Wells v. Liddy , 37 F. App'x 53 ( 2002 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
IDA MAXWELL WELLS, 
Plaintiff-Appellant,
v.
G. GORDON LIDDY,  No. 01-1266
Defendant-Appellee.
PHILLIP MACKIN BAILLEY,
Movant.

Appeal from the United States District Court
for the District of Maryland, at Baltimore.
J. Frederick Motz, District Judge.
(CA-97-946-JFM)
Argued: October 29, 2001
Decided: March 1, 2002
Before WILKINS, WILLIAMS, and MICHAEL, Circuit Judges.
Affirmed in part, reversed in part, and remanded for further proceed-
ings by unpublished per curiam opinion.
COUNSEL
ARGUED: David M. Dorsen, WALLACE, KING, MARRARO &
BRANSON, P.L.L.C., Washington, D.C., for Appellant. John
Buchannan Williams, COLLIER, SHANNON, SCOTT, P.L.L.C.,
Washington, D.C., for Appellee. ON BRIEF: Kerrie L. Hook, COL-
LIER, SHANNON, SCOTT, P.L.L.C., Washington, D.C.; Douglas
2 WELLS v. LIDDY
R.M. Nazarian, HOGAN & HARTSON, Baltimore, Maryland, for
Appellee.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
This defamation case, filed by Ida Maxwell "Maxie" Wells against
G. Gordon Liddy, reaches this court for the second time. Wells’s def-
amation claims are based on statements Liddy made alleging that
Wells was involved with a call-girl ring while working as a secretary
at the Democratic National Committee (DNC) in 1972. The district
court initially granted Liddy’s motion for summary judgment, con-
cluding that Wells, an involuntary public figure, could not prove that
Liddy acted with actual malice. Wells appealed and this court held
that under the evidence presented, a rational trier of fact could con-
clude that Liddy acted with actual malice. See Wells v. Liddy, 186
F.3d 505, 542-44 (4th Cir. 1999). This court further held that Wells
was a private individual, and therefore, that while a showing of actual
malice was required to recover punitive and presumed damages, she
needed only to prove that Liddy was negligent in making the state-
ments to recover compensatory damages. On remand the district court
held a trial, but the jury was unable to render a verdict. Based upon
the trial record, the district court granted Liddy’s renewed motion for
judgment as a matter of law, holding that no reasonable jury could
find that Liddy was negligent in making the allegedly false state-
ments. Because we determine that the evidence does not preclude
Wells from proving that Liddy failed to take reasonable steps in
assessing the veracity of his statements, we reverse the district court’s
grant of judgment as a matter of law and remand for further proceed-
ings consistent with this opinion.
WELLS v. LIDDY 3
I.
Recognizing the importance of the historical background in this
case, we begin by briefly recounting the chronology of events that
underlie the present dispute.1 From February of 1972 until July of
1972, Wells was employed at the DNC offices in Washington, D.C.,
located at that time in the Watergate complex. Wells worked as the
secretary to Spencer Oliver, Executive Director of the Association of
State Democratic Chairmen.
In the early morning hours of June 17, 1972, Frank Wills, a secur-
ity guard, summoned the police because a door at the Watergate had
been suspiciously taped so that it would not lock. Upon their arrival,
the police arrested five men, and the inquiry into the now infamous
Watergate break-in began. The initial focus of the investigation tar-
geted the five would-be burglars and two of their co-conspirators,
namely E. Howard Hunt, then White House aide, and Liddy, then
counsel for the Committee to Reelect the President. All seven were
indicted by a federal grand jury on September 15, 1972. Liddy was
charged with multiple counts of burglary, conspiracy, and interception
of wire and oral communications. Liddy, refusing to plead guilty or
cooperate with the prosecution, was tried, convicted, and served fifty-
two months in prison.
James McCord, one of the five burglars, pled guilty to a variety of
burglary, conspiracy, and wiretapping charges but then claimed that
he was pressured to plead guilty and lie during the district court pro-
ceedings. McCord’s allegations implicated high-level administration
officials. As subsequent investigations unfolded, the White House’s
effort to cover up its involvement led to the imprisonment of several
high-ranking White House officials and ultimately to the resignation
of President Richard M. Nixon in August of 1974.
Since his release in 1977, Liddy has engaged in public commentary
through a successful radio talk show, an autobiography, and as a fre-
quent speaker on the lecture circuit. During several public appear-
ances, Liddy presented an alternative theory behind the Watergate
1
These past events that are more completely recounted in our earlier
opinion. See Wells v. Liddy, 186 F.3d 505, 513-518 (4th Cir. 1999).
