May 2, 2022

Court requires company to turn over internal investigation documents to former employees charged with bribery

On April 27, 2022, Cognizant Technology Solutions Corp., a multinational information technology services and consulting company, was ordered by a federal court in New Jersey to produce to two former Cognizant executives a “substantial set of documents” related to an internal Foreign Corrupt Practices Act investigation that had been conducted by Cognizant and outside counsel.  The documents are to be produced in connection with a criminal case against the two executives, who are being prosecuted for their roles in allegedly paying $2 million in bribes to Indian officials to obtain a construction permit in 2014.  Among the documents to be produced are “memoranda, notes, summaries, [and] other records of interviews” conducted as part of Cognizant’s internal investigation.  According to the April 27, 2022 Order, which was unsealed by the court on May 4, 2022, Cognizant had waived attorney-client privilege and work product protections over the memoranda, notes, and summaries because Cognizant had shared “detailed summaries of [these] interviews” with the Department of Justice and Securities and Exchange Commission.  

In February 2019, Cognizant settled an FCPA matter with the DOJ and the SEC.  Cognizant agreed to pay disgorgement of $16,394,351, prejudgment interest of $2,773,017, and a civil monetary penalty of $6,000,000 to the SEC.  The DOJ issued a declination, with Cognizant agreeing to pay disgorgement of $19,370,561 to the DOJ, although the DOJ credited the disgorgement paid to the SEC.  In the declination letter, the DOJ noted Cognizant’s “full and proactive cooperation in this matter (including its provision of all known relevant facts about the misconduct.”  Although the declination letter did not mention interviews, the DOJ’s Justice Manual, section 9-28.720, states that in order for a corporation to receive cooperation credit, the corporation must produce “relevant factual information—including relevant factual information acquired through . . . interviews.”  

At the same time as the settlement with Cognizant, the DOJ indicted Gordon Coburn, the former President of Cognizant, and Steven Schwartz, the former Chief Legal and Corporate Affairs Officer of Cognizant, for their alleged roles in the bribery scheme.  As part of their defense, Coburn and Schwartz subpoenaed Cognizant’s interview memoranda and related documents and argued they were being improperly withheld because of Cognizant’s disclosures to the government.  

In a January 24, 2022 order, the Court granted Coburn and Schwartz’s joint motion to compel Cognizant to produce, inter alia, these interview summaries and underlying documents.  In an accompanying opinion, the Court held that “to the extent that summaries of interviews were conveyed to the government, whether orally or in writing, the privilege [was] waived as to all memoranda, notes, summaries, or other records of the interviews themselves.  Second, to the extent the summaries directly conveyed the contents of documents or communications, those underlying documents or communications themselves [were] within the scope of the waiver. Third, the waiver extend[ed] to documents and communications that were reviewed and formed any part of the basis of any presentation, oral or written, to the DOJ in connection with this investigation.”  (emphasis added).  

Subsequent to that order, Cognizant moved for clarification of the ruling and argued that it should be allowed to redact the interview memoranda and withhold attorney notes used to prepare the disclosures to the government because Cognizant never turned over these memoranda and notes to the government and, therefore, retained attorney-client and work product protections over the documents.  However, in its April 27, 2022 order, the Court rejected Cognizant’s arguments because “disclosure to the government waived any privilege as to the documents actually disclosed and certain related documents pertaining to the same subject matter.”  The court cited Shire LLC v Amneal Pharms, LLC, No. 2:11-CV-03781, 2014 WL 1509238, at *6 (D.N.J. Jan 10, 2014), which held that a privilege waiver is extended to undisclosed documents and communications if “1) the waiver is intentional, 2) the disclosed and undisclosed communications or information concern the same subject matter, and 3) they ought in fairness to be considered together.”  In particular, the Court noted that Cognizant’s disclosures to the government “undermined the purpose of both attorney-client and work product protections, waiving those privileges” not only “as to the information actually conveyed” but also as to “the documents so related to that information that they ought in fairness be considered together.”  (internal quotation marks omitted).  The Court therefore ordered the documents produced within 14 days.  

Unsealed Memorandum and Order | DOJ declination letter | SEC Order | Indictment