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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 01-cv-1451-REB-CBS (Consolidated with Civil Action Nos. 01-RB-1472, 01-RB-1527, 01-RB-1616, 01-RB1799, 01-RB-1930, 01-RB-2083, 02-RB-333, 02-RB-374, 02-RB-507, 02-RB-658, 02RB-755, 02-RB-798, 04-RB-238)

In re QWEST COMMUNICATIONS INTERNATIONAL INC. SECURITIES LITIGATION ______________________________________________________________________ QWEST'S RESPONSE TO LEAD PLAINTIFFS' SECOND MOTION FOR AN ORDER COMPELLING THE PRODUCTION OF DOCUMENTS FROM DEFENDANTS QWEST COMMUNICATIONS INTERNATIONAL INC., PHILIP F. ANSCHUTZ, CRAIG D. SLATER AND DRAKE S. TEMPEST CONCERNING AN ADVICE OF COUNSEL DEFENSE OR, IN THE ALTERNATIVE, PRECLUDING DEFENDANTS PHILIP F. ANSCHUTZ, CRAIG D. SLATER AND DRAKE S. TEMPEST FROM ASSERTING AN ADVICE OF COUNSEL DEFENSE ______________________________________________________________________

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TABLE OF CONTENTS INTRODUCTION............................................................................................................. 1 ARGUMENT.................................................................................................................... 1 I. Lead Plaintiffs Are Wastefully Litigating The Same Issues Before Different Judges At The Same Time And Have Failed To Develop A Record To Support The Sweeping Relief They Seek........................................ 1 A. B. II. Lead Plaintiffs Are Wastefully Litigating The Same Issues Before Different Judges At The Same Time ................................... 1 Lead Plaintiffs Have Failed To Develop A Record To Support The Sweeping Relief They Seek ............................................. 3

Although The Issue Is Not Ripe, The Individual Defendants Cannot Waive Qwest's Privileges......................................................................... 5 A. B. Only Qwest Can Waive Its Privileges......................................................... 5 This Case Does Not Fall Within The Narrow Circumstance When An Individual Not Authorized To Do So Can Waive A Corporation's Privilege......................................... 7

III.

Even If the Court Were To Find That The Individual Defendants Are Capable Of Waiving Qwest's Privileges, There Can Be No Waiver Under These Facts .................................................... 10 Even If There Had Been A Waiver, It Would Be Significantly More Narrow In Scope Than The One Lead Plaintiffs Propose .......................... 13 A. B. Attorney-Client Communications ............................................................. 13 Attorney Work Product............................................................................. 14

IV.

CONCLUSION .............................................................................................................. 15

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TABLE OF AUTHORITIES CASES Allen v. Burns Fry Ltd., No. 83-C-2915, 1987 WL 12199 (N.D. Ill. June 8, 1987) ........................................... 6 Arnold v. Society for Sav. Bancorp, Inc., 678 A.2d 533 (Del. 1996)........................................................................................... 6 Aull v. Cavalcade Pension Plan, Inc., 185 F.R.D. 618 (D. Colo. 1998) ........................................................................... 3, 12 Bittaker v. Woodford, 331 F.3d 715 (9th Cir. 2003).................................................................................... 13 Burns v. Int'l Ins. Co., 929 F.2d 1422 (9th Cir. 1991).................................................................................. 11 Commodity Futures Trading Commission v. Weintraub, 471 U.S. 343 (1985)............................................................................................... 5, 6 Evello Investments N.V. v. Printed Media Services, Inc., No. 94-2254-EEO, 1995 WL 135613 (D. Kan. Mar. 28, 1995)................................. 13 Fraser v. Major League Soccer, LLC, 284 F.3d 47 (1st Cir. 2002) ...................................................................................... 12 Frontier Refining, Inc. v. Gorman-Rupp Co., Inc., 136 F.3d 695 (10th Cir. 1998)...................................................................... 10, 11, 12 Glenmede Trust Co. v. Thompson, 56 F.3d 476 (3d Cir. 1995)....................................................................................... 13 Granite Partners, L.P. v. Merrill Lynch, Pierce, Fenner & Smith Inc., No. 96-CIV-7874, 2002 WL 737482 (S.D.N.Y. April 26, 2002) ................................ 13 Hearn v. Rhay, 68 F.R.D. 574 (E.D. Wash. 1975) ................................................................ 10, 11, 12 In re Gibco, Inc., 185 F.R.D. 296 (D. Colo. 1997) ........................................................................... 6, 13 In re Grand Jury Proceedings (John Doe Co.) I, 219 F.3d 175 (2d Cir. 2000).............................................................................. passim

