Click here for Adobe Acrobat version
Click here for Microsoft Word version

******************************************************** 
                      NOTICE
********************************************************

This document was converted from Microsoft Word.

Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.

All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.

Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.

If you need the complete document, download the
Microsoft Word or Adobe Acrobat version.

*****************************************************************



                           Before the
                Federal Communications Commission
                     Washington, D.C. 20554


In the Matter of                 )
                                )
AudioText International, Ltd.,   )
                                )
                                        )
Complainant,                     )    File No. EB-03-MD-010
                                )
v.                               )
                                )
AT&T Corp.,                      )
                                )
                                          
Defendant.


                  MEMORANDUM OPINION AND ORDER


Adopted:  January 23, 2004              Released:  January 27, 
2004

By the Chief, Enforcement Bureau:


I.   INTRODUCTION

     1.   In this Order, we deny the request of defendant AT&T 
Corporation (``AT&T'') for confidential treatment and other 
relief relating to eleven pages of documents (``the Subject 
Documents'') that complainant AudioText International, Ltd. 
(``AudioText'') included in the appendix to the formal complaint 
that AudioText filed with the Commission under section 208(a) of 
the Communications Act of 1934, as amended (``Act'').1  AT&T 
seeks confidential treatment of the Subject Documents pursuant to 
sections 0.457 and 0.459 of our rules,2 on the grounds that they 
are protected by the attorney-client and attorney work product 
privileges.3  AudioText opposes AT&T's request.4  As explained 
below, we deny AT&T's requests relating to the Subject Documents, 
because we find that AT&T has waived any attorney-client 
privilege and/or work product protection that may have once 
attached to these documents.  

II.  FACTUAL BACKGROUND

     II.A.     The District Court Litigation

     2.   Prior to initiating this proceeding before the 
Commission, AudioText had filed a complaint against AT&T in the 
United States District Court for the Eastern District of 
Pennsylvania (``the District Court'') alleging breach of contract 
and of the covenant of good faith and fair dealing. 5  In the 
course of that litigation, AT&T produced the Subject Documents to 
AudioText on August 2, 2001 in response to AudioText's discovery 
requests.  AT&T's outside counsel, Thomas P. Bracaglia, enclosed 
the Subject Documents in a transmittal letter to AudioText's 
outside counsel, Stephen G. Burns,6 and advised that 
``[a]dditional documents which are deemed confidential and/or 
privileged will be produced upon receipt of the signed Protective 
Order.''7

     3.   On August 31, 2001, Mr. Bracaglia sent a letter to Mr. 
Burns stating that certain documents protected by the attorney-
client privilege, including the Subject Documents, ``were 
inadvertently produced by error.''8  Mr. Bracaglia asked whether 
AudioText would return the documents or whether AT&T would 
instead need ``to file a motion to correct this error.''9  Mr. 
Burns responded in two letters, both dated September 13, 2001, in 
which he indicated that because AudioText lacked information 
about the authors and recipients of the Subject Documents, it 
could not agree that the documents were attorney-client 
communications.10  Mr. Burns invited Mr. Bracaglia to call him to 
discuss the matter further.11  Three months passed, during which 
AT&T failed to persuade AudioText to return the Subject 
Documents. 

     4.   On December 17, 2001, AT&T filed a motion asking the 
District Court to dismiss AudioText's complaint or, in the 
alternative, to dismiss it without prejudice to AudioText's 
submission of its claims to the Commission for disposition 
pursuant to the primary jurisdiction doctrine.12  On December 18, 
2001, AT&T's in-house counsel, Jennifer L. Leuba, sent a letter 
to AudioText's outside counsel, Mr. Burns, noting that the 
parties ``had agreed last week to resolve the privilege issues'' 
prior to the deposition of AT&T in-house counsel, Andrew 
Schlafly, which was scheduled for December 21, 2001. 13  Ms. 
Leuba asked Mr. Burns to let her know ``which documents you will 
not return, so that we may file the appropriate motion with the 
Court.''14  On December 19, 2001, Mr. Kasman informed Ms. Leuba 
by letter that AudioText did not intend to return any of the 
documents that AT&T had requested because AudioText did not 
believe they were privileged.15  Mr. Kasman advised AT&T to 
``take any steps you deem appropriate with respect to these 
documents.''16  

