Sword-Shield: Privilege Waivers and Evidentiary Preclusion in Antitrust Trials

The Sword-Shield Doctrine

Many litigants are familiar with the sword-shield doctrine embodied in Federal Rule of Evidence 502(a). The doctrine holds that if a party discloses privileged information as part of its case (the sword), the party may be precluded from withholding privileged information on the same subject matter (the shield). In such situations, fairness may dictate a finding that the party has impliedly waived privilege with respect to other materials addressing the same subject matter.

But what if--instead of affirmatively disclosing privileged material--a party makes assertions in the litigation on a subject matter for which materials have been withheld as privileged? Then do the party's actions give rise to an implied waiver of privilege? Nothing in Rule 502 or any other Rule addresses this scenario. There is, however, a growing (but limited) applicable body of antitrust caselaw developing around this issue. The caselaw, however, is circuit specific, and courts across the country have reached different conclusions about the extent to which positions taken in litigation may lead to an implied waiver of privilege.

One of the most cited decisions on these issues is In re Lidoderm Antitrust Litigation, 2016 WL 4191612 (N.D. Cal. Aug 9, 2016). In Lidoderm the court held that if a party chooses to make assertions at trial "that the record shows directly implicate[s] attorney-client advice, [that party] will have effectuated an at-issue waiver for that belief and will be required to produce withheld privileged documents." Id. at 6. The court based its holding on the rationale that privilege may not be used as "both a sword and a shield" and that a party cannot "assert[] claims the opposing party cannot adequately dispute unless it has access to the privileged materials." Id. at *3.

The Doctrine in Practice in Antitrust Cases

Implied waiver has repeatedly arisen in so-called "generic delay" antitrust cases where a central issue is why the parties settled a prior patent litigation. That decision is, of course, deeply intertwined with attorney advice. These cases have provided a few examples of how sword-shield privilege disputes can unfold and significantly impact parties' trial presentations. Scope and timing are two specific issues where courts differ as to the doctrine's application.

Courts have interpreted the scope of the doctrine differently. The court in Lidoderm held that waiver arises where the information is "directly relevant and necessary to allow a party to fully challenge the claims or defenses." Id. at *4 (emphasis original). On the other end of the spectrum, the court in In re Niaspan Antitrust Litigation found that an implied privilege waiver arises only where a party expressly relies on the advice of counsel. 2018 WL 2363577, at *3 (E.D. Pa. May 24, 2018). And the court in In re Zetia Antitrust Litigation sought to forge a middle ground by stating that while reliance on the privileged materials is required, that reliance may be implied as opposed to express. 2022 WL 4354620, at *7 (E.D. Va. Aug. 15, 2022).

The timing of the resolution of a sword-shield challenge is another area in which courts differ. The court in Lidoderm took an aggressive approach and required the defendants to determine what contentions they would place "at issue" at trial well before trial so that all related issues could be resolved during pretrial proceedings. 2016 WL 4191612, at *1-2. In Zetia, the court took a different approach and declined to broadly wade into sword-shield issues, instead focusing its ruling on contentions the parties made during summary judgment briefing. 2022 WL 4354620, at *6. The Zetia court noted that the different procedural posture--where defendants had not broadly identified the contentions they would make at trial--impacted the court's assessment of the applicable legal standard. Id.

A finding of implied waiver leaves the asserting party with two options: either forego presenting their "subjective beliefs" at trial or waive privilege and produce previously withheld documents. In Lidoderm, the court directed the defendants to identify their "subjective beliefs" about certain topics (such as the reasons for the patent litigation settlement) that they intended to present at trial. 2016 WL 4191612, at *1-2. The court found that assertion of the majority of these beliefs would result in an implied waiver of related privileged materials. Id. at *7-21. Thereafter, the defendants elected to forego presenting those beliefs at trial as opposed to waiving privilege for related materials. Given that the subjective beliefs at issue were directly relevant to the key issues in the case, the court's order had a significant impact on how defendants could present their case at trial and the litigation settled shortly before. In another generic delay case--In re HIV Antitrust Litigation (N.D. Cal.)--one of the defendants did elect to waive privilege as to two key issues in the case. 2022 WL 1836820, at *4 (N.D. Cal. June 3, 2022). The defendant then presented the otherwise privileged materials at trial which, by many accounts, proved to be a shrewd strategic decision. As these examples show, the court's rulings on sword-shield issues and parties' subsequent strategic decisions can have a significant impact on the evidence presented at trial and the outcome of the litigation.

Looking Ahead

The inconsistency with which courts have approached sword-shield issues in antitrust contexts may get resolved--or further compounded--over the coming years. What seems certain is that, where the issue is fully developed, an increasing number of antitrust trials may be significantly impacted by strategic choices made by litigants and decisions from courts regarding how to respond to and ultimately adjudicate sword-shield disputes. The sword-shield doctrine may also become an effective tool for combatting overbroad privilege designations, serving to limit the contentions a party can make on matters for which it has broadly asserted privilege.

Scott Grzenczyk is a partner and Mikaela Bock is an associate at Girard Sharp LLP.