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In re Info. Res., Inc. Sec. Litig., No. 89-C-3772, 1994 U.S. Dist. LEXIS 16683 (N.D. Ill. Nov. 17, 1994) ................... 10 In re Keeper of Records, 348 F.3d 16 (1st Cir. 2003) .................................................................................. 3, 10 In re National Smelting of New Jersey, Inc. Bondholders' Litigation, No. 84-3199, 1989 U.S. Dist. LEXIS 16962 (D.N.J. June 29, 1989) ........................ 10 In re von Bulow, 828 F.2d 94 (2d Cir. 1987)......................................................................................... 9 John Doe Co. v. United States (In re Grand Jury Proceedings II), 350 F.3d 299 (2d Cir. 2003)..................................................................................... 12 Milroy v. Hanson, 875 F. Supp. 646 (D. Neb. 1995)............................................................................... 6 Moskowitz v. Lopp, 128 F.R.D. 624 (E.D. Pa. 1989)............................................................................... 10 Norton Frickey, P.C. v. James B. Turner P.C., 94 P.3d 1266 (Colo. Ct. App. 2004) ........................................................................... 5 Rhone-Poulenc Rorer Inc. v. Home Indem. Co., 32 F.3d 851 (3d Cir. 1994)........................................................................... 11, 12, 14 Roe v. Gray, 165 F. Supp. 2d 1164 (D. Colo. 2001) ....................................................................... 3 Sedillos v. Board of Education of School District No. 1, 313 F. Supp. 2d 1091 (D. Colo. 2004) ................................................................. 6, 13 Simmons, Inc. v. Bombardier, Inc., 221 F.R.D. 4 (D.D.C. 2004) ..................................................................................... 14 Southwire Co. v. Essex Group, Inc., 570 F. Supp. 643 (N.D. Ill. 1983) ............................................................................... 5 Sprague v. Thorn Americas, Inc., 129 F.3d 1355 (10th Cir. 1997).............................................................................. 5, 7 Tennenbaum v. Deloitte & Touche, 77 F.3d 337 (9th Cir. 1996)...................................................................................... 10

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Thorn EMI N. America, Inc. v. Micron Tech., Inc., 837 F. Supp. 616 (D. Del. 1993) .............................................................................. 14 United States v. Chen, 99 F.3d 1495 (9th Cir. 1996)...................................................................................... 5 United States v. Gasparik, 141 F. Supp. 2d 361 (S.D.N.Y. 2001) ...................................................................... 13 United States v. Graham, No. 03-CR-089-RB, 2003 WL 23198792 (D. Colo. Dec. 2, 2003)...................... 14, 15 United States v. White, 887 F.2d 267 (D.C. Cir. 1989).................................................................................. 12 United States v. Workman, 138 F.3d 1261 (8th Cir. 1998).................................................................................. 13 Upjohn Co. v. United States, 449 U.S. 383 (1981)................................................................................................... 5 OTHER AUTHORITIES Fed. R. Civ. P. 1.............................................................................................................. 3 Fed. R. Civ. P. 26(b)(3) ................................................................................................. 15 Representation of a Partnership, ABA Comm. on Ethics and Prof'l Responsibility, Formal Op. 91-361 (1991) ......................................................................................... 4 Restatement (Second) of Agency § 14C (1958).............................................................. 6

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INTRODUCTION Lead Plaintiffs again urge the Court to find a sweeping and ill-defined waiver of Qwest's privileges based on the intention of Messrs. Anschutz, Slater, and Tempest (the "Individual Defendants") to pursue some form of reliance on legal counsel defense. Lead Plaintiffs' motion should be denied for four independent reasons. First, Lead Plaintiffs are wastefully litigating the same issues before different judges at the same time, and have failed to develop a record to support the sweeping relief they seek. Second, even if this issue were ripe for decision, Qwest has not authorized the Individual Defendants to waive its privileges and, therefore, none of them can do so. Third, Lead Plaintiffs have failed to meet their burden of establishing waiver. Finally, even if the issue were ripe and there had been a waiver, any waiver would need to be narrowly tailored to actual communications with the Individual Defendants on the specific subject matter of the advice ­ it would be fundamentally unfair to Qwest for waiver to reach all documents "concerning an advice of counsel defense" as Lead Plaintiffs request. ARGUMENT I. Lead Plaintiffs Are Wastefully Litigating The Same Issues Before Different Judges At The Same Time And Have Failed To Develop A Record To Support The Sweeping Relief They Seek. A. Lead Plaintiffs Are Wastefully Litigating The Same Issues Before Different Judges At The Same Time.