     5.   The deposition of Mr. Schlafly was held on December 21, 
2001, as scheduled.17  During the deposition, Ms. Leuba and Mr. 
Burns discussed their dispute concerning the Subject Documents, 
and Ms. Leuba noted that ``the parties have not yet briefed the 
issue of privilege, and I think we all assume we may be doing 
that in the near future.''18  On January 17, 2002, the District 
Court ordered that AudioText may submit its claims to the 
Commission, and stayed all further proceedings in the case 
pending completion of administrative proceedings before the 
Commission.19  AT&T did not file a motion to compel the return of 
the Subject Documents, or otherwise notify the District Court of 
the parties' dispute regarding these documents, at any time 
before or after the District Court issued the stay order.  

     6.   In August 2002, AudioText filed a second complaint in 
the District Court charging that AT&T violated section 201 of the 
Act and AT&T's tariffs by terminating AudioText's services and 
blocking its traffic.20  In November 2002, the District Court 
granted a motion by AT&T to consolidate AudioText's two suits, 
and to stay both cases pending referral to the Commission for 
disposition.21  

     II.B.     The Complaint Proceeding Before The Commission

     7.   AudioText filed and served its Complaint before the 
Commission on May 13, 2003 following an unsuccessful effort at 
pre-complaint mediation before Commission staff.22 AudioText 
included the Subject Documents in the appendix it filed and 
served with its Complaint, and quoted or divulged information 
from the Subject Documents in several paragraphs of the 
Complaint.23 AT&T did not notify the Commission that it 
considered the Subject Documents to be privileged and 
confidential until May 22, 2003, and only then raised the issue 
in response to an inquiry from Commission staff about whether 
certain documents included in the appendix to the Complaint, that 
were stamped ``confidential'' or ``proprietary,'' were intended 
to be made publicly available.24  In response to this inquiry, 
AT&T made an informal request to staff that the Subject Documents 
be excluded from the public record because they are privileged 
documents.25  

     8.   At the suggestion of staff, AT&T documented this 
request in a letter to the Commission, which AT&T filed on June 
4, 2003.26  In that letter, AT&T requested confidential treatment 
of the Subject Documents pursuant to sections 0.457 and 0.459 of 
our rules,27 on the asserted grounds that the documents were 
protected by the attorney-client and work product privileges.28  
Two weeks after filing its June 4 Letter, AT&T made an additional 
request to the Commission for an order requiring AudioText to 
return to AT&T all copies of the Subject Documents, and 
precluding AudioText from introducing, referencing, and/or 
relying upon the Subject Documents in this proceeding.29  This 
was AT&T's first and only request to an adjudicatory entity for 
an order requiring return of the Subject Documents, and it came 
almost two years after AT&T produced the documents.  AudioText 
submitted letters opposing both requests.30   

     9.   We have excluded the Subject Documents from the public 
record to preserve the status quo pending resolution of AT&T's 
request.  We have not, however, ordered AudioText to return the 
Subject Documents to AT&T or precluded AudioText from referencing 
and/or relying upon them.31 

III.      DISCUSSION

     10.  AT&T's request to exclude the Subject Documents from 
the public record rests on sections 0.457 and 0.459 of the 
Commission's rules,32 which implement the Freedom of Information 
Act (``FOIA'').33  Under FOIA, the Commission must disclose 
reasonably described agency records requested by any person, 
unless the records contain information that fits within one of 
the nine exemptions from disclosure provided in the Act.34  
Section 0.457(d) of the Commission's rules, which implements FOIA 
Exemption 4, provides that records not routinely available for 
public inspection include ``[t]rade secrets and commercial or 
financial information obtained from any person and privileged or 
confidential.''35  Section 0.459(a) provides that any person 
submitting information or materials to the Commission may request 
that such information not be made routinely available for public 
inspection.  

