Westinghouse Elec. Corp. v. Republic of Philippines

• Citation: 951 F.2d 1414
• Decision Date: 19 December 1991
• Docket Number: No. 90-5920,90-5920
• Parties: , 22 Fed.R.Serv.3d 377, 35 Fed. R. Evid. Serv. 1070 WESTINGHOUSE ELECTRIC CORPORATION; and Westinghouse International Projects Company, Petitioners, v. The REPUBLIC OF THE PHILIPPINES; and National Power Corporation, Respondents, and Honorable Dickinson R. Debevoise, United States District Judge, Nominal Respondent.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 1414

951 F.2d 1414

60 USLW 2424, 22 Fed.R.Serv.3d 377,

35 Fed. R. Evid. Serv. 1070

WESTINGHOUSE ELECTRIC CORPORATION; and Westinghouse

International Projects Company, Petitioners, v. The REPUBLIC OF THE PHILIPPINES; and National Power

Corporation, Respondents,

and

Honorable Dickinson R. Debevoise, United States District

Judge, Nominal Respondent.

No. 90-5920.

United States Court of Appeals, Third Circuit.

Argued Jan. 25, 1991.

Decided Dec. 19, 1991.

Richard W. Clary (argued), David Boies, Cravath, Swaine & Moore, New York City, Raymond M. Tierney, Jr., William D. Sanders, Shanley & Fisher, P.C., Morristown, N.J., Jerome J. Shestack, Schnader, Harrison, Segal & Lewis, Philadelphia, Pa., Jonathan D. Schiller, Donovan, Leisure, Rogovin, Huge & Schiller, Washington, D.C., for petitioner.

David J. Cynamon (argued), Mark Augenblick, P.C., Ellen M. Jakovic, Shaw, Pittman, Potts & Trowbridge, Washington, D.C., Paul A. Rowe, Alan S. Naar, Greenbaum, Rowe, Smith, Ravin, Davis & Bergstein, Woodbridge, N.J., Reichler, Appelbaum & Wippman, Clifford & Warnke, Washington, D.C., for respondent.

Before BECKER, HUTCHINSON, Circuit Judges and ATKINS, District Judge ^*.

OPINION OF THE COURT

BECKER, Circuit Judge.

This petition for a writ of mandamus requires us to resolve an important issue that has divided the circuits: whether a party that discloses information protected by the attorney-client privilege and the work-product doctrine ¹ in order to cooperate with a government agency that is investigating it waives the privilege and the doctrine only as against the government, or waives them completely, thereby exposing the documents to civil discovery in litigation between the discloser and a third party. The issue arises in an action brought by the Republic of the Philippines (the "Republic") and its National Power Corporation ("NPC") against Westinghouse Electric Corporation and its wholly-owned subsidiary, Westinghouse International Projects Company (collectively "Westinghouse"). The Republic and the NPC allege that Westinghouse obtained a large power plant contract in the Philippines by bribing a henchman of former President Ferdinand Marcos. Their complaint charges that Westinghouse and others tortiously interfered with and conspired to tortiously interfere with the fiduciary duties that President Marcos owed to the Philippine people and to the NPC. The complaint seeks damages on a variety of theories.

During discovery, the Republic sought certain documents generated during an internal investigation conducted by Westinghouse's outside counsel. The investigation was a response to an investigation by the Securities and Exchange Commission ("SEC") into allegations that Westinghouse had obtained contracts by bribing foreign officials. Westinghouse disclosed the documents in question to the SEC in order to cooperate with the agency's investigation. Westinghouse later disclosed the same documents, as well as other, related documents, to the Department of Justice ("DOJ") in order to cooperate with an investigation conducted by the DOJ. Westinghouse's petition for mandamus follows the district court's ruling that the disclosures effected a complete waiver of the attorney-client privilege and the work-product doctrine, thus rendering the documents available to the Republic in discovery.

For the reasons that follow, we hold that by disclosing documents to the SEC and to the DOJ, Westinghouse waived both the attorney-client privilege and the work-product doctrine with respect to those documents. We also hold that we lack jurisdiction to review Westinghouse's request for a writ of mandamus commanding the turnover of certain documents that the Republic and the NPC shared with the DOJ pursuant to an agreement for mutual legal assistance.

I. FACTUAL BACKGROUND ²

A. The Contract

In the mid-1970s, Westinghouse sought and obtained the prime contract to construct the first Philippine nuclear power plant and to ready it for use on a turnkey basis. ³ As part of Westinghouse's efforts to procure the contract, it retained as its "special sales representative" Herminio T. Disini, a Philippine businessman and close friend and associate of then-President Marcos. Disini agreed to promote Westinghouse's interests with the NPC, which was the Philippine government agency responsible for electric power generation and for contract negotiations on the power plant project. Westinghouse received the prime contract for the power plant. Several years later, newspaper articles appeared in the Philippine and American press, charging that the company had procured the contract by passing bribes to Philippine government officials through Disini.