Judge Blackburn is currently reviewing two orders that will render moot, or significantly narrow the relief at issue in this motion. The first is Judge Blackburn's review of Magistrate Judge Shaffer's April 19, 2005 Order Denying Without Prejudice Lead Plaintiffs' Motion Concerning the Advice of Counsel Defense. Lead Plaintiffs sought that review, requesting that Judge Blackburn compel "the production of documents from defendants Qwest, Anschutz, Slater and Tempest concerning an advice of counsel 1

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defense." While that application was still pending, Lead Plaintiffs filed this motion, requesting that Magistrate Judge Shaffer "issue an order compelling the production of documents from Qwest and the Individual Defendants concerning an advice of counsel defense." Put simply, if Judge Blackburn were to grant the relief Lead Plaintiffs seek as part of the review of Magistrate Judge Shaffer's April 19, 2005 Order, the relief they seek in this motion would be rendered moot. Conversely, if Judge Blackburn were to deny the relief Lead Plaintiffs seek, the rationale for such denial would likely be instructive for the proper disposition of this motion. Thus, any time Magistrate Judge Shaffer spends on this motion may be time wasted. By simultaneously pursuing the same relief from different judges, Lead Plaintiffs are improperly trying to get two bites at the apple, and, in the process, wasting the resources of this Court and the other parties. Lead Plaintiffs made a deliberate decision to pursue their objections to Magistrate Judge Shaffer's April 19, 2005 Order. If that decision means that a final resolution of this issue takes longer, then that is a cost Lead Plaintiffs must bear ­ they should not be permitted to shift it to the other parties or this Court. The second order currently subject to Judge Blackburn's review is Magistrate Judge Shaffer's May 31, 2005 Order, which called for Qwest to produce those privileged documents it previously produced to the government. Of the approximately 89 documents Messrs. Anschutz and Slater identified in their Second Supplemental Rule 26(a)(1) Disclosures as supporting their advice of counsel defense, 43 were previously produced to the government. Therefore, if Judge Blackburn affirms Magistrate Judge Shaffer's May 31, 2005 Order and the limited waiver documents are required to be produced, almost half of the documents identified by Messrs. Anschutz and Slater will be available to Lead Plaintiffs, rendering this motion largely moot. 2

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Lead Plaintiffs' motion is not designed to "secure the just, speedy, and inexpensive determination" of this action; they should not be permitted to pursue these wasteful tactics, needlessly burdening the Court and parties. Fed. R. Civ. P. 1; cf. Roe v. Gray, 165 F. Supp. 2d 1164, 1175 (D. Colo. 2001) (holding that when two cases presenting same issue are pending in different federal courts, it is appropriate to stay proceedings in one of the matters "in order to promote the efficient use of judicial resources"). The objections pending before Judge Blackburn should be resolved first and then ­ and only then ­ will it be appropriate to consider the need for another motion. B. Lead Plaintiffs Have Failed To Develop A Record To Support The Sweeping Relief They Seek.

Although Lead Plaintiffs seek a sweeping waiver of privileges covering any documents "concerning an advice of counsel defense," they have failed to develop a record to support such relief.1 Indeed, the only thing that has changed since this Court last denied Lead Plaintiffs' motion to compel is that the Individual Defendants served supplemental initial disclosures. Although those disclosures began to crystallize the facts relevant to an assessment of this issue, further factual development is necessary for this Court to conduct the required "fastidious sifting of the facts and a careful weighing of the circumstances." In re Keeper of Records, 348 F.3d 16, 23 (1st Cir. 2003); see also In re Grand Jury Proceedings (John Doe Co.) I, 219 F.3d 175, 183 (2d Cir. 2000) (whether there has been a waiver, and the extent of waiver where one exists, can only be assessed "on a case-by-case basis, and depends primarily on the specific context in which the privilege is asserted"). At this point, all we know is that Mr. Tempest does not intend to support his

"A party asserting waiver of a privilege has the burden of establishing the waiver." Aull v. Cavalcade Pension Plan, Inc., 185 F.R.D. 618, 624 (D. Colo. 1998).

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defense with any information subject to Qwest's claim of privilege, and Messrs. Anschutz and Slater have identified some privileged Qwest documents as being potentially relevant to their defenses. Without knowing more, this record cannot support a waiver of Qwest's privileges covering all documents "concerning an advice of counsel defense." Lead Plaintiffs' present this Court with a false choice: prematurely find a sweeping waiver of Qwest's privileges, or prematurely foreclose the Individual Defendants from invoking a defense that may not even implicate the attorney-client privilege. See, e.g., Exhibit F to Lead Plaintiffs' Second Motion to Compel, Tempest's Supplemental Rule 26(a)(1) Disclosures ("Tempest Supplemental Disclosures") (confirming that Mr. Tempest "does not intend to support [his] defenses with evidence Qwest has withheld on grounds of attorney-client privilege or attorney work product."). This Court should reject Lead Plaintiffs' Hobson's Choice and allow for further factual development ­ e.g., time for the Individual Defendants to respond to the interrogatories Lead Plaintiffs have only now prepared on this issue.2

Further complicating the factual context is that, under certain circumstances, a lawyer for a corporation may also have an attorney-client relationship with a constituent of the corporation in his individual capacity. According to an ABA Formal Opinion discussing this issue: Whether [an attorney-client] relationship has been created [between the organization's counsel and one of its constituents] almost always will depend on an analysis of the specific facts involved. The analysis may include such factors as whether the lawyer affirmatively assumed a duty of representation to the individual partner, whether the partner was separately represented by other counsel when the partnership was created or in connection with its affairs, whether the lawyer had represented an individual partner before undertaking to represent the partnership, and whether there was evidence of reliance by the individual partner on the lawyer as his or her separate counsel, or of the partner's expectation of personal representation. See Representation of a Partnership, ABA Comm. on Ethics and Prof'l Responsibility, Formal Op. 91-361 (1991) (attached as Ex. 1) (noting that same principles apply in (continued...) 4

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II.

