I. Background

*1 This is a class action in which it is alleged that Defendants Broadcom Corporation and three of its officers, Henry T. Nicholas III, Henry Samueli, and William J. Ruehle, violated Sections 10(b) and 20(a) of the Securities Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5. The plaintiff class consists of all individuals and entities who acquired publicly traded securities of Broadcom Corporation or bought or sold stock options between July 31, 2000 and February 26, 2001. It is alleged that Defendants artificially inflated Broadcom's stock price between those dates by devising a scheme to “purchase” revenue through the issuance of warrants to the customers of five companies acquired by Broadcom, to the detriment of the stockholders. (Order Granting Plaintiffs' Motion for Class Certification at 1; Joint Stipulation “JS” at 2.)

Among the matters in dispute between the parties is the truth and accuracy of certain public disclosures made by Broadcom, which the class contends contributed to the artificial inflation of Broadcom's stock price. Based on statements made by the individual Defendants at their depositions that the public disclosures were “legal counsel's responsibility,” District Judge Gary L. Taylor held a hearing on February 7, 2005 to determine if Defendants were asserting a “reliance on counsel” defense which might result in a waiver of the attorney-client privilege. (See Order re: Offer of Proof at February 7 Hearing on Plaintiffs' Motion to Compel Communications [hereinafter Jan. 31 Order].) At the hearing, Defendants made an offer of proof, which Judge Taylor summarized as follows:

(Order on Pending Matters, at 4 [hereinafter Feb. 10 Order].) Despite Defendants' argument to the contrary, Judge Taylor determined that this constituted a reliance on counsel defense. (Id., at 2.)

Based upon this finding, Judge Taylor reopened discovery “so Plaintiff may submit appropriate discovery requests for attorney-client communications with defendants during the relevant period concerning the relevant transactions.” (Id. at 5). Plaintiffs have interpreted this decision broadly, demanding that Defendants produce “all documents contained on defendant's privilege and redaction logs which have been withheld on the basis of, inter alia, the attorney client privilege.” They also seek to depose outside counsel for Broadcom. Defendants object to these broad categories of discovery material, contending that the waiver must be construed much more narrowly. A hearing was held on these motions on March 22, 2005 and the matter is ready for decision.

II. Scope of Waiver

*2 In light of Judge Taylor's decision that additional discovery was required because the privilege was waived on the “subject topics,” Plaintiffs filed this motion to compel discovery, demanding production of “all attorney-client communications between July 1, 1999 and March 5, 2002 concerning Broadcom's acquisitions of the Acquired Companies and those related warrant agreements between customers and the Acquired Companies.” (JS at 15.) Plaintiffs claim that Judge Taylor's order entitles them to this broad range of material. Defendants contend, in opposition to Plaintiff's motion and as part of their motion to quash, that discovery should be more narrowly tailored to include only those communications explicitly relating to Broadcom's public statements which form the basis of the cause of action. (JS at 36.)

The defense of reliance on counsel is an implied waiver of the attorney-client privilege. See Chevron Corp. v. Pennzoil Co., 974 F.2d 1156, 1162-63 (9th Cir.1992) (finding implicit waiver of privilege where defendant claimed to have relied on advice of counsel). Once the privilege is waived, all communications relating to the “same subject matter” are discoverable. See Chiron Corp. v. Genentech, Inc., 179 F.Supp.2d 1182 (E.D.Cal.2001).

While waiver extends to all communications on the same subject matter, it should be “no broader than needed to ensure the fairness of the proceedings.” Bittaker v. Woodford, 331 F.3d 715, 720 (9th Cir.2003); see also Terra Novo, Inc. v. Golden Gate Products, Inc., 2004 WL 2254559 (N.D.Cal.2004) (“[The waiver] is only as broad as necessary to assure fair disclosure on the subject matter of the advice.”), but see Chiron, 179 F.Supp.2d at 1186 (“The scope of waiver must of necessity be somewhat broad.”). The purpose of the waiver is to allow the opposing party to respond to the reliance on counsel defense. Bittaker, 331 F.3d at 720.

Here, since the purported reliance on counsel extends only to the issue of the Defendants's knowledge of the legality and accuracy of Broadcom's public statements, the waiver should be deemed to extend only to those communications relating to the public statements at issue. Plaintiffs are entitled to no more.