4 WELLS v. LIDDY
2
break-in. This alternative theory, which is described in a 1991 book
by Len Colodny and Robert Gettlin titled Silent Coup: The Removal
of a President, alleges that John Dean had personally ordered the
Watergate break-in to protect his own reputation and the reputation
of his now-wife Maureen Biner. Len Colodny & Robert Gettlin, Silent
Coup: The Removal of a President, 131-33, 147-48 (1991).
Biner was allegedly a close friend of Erica L. "Heidi" Rikan, who
operated a call-girl operation at the Columbia Plaza apartments, near
the Watergate complex. The Silent Coup theory of the break-in asserts
that Phillip Mackin Bailley, an attorney, used his connections with the
DNC to promote Rikan’s prostitution ring. According to Colodny and
Gettlin, when Oliver was not in the office, his phone, which was the
target of the first Watergate break-in, was used to arrange meetings
between visitors to the DNC and Rikan’s call girls. Bailley was
arrested and indicted for various crimes, including violations of the
Mann Act, and as a result, his address books were seized.
According to Silent Coup, Dean, upon hearing of Bailley’s arrest,
called the Assistant United States Attorney investigating the case and
summoned him to the White House. During this meeting, Dean sup-
posedly stated that he thought the Democrats had leaked the story
about the prostitution ring. Dean photocopied Bailley’s address book
to compare it with a list of White House Staff. Biner’s name, as well
as an alias of her good friend Rikan, were found in Bailley’s address
book.
The implication, therefore, is that Dean ordered the second and ill-
fated Watergate break-in to determine whether the Democrats had
information linking Biner to the Bailley/Rikan call-girl ring and, if
they did, whether they intended to use that information to embarrass
him and the White House. The authors of Silent Coup, noting that one
of the Watergate burglars was found to be carrying a key to Wells’s
desk, prompt its readers to contemplate the following unanswered
question: "Why would a Watergate burglar have a key to Wells’s desk
2
The conventional theory is that the motive behind the Watergate
break-in was to replace a malfunctioning listening device that had been
installed in an earlier break-in at the DNC. See, e.g. Karlyn Barker &
Walter Pincus, Watergate Revisited, Wash. Post, June 14, 1992, at A1.
WELLS v. LIDDY 5
in his possession, and what items of possible interest to a Watergate
burglar were maintained in Wells’s locked desk drawer?" Colodny &
Gettlin, supra, at 159 (emphasis in original).
Beginning in 1988, Liddy had extensive conversations with
Colodny regarding the Silent Coup theory, and by 1991, Liddy had
reached the conclusion that the theory was valid. As a result, in 1991,
Liddy endorsed the theory in a special paperback edition of his auto-
biography titled Will. On June 3, 1991, Liddy met with Bailley to dis-
cuss Bailley’s involvement with the Rikan prostitution ring. During
that meeting Bailley described to Liddy how the DNC procured pros-
titution services for some of its visitors. According to Bailley, photo-
graphs of Rikan’s call girls were kept in a desk in the
Oliver/Wells/Governors area and various personnel at the DNC would
display the photographs to DNC visitors and would then arrange
meetings with the visitor’s call girl of choice. Bailley also stated that
DNC employees were paid a commission on their referrals. Liddy
began routinely to incorporate the Silent Coup theory of the Water-
gate break-in, including his discussion with Bailley, into his public
speeches. This case on appeal concerns two occasions on which
Liddy espoused the Silent Coup theory. First, on April 2, 1996, Liddy
delivered a speech at James Madison University in Harrisonburg, Vir-
ginia (the JMU speech). During the JMU speech, Liddy, in response
to a question, made the following statement:
[S]ome members of the DNC were using the call girl ring
as an asset to entertain visiting firemen. And to that end they
had a manila envelope that you could open or close by
wrapping a string around a wafer. And in that envelope were
twelve photographs of an assortment of these girls and then
one group photograph of them. And what you see is what
you get. It was kept, he said, in that desk of Ida Maxine
Wells. Thus, the camera [and] all the rest of it. And what
they were doing is as these people would be looking at the
brochure, if you want to call it that, and making the tele-
phone call to arrange the assignation that was being wiretap-
ped, recorded and photographed.
(J.A. at 53-54.) Second, Liddy gave a similar speech while on a Medi-
terranean cruise (the cruise ship speech) in August 1997.
6 WELLS v. LIDDY
II.