     11.  AT&T advances two principal arguments in favor of 
withholding the Subject Documents from the public record.  First, 
AT&T argues that AudioText should not have included the Subject 
Documents in its Complaint to the Commission, because AT&T had 
asserted a claim of privilege with respect to these documents and 
notified AudioText that the documents had been produced 
inadvertently in the District Court litigation.36  AT&T contends 
that ``[i]t is contrary to the basic tenets of FOIA to take 
information that is otherwise private and unavailable to the 
public,'' such as the Subject Documents, and ``place that 
information in the public domain by capitalizing on an 
inadvertent mistake made by'' AT&T's counsel.37  AT&T asserts 
that the Subject Documents should be excluded from the record 
``[o]n this ground alone,'' and that the traditional tests 
governing application of FOIA Exemption 4 are inapplicable.38

     12.  Second, AT&T argues that even if AT&T is required to 
make a showing that the Subject Documents are excludable from the 
public record under FOIA Exemption 4, 39 the Bureau should 
conclude that the Subject Documents qualify for protection under 
that exemption.40  AT&T contends that the Subject Doctrines are 
protected under Exemption 4 because they are ``commercial'' 
documents, in that they involve attorney-client communications 
with respect to AT&T's ability to suspend service to a business 
customer, and are both ``privileged'' and ``confidential.''41  

     13.  Regarding AT&T's first argument, we reject AT&T's 
suggestion that AudioText's allegedly improper submission of the 
Subject Documents to the Commission relieves AT&T of its 
obligation to satisfy the standards for excluding material from 
the public record under FOIA exemption 4.  We have no authority 
to exclude the Subject Documents from the public record under 
FOIA Exemption 4 without a showing that the Documents qualify as 
``trade secrets'' or ``commercial or financial information'' that 
is ``privileged or confidential'' within the meaning of FOIA 
Exemption 4 and section 0.457(d) of our rules.42  

     14.  We also reject AT&T's second argument, which attempts 
to show that the Subject Documents are protected under Exemption 
4 on the ground that they are ``commercial'' materials that are 
both ``privileged'' and ``confidential.''  As discussed below, 
even assuming, arguendo, that the Subject Documents are 
commercial documents that were subject to the attorney-client and 
work product privileges before AT&T produced them to AudioText in 
August 2001, and even assuming such production was inadvertent, 
we find that AT&T waived any privilege or confidentiality 
relating to these materials by failing to take reasonable action 
in the District Court to secure their return.  The Subject 
Documents thus do not qualify for protection under FOIA Exemption 
4, because they lost whatever confidentiality or privilege that 
may have once attached to them, before AudioText ever filed the 
Subject Documents with the Commission.

     15.  Courts have widely recognized in cases involving 
inadvertent or involuntary production of privileged materials 
that the privilege holder waives the privilege where he ``fails 
to pursue all reasonable means of preserving the confidentiality 
of the privileged matter.''43  The law of the Third Circuit, 
which AT&T urges us to apply in this case,44 provides a case on 
point.  In Grand Jury,45 the court held that a party waived the 
work-product privilege when he waited three and a half months 
before filing a motion to compel the return of a file that had 
been inadvertently produced to his adversary.46  Because the 
involuntary disclosure was made directly to the party's 
adversary, who refused requests for return of the file, the court 
in Grand Jury found that judicial enforcement of the privilege 
was the ``only remedy'' that would have foreclosed the 
adversary's use of the documents.47  ``Without such judicial 
vindication,'' the court held that the adversary ``was free to 
continue to utilize the documents, thereby negating their 
confidential character.''48  The court observed that