This narrow view of the subject matter comports with the Ninth Circuit's approach to waiver. See Bittaker, 331 F.3d at 720; see also In re Sealed Case, 877 F.2d 976, 981 (D.C.Cir.1989) (reversing district court for allowing discovery of communications relating to entire 24-point marketing plan when waiver only applied to two points). It also is consistent with Judge Taylor's view of the scope of the waiver based on Defendants' offer of proof.[1] Defendants' use of the reliance on counsel defense creates an implied waiver of attorney-client communications relating to Broadcom's public statements during the class period.

III. Waiver By Broadcom

Plaintiffs contend that the waiver of the attorney-client privilege extends not just to the individual defendants, but to Broadcom as well. (JS at 22.) Defendants assert that only the individual defendants are raising the reliance on counsel defense, so the waiver only applies to them and not to Broadcom the corporation. (JS at 59.) Defendants do not disagree that the individual defendants have the ability to waive the privilege on behalf of the corporation. See Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343, 349, 105 S.Ct. 1986, 85 L.Ed.2d 372 (1985).

*3 In discussing the reliance on counsel defense during the hearing before Judge Taylor, Defendants did not specify that the defense applied only to the individual defendants. (See Defs.' Evid. App ., Ex. 2 at 69.) In addition, Judge Taylor's order did not confine the attorney-client waiver to the individual defendants. (Feb. 10 Order.) In the absence of any evidence to the contrary, I conclude that the reliance on counsel defense has been asserted as to all Defendants, including Broadcom. Therefore, Broadcom has also waived the attorney-client privilege for communications relating to the public statements.

IV. Work Product

Plaintiffs assert that work product protection is waived by assertion of a reliance on counsel defense. (JS at 17.) Most courts recognize that a work product waiver is not automatic in cases involving a reliance on counsel defense. See, e.g., SNK Corp. of America v. Altus Dream Entertainment Co., 188 F.R.D. 566, 571 (N.D.Cal.1999). Since protections afforded work product and attorney-client communications address different goals, it does not follow that a waiver of one automatically results in a waiver of the other. Handgards, Inc. v. Johnson & Johnson, 413 F.Supp. 926, 929-30 (N.D.Cal.1976).

However, many courts do find that waiver of the work product doctrine is proper under the same fairness considerations that govern waiver of attorney-client privilege. See Mushroom Assoc. v. Monterey Mushrooms, Inc., 1992 WL 442892, *4 (N.D.Cal.1992); but see Steelcase, Inc. v. Haworth, Inc., 954 F.Supp. 1195 (W.D.Mich.1997). These courts reason that an attorney's state of mind and the facts and documents informing that state of mind are relevant in determining a client's state of mind. See Dunhall Pharmaceuticals, Inc. v. Discus Dental, Inc., 994 F.Supp. 1202, 1205 (C.D.Cal.1998); SNK Corp., 188 F.R.D. at 571; Chiron, 179 F.Supp.2d at 1188. Courts also find waiver in an effort to avoid selective disclosure by the defendant. See Chiron, 179 F.Supp.2d at 1189. Given the fairness principles underlying waiver in this circumstance and the liklihood that work product material may be relevant to determining Defendants' state of mind and knowledge, Defendants' reliance on the advice of counsel defense has waived the protections of the work product doctrine as to the same subject matter.

V. VisionTech and Silicon Spice Public Statements

On November 23, 2004, Judge Taylor granted summary judgment to Defendants with respect to the press releases issued by Broadcom regarding Broadcom's acquisition of VisionTech, Ltd. and Silicon Spice, Inc. (Order on Defendants' Motions for Partial Summary Judgment on the VisionTech Press Releases, the Silicon Spice Press Releases, and the Pre-November 9 Statements, at 4-11.) Plaintiffs assert that communications relating to the acquisition of VisionTech and Silicon Spice are discoverable because the Court has determined that Defendants waived their attorney-client privilege.[2] Although the press releases themselves no longer are part of a viable claim for relief, communications about the press releases might still be relevant to Plaintiff's other claims involving the acquisition of VisionTech and Silicon Spice and are therefore discoverable.

VI. Post-Public Statement Communications

*4 Plaintiffs contend that the attorney-client waiver applies to all relevant statements during the class period. Defendants assert that the waiver only applies to communications made prior to issuing the public statements. Since only counsel's communications prior to the release of the public statements are relevant to the reliance defense, only those communications are discoverable. See, e.g., United States v. Amlani, 169 F.3d 1189, 1196 (9th Cir.1999). This includes documents created after the release of the statements that reference communications made prior to the public statements.

VII. Conclusion

Plaintiffs' motion to compel discovery is GRANTED with the limitations outlined in this Order. Defendants' motion to quash subpoenas is DENIED.