On April 1, 1997, Wells filed a defamation action against Liddy,
asserting that Liddy defamed her by stating on several occasions that
she acted as a procurer of prostitutes for men who visited the DNC.3
The complaint sought one million dollars for injury to reputation and
standing in the community, one million dollars for mental suffering,
humiliation, and embarrassment, and three million dollars in punitive
damages. Liddy filed an Answer and Affirmative Defenses on April
28, 1997.
Following discovery, Liddy filed a motion for summary judgment,
which the district court granted in Liddy’s favor on April 13, 1998.
See Wells v. Liddy, 1 F. Supp. 2d 532 (D. Md. 1998). This court
reversed the district court’s grant of summary judgment and
remanded the case for trial. See Wells v. Liddy, 186 F.3d 505 (4th Cir.
1999). Specifically, we determined that Virginia law, rather than Lou-
isiana law, applied to the allegations surrounding Liddy’s JMU
speech, and maritime law applied to the cruise ship speech.4 See id.
at 522, 524. Moreover, we held that the cruise ship speech, in addition
to the JMU speech, was capable of conveying a defamatory meaning.
See id. at 523 & 527. On the claims regarding the Don & Mike show
and the Accuracy in Media web site, this court affirmed the district
court’s application of Louisiana law and its conclusion that neither is
capable of having a defamatory meaning. See id. at 527-30. This court
then determined that Wells is a private individual, not an involuntary
public figure, and therefore need not prove actual malice to recover
3
Initially, in addition to the JMU speech and the cruise ship speech,
Wells alleged that Liddy made defamatory statements that were quoted
on the Accuracy in Media web site, broadcast on the Don & Mike radio
show, and broadcast on the Hardball television show. The defamation
claims based on the statements made on the Don & Mike show and
appearing in the Accuracy in Media web site were dismissed by the dis-
trict court on summary judgment and we affirmed. See Wells, 186 F.3d
527-31. Wells voluntarily dismissed the Hardball claim prior to the dis-
trict court’s summary judgment ruling. See Wells v. Liddy, 1 F. Supp. 2d
532, 534 n.1 (D. Md. 1998).
4
The parties, however, have since stipulated to the application of Vir-
ginia law to both of Liddy’s statements.
WELLS v. LIDDY 7
compensatory damages. See id. at 531-542. Moreover, concerning
Wells’s claim that Liddy acted with actual malice, which must be
proven to recover punitive and presumed damages, this court deter-
mined that Wells had raised a genuine issue of material fact. See id.
at 542-44.
Upon remand, a jury trial commenced on January 16, 2001. The
jury, however, failed to render a verdict. The district court excused
the jury and entered an order granting Liddy’s renewed motion for
judgment as a matter of law on February 6, 2001. See Wells v. Liddy,
135 F. Supp. 2d 668 (D. Md. 2001). Specifically, the district court
held that "no ‘reasonable jury’ could have found in favor of plaintiff
Ida Maxwell Wells against defendant G. Gordon Liddy on the issue
of whether Liddy had been negligent in making the allegedly defama-
tory remarks upon which Wells’s suit was based." See id. at 669.
Wells again appeals to this court, alleging that (1) the district court
erred in entering judgment as a matter of law on the issue of Liddy’s
negligence; (2) the district court erred in making numerous evidenti-
ary rulings; (3) the district court erred in ruling that Liddy did not
waive attorney-client and work-product privileges; and (4) the district
court erred in denying Wells’s unopposed motion to file her second
amended complaint. We will review each challenge in turn.
III.
We review the district court’s entry of judgment as a matter of law
de novo. See United States v. Vanhorn, 20 F.3d 104, 109 (4th Cir.
1994). Judgment as a matter of law is appropriate when "a party has
been fully heard on an issue and there is no legally sufficient evidenti-
ary basis for a reasonable jury to find for that party on that issue . . . ."
Fed. R. Civ. Pro. 50(a)(1). In other words, we must determine
"whether, without weighing the evidence or considering the credibil-
ity of witnesses, there can be but one conclusion as to the verdict that
reasonable jurors could have reached." Vanhorn, 20 F.3d at 109(internal quotation marks omitted). Moreover, when making our
determination, we must view the evidence, and make all reasonable
inferences to be drawn therefrom, in favor of the nonmoving party.
See Price v. City of Charlotte, 93 F.3d 1241, 1249 (4th Cir. 1996)
("While our review of this motion is plenary, it is also circumscribed
8 WELLS v. LIDDY
because we must review the evidence in the light most favorable to
[the nonmoving party].") (quoting Singer v. Dungan, 45 F.3d 823,
827 (4th Cir. 1995)). We are also obligated to apply the "substantive
evidentiary standard of proof that would apply at the trial on the mer-
its." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).