          [A] reasonable person would not only inform 
          his or her adversary of the breach of the 
          privilege, but also would seek a judicial 
          determination of the controversy if his or 
          her adversary took an opposing stance.  
          Merely asserting the privilege to an 
          adversary is not sufficient to protect the 
          privilege in these circumstances inasmuch as 
          the adversary has possession of the materials 
          claimed to be privileged and thus can make 
          use of them.49

     16.  In this case, as in Grand Jury, the holder of the 
alleged privilege, AT&T, failed to take reasonable steps to 
retrieve the inadvertently produced Subject Documents.  The 
record indicates that three months after AudioText told AT&T's 
counsel on September 13, 2001 that AudioText could not agree that 
the Subject Documents were attorney-client communications,50 AT&T 
had failed to obtain the return of the Subject Documents, either 
by agreement or by requesting court intervention.51  Moreover, 
after AudioText informed AT&T, in its letter of December 19, 
2001, that AudioText did not intend to return the Subject 
Documents,52 AT&T again took no action to obtain relief from the 
District Court.  Indeed, although AT&T's counsel informed 
AudioText's counsel on August 31, 2001, and again on December 18, 
2001, that AT&T would file a motion with the District Court if 
AudioText did not return the Subject Documents, AT&T never did 
so.53  

     17.  AT&T's suggestion that it was prevented from filing 
such a motion to compel by the District Court's decision to stay 
the litigation is wholly unpersuasive.54  First, AT&T was the 
party who filed the Motion to Dismiss that resulted in the 
District Court decision to stay the action.  If filing the Motion 
to Dismiss jeopardized AT&T's ability to protect the privilege 
and confidentiality of the Subject Documents, AT&T has only 
itself to blame.  Second, the District Court order staying the 
litigation was issued on January 17, 2002 - nearly a month after 
AudioText informed AT&T that it did not intend to return the 
Subject Documents.  AT&T has not explained why it did not file a 
motion to compel return of the Subject Documents before the stay 
order issued.55  Nor has AT&T explained why it did not ask the 
District Court to lift the stay, once it issued, for the limited 
purpose of addressing AT&T's request for return of the Subject 
Documents.56  The testimony of AT&T's outside counsel, Mr. 
Bracaglia, indicates that AT&T intended to ask the court to 
compel return of the Subject Documents only if the District Court 
did not dismiss or stay the case.57  This testimony, and AT&T's 
failure to seek court intervention, suggest that AT&T was willing 
to leave the Subject Documents in the hands of its adversary, 
AudioText, as long as the District Court action was dismissed or 
stayed.  Based on this record, we cannot conclude that AT&T 
``pursue[d] all reasonable means of preserving the 
confidentiality'' of the Subject Documents.''58

     18.  AT&T's reliance on case law holding that inadvertent 
production of privileged documents does not, as a matter of law, 
result in a waiver of the privilege is unavailing.59  AT&T cites 
cases from Pennsylvania setting forth five factors that courts 
consider in determining whether inadvertent disclosure waives the 
attorney client privilege, and attempts to show that these 
factors support the conclusion that no waiver occurred here.60  
To the extent these arguments had merit, AT&T should have 
presented them to the District Court, as AT&T repeatedly told 
AudioText it would do.  At this point, after AudioText has been 
in possession of the Subject Documents for two years, has 
thoroughly analyzed and digested the documents, and included them 
in its pleadings, the confidentiality of the Subject Documents 
has been completely destroyed, and no order from this agency can 
restore it.61  

     19.  For all of these reasons, we conclude that AT&T has 
failed to show that the Subject Documents are confidential or 
privileged.  Thus, we deny AT&T's request that the Subject 
Documents be excluded from the public record under sections 0.457 
and 0.459 of the Commission's rules.  We also deny AT&T's further 
request for an order requiring AudioText to return to AT&T all 
copies of the Subject Documents, and precluding AudioText from 
relying upon the documents in this proceeding. AT&T has failed to 
cite any authority permitting the Commission to order a party to 
return documents produced in the District Court litigation and, 
in any event, we see no basis to require AudioText to return the 
Subject Documents, or to refrain from relying upon them, in view 
of our finding that the Subject Documents have lost any privilege 
or confidentiality that may have once attached to them. 
IV.  ORDERING CLAUSES 