Although The Issue Is Not Ripe, The Individual Defendants Cannot Waive Qwest's Privileges. A. Only Qwest Can Waive Its Privileges.

The attorney-client privilege "attaches to corporations as well as individuals." Commodity Futures Trading Commission v. Weintraub, 471 U.S. 343, 348 (1985); see also Upjohn Co. v. United States, 449 U.S. 383, 389 (1981) (same). The power to waive the corporate attorney-client privilege rests with the corporation's current management and is exercised by its officers and its board of directors. See Weintraub, 471 U.S. at 348; Sprague v. Thorn Americas, Inc., 129 F.3d 1355, 1371 (10th Cir. 1997) (same). Qwest has not authorized anyone ­ including any of the Individual Defendants ­ to waive its corporate privileges. Because none of the Individual Defendants possesses authority to waive Qwest's corporate privileges, none may do so. Take for example Messrs. Slater and Tempest. Mr. Tempest is a former Qwest officer and Mr. Slater is a former member of Qwest's Board of Directors. Courts have routinely recognized that former officers and directors lack authority to waive a corporation's privilege. See, e.g., United States v. Chen, 99 F.3d 1495, 1502 (9th Cir. 1996) (former employee "lacked authority to waive the corporation's attorney-client privilege" and, thus, "disclosures of attorney-client communications [by former employee] could not and did not waive the privilege"); Southwire Co. v. Essex Group, Inc., 570 F. Supp. 643, 645 (N.D. Ill. 1983) (testimony of former president that he relied on opinion of counsel regarding patent invalidity did not waive privilege since "only the party that holds the attorney-client privilege

corporate context); see also Norton Frickey, P.C. v. James B. Turner P.C., 94 P.3d 1266, 1267 (Colo. Ct. App. 2004) (Colorado Rules of Professional Conduct are derived from the ABA Model Rules of Professional Conduct and, therefore, Colorado courts frequently look to the ABA rules and opinions for guidance).

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may waive it, [the former president's] testimony did not constitute a waiver of the privilege."); see also Allen v. Burns Fry Ltd., No. 83-C-2915, 1987 WL 12199, at *3 (N.D. Ill. June 8, 1987) (attached as Ex. 2) (one's "power to waive the privilege terminates when he leaves his job"). The same is true for Mr. Anschutz, a current member of the Board of Directors. An individual director has "no power of his own to act on the corporation's behalf." See Restatement (Second) of Agency § 14C (1958), comment b ("Individual directors: An individual director, as such, has still less resemblance to an agent than has the board as a body. He has no power of his own to act on the corporation's behalf, but only as one of the body of directors acting as a board."); Arnold v. Society for Sav. Bancorp, Inc., 678 A.2d 533, 539-40 (Del. 1996) ("Directors, in the ordinary course of their service as directors, do not act as agents of the corporation . . ."). Thus, a director acting alone "is by definition not `management' and, accordingly, has no authority to pierce ... the attorneyclient privilege [of a corporation] when such action conflicts with the will of `management.'" Milroy v. Hanson, 875 F. Supp. 646, 649-50 (D. Neb. 1995).3 Put simply, the Individual Defendants cannot, expressly or impliedly, waive Qwest's privileges, when its current management has elected not to do so. See Weintraub, 471 U.S. at 348 (power to waive corporate privilege rests with corporation's management);

Nearly all the cases Lead Plaintiffs cite to support their waiver argument against Qwest are inapposite because they involve instances where the privilege holder has put his privilege at issue. See, e.g., Sedillos v. Board of Education of School District No. 1, 313 F. Supp. 2d 1091 (D. Colo. 2004) (discussing whether, and to what extent, party's assertion of reliance on counsel waived that party's privilege); In re Gibco, Inc., 185 F.R.D. 296 (D. Colo. 1997) (same). Here, however, Qwest ­ the privilege holder ­ has made clear that it does not intend to put its privilege at issue. This is a critical distinction rendering most of Lead Plaintiffs' brief irrelevant.

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Sprague, 129 F.3d at 1371 (same). This is not merely the starting point of the inquiry ­ it is the ending point. B. This Case Does Not Fall Within The Narrow Circumstance When An Individual Not Authorized To Do So Can Waive A Corporation's Privilege.

