SDNY Rules AI Tools Waive Privilege in US v. Heppner

Published
Score
13

Why it matters

A federal judge in Manhattan has ruled that a financial services executive waived attorney-client privilege and work product protection by using Anthropic's Claude AI tool without his lawyers' involvement. In United States v. Heppner, Judge Jed S. Rakoff ordered disclosure of 31 strategy documents the defendant generated after inputting case details derived from attorney communications. The court found that Claude, as a non-attorney third party, lacks fiduciary duties, and that Anthropic's privacy policy—which permits data use for training and third-party sharing—destroyed any reasonable expectation of confidentiality. This marks the first federal decision of its kind, rejecting the defendant's argument that later sharing the materials with counsel could retroactively restore privilege protection.

The ruling conflicts sharply with a concurrent decision from Michigan. In Warner v. Gilbarco, Magistrate Judge Patti shielded a pro se plaintiff's ChatGPT-assisted materials as opinion work product, treating AI as a neutral tool comparable to word processors rather than as a third party capable of waiving privilege. Judge Patti found no waiver absent disclosure to opposing counsel. The two decisions emerged within days of each other from discovery disputes in unrelated cases, leaving the law unsettled.

Attorneys should treat these rulings as a warning about consumer AI platforms in sensitive work. The Heppner decision suggests that inputting privileged information into tools with permissive terms of service—even for strategic analysis—risks waiver regardless of intent. Firms should restrict such use to attorney-supervised processes or platforms with appropriate confidentiality protections. The conflicting outcomes mean courts remain divided on whether AI functions as a mere tool or as a third party capable of destroying privilege, making the issue ripe for appellate clarification.

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