Civil Procedure – Discovery – Trade Secret Claim – Government Investigation

In a discovery dispute in DuPont’s suit against Kolon Industries alleging trade secret misappropriation, theft of confidential business information and conspiracy, a Richmond U.S. District Court says Kolon is entitled to a cover e-mail DuPont in-house counsel sent to an FBI agent on DuPont’s willingness to share information with the government, and a document reflecting the in-house attorney’s efforts to prepare a DuPont employee for an expected telephone call from Kolon to be arranged by Mitchell.
The latter document contains the lawyer’s ideas and impressions about what the DuPont, for which DuPont waived privilege.

The documents at issue have been submitted for in camera review. The motion is addressed to seven documents, six of which were e-mails sent by counsel for plaintiff DuPont forwarding various attached documents to federal law enforcement officers and a federal prosecutor, all of whom were investigating the theft of DuPont trade secrets and confidential information by a former DuPont employee, Michael Mitchell, allegedly acting on behalf of defendant Kolon Industries Inc.

Kolon also seeks production of an entry from the journal of Harry Yang, a retired DuPont employee, who cooperated with the government investigation of Mitchell and Kolon. Yang, who is represented by counsel for DuPont in this action, kept a journal in which he recorded information about his involvement in the investigation of Mitchell and Kolon. DuPont seeks production of an entry from Dec. 8, 2008, for which DuPont has claimed work product privilege, as it involved a discussion with DuPont’s in-house attorney about anticipated civil litigation.

None of the documents submitted for in camera review evidence an effort by DuPont to instigate an investigation of Mitchell or Kolon. Nor, contrary to Kolon’s argument, do the documents support the view that DuPont is engaged in post hoc rationalization to prevent their disclosure. However, the documents clearly show that, in 2008, DuPont was providing work product documents to the government which, at the time, was investigating Mitchell and Kolon. That brings the inquiry to the waiver issue.

DuPont, having demonstrated that the government e-mails were sent after the government began its investigation, and having shown that DuPont and the government had a common interest, and having shown that it had a reasonable expectation that confidentiality of the communications would be preserved, has demonstrated that, as to those documents to which the work product protection applies, the protection has not been waived by disclosure to the government.

Although DuPont failed to include language in many of its e-mail communications that the information was intended to remain privileged, given the confidential nature of government investigations, it was reasonable for DuPont to act on the belief that the information would not be subject to disclosure by the government. And it is difficult to see how the government could have conducted its case without DuPont’s assistance. That DuPont achieved a commercial benefit from the investigation does not undermine the fact that DuPont had a right, and in some sense, an obligation, to report Mitchell’s suspicious activity; his subsequent conviction underscores the legitimacy of DuPont’s concerns.

Kolon may discover a cover e-mail DuPont in-house counsel sent to an FBI agent, with no substantive information, that expresses DuPont’s willingness to share information with the government and disclaims an intent to waive attorney-client privilege by so doing; the law firm memorandum and letter are protected, but the letter has been voluntarily disclosed.

Two documents, one a copy of the other, are covered by waiver. The base document reflects DuPont’s in-house attorney’s efforts to prepare a DuPont employee for an expected telephone call from Kolon to be arranged by Mitchell. The document contains the lawyer’s ideas and impressions about what the DuPont employee could say to gather information that would be useful in DuPont’s likely litigation against Mitchell and Kolon and in the government’s investigation of Mitchell and Kolon.

The lawyer’s mental impressions and opinions, as reflected in the document, are not protected because the protection was waived. The forwarding e-mail is not work product.

Motion to compel granted in part and denied in part.

E.I. DuPont de Nemours v. Kolon Industries Inc. (Payne, J.) No. 3:09cv58, April 13, 2010; USDC at Richmond, Va. VLW 010-3-213, 24 pp.