The United States Court of Appeals for the Second Circuit ­ the only court of appeals to consider the issue ­ has identified four factors to assess whether an unauthorized disclosure by an officer (which has not happened in this case) could waive a corporation's privilege. See Grand Jury I, 219 F.3d at 175.4 First, the court must consider the "corporate-agent dichotomy," meaning the witness' authority to waive the corporation's privileges and whether the disclosure of confidences would benefit the corporation or advance the witness' own defense. Id. at 184-86. Second, the court must consider the context of the disclosure, and specifically whether the corporation should be deemed in control of the officer's action at the time of the disclosure. Id. at 186-87. Third, the court must examine the nature of the disclosure by the individual (general versus specific and substantive) and whether it could be characterized as advancing corporate interests. Id. at 187-88. Finally, the court must weigh the prejudice caused by the disclosure, if any, to the party seeking the waiver. Id. at 188-89.

Lead Plaintiffs have argued in the past that the Court should ignore In re Grand Jury Proceedings I because the case involved testimony before a grand jury. Qwest agrees that the Court need not consider In re Grand Jury Proceedings I, but for a different reason. Unlike In re Grand Jury Proceedings I, this case does not involve a disclosure of privileged information by a Qwest officer/director ­ there has been no disclosure. Should the Court, however, determine that the Individual Defendants might be able to waive Qwest's privileges, the Second Circuit's decision in In re Grand Jury Proceedings I provides the appropriate analytic framework; while the fact that the disclosures occurred in the grand jury context might mean that the factors should be weighed differently, it does not mean the decision should be ignored.

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Each factor identified by the Second Circuit underscores that the Individual Defendants have not waived Qwest's privileges. First, with respect to the corporate-agent dichotomy, as discussed above, none of the Individual Defendants has authority to waive Qwest's privileges. Further, each of the Individual Defendants has been personally named as a defendant to this action and, as such, none of them purports to be acting as a representative of Qwest in the context of this lawsuit. Grand Jury I, 219 F.3d at 185 (witness' "interest in exculpating his own conduct" may differ from the corporation's interest in preserving its privilege). The second and third factors ­ i.e., the context in which the disclosure occurred and the nature of the disclosure ­ also weigh against a finding of waiver. It is undisputed that the Individual Defendants have not disclosed the substance of any material subject to Qwest's privilege. While the Individual Defendants have indicated that they intend to rely upon the processes for legal review and governance practices that Qwest had implemented, the Second Circuit drew an explicit distinction between general statements that counsel had examined or approved the company's overall business practices and specific, substantive disclosures of the content of legal advice. See Grand Jury I, 219 F.3d at 187-88. Under the Second Circuit's analysis, the process defense does not implicate, much less waive, the attorney client privilege. Finally, weighing the potential prejudice of maintaining Qwest's privileges strongly favors a finding of no waiver. This is not a case where a party seeks to disclose some, but not all privileged communications on a particular subject. Qwest has uniformly directed the Individual Defendants not to disclose any of its privileged information, and it remains undisputed that none of the Individual Defendants has disclosed information subject to Qwest's privilege. Thus, Lead Plaintiffs do not face a party who discloses some privileged 8

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information to advance its defense while shielding other material from examination. See, e.g., In re von Bulow, 828 F.2d 94, 103 (2d Cir. 1987). Indeed, the Individual Defendants have only asserted reliance on the advice of counsel at the most general level, and much of the evidence relevant to their defense would not implicate Qwest's claim of privilege. Among other things, the defense will involve the presentation of evidence about Qwest's internal control process, which included involvement from lawyers and accountants. As Mr. Tempest stated, he intends to demonstrate his good faith "based upon his knowledge of, and reliance upon Qwest's procedures, practices, and governance practices." See Tempest Supplemental Disclosures. Mr. Tempest has further stated that he "does not intend to support [his] defenses with evidence Qwest has withheld on grounds of attorneyclient privilege or attorney work product." Id.5 Under these circumstances, it is clear that Lead Plaintiffs suffer no prejudice if Qwest's privileges are maintained ­ they simply must challenge the Individual Defendants' defense based on the same evidence that the Individual Defendants have available to prove their defense. This is not prejudice, it is parity, and it stands in stark contrast to the extreme prejudice Qwest faces if Lead Plaintiffs obtain the sweeping waiver they seek.

Although Messrs. Anschutz and Slater have identified 89 privileged Qwest documents they would consider using to support their defense, they do not have control over those documents and, thus, will need to maintain their advice of counsel defense without reliance on them. Furthermore, in order to narrow and focus this dispute, Qwest is undertaking a supplemental review of the privileged Qwest documents Messrs. Anschutz and Slater identified on the chart attached to their Second Supplemental Rule 26(a)(1) Disclosures. If Qwest concludes that any of those documents were inadvertently withheld based on privilege, it intends promptly to withdraw its privilege claim and produce the material to Lead Plaintiffs and the other parties.