     20.  ACCORDINGLY, IT IS ORDERED, pursuant to sections 1, 
4(i), 4(j), and 208 of the Communications Act of 1934, as 
amended, 47 U.S.C.  151, 154(i), 154(j), 208, sections 0.457 
and 0.459 of the Commission's rules, 47 C.F.R.  0.457 and 
0.459, and the authority delegated in sections 0.111 and 0.311 of 
the Commission's rules, 47 C.F.R.  0.111, 0.311, that AT&T's 
requests for confidential treatment of the Subject Documents and 
for an order requiring AudioText to return to AT&T all copies of 
the Subject Documents, and precluding AudioText from introducing, 
referencing, and/or relying upon the document in this proceeding, 
are DENIED.

     21.  IT IS FURTHER ORDERED, pursuant to section 0.459(g) of 
the Commission's rules, 47 C.F.R. 0.459(g), that AT&T may, 
within five working days, file an application for review of this 
Order by the Commission. 

                         FEDERAL COMMUNICATIONS COMMISSION




                         David H. Solomon
                         Chief, Enforcement Bureau
_________________________

1    47 U.S.C.  208.  See Formal Complaint, File No. EB-03-MD-
010 (filed May 13, 2003) (``Complaint'').  The Complaint alleges 
that AT&T violated sections 203(c)(3) and section 201(a) of the 
Act by engaging in conduct that was not authorized by AT&T's 
governing tariffs.  Citations to the appendix to the Complaint 
appear in the form (``Complaint App. at __'').
2    47 C.F.R.  0.457 and 0.459.
3    See Letter from Jennifer L. Leuba, Counsel for AT&T to 
Marlene H. Dortch, Secretary, Federal Communications Commission, 
File No. EB-03-MD-010 (filed June 4, 2003) (``June 4, 2003 
Letter'').  The Subject Documents appear at the following pages 
of the appendix to the Complaint: Complaint App. at 270-271; 277-
79; 281; 282; 303-06; 307-08.  See June 4, 2003 Letter at 5-7.  
See also Letter from Jennifer L. Leuba, Counsel for AT&T to 
Marlene H. Dortch, Secretary, Federal Communications Commission, 
File No. EB-03-MD-010 (filed June 18, 2003) (``June 18, 2003 
Letter'') at 10.  AT&T has described the eleven pages of Subject 
Documents as consisting of ``emails written to and/or from AT&T 
in-house attorneys, on the subject of AT&T's legal right to 
suspend services to AudioText . . .;'' a ``facsimile from an AT&T 
sales executive, transmitting fact information to Sharon Gans, an 
AT&T in-house litigator, for the purpose of receiving legal 
advice, and in anticipation of litigation''; ``handwritten notes 
of Ms. Gans, reflecting internal, privileged communications with 
AT&T clients on the subject of suspension;'' and ``a draft of an 
AT&T tariff, prepared by, and in consultation with, AT&T in-house 
attorneys.''  June 4, 2003 Letter at 2.    
4    See Letter from Russell D. Lucas, Counsel for AudioText, to 
Marlene H. Dortch, Secretary, Federal Communications Commission, 
File No. EB-03-MD-010 (filed June 11, 2003) (``June 11, 2003 
Letter''); Letter from Russell D. Lucas, Counsel for AudioText, 
to Marlene H. Dortch, Secretary, Federal Communications 
Commission, File No. EB-03-MD-010 (filed June 23, 2003) (``June 
23, 2003 Letter'').
5    Joint Statement of the Parties, File No. EB-03-MD-010 (filed 
July 23, 2003) (``Joint Statement'') at 34,  181.
6    June 11, 2003 Letter, Exhibit 1.  
7    June 11, 2003 Letter, Exhibit 1.  On October 11, 2001, the 
District Court entered an order adopting an Agreed Protective 
Order submitted by the parties that, inter alia, provided for 
confidential treatment of designated information produced in 
discovery.  See Order and attached Agreed Protective Order, 
attached as an exhibit to June 4, 2003 Letter.  The Agreed 
Protective Order contains no language or provision addressing 
