Court of Chancery Draws the Line on Privilege Waivers: Lawyers’ Internal Brainstorming Stays Protected
In a June 25, 2026 letter opinion in Albertsons Companies, Inc. v. The Kroger Co., Vice Chancellor Lori W. Will of the Delaware Court of Chancery provided useful guidance on how the court will construe a stipulated partial waiver of the attorney-client privilege—and, in particular, whether such a waiver reaches a law firm’s purely internal communications. The decision balances the text of the waiver against the practical realities facing a document reviewer who must draw the line between protected intra-firm deliberations and materials reflecting advice actually given to the client. The opinion is a helpful reminder both that the words of a privilege stipulation matter and that Delaware courts remain reluctant to expose lawyers’ uncommunicated brainstorming even when a party’s reliance on counsel is squarely at issue.
Background
The litigation arises out of the failed merger of grocery retailers Albertsons Companies, Inc. (Albertsons) and The Kroger Co. (Kroger). Albertsons claims that Kroger willfully breached its obligation to use “best efforts” (and, ultimately, to take “any and all actions”) to eliminate antitrust impediments to the merger by proposing deficient divestiture packages. During discovery, Kroger witnesses testified that they believed Kroger was complying with its contractual duties based on legal advice from its outside antitrust counsel—after which Albertsons asserted that Kroger had put that legal advice at issue. Kroger subsequently agreed to a defined waiver of privilege over “legal advice on the construction of the divestiture packages and the adequacy of the divestiture packages from a regulatory perspective”; further, Kroger agreed to review and produce (i) direct communications from counsel to Kroger and (ii) internal law firm documents reflecting the formulation of that legal advice.
Albertsons took issue with this approach and moved to compel, arguing that the waiver was broader than Kroger acknowledged and that Kroger was improperly withholding internal law firm communications.
The Court’s Analysis
The Court of Chancery denied the motion, except to the limited extent of providing guidance on how the stipulated waiver applies to internal law firm communications. The court began with first principles: when a party makes the “conscious decision” to waive privilege and advance an advice-of-counsel defense, the waiver is a partial one, limited to documents that concern the same subject matter and that “ought in fairness to be considered together.” The court then turned to the text of the parties’ stipulation. Kroger had agreed to waive privilege over “legal advice” concerning the divestiture packages. Kroger’s position was that a document falls within the waiver only if it involves the formulation or communication of legal advice to Kroger and is connected to a specific proposal or analysis being prepared for the client. Albertsons took the view that the waiver required production of all of outside counsel’s documents related to the construction or adequacy of the divestiture packages, regardless of whether those documents reflected advice actually provided to Kroger.
The court sided with Kroger. Vice Chancellor Will reasoned that Alberton’s interpretation “reads the phrase ‘legal advice’ out of the waiver,” and she explained that legal advice “requires a communicative act to a client” and does not extend to every “uncommunicated musing of a law firm associate or a partner’s internal reaction to a meeting.” The court thus held that Kroger’s approach was consistent with the waiver’s text, noting that this approach also aligned with precedent explaining that Delaware courts are “chary” of construing a privilege waiver to encompass internal lawyer communications that never culminated in advice to the client. The court pointed to Chancellor William Chandler’s decisions in In re Dairy Mart Convenience Stores, Inc., Derivative Litigation and Pfizer, Inc. v. Warner-Lambert Co., each of which limited a privilege waiver to materials that were actually communicated or presented to the client, and noted that the Court of Chancery has maintained this distinction “to preserve room for lawyers to freely brainstorm.” As the court put it, quoting an earlier decision, “[d]isclosing advice the[] [client] never received moves no soil.”
Turning to the practical implications of its ruling, the court acknowledged as “well taken” Albertsons’ argument that there was no principled way for a reviewer to apply the distinction between protected intra-firm deliberations and materials reflecting the creation of legal advice, describing it as “a difficult line-drawing exercise.” It therefore offered guidance for Kroger’s review: “internal ‘back and forth’ among lawyers—summarizing a meeting, workshopping theories, or reflecting internal debate—is not legal advice.” But when a firm-side document “is used to draft or prepare legal advice for communication to the client—whether that advice is written or oral—it ceases to be mere brainstorming”; such a document reflects the formulation of legal advice to Kroger, falls within the scope of the waiver, and must be produced. In a footnote, the court also described as overbroad Kroger’s carve-out for documents reflecting “an attorney’s contemporaneous reaction to a meeting or email that is not connected to any specific proposal or analysis being prepared for the client.” That is, if an internal law firm communication—including a “contemporaneous reaction”—“memorializes, reflects, or discusses information conveyed to the client,” it should be produced.
Key Takeaways
Although Albertsons arises from a discovery dispute, the letter opinion offers several practical lessons for parties and counsel who find themselves negotiating—or litigating under—a partial privilege waiver.
First, parties should draft waiver stipulations with the same care they would bring to any other contract and should expect a court to hold them to that language. Thus, parties should consider whether to expressly address, for example, internal communications and deliberations.
Second, Delaware courts remain protective of lawyers’ internal deliberations. Even where a client puts its reliance on counsel at issue, the Court of Chancery will not lightly order production of intra-firm “back and forth” communications that never ripened into advice to the client.
Third, the opinion supplies a workable rule for document reviewers. Depending on the language of the waiver stipulation, summaries of meetings, workings through theories, and internal debate are protected, whereas documents used to draft or prepare advice for communication to the client (whether written or oral), and any internal communication that memorializes, reflects, or discusses information actually conveyed to the client, may not be protected.
Parties entering similar stipulations should heed these lines—and should consider how a court may tackle the line-drawing problems presented by the scope of such waivers before, rather than after, agreeing to the waivers’ terms.
This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.