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Therefore, even if this Court were to recognize the narrow exception to the rule that only an authorized person can waive a company's privilege, application of the Second Circuit's Grand Jury I test reveals there has been no waiver.6 III. Even If the Court Were To Find That The Individual Defendants Are Capable Of Waiving Qwest's Privileges, There Can Be No Waiver Under These Facts. In Frontier Refining, Inc. v. Gorman-Rupp Co., Inc., 136 F.3d 695 (10th Cir. 1998), the United States Court of Appeals for the Tenth Circuit provided guidance for how district courts should assess claims of implied privilege waiver.7 After rejecting the "automatic waiver" test, the Tenth Circuit identified two potential tests for implied waiver ­ a threefactor test articulated in Hearn v. Rhay, 68 F.R.D. 574 (E.D. Wash. 1975), and a Qwest respectfully submits that the three district court opinions Lead Plaintiffs cite for the proposition that an unauthorized individual can waive a company's privilege were wrongly decided and distinguishable. Those decisions ­ two of which are unreported ­ pre-date the Second Circuit's In re Grand Jury Proceedings I opinion. Further, they are distinguishable. In In re National Smelting of New Jersey, Inc. Bondholders' Litigation, No. 84-3199, 1989 U.S. Dist. LEXIS 16962, at *39 (D.N.J. June 29, 1989) (attached as Ex. 3), the court took into consideration a number of factors not present here; e.g., the corporate officer had made substantive disclosures in a deposition and in opposition to summary judgment, without objection. In Moskowitz v. Lopp, 128 F.R.D. 624 (E.D. Pa. 1989), the court denied the plaintiffs' wholesale motion to compel (like that brought here) and referred all privilege disputes having to do with advice-of-counsel to a special master for evaluation on a document-by-document basis. Id. at 636-38. Finally, in In re Info. Res., Inc. Sec. Litig., No. 89-C-3772, 1994 U.S. Dist. LEXIS 16683, at *3 (N.D. Ill. Nov. 17, 1994) (attached as Ex. 4), the individual defendants, who were officers of the defendant corporation, sought to assert the advice of counsel defense at trial. The court noted that the corporation had neither waived its attorney-client privilege nor relied on the advice of counsel defense and, thus, denied the "plaintiffs' motion to limit the [corporation's] attorney-client privilege" and rejected plaintiffs' request for discovery of the privileged materials. Courts have recognized two types of privilege waiver ­ express and implied. An express waiver occurs when the "privilege holder selectively disclos[es] privileged communications to an adversary, revealing those that support the cause while claiming the shelter of the privilege to avoid disclosing those that are less favorable." Tennenbaum v. Deloitte & Touche, 77 F.3d 337, 340-41 (9th Cir. 1996); cf. Keeper of Records, 348 F.3d at 23 (distinguishing between express and implied waivers). In this case, Lead Plaintiffs seek to establish an implied waiver.
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subsequent line of authority exemplified by Rhone-Poulenc Rorer Inc. v. Home Indemnity Co., 32 F.3d 851, 863 (3d Cir. 1994).8 Under Hearn, waiver requires that "through [his] affirmative act, the asserting party put the protected information at issue by making it relevant to the case; and [that] application of the privilege would have denied the opposing party access to information vital to [its] defense." Hearn, 68 F.R.D. at 581 (emphasis added). Rhone-Poulenc similarly holds that waiver cannot occur unless the client asserts a claim or defense, and attempts to prove that claim or defense by disclosing or describing an attorney-client communication. Rhone-Poulenc, 32 F.3d at 863 ("advice of counsel is placed in issue where the client asserts a claim or defense, and attempts to prove that claim or defense by disclosing or describing an attorney-client communication"). As was true in Frontier, Lead Plaintiffs cannot establish waiver as to Qwest's privilege under either the Hearn or Rhone-Poulenc tests ­ the two potentially relevant waiver tests after Frontier. First, Qwest previously confirmed that it does not intend to assert a defense of reliance on legal counsel.9 Thus, the asserting party in this case ­ Qwest ­ has done nothing to put the protected information "at issue." This undisputed fact is critical because waiver under either Hearn or Rhone-Poulenc requires, as a threshold In Frontier, the court concluded that it need not choose between the Hearn and Rhone-Poulenc tests because, as in this case, neither was satisfied. Although Frontier addressed the attorney-client privilege under Wyoming law, it relied on "other state-court decisions, well-reasoned decisions of other jurisdictions, and any other available authority to determine the applicable state law." 136 F.3d at 700 (quoting Burns v. Int'l Ins. Co., 929 F.2d 1422, 1424 (9th Cir. 1991)). Thus, the Frontier decision represents a strong indication of how the Tenth Circuit would view the federal common law applicable in this instance. This Court previously recognized that Qwest's stated intention not to assert a reliance on legal counsel defense did not preclude it from later seeking to raise such a defense if the circumstances were to change. See March 1, 2005 Hearing Tr. at 3-4 (attached as Ex. 5) ("I'm not going to sit hear and make people swear unequivocally that they will never present [an advice of counsel] defense, because I think that's unrealistic.").
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matter, that "the party asserting the privilege [have] placed information protected by it in issue through some affirmative act for his own benefit." Hearn, 68 F.R.D. at 581; see also Rhone-Poulenc, 32 F.3d at 863. Qwest has neither placed its privilege "at issue," nor permitted any of the Individual Defendants to disclose information subject to its privilege. There can be no waiver under these circumstances. Second, even if the conduct of the Individual Defendants could be imputed to the Company, that conduct has not put the substance of Qwest's privilege at issue and, therefore, there can be no waiver under the Hearn or Rhone-Poulenc tests. The weight of authority recognizes that putting the advice of counsel "at issue" requires the interposition of substantive attorney-client communications, not merely generalized references to the role of counsel. In United States v. White, 887 F.2d 267 (D.C. Cir. 1989) (Ginsburg, J.), for example, the court held that a "general assertion lacking substantive content that one's attorney has examined a certain matter is not sufficient to waive the attorney-client privilege." Id. at 270-71; accord John Doe Co. v. United States (In re Grand Jury Proceedings II), 350 F.3d 299, 304 (2d Cir. 2003) (relevant case law "in no way suggests that, merely by telling the prosecutor that he believes he is innocent, a defendant or suspect forfeits his privileges").10

