The Wall Street Journal
Monday, November 13, 2006
Qwest Communications International Inc. lost an appeal on
whether it must turn over privileged documents in class-action
suits related to accounting fraud allegations against the
company. The company had challenged lower-court rulings that
allowed privileged documents turned over during government
securities fraud investigations to also be viewed by private
parties suing the company.
The documents in question were turned over to the Securities and
Exchange Commission and Justice Department during investigations
into the company's 1999-2002 accounting scandal that, so far,
could cost the company as much as $650 million in financial
Qwest maintains the documents, given to the government under
confidentiality agreements, should not be turned over to private
parties who have brought a variety of investor lawsuits against
the company. Those filing investor lawsuits, however, won
access to the documents during federal court proceedings.
Although the investor lawsuit at issue in the Supreme Court
appeal has reached a proposed settlement with Qwest, the
documents could still be used by investors who have yet agreed
The case is Qwest
Communications v. New England Health Care Employees.