inadvertent production of privileged documents.  
8    June 11, 2003 Letter, Exhibit 2; June 18 Letter, Declaration 
of Thomas P. Bracaglia (``Bracaglia Decl.''), attached as 
exhibit, at 3,  14.   
9    June 11, 2003 Letter, Exhibit 2.
10   June 11, 2003 Letter, Exhibit 3.
11   June 11, 2003 Letter, Exhibit 4.
12   Complaint App. at 402-37; Bracagalia Decl. at 3,  16; Joint 
Statement at 34,  186.  AT&T's motion was entitled, Motion Of 
Defendant, AT&T Corp., To Dismiss, Or In The Alternative, Motion 
To Dismiss Without Prejudice To Submit This Matter To The Federal 
Communications Commission For Disposition (``Motion to 
Dismiss'').  
13   June 11, 2003 Letter, Exhibit 5.  
14   June 11, 2003 Letter, Exhibit 5.  Ms. Leuba made a similar 
request to Mr. Burns's colleague, Andrew Kasman, that same day.  
See June 11, 2003 Letter, Exhibit 6.
15   June 11, 2003 Letter, Ex. 7.
16   June 11, 2003 Letter, Ex. 7.
17   Complaint App. at 438.
18   Complaint App. at 454, page 96.  
19   Complaint App. at 565-66; Joint Statement at 35,  191.
20   Complaint App. at 580-86.
21   Complaint App. at 587.  
22   See Addendum to Complaint at 26-27,  70-74.  In its June 
11, 2003 Letter, AudioText argues that a submission that 
AudioText provided to Commission staff during the pre-complaint 
mediation process included quotes from some of the Subject 
Documents.  Id. at 6.  According to AudioText, AT&T raised no 
objection to these disclosures.  Id.  AT&T did not dispute this 
contention in its June 18 2003 Letter responding to AudioText's 
arguments.
23   See Complaint at  161, 177, 178, 180, 181, 182, 183, 184, 
206, 325, and 328.  
24   See e-mail communications between Christopher N. Olsen, 
Assistant Chief, Market Disputes Resolution Division, Enforcement 
Bureau, and Jennifer L. Leuba, counsel for AT&T, attached hereto 
as Exhibit 1.  AT&T's counsel noted in the June 4, 2003 Letter 
that she had sent AudioText's counsel a letter on May 20, 2003 
requesting the return of the Subject Documents.  See June 14, 
2003 Letter at 1-2.  According to AT&T, AudioText refused this 
request.  Id.  
25   Id.  AT&T's counsel advised staff that a few of the Subject 
Documents contain both privileged and non-privileged information, 
and offered to provide redacted versions of such documents for 
inclusion in the record.  Id.   
26   June 4, 2003 Letter.
27   47 C.F.R.  0.457 and 0.459.
28   See June 4, 2003 Letter at 1.  
29   June 18, 2003 Letter at 6, 10.
30   See June 11, 2003 Letter; June 23, 2003 Letter.
31   See 47 C.F.R.  0.459(d)(1)(where the Commission has 
received a request that information submitted to the Commission 
be withheld from public inspection, ``the information will be 
accorded confidential treatment. . . until the Commission acts on 
the confidentiality request and all subsequent appeal and stay 
proceedings have been exhausted.'')
32   47 C.F.R.  0.457 and 0.459.  
33   5 U.S.C.  552.  
34   See 5 U.S.C.  552(b).
35   47 C.F.R.  0.457(d).  See 5 U.S.C.  552(b)(4) (Exemption 
4, stating that the government need not disclose ``trade secrets 
and commercial or financial information obtained from a person 
and privileged or confidential.'')
36   June 4, 2003 Letter at 2.
37   June 4, 2003 Letter at 2.  
38   June 4, 2003 Letter at 2-3 (citing the tests set forth in 
National Parks and Conservation Ass'n v. Morton, 498 F.2d 765, 
770 (D.C. Cir. 1974) and Critical Mass Energy Project v. NRC, 975 
F.2d 871, 879 (D.C. Cir. 1992 (en banc), cert denied, 507 U.S. 
984 (1993)).  
39   5 U.S.C.  552(b)(4).
40   June 4, 2003 Letter at 3.  
41   June 4, 2003 Letter at 3.  AudioText contends that the 