See also Fraser v. Major League Soccer, LLC, 284 F.3d 47, 63 (1st Cir. 2002) (refusal of district court to allow cross-examination on subject of legal opinion after witness alluded to it on direct was not an abuse of discretion); Frontier, 136 F.3d at 701-02 (Tenth Circuit found plaintiff's privilege was not waived by filing suit for indemnification of settlement payments, even though it had put the reasonableness of settlement in issue and counsel's advice was relevant to that issue); Rhone-Poulenc, 32 F.3d at 863 ("advice of counsel is placed in issue where the client asserts a claim or defense, and attempts to prove that claim or defense by disclosing or describing an attorney- client communication"); Aull, 185 F.R.D. at 630 (holding that statement in deposition that Plan Committee relied on advice of counsel "does not indicate that the Defendants have taken affirmative action to place the advice of the Plan Committee's counsel at issue" and thus (continued...) 12

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In this case, Mr. Tempest has stated affirmatively that he does not seek to rely on privileged Qwest information. See Tempest Supplemental Disclosures. Similarly, while Messrs. Anschutz and Slater have identified a handful of privileged Qwest documents that may be relevant to their defense, they do not have access to that material and must therefore present their defense independent of these privileged Qwest documents. Lead Plaintiffs do not identify any privileged information that has been described or disclosed and, thus, the advice of counsel has not been put at issue. As such, there can be no waiver.11 IV. Even If There Had Been A Waiver, It Would Be Significantly More Narrow In Scope Than The One Lead Plaintiffs Propose. A. Attorney-Client Communications.

"The animating principle behind waiver is fairness to the parties, if the court finds that the privilege was waived, then the waiver should be tailored to remedy the prejudice to the [other party]." Grand Jury I, 219 F.3d at 188; see also Bittaker v. Woodford, 331 F.3d did not effect a waiver); United States v. Gasparik, 141 F. Supp. 2d 361, 371-72 (S.D.N.Y. 2001) (general statements regarding defendant's preference to be guided by his attorney and that defendant "wants to do things legally" not a waiver because statements did not reference particular conversation between lawyer and client and did not disclose any confidential and privileged information). Lead Plaintiffs' authority does not support their position. In Sedillos, 313 F. Supp. 2d at 1091, for example, the party asserting waiver sought to put the matter at issue by filing a motion to amend its answer, identifying a report by counsel it intended to rely on, and asking the court for an advance ruling on the scope of the resulting waiver. Similarly, In re Gibco, 185 F.R.D. at 296, and Evello Investments N.V. v. Printed Media Services, Inc., No. 94-2254-EEO, 1995 WL 135613 (D. Kan. Mar. 28, 1995) (attached as Ex. 6) were decided before Frontier and represent applications of the "automatic waiver" rule that the Tenth Circuit later rejected. A number of other cases in other circuits that are cited by Lead Plaintiffs are express waiver cases and, thus, irrelevant to the instant case, which involves an alleged implied waiver. See Glenmede Trust Co. v. Thompson, 56 F.3d 476 (3d Cir. 1995); Granite Partners, L.P. v. Merrill Lynch, Pierce, Fenner & Smith Inc., No. 96CIV-7874, 2002 WL 737482 (S.D.N.Y. April 26, 2002) (attached as Ex. 7); United States v. Workman, 138 F.3d 1261, 1263-64 (8th Cir. 1998).
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715, 720 (9th Cir. 2003) (implied waivers must be closely tailored to needs of opposing party in litigating claim in question). Thus, in a case such as this, any waiver must be limited to actual communications with the Individual Defendants on the specific subject matter of the advice, and cannot extend to communications or work product that the individuals never saw or heard because such materials would be irrelevant to that individual's state of mind. See e.g., Rhone-Poulenc, 32 F.3d at 866 ("Work product that was not communicated to the client cannot affect the client's state of mind;" scope of waiver limited to actual communications); Simmons, Inc. v. Bombardier, Inc., 221 F.R.D. 4, 9-10 (D.D.C. 2004) (reliance on opinion letters of counsel did not waive work product protection for drafts never communicated to client); Thorn EMI N. America, Inc. v. Micron Tech., Inc., 837 F. Supp. 616, 621-22 (D. Del. 1993) (waiver extends only to materials communicated to client). The fact that Qwest has not sought to assert any advice of counsel defense and none of its privileged information has been disclosed underscores the need for any finding of waiver to be narrowly tailored to actual communications with the Individual Defendants on the specific subject matter of the advice. B. Attorney Work Product

