for a Writ of Mandamus to the United States District Court
for the Southern District of Mississippi
DENNIS, SOUTHWICK, and HIGGINSON, Circuit Judges.
STEPHEN A. HIGGINSON, CIRCUIT JUDGE:
mandamus petition calls on us to correct a significant
misapplication of attorney-client privilege law. The
underlying lawsuit springs from a disputed corporate merger.
Plaintiff-Petitioner Itron acquired a company called
SmartSynch. According to Itron, misrepresentations by three
of SmartSynch's corporate officers
("Defendants") caused it unknowingly to assume an
unwanted $60 million contractual obligation to a third
company, Consert. After years of litigation, Itron settled
Consert's claims against it for $18 million. Itron now
sues Defendants for negligent misrepresentation, seeking as
compensatory damages the cost of the Consert litigation and
settlement. Discovery is nearly complete.
Defendants' motion, the presiding magistrate judge
ordered Itron to produce, without qualification:
• "All documentation or correspondence including,
but not limited to, emails, memoranda, letters, minutes, and
reports of any kind, which include any analysis, assessment,
or evaluations that were directed to, or received by, any
member of Itron's management (including but not limited
to its General Counsel) regarding the merits of Consert's
claims or Itron's defenses thereto, and any proposed or
actual settlement of the lawsuit."
•"All documents, communications, files, packages
and presentations presented to the Board of Directors of
Itron regarding or relating to . . . the Consert Agreement
and/or the Consert litigation."
• "All documents, communications, files, packages,
presentations and minutes of the Board of Directors of Itron
regarding or relating to the decision to settle the Consert
•"All documents, including but not limited to all
communications to or from [fifteen specifically-named
attorneys with Gibson, Dunn & Crutcher LLP (the law firm
who represented Itron against Consert)], or any other
attorney with Gibson Dunn, regarding or relating to the
decision to settle the Consert Litigation."
•"All documents, including but not limited to all
communications to or from [those same fifteen attorneys] or
any other attorney with Gibson Dunn, regarding, relating to,
or evidencing that the decision to settle the Consert
Litigation either 'was compelled by the desire to limit
[Itron's] liability, ' or that the 'amount paid
[to settle the Consert Litigation] was reasonable.'"
(alterations in original) (quoting Liberty Mut. Ins. Co.
v. Holloway, 556 Fed.Appx. 299, 305 n.15 (5th Cir.
•"All documents, including all correspondence
involving Itron's counsel, which relate to Itron's
decision to settle the Consert Litigation."
objected that many if not all of these materials are shielded
from disclosure by the attorney-client privilege. But the
magistrate judge disagreed, concluding that Itron waived its
privilege by filing a lawsuit to which the attorney-client
communications would be relevant. That was error.
that the mere act of filing this lawsuit effected no waiver
of any attorney-client privilege. We further hold that the
magistrate judge's contrary ruling amounted to clear
error warranting mandamus relief. We therefore GRANT
Itron's petition for mandamus, VACATE the magistrate
judge's order, and REMAND the case with instructions to
re-evaluate Defendants' motion in a manner consistent
with this opinion.
agreed to acquire SmartSynch for approximately $100 million.
Six days before the closing date, however, SmartSynch entered
a new agreement with third-party company Consert. Itron then
assumed SmartSynch's obligations under the agreement as
SmartSynch's successor-in-interest. Itron alleges that
SmartSynch's CEO, CFO, and VP of Product Marketing
(Defendants) negligently failed to disclose the Consert
agreement; that the Consert agreement was adverse to
Itron's financial interest; and that the Consert
agreement committed Itron to unwanted expenditures exceeding
$60 million. Itron allegedly discovered the agreement when
Consert sent its first invoice. At that point, Itron filed a
declaratory judgment action against Consert seeking to void
or reform the agreement. See Itron, Inc. v. Consert
Inc., 109 A.3d 583, 584-85 (Del. Ch. 2015). Consert
asserted counterclaims including breach of contract. After
more than two-and-a-half years of litigation, Itron and
Consert settled their dispute the weekend before trial. As
part of the settlement agreement, Itron paid Consert $18
now sues all three Defendants for negligent misrepresentation
under Mississippi law. See 28 U.S.C. §§
1332(a), 1652. It alleges that Defendants'
misrepresentations caused it to "unwittingly assume
liability for the Consert Agreement, " "result[ing]
in substantial losses to Itron due to the Consert
Litigation and the resulting settlement."
the voluminous pretrial proceedings, Defendants moved to
compel Itron to produce, among other things, the documents
listed above. They argued that Itron "waived its
attorney-client privilege as to all communications with
counsel concerning potential exposure and settlement [with
Consert], " because "whether Itron's settlement
of Consert's counterclaims was compulsory and reasonable
are disputed material issues" and "the most
relevant evidence of whether the settlement was reasonable
will be the opinions of counsel for Itron." Itron
opposed the motion on the grounds that these documents reside
at the "core" of the attorney-client privilege, and
that Itron never affirmatively relied on, used, or disclosed
privileged communications, as required for this type of
waiver under Mississippi law. See Jackson Med. Clinic for
Women, P.A. v. Moore, 836 So.2d 767, 773 (Miss. 2003);
see also In re Cty. of Erie, 546 F.3d 222, 229 (2d
Cir. 2008); Rhone-Poulenc Rorer Inc. v. Home Indem.
Co., 32 F.3d 851, 864 (3d Cir. 1994). In fact, Itron
said, it had stipulated that "so long as the Court does
not find a privilege waiver, Itron will not affirmatively use
any privileged information against Defendants in this
case." Finally, Itron observed that Defendants were free
to dispute the objective reasonableness of Itron's
settlement by examining the underlying facts and calling
expert witnesses, whom both sides had designated to address
that very issue.
magistrate judge granted Defendants' motion to compel in
substantial part, ordering Itron to produce the documents
listed above. The magistrate judge's order rejected
Itron's argument regarding the proper legal standard
under Mississippi law. But the order did not cite Jackson
Medical (the primary case on which Itron relied), nor
did it address how, under Defendants' proposed standard,
the privileged materials were "vital" to the case.
The order instead asserted that, "since Itron seeks in
the present lawsuit to recover its Consert litigation losses
from Defendants, the law in this Circuit will not permit
Itron to withhold under claim of privilege the documents
regarding the Consert litigation." Order [ECF No. 202]
at 2-3, Itron, Inc. v. Johnston, No. 3:15-cv-330
(S.D.Miss. June 30, 2017) (citing federal district court
opinions, themselves citing Conkling v. Turner, 883
F.2d 431, 434 (5th Cir. 1989)).
has been challenging that order ever since. It first lodged
objections with the district court, but the district court
overruled them on the ground that the magistrate judge's
ruling was "not clearly erroneous." Itron then
moved the district court for reconsideration, or, in the
alternative, to certify the magistrate judge's order for
interlocutory appeal. See 28 U.S.C. § 1292(b).
Both motions were denied. Running up against the production
deadline, Itron petitioned us for review.
evaluating a claim of attorney-client privilege, we review
factual findings for clear error and "the application of
the controlling law de novo." In re Avantel,
S.A., 343 F.3d 311, 318 (5th Cir. 2003) (quotation mark
omitted). The controlling law to be applied here is that of
Mississippi, which governs Itron's causes of action and,
by extension, any assertion of attorney-client privilege or
putative waiver thereof. Id. at 323; see
Fed. R. Evid. 501. Our task is to apply the law as would the
Mississippi Supreme Court. Guilbeau v. Hess Corp.,
854 F.3d 310, 311 & n.4 (5th Cir. 2017).
law gives clients the "privilege to refuse to disclose .
. . any confidential communication[s] made to facilitate
professional legal services, " if those communications
were made "between the client . . . and [its]
lawyer" or "among lawyers . . . representing the
same client." Miss. R. Evid. 502(b). Like the magistrate
judge, we assume (but do not decide) that the documents
sought here-communications to or from Itron's attorneys
relating to the merits of Consert's claims against
it-meet this definition. The parties are free to contest this
premise on remand with respect to particular documents. We
decide today only whether Itron impliedly waived its
attorney-client privilege by the mere act of filing this
lawsuit. It did not.
waiver principles resolve the present dispute. By definition,
the attorney-client privilege protects only
confidential communications. Miss. R. Evid. 502(b).
By disclosing such communications to third parties-such as by
revealing them in open court-the client waives the privilege.
Hewes v. Langston, 853 So.2d 1237, 1264 (Miss.
2003); see, e.g., Bennett v. State, 293
So.2d 1, 5 (Miss. 1974) (client waived privilege by
testifying to his counsel's advice at trial),
overruled on other grounds by Triplett v. State, 579
So.2d 555, 559 (Miss. 1991), but cited in Jackson
Med., 836 So.2d at 771. And to prevent selective or
misleading disclosures, fairness dictates that the waiver
extend to related subject matter. E.g., United
States v. Woodall, 438 F.2d 1317, 1324-25 (5th Cir.
1970) (en banc); Century 21 Deep S. Props., Ltd. v.
Corson, 612 So.2d 359, 374-75 (Miss. 1992). Hence the
animating maxim that the privilege cannot "be used as
both sword and shield."
same token, a client waives the privilege by affirmatively
relying on attorney-client communications to support an
element of a legal claim or defense-thereby putting those
communications "at issue" in the case. See
generally 8 Fed. Prac. & Proc. § 2016.6 (3d ed.
updated Apr. 2017); 2 The New Wigmore: A Treatise on Evidence
§ 6.12.4(b)(2) (3d ed. 2017); 81 Am. Jur. 2d
Witnesses § 329 (2d ed. updated Nov. 2017); 1
McCormick On Evidence § 93 (7th ed. updated June 2016).
"In other words, when a party entitled to claim the
attorney-client privilege uses confidential information
against his adversary (the sword), he implicitly waives its
use protectively (the shield) under that privilege."
Willy v. Admin. Review Bd., 423 F.3d 483, 497 (5th
adopted this rule expressly in Jackson Medical Clinic for
Women, P.A. v. Moore, 836 So.2d 767, 773 (Miss. 2003).
The plaintiff in that case, Grace Moore, had opposed the
defendant medical clinic's motion for summary judgment on
the ground that her attorney's bad advice tolled the
statute of limitations. Id. at 768-69, 770-71, 773.
After the trial court denied the clinic's motion, the
clinic sought discovery into what Moore's attorney had
told her. Id. at 768. That is, the clinic sought to
test the factual assertion Moore had just used to overcome
the clinic's statute-of-limitations defense. Moore
invoked the privilege. Id.
Mississippi Supreme Court held that Moore waived her
privilege as to those attorney-client communications when she
"specifically pled reliance on [her attorney's]
advice as an element of her defense to [the] motion for
summary judgment." Id. at 773 (citing
Metro. Life Ins. Co. v. Aetna Cas. & Sur. Co.,
730 A.2d 51, 60 (Conn. 1999)). "When Moore used
confidential communications with her attorney to toll the
statute of limitations, " the court explained, "she
used the attorney-client privilege as a sword."
Id. "[F]airness require[d]" that she not
"hide behind the shield" of that same privilege
now. Id. This holding aligns with the numerous cases
across jurisdictions finding waiver "when a client
asserts reliance on an attorney's advice as an element of
a claim or defense, " Sedco Int'l, S. A. v.
Cory, 683 F.2d 1201, 1206 (8th Cir. 1982),
the many dozens of cases finding no waiver when no such
reliance has occurred.
no one argues that Itron's complaint effected waiver
under the Jackson Medical test. Although the
complaint seeks as damages the amount of Itron's
settlement with Consert, it never "specifically ple[ads]
reliance" on any legal advice. Jackson Med.,
836 So.2d at 773. Nor does it refer to any "confidential
[attorney-client] communications." Id. In fact,
a person reading the complaint would have no idea that Itron
even had attorneys in the Consert matter, were it
not for the common-sense understanding that corporations
engaged in prolonged, multimillion-dollar lawsuits tend to
employ counsel. In short, because Itron's complaint
mentions no attorneys, no attorney-client communications, and
no attorney-client relationships, it cannot be said to
"use the attorney-client privilege as a sword."
Id. The privilege thus remains available. Accord
In re Lott, 424 F.3d 446, 454 (6th Cir. 2005)
("[W]hile the sword stays sheathed, the privilege
stands."). Although we do not foreclose the possibility
that some other act by Itron might constitute
waiver, we see no basis in Mississippi law for concluding the
complaint itself had that effect.
would have us broaden the Jackson Medical rule such
that waiver occurs whenever the client files a lawsuit to
which privileged communications, if disclosed, might prove
"highly relevant"-even if the client never relies
on or uses those communications to make her legal case. The
magistrate judge embraced a more expansive rule, requiring
only simple relevance. These expansions of Jackson
Medical find no support in the Mississippi Rules of
Evidence, see Miss. R. Evid. 502(d), or any
Mississippi caselaw. ...