Court Orders Production in ISDAfix Civil Litigation of Materials Presented to Regulators: White Papers, Presentations, Letters, and Briefs Provided to Regulators or Prosecutors During Government Investigations Held Subject to Discovery in Civil Litigation

Sullivan & Cromwell LLP - January 25, 2017

On January 20, 2017, Judge Jesse Furman in the Southern District of New York ordered defendants in the ISDAfix class-action litigation to produce white papers, presentations, letters, and briefs they had provided to government authorities in connection with investigations of potential manipulation of ISDAfix.  Significantly, the court ordered production of materials that had been “merely shown, and not physically provided,” to the authorities.

The court found that the production of these materials to the government waived work-product protection over them, on the ground that voluntary disclosure of these materials during a government investigation with the intent to dissuade the government from bringing charges was inconsistent with the rationale behind the work-product doctrine.  The court found it significant that none of the defendants had entered into written agreements with the government to maintain the confidentiality of the produced materials.
Judge Furman’s decision underscores the risk of collateral civil-litigation consequences inherent in providing factual and advocacy materials in the course of a government investigation – even where copies of those materials are not physically produced to the authorities.  While a written confidentiality/non-waiver agreement with the government may help protect against waiver, such an agreement may not be sufficient.  Companies should consult with counsel and carefully consider the risks associated with the affirmative presentations and work product that they provide to the government in enforcement investigations.