In their challenges to Qwest's assertions of attorney-client privilege and workproduct protections, Lead Plaintiffs have persistently ignored the differences between the attorney-client privilege and the work product doctrine. Work product receives greater protection than even attorney-client communications, and waivers of work product ­ particularly "opinion" work product ­ are very narrowly construed. See generally United States v. Graham, No. 03-CR-089-RB, 2003 WL 23198792, *4 (D. Colo. Dec. 2, 2003) (attached as Ex. 8) ("opinion work-product is subject to enhanced and heightened protection, which approaches absolute protection"). A party seeking fact work product 14

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must make a showing of "substantial need," and work product that shows the "mental impressions, conclusions, opinions, or legal theories of an attorney," Fed. R. Civ. P. 26(b)(3), is virtually immune from compulsory disclosure on public policy grounds. See, e.g., Grand Jury I, 219 F.3d at 190-91 (holding that "work-product will not be disclosed absent a showing of substantial need, in the case of fact work-product, or . . . a highly persuasive showing of need in the case of opinion work-product" and that "work-product not communicated to the client remains shielded") (emphasis added and citation omitted); Graham, 2003 WL 23198792, at *4. Lead Plaintiffs have not identified the specific work product they seek, nor have they attempted to demonstrate any need, substantial or otherwise, that would justify its production. In other words, Lead Plaintiffs have made absolutely no showing on which a waiver of work product protections could even be considered. To the extent that Lead Plaintiffs' motion seeks the production of work product, it should also be denied. CONCLUSION For the foregoing reasons, Qwest respectfully requests that Lead Plaintiffs' Motion to Compel be denied. DATED: July 5, 2005 Respectfully submitted,

Jonathan D. Schiller David R. Boyd Alfred P. Levitt BOIES, SCHILLER & FLEXNER LLP 5301 Wisconsin Avenue, N.W. Washington, D.C., 20015 Telephone: (202) 237-2727 Facsimile: (202) 237-6131

/s/Terence C. Gill_______________ Terence C. Gill SHERMAN & HOWARD, L.L.C. 633 Seventeenth Street, Suite 3000 Denver, Colorado, 80202 Telephone: (303) 297-2900 Facsimile: (303) 298-0940

Attorneys for Qwest Communications International, Inc. 15

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CERTIFICATE OF SERVICE I hereby certify that on July 5, 2005, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses: Jeffrey Allen Berens [email protected] Thomas E. Egler [email protected];[email protected] James E. Nesland [email protected]; [email protected];[email protected] James Michael Lyons [email protected];[email protected] Neil Peck [email protected];[email protected];[email protected] Charles A. Stillman [email protected] Mark T. Drooks [email protected];[email protected] Bruce F. Black [email protected];[email protected] Stephanie Erin Dunn [email protected]; [email protected] Timothy Granger Atkeson [email protected] John A. Freedman [email protected] Roberta A. Kaplan [email protected] Walter W. Garnsey, Jr [email protected]; [email protected]

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and I hereby certify that I have served the foregoing via U.S. mail and Federal Express as indicated on this 5th day of July, 2005 to the following individuals: William S. Lerach (via Fed Ex) Lerach, Coughlin, Stoia & Robbins LLP 401 B. Street, suite 1700 San Diego, CA 92101-4297 Jason R. Llorens (via mail) Lerach, Coughlin, Stoia & Robbins LLP 9601 Wilshire Blvd. Suite 510 Los Angeles, CA 90210 David L. Schwarz (via mail) Kellogg, Huber, Hansen, Todd & Evans, PLLC 1615 M Street, NW #400 Washington, DC 20036-3209 Joe R. Whatley, Jr. (via mail) Whatley Drake, L.L.C. P.O. Box 10647 Birmingham, Al 35202-0647 Barbara Moses (via mail) Morvillo, Abramowitz, Grand, & Silverberg, P.C. 565 Fifth Avenue New York, NY 10017 Wesley R. Powell (via mail) Clifford Chance US LLP 31 West 52nd Street New York, NY 10019-6131 s/Debra S. Sikes

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