protections of sections 0.457 and 0.459 are not available to AT&T 
because AT&T was not the person who submitted the Subject 
Documents to the Commission.  According to AudioText, only 
persons who have submitted materials to the Commission are 
entitled to request that they be withheld from the public record 
under sections 0.457 and 0.459 of our rules.  See June 11, 2003 
Letter at 1-2.  AudioText's suggestion that only the person who 
has submitted information to the Commission may request 
confidential treatment of the information appears to be at odds 
with section 0.459(i) of our rules, which provides that ``[t]hird 
party owners of materials submitted to the Commission by another 
party may participate in the proceeding resolving the 
confidentiality of the materials.''  47 C.F.R.  0.459(i).  We 
need not, however, decide whether AT&T is entitled to request 
that the Subject Documents be withheld from public inspection 
under sections 0.457 and 0.459, even though AT&T itself did not 
submit these materials to the Commission, because we find that 
AT&T has not established that the Subject Documents qualify for 
confidential treatment under those rules, regardless of who 
submitted the Subject Documents to the Commission.
42   47 C.F.R.   0.457(d).  See 5 U.S.C.  552(b)(4).
43   United States v. de la Jara, 973 F.2d 746, 749-50 (9th Cir. 
1992)(finding that attorney-client privilege was waived where a 
criminal defendant waited six months before seeking the return of 
a privileged letter that the government seized in executing a 
search warrant).  See, e.g., In re Grand Jury (Impounded), 138 
F.3d 978 (3d Cir. 1998) (holding that in cases of inadvertent 
disclosure, ``the party asserting the work product doctrine must 
pursue all reasonable means to restore the confidentiality of the 
materials and to prevent further disclosures within a reasonable 
period to continue to receive the protection of the privilege''); 
SEC v. Lavin, 111 F.3d 921, 929 (D.C. Cir. 1997)(noting that the 
D.C. Circuit ``adheres to a strict rule on waiver of 
privileges,'' and holding that ``'the confidentiality of 
communications covered by [a] privilege must be jealously guarded 
by the holder of the privilege lest it be waived.''') (citations 
omitted). 
44   June 18, 2003 Letter at 3 and n.1 (arguing that ``[b]ecause 
the AudioText litigation was pending in Pennsylvania and because 
the inadvertent production of these privileged documents at issue 
occurred in Pennsylvania, the holdings of the Court of Appeals 
for the Third Circuit and the District Courts sitting in 
Pennsylvania should govern the scope of the privilege afforded 
the documents and all issues regarding waiver'').
45   138 F.3d 978 (3d Cir. 1998).
46   Although Grand Jury addressed the work-product privilege, in 
analyzing the factors considered in determining whether a waiver 
occurred, the court in Grand Jury relied upon decisions 
concerning the attorney-client privilege. 138 F.3d at 981 (citing 
the holding in United States v. de la Jara, 973 F.2d at 750). 
47   Id. at 982.
48   Id. at 982.  
49   Grand Jury, 138 F.3d at 982.  
50   June 11, 2003 Letter, Exhibit 3.
51   See June 11, 2003 Letter, Exhibits 5, 6.
52   See June 11, 2003 Letter, Exhibit 7 at 1(stating that 
AudioText ``did not intend to return any of these documents to 
[AT&T],'' and advising AT&T's counsel to ``take any steps you 
deem appropriate with respect to these documents.'') .
53   Like the privilege holder in Grand Jury, AT&T does not even 
claim that it had ``had reason to believe that the adversarial 
party was not making use of'' the allegedly privileged material.  
138 F.3d at 982.  The record shows that, at the Schlafly 
