considerations of encouraging full cooperation with
government agencies conducting investigations are rejected by me.
They are also factually distinguishable. In this case, there were
no specific documents prepared by independent outside counsel
which directly related to the same issues being investigated by
the SEC as in Diversified Industries, Inc. v. Meredith,
572 F.2d 596 (8th Cir. 1978); Byrnes v. IDS Realty Trust, 85 F.R.D. 679
(S.D.N.Y. 1980); and In re Grand Jury Subpoena Dated July 13,
1979, 478 F. Supp. 368 (E.D.Wis. 1979). Here Mr. Fitzpatrick was
both a corporate officer and in-house general counsel of Loeb
Rhoades who was involved in the day-to-day business of Loeb
Rhoades. He testified that it was difficult to separate his
roles. He has already given a lengthy deposition (several
thousands of pages) in these cases as a "fact witness." It is
possible that other corporate officers, partners, or managerial
personnel from Loeb Rhoades could have testified before the SEC
with respect to the same facts to which Mr. Fitzpatrick testified
without waiving any attorney-client privilege.
On the facts as I understand them, Loeb Rhoades probably could
have fully cooperated and also maintained its privilege. (In any
event, Loeb Rhoades chose to waive the privilege without
negotiating with the SEC as to whether such waiver was necessary
to what the SEC would consider "full cooperation.") That would
not have been true, for example, in Diversified and Byrnes
because of the nature of the investigative documents involved in
those cases. Thus, the public policy consideration of encouraging
cooperation with the SEC is not strong in this case.
The recent case of Teachers Insurance and Annuity Association
of America v. Shamrock, 521 F. Supp. 638 (S.D.N.Y. 1981), holds
that in the SEC context there is a limited waiver provided the
right to assert the privilege in subsequent proceedings is
specifically reserved at the time the disclosure is made. Such a
rule still would permit clients to pick and choose those to whom
disclosure could be made without incurring the penalty of loss of
I agree with the opinion in The Permian Corporation v. United
States, supra, that "the attorney-client privilege should be
available only at the traditional price: a litigant who wishes to
assert confidentiality must maintain genuine confidentiality."
665 F.2d at 1222.
Accordingly, the motion to compel is granted.