KINGSWAY FINANCIAL SERVICES, INC., Plaintiff, v. PRICEWATERHOUSECOOPERS LLP, et al., Defendants No. 03 Civ. 5560RMBHBP United States District Court, S.D. New York June 27, 2007 Pitman, Henry B., United States Magistrate Judge OPINION AND ORDER I. Introduction *1 Defendant John Dore (“Dore”) moves for an Order compelling production of an April 25, 2003 email and attached memorandum, Bates numbered WS-Search-3-002239 through 41 (the “4-25-03 E-Mail”), from a Kingsway Financial Services, Inc. (“Kingsway”) executive to Kingsway's counsel, on the ground that any protection afforded by the attorney-client privilege has been waived. For the reasons set forth below, Dore's motion is granted. II. Facts A. Background The facts relevant to this particular dispute can be briefly stated. The parties in this case entered into a protective order which provided, among other things, that the inadvertent production of purportedly privileged documents would not operate as a waiver of any applicable privilege. On or about August 2006, plaintiff produced the 4-25-03 E-Mail at issue as part of a production of electronic documents. On or about November 30, 2006, Dore utilized the 4-25-03 E-Mail in, and attached a copy to, a motion for reconsideration of a decision denying a summary judgment motion in a related action pending in the Illinois state courts in which Dore is the plaintiff. In response, plaintiff submitted a letter to this Court on December 4, 2006 (the “December 4, 2006 Letter”), requesting, inter alia, the return of all copies of the 4-25-03 E-Mail on the ground that it was protected by the attorney-client privilege and had been produced inadvertently. The December 4, 2006 Letter was filed with the Court under seal, as was a copy of the 4-25-03 E-Mail which plaintiff attached as an exhibit therewith (See Docket Item 129). Plaintiff served copies of the December 4, 2006 Letter, along with the attached 4-25-03 E-Mail, on all defendants in this action, including Dore. By Order dated December 28, 2006, I directed all defendants, including Dore, to return all copies of the 4-25-03 E-Mail, to destroy any documents disclosing its contents, to use best efforts to retrieve any such documents filed with any Court, and to make no use of the 4-25-03 E-Mail pending further Order of this Court. This Order was without prejudice to a motion to compel production of the 4-25-03 E-Mail. By Order dated February 8, 2007, I elaborated on my December 28, 2006 ruling, instructing Dore not to refer to the substance of the 4-25-03 E-Mail in any motion to compel its production, unless plaintiff's opposition to such motion mischaracterized the nature of the document. B. The Parties' Arguments In support of this motion, Dore argues that the 4-25-03 E-Mail is not protected by the attorney-client privilege due to (1) waiver arising out of plaintiff's deliberate distribution of the 4-25-03 E-Mail to the defendants with its service copies of the December 4, 2006 Letter, and (2) application of the crime/fraud exception to the attorney-client privilege. Plaintiff argues that (1) it did not waive the attorney-client privilege with respect to the 4-25-03 E-Mail because its initial production of the e-mail was subject to a non-waiver agreement and it has filed all motions concerning the e-mail with under seal, and (2) the crime/fraud exception to the attorney-client privilege is inapplicable. Plaintiff does not, however, respond to Dore's assertion that it waived the attorney-client privilege by distributing the 4-25-03 E-Mail in its service copies to the defendants. III. Analysis A. Attorney-Client Privilege 1. Choice of Law *2 The complaint asserts federal claims based on the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10-b-5 promulgated thereunder, 15 U.S.C. § 78j(b); 17 C.F.R. § 240.10b-5, as well as common law claims of negligence and fraud based on diversity and supplemental jurisdiction. While Rule 501 of the Federal Rules of Evidence requires the application of federal privilege law to federal question claims and state privilege law to state law claims, Bondi v. Grant Thornton Int'l, 04 Civ. 9971(LAK), 2006 WL 1817313 at *2 (S.D.N.Y. June 30, 2006), citingBank Brussels Lambert v. Credit Lyonnais (Suisse) S.A., 160 F.R.D. 437, 441 (S.D.N.Y.1995) and G-I Holdings, Inc. v. Baron & Budd, 01 Civ. 0216(RWS), 2005 WL 1653623 (S.D.N.Y. July 13, 2005), the Federal Rules of Evidence do not specify which law is to be applied where a proceeding includes claims based on both federal and state law. SeeJaffee v. Redmond, 518 U.S. 1, 15 n.15 (1996) (noting “disagreement