article | publication
By: Albert Manwaring
Originally published in ALM's Delaware Business Court Insider
The purpose of the attorney-client privilege is to encourage full and open communications between clients and their counsel. When a party asserts a defense that relies on the advice of counsel, the defense operates, however, as a partial waiver of the privilege. The scope of such a waiver was analyzed in the recent decision, Albertsons Companies v. The Kroger, C.A. No. 2024-1276-LWW (Del. Ch. June 25, 2026) Albertsons claimed that Kroger willfully breached the contract, which turned on Kroger’s actual knowledge and intent. Relying on the advice of counsel to negate knowledge and intent to breach the contract, Kroger agreed to waive privilege “‘over legal advice’ concerning the divestiture packages.” In its motion to compel, Albertsons asserted that all counsel documents relating to the divestiture packages were subject to the privilege waiver, and must be produced, regardless of whether they reflect legal advice “actually provided to Kroger.”
The Court of Chancery held that Kroger’s privilege waiver was limited to direct communications of legal advice actually provided to the client, together with internal documents that reflected the formulation of that advice. The Court reasoned that “internal lawyer communications that never culminate in advice to the client” would read the phrase “legal advice” out of the privilege waiver because legal advice “requires a communicative act to a client.” The Court emphasized that legal advice “does not extend to every uncommunicated musing of a law firm associate or a partner’s internal reaction to a meeting.” Delaware courts have consistently maintained the distinction between communications and documents containing legal advice provided to a client, which are within the scope of a privilege waiver, and documents containing legal advice never presented or offered to a client, which are not. The Court of Chancery has maintained this distinction “to preserve room for lawyers to freely brainstorm.” Here, Albertsons claimed that Kroger willfully breached the contract. But the uncommunicated advice of Kroger’s counsel relating to the divestiture packages was not the “measure of Kroger’s intent.”
The Court noted, however, the difficulty in practice of applying the distinction between materials that reflect the formulation of legal advice and intra-firm deliberations. For guidance, the Court explained that “‘back and forth’ among lawyers—summarizing a meeting, workshopping theories, or reflecting internal debate—is not legal advice” subject to the privilege waiver. However, when a “firm-side document is used to draft and prepare legal advice for communication to the client—whether that advice is written or oral—it ceases to be mere brainstorming.” Accordingly, the Court concluded that documents reflecting the formulation of legal advice fall within the scope of the privilege waiver, and must be produced.
The Court reasoned that “internal lawyer communications that never culminate in advice to the client” would read the phrase “legal advice” out of the privilege waiver because legal advice “requires a communicative act to a client.”
