Superior Court Addresses Scope of Privilege Waiver in Dispute Involving The American Bottling Company, Coke, and Bodyarmor

Morris James LLP

The American Bottling Co. v. BA Sports Nutrition, LLC et. al, C.A. No: N19C-03-048-AML CCLD (Del. Super. Feb. 11, 2021)

Delaware courts generally uphold the attorney-client privilege, including by recognizing waivers that are limited in scope. But they also police selective disclosures to ensure fairness using doctrines like the “partial waiver doctrine,” under which a partial disclosure of a privileged communication may waive privilege as to the entire communication, and the “at issue” exception, under which privilege may be waived by injecting a particular privileged communication or broader issue into the litigation. Applying these doctrines in The American Bottling Company decision, the Delaware Superior Court’s Complex Commercial Litigation Division defined the scope of a party’s tactical waiver broader than that party contended was appropriate.

Plaintiff, The American Bottling Company, alleged, in part, that The Coca-Cola Company engaged in tortious interference by causing BA Sports Nutrition, LLC (“Bodyarmor”) to terminate its distribution agreement with American Bottling. During the course of discovery, Coke produced an email redacting certain communications between Coke executives and outside counsel. Later, for tactical reasons, Coke re-produced the email without redactions—revealing Coke’s outside counsel’s advice relating to Bodyarmor’s ability to terminate the agreement as well as Coke’s risk of liability in connection with that termination. Coke also permitted its executive to testify about this advice in his deposition.

Arguing that Coke waived the privilege under both the “at issue” and “partial waiver” doctrines, American Bottling move to compel the production of all of Coke’s communications with outside counsel regarding Bodyarmor’s right to terminate the agreement and Coke’s risk of liability in connection with that termination. While Coke acknowledged its privilege waiver, it argued that the waiver was limited to communications between outside counsel and Coke’s executives regarding these two topics. Reasoning that Coke’s narrow view of its waiver could impermissibly permit Coke to weaponize the attorney-client privilege in the circumstances, the Court ruled that, except for communications solely among and between Coke’s outside counsel where advice to Coke was not discussed, the waiver extended essentially to all communications regarding Bodyarmor’s termination rights and Coke’s risk of liability.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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