concerning the proper rule in cases [where] relevant evidence would be privileged under state law but not under federal law”); 3 Jack B. Weinstein & Margaret A. Berger, Weinstein's Federal Evidence § 501.02[2][c] (Joseph M. McLaughlin ed., 2d ed. 2006) (“Rule 501 is not clear on which rule should be followed” where state and federal law claims are raised in same action). Nonetheless, the law is clear in this Circuit that federal privilege law should be applied to evidence relevant to both federal and state law claims. See von Bulow v. von Bulow, 811 F.2d 136, 141 (2d Cir.1987); Bayne v. Provost, 359 F.Supp.2d 234, 238-39 (N.D.N.Y.2005); Boss Mmg. Co. v. Hugo Boss AG, 97 Civ. 8495(SHS)(MHD), 1999 WL 47324 at *1 (S.D.N.Y. Feb. 1, 1999). Here, because the 4-25-03 E-Mail is relevant to both plaintiff's federal and common law claims, I conclude that the present motion is governed by principles of federal law. 2. Waiver The standards applicable to attorney-client privilege issues in federal question cases are well settled. In order “[t]o invoke the attorney-client privilege, a party must demonstrate that there was: (1) a communication between client and counsel, which (2) was intended to be and was in fact kept confidential, and (3) made for the purpose of obtaining or providing legal advice.” United States v. Constr. Prods. Research, Inc., 73 F.3d 464, 473 (2d Cir.1996). “The privilege is intended to encourage clients to be forthcoming and candid with their attorneys so that the attorney is sufficiently well-informed to provide sound legal advice.” United States v. Adlman, 68 F.3d 1495, 1499 (2d Cir.1995); see Upjohn Co. v. United States, 449 U.S. 383, 390 (1981). The attorney-client privilege is not absolute, however, and may be waived through, among other things, the voluntary disclosure of a privileged communication to a third party, especially a litigation adversary. See In re Horowitz, 482 F.2d 72, 81 (2d Cir.1973) (disclosure of a privileged communication to a third party eliminates attorney-client privilege); NXIVM Corp. v. O'Hara, 241 F.R.D. 109, 138 (N.D.N.Y.2007) (“Once a party allows an adversary to share in an otherwise privileged document, the need for the privilege disappears[.]” (internal quotation marks omitted)); Spanierman Gallery, Profit Sharing Plan v. Merritt, 00 Civ. 5712(LTS)(THK), 2003 WL 22909160 at *2 (S.D.N.Y. Dec. 9, 2003) (attorney-client privilege automatically waived by disclosure to third-party); In re Kidder Peabody Sec. Litig., 168 F.R.D. 459, 468-69 (S.D.N.Y.1996) (disclosure of privileged communications in report used to support position in litigation constitutes waiver of the attorney-client privilege); Bowne of N.Y. City, Inc. v. AmBase Corp., 150 F.R.D. 465, 478-79 (S.D.N.Y.1993) (disclosure of privileged communication to adversary constitutes a waiver of the attorney-client privilege); see also United States v. Jacobs, 117 F.3d 82, 91 (2d Cir.1997) (voluntary public disclosure of privileged communication constitutes a waiver of the attorney-client privilege). *3 Here, plaintiff has unquestionably waived any attorney-client privilege which may have existed with respect to the 4-25-03 E-Mail. Plaintiff does not dispute that it disclosed the E-Mail to its adversaries by attaching it to the copies of the December 4, 2006 Letter served on its adversaries.[1] Nor does plaintiff assert that its attachment of the E-Mail to the service copies was in any way inadvertent.[2] Indeed, plaintiff's attachment of the E-Mail to the service copies was evidently deliberate. In light of these considerations, plaintiff's disclosure of the 4-25-03 E-Mail constitutes a waiver of the attorney-client privilege.[3] IV. Conclusion For all the foregoing reasons, Dore's motion to compel production of the 4-25-03 E-Mail is granted. SO ORDERED Footnotes [1] While plaintiff argues that it filed the December 4, 2006 Letter and attached 4-25-03 E-Mail with the Court under seal, it does not address Dore's argument that any protection afforded by the attorney-client privilege was waived through plaintiff's attaching the 4-25-03 E-Mail to the service copies of the December 4, 2006 Letter. [2] Although plaintiff argues that its initial disclosure of the 4-25-03 E-Mail in discovery was inadvertent and subject to a non-waiver agreement, plaintiff does not make these assertions with respect to its disclosure as an attachment to the December 4, 2006 Letter. [3] My finding of waiver of any attorney-client privilege with respect to the 4-25-03 E-Mail obviates the need to address the applicability of the crime/fraud exception.