Under Virginia law, to recover actual or compensatory damages in
a defamation action Wells, a private individual, must establish by a
preponderance of the evidence that Liddy was at least negligent in
making each statement, that is, that he "either knew it to be false, or
believing it to be true, lacked reasonable grounds for such belief, or
acted negligently in failing to ascertain the facts on which the publica-
tion was based." See Gazette, Inc. v. Harris, 325 S.E.2d 713, 725 (Va.
1985).5 Therefore, to survive Liddy’s motion for judgment as a matter
of law, there must be sufficient evidence for a reasonable jury to find,
by a preponderance of the evidence, that Liddy either knew that he
was making a false statement, or that he lacked reasonable grounds
for believing his statements were true or acted negligently in failing
to ascertain the facts upon which his statements were based. Because
we find that sufficient evidence exists, we reverse the district court’s
judgment as a matter of law.
As we noted during the first appeal, Bailley’s statements are clearly
the only direct evidence that Wells personally had a role in the alleged
prostitution-related activities conducted out of the DNC. See Wells,
186 F.3d at 542-44. It is also well established in the record that Bail-
ley is an unreliable source. See id. at 542 ("Bailley, who is a disbarred
attorney and convicted felon with a long history of substance abuse
and mental illness, had changed his story about the prostitution ring
several times and was not a reliable source."). The issue, therefore, as
the district court points out, is "whether Liddy reasonably assessed the
veracity of what Bailley told him about the pictures allegedly in
Wells’s desk." Wells v. Liddy, 135 F. Supp. 2d 668, 670 (D. Md.
2001) ("Liddy was required to examine Bailley’s statements with cau-
tion and weigh them with great care.").
5
Recovery of presumed or punitive damages for defamation under Vir-
ginia law requires a finding of actual malice, that is, clear and convincing
evidence that Liddy made the statements with "knowledge of [their] fal-
sity or reckless disregard for the truth." Gazette, Inc., 325 S.E.2d at 724.
WELLS v. LIDDY 9
The district court concluded that Wells had not produced sufficient
evidence to establish that Liddy failed to fulfill his obligation to
assess the veracity of Bailley’s statements. See id. Determining that
Liddy was aware of facts that reasonably corroborated what Bailley
had said, the district court concluded that Liddy had tested Bailley’s
statements sufficiently by independent investigation. See id. at 671.
Specifically, the district court determined that the following evidence,
all known to Liddy, sufficiently corroborated Bailley’s statements
about Wells’s involvement in call-girl activities, preventing Wells
from meeting her burden of proof: (1) Eugenio Martinez, a Watergate
burglar, was apprehended with a key to Wells’s desk and at trial
Wells provided no other explanation for why the burglars would tar-
get her desk; (2) Carl Shoffler, an arresting officer, testified in another
case that one of the burglars’ cameras was found on Wells’s desk; (3)
conversations of a sexual nature had been intercepted by the tap on
Oliver’s phone; (4) the conventional theory explaining the reasons for
the Watergate break-ins long has been subject to question because of
the type of equipment used and the ineffectiveness of such an opera-
tion; (5) deposition testimony from another case stating that an infor-
mant implicated Oliver in the call-girl ring and one of the FBI Agents
identified a coded name in Bailley’s address book as a secretary or
administrative aide in the DNC office; (6) Bailley’s sister said that
Wells had a relationship with Bailley; (7) Officer Shoffler stated that
Wells, acting as if she were very surprised and shocked to learn that
the burglars placed photography equipment on her desk, exclaimed,
"My God, they haven’t gone in there"; and (8) Wells wrote a contem-
poraneous letter to a close personal friend that could be read as impli-
cating her in "questionable activities."6 See id. at 671-74.
These eight pieces of corroborating evidence are very similar to the
following seven pieces of corroborating evidence upon which the dis-
trict court based its original grant of summary judgment:
6
The district court also noted that a third party was present at Liddy’s
interview of Bailley, demonstrating that Liddy and Bailley were not
engaged in casual conversation, and that Liddy relied on the judgment of
a well-known author, James Hougan, who also determined that Bailley
was telling the truth. See Wells, 135 F.Supp. at 670-71.
10 WELLS v. LIDDY
(1) although Bailley changed his story several times, he con-
sistently stated that a DNC secretary was involved in the
call-girl ring; (2) in 1976 public reports circulated that inti-
mate phone calls were occurring on DNC phones that led to
unconfirmed rumors that the phones were being used in a
call-girl ring; (3) the FBI found a tap on Oliver’s phone; (4)
Martinez possessed a key