deposition, held in December 2001, AT&T's counsel noted that 
several of the topics on which AudioText sought deposition 
testimony were based on the privileged documents that AT&T had 
asked AudioText to return.  See Complaint App. at 439-40.  
54   See June 18, 2003 Letter at 2, 5 (arguing that ``AT&T had 
intended to file a motion for their return when the matter was 
referred to the Commission'' and that ``AT&T's efforts to rectify 
the disclosure were not only timely but ongoing and persistent up 
until the time this action was stayed'').  See also June 4, 2003 
Letter at 1 (arguing that the District Court's Order of January 
17, 2002 ``stayed `all further proceedings,' which, among other 
things, included all motion practice.'')
55   Indeed, AT&T could have asked the District Court for 
expedited treatment of such a motion to compel in view of the 
pendency of the Motion to Dismiss, or requested that the court 
decide the motion to compel before ruling on the Motion to 
Dismiss. 
56   AT&T apparently did not regard the January 17, 2002 stay 
order as precluding all activity in the District Court 
litigation, as evidenced by its successful motion, in November 
2002, to have AudioText's second-filed action consolidated with 
the action that was the subject of the January 17, 2002 stay 
order.  See, supra, at  6.  In addition, the fact that AudioText 
filed a motion with the District Court on January 25, 2002 
seeking reconsideration of the January 17, 2002 stay order, which 
the District Court denied in an order dated August 21, 2002, 
provides further evidence that the January 17, 2002 stay order 
did not bar all motion practice in the District Court litigation  
See Complaint App. at 567-79.
57   Bracagalia Decl. at 4,  17(stating that AT&T ``intended to 
file a motion to compel return of the documents if its [Motion to 
Dismiss] was not been [sic] granted.'')
58   United States v. de la Jara, 973 F.2d at 750. 
59   See June 18, 2003 Letter at 3
60   June 18, 2003 Letter at 3.  The five factors are as follows:  
(1) the reasonableness of the precautions taken to prevent 
inadvertent disclosure in view of the extent of the document 
production; (2) the number of inadvertent disclosures; (3) the 
extent of the disclosure; (4) any delay and measures taken to 
rectify the disclosure; (5) whether the overriding interests of 
justice would or would not be served by relieving a party of its 
error.  Id. citing Rotelli v. 7-Up Bottling Co. of Phila., 1995 
WL 234171 (E.D. Pa. 1995); Advanced Medical, Inc. v. Arden 
Medical Services, Inc., C.A. No. 87-3059, 1988 WL 76128 (E.D. Pa. 
July 18, 1988).  
61   See In re Grand Jury Investigation of Ocean Transp., 604 
F.2d 672, 674-75 (D.C. Cir.), cert denied, 444 U.S. 915 (1979) 
(where documents were turned over one year prior to the assertion 
of privilege, and they had already been ``copied, digested and 
analyzed'' before a motion was filed with the district court, 
``the disclosure [could not] be cured simply by a return of the 
documents'' and the ``privilege ha[d] been permanently 
destroyed); McGreevy v. CSS Industries, Inc., Fair Empl. Prac. 
Cas. (BNA) 1644, 1996 WL 412813, at *2 (E.D. Pa. 1996) 
(disclosure of privileged document was already complete, as 
opposing party had learned its full contents); Advanced Medical, 
Inc., 1988 WL 76128, at *3 (E.D. Pa. 1988) (noting that, although 
a ``limited disclosure resulting from glancing at an open file 
drawer or designated documents for copying may not justify a 
finding of waiver when the party does not know the essence of the 
document's contents. . . when disclosure is complete, a court 
order cannot restore confidentiality'').