PASADENA, Calif. (Legal Newsline) ' Stolen documents related to an attorney's fight to claim possession of Superman are no longer subject to attorney-client privilege, a federal appeals court has ruled.

The U.S. Court of Appeals for the Ninth Circuit ruled Marc Toberoff, a movie producer and intellectual property attorney, must produce documents once stolen by an employee to DC Comics. Toberoff is representing the heirs of writer Jerome Siegel and illustrator Joe Shuster, who created Superman in the 1930s.

Judge Diarmuid O'Scannlain, of the U.S. Court of Appeals for the Ninth Circuit, noted the long-running dispute between the estates of Siegel and Shuster and DC Comics, which is owned by Warner Bros.

O'Scannlain wrote that Toberoff waived an attorney-client privilege defense in litigation over the documents by handing them to a third party, a federal prosecutor.

"It may well be that encouraging cooperation with the government is an alternative route to the ultimate goal of promoting adherence to the law," O'Scannlain wrote.

"And there are those who assert that 'an exception to the third-party waiver rule need (not) be moored to the justifications of the attorney-client privilege.' We disagree.

"If we were to unmoor a privilege from its underlying justification, we would at least be failing to construe the privilege narrowly. And more likely, we would be creating an entirely new privilege."

The opinion says Toberoff approached the heirs with an offer to manage preexisting litigation over rights ceded by Siegel and Shuster to DC Comics when they joined the company as independent contractors in 1937, a year before Superman made his first appearance.

It adds that Toberoff told the heirs he would arrange for a new Superman film and created a joint venture between the heirs and an entity he owned, serving as both business advisor and attorney.

Attorney David Michaels worked for one of Toberoff's companies for only three months in 2006 before stealing copies of several documents from the Siegel and Shuster files. He first attempted to solicit business from the heirs, and then sent the documents to executives at DC Comics.

Without reading them, DC Comics gave the documents to an outside attorney and sought to obtain them through discovery in two ongoing lawsuits over Superman.

Toberoff considered the documents to be privileged and would not disclose them to DC Comics. However, in 2007, a magistrate judge ordered certain documents turned over, and Toberoff reported the theft to the Federal Bureau of Investigation.

In December 2008, Toberoff produced some of the documents. In 2010, DC Comics filed a lawsuit alleging Toberoff interfered with its contractual relationships with the heirs. The cover letter, which showed a timeline outlining Toberoff's alleged plan to make Superman his own, contained in the documents formed the basis of the lawsuit.

After Toberoff asked the U.S. Attorney's Office to investigate Michaels, DC Comics immediately requested all documents disclosed to the office, claiming the privilege was waived when Toberoff turned them over.

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

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