B. The SEC Investigation and Westinghouse's Disclosures Pursuant Thereto

In January 1978, shortly after the appearance of the press reports concerning Westinghouse's alleged misconduct in connection with the Philippine nuclear plant, the SEC commenced an investigation into whether Westinghouse had violated United States securities laws by making illegal payments to obtain the contract. In March 1978, Westinghouse retained the law firm Kirkland & Ellis to conduct an internal investigation into whether company officials had made improper payments. In the course of the internal investigation, which lasted until November 1978, Kirkland & Ellis produced two letters reporting its findings.

The law firm, at the behest of Westinghouse, showed the SEC investigators one of the letter reports and, in addition, orally presented its findings to the agency. Kirkland & Ellis did not supply the SEC with any of the documents underlying the presentation and the report, and the SEC agreed not to retain the report. Westinghouse asserts that in disclosing to the SEC the results of the Kirkland & Ellis investigation, it relied upon the SEC's confidentiality regulations, ⁴ as well as the Eighth Circuit's decision in Diversified Industries, Inc. v. Meredith, 572 F.2d 596 (8th Cir.1977) (en banc), as creating a reasonable expectation of continuing confidentiality for the materials shown to the SEC.

In 1980, the SEC served subpoenas on Disini, based on allegations that he had engaged in illegal activities relating to the award of the prime contract for the power plant. Thereafter, counsel for Westinghouse and for Disini entered into a joint defense agreement, under which they agreed to exchange--and to maintain confidentiality with respect to--privileged information and work product. Counsel for Disini, the law firm Baker & McKenzie, subsequently began negotiating with the SEC on his behalf. As a result, the accounting firm Coopers & Lybrand was retained to perform audits tracing the funds that Westinghouse had paid to Disini. Coopers & Lybrand summarized the results of these audits in a report that Disini made available to the SEC, which in turn agreed to keep the contents of the report confidential and neither to copy nor to retain it. Pursuant to their joint defense agreement, Disini provided Westinghouse with a copy of the Coopers & Lybrand report. The SEC discontinued its investigation of Westinghouse in April 1983.

C. The Department of Justice Investigations and Westinghouse's Disclosures Pursuant Thereto

In 1978, the DOJ began to investigate Westinghouse. The DOJ's investigation explored whether Westinghouse had made illegal payments to obtain contracts not only in the Philippines, but also in other countries. A grand jury subsequently issued a subpoena, with which Westinghouse complied, requesting that the company produce certain privileged documents (not at issue here) subject to the confidentiality protections of FRCrP 6(e). The DOJ's investigation ended when Westinghouse entered into a plea agreement concerning payments that the company admitted making in order to obtain business in Egypt.

In 1986, after Marcos was deposed as President of the Philippines, the DOJ reactivated its 1978 investigation of Westinghouse's conduct in procuring the turnkey contract on the Philippine nuclear plant. A grand jury subpoenaed the Kirkland & Ellis letters reporting the results of Westinghouse's internal investigation, as well as all documents accumulated in connection with that investigation. In an effort to preserve its attorney-client privilege and work-product protection, Westinghouse moved to quash the subpoena. After entering into a confidentiality agreement with the DOJ, subsequently memorialized in a stipulated court order entered in the district court for the Western District of Pennsylvania, Westinghouse disclosed the subpoenaed documents to the grand jury. According to Westinghouse, this agreement, which was itself confidential, provided

that the [DOJ] review at Westinghouse counsel's office (but not keep copies of) attorney-client privileged and work product protected materials in the Kirkland & Ellis files, that the information contained therein would not be disclosed to anyone outside of the [DOJ], and that such review of the Kirkland & Ellis documents would not constitute a waiver of Westinghouse's work product and attorney-client privileges.

See 132 F.R.D. at 385-86. The DOJ's investigation is apparently still ongoing (at least the record does not indicate the contrary).

D. The Republic's Investigation

In 1987, the Republic initiated its own investigation into the contract-procurement activities of Westinghouse and a second company, Burns & Roe Enterprises, Inc., a New Jersey corporation that had obtained the architecture and engineering contract on the power plant project and that also had secured the services of Disini as a "special sales representative." The Republic's Presidential Commission on Good Government (the "PCGG"), the government entity charged with investigating Westinghouse's and Burns & Roe's conduct, subsequently entered into an agreement with the DOJ, denominated the "Agreement on Procedures for Mutual Legal Assistance" (the "Agreement").

The Agreement, which is still in force, provides that...