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A Ninth Circuit Court of Appeals opinion proved to be kryptonite to an attorney's privilege defense in a Superman lawsuit this week.
The San Francisco-based court ruled that attorney Marc Toberoff waived his attorney-client privilege over stolen documents once he revealed the nature of the documents to officers investigating the theft.
Toberoff represents the estates of late Superman co-creators Jerry Siegel and Joe Shuster; he was accused of tortious interference with D.C. Comics contracts after he tried to strike a deal with the estates' heirs for Superman's rights.
David Michaels, a former Toberoff associate, stole documents detailing the arrangement from Toberoff, and sent them to D.C. Comics with a timeline he constructed to reveal Toberoff's plot to acquire Superman. D.C. Comics sued Toberoff in 2010 based on the timeline.
D.C. alleged that Toberoff interfered with its contractual relationships with Siegel and Shuster's heirs. Michaels' cover letter formed the basis of the lawsuit and was incorporated into the complaint. Toberoff has continued to resist the use of any of the documents taken from his offices, including those already disclosed to D.C. Comics and especially Michaels' letter.
About a month after D.C. filed suit, Toberoff asked the U.S. Attorney's office to investigate Michaels. In response to Toberoff's request, the U.S. Attorney's Office issued a grand jury subpoena for the documents as well as a letter stating that if Toberoff voluntarily complied with the subpoena the Government would not provide the documents to nongovernmental third parties, except as required by law or court order. Toberoff cooperated.
A Ninth Circuit Court of Appeals three-judge panel ruled this week that Toberoff cannot claim pick and choose when the attorney-client privilege on documents applies. Since he turned the documents over to prosecutors investigating Michaels, he waived the attorney-client privilege, reports Thomson Reuters News & Insight.
The case presents a bit of a quandary for attorneys: How would you strike a balance between attorney-client privilege and prosecuting a former employee who stole information from you?