Recent Delaware Decision Orders Production of Communications Among Independent Counsel, Special Committee, and Full Board of Directors in Stock Options Investigation

In a recent decision that may have significant implications for corporate internal investigations and for special committee practice, a Delaware court ordered the production to civil plaintiffs of all communications between a special committee and its independent counsel in an internal investigation. The court reasoned that any applicable attorney-client privilege was waived when counsel for the special committee presented its final investigative report to the company’s full board of directors, including some board members who were defendants in related civil litigation and outside counsel who jointly represented the company and the board members. The decision, Ryan v. Gifford, C.A. No. 2213 (Del. Ch. Nov. 30, 2007), arose from an investigation by a special committee of the board of directors of Maxim Integrated Products, Inc. of the company’s stock options practices. In a further significant ruling, the court also ordered Maxim to produce electronic documents in native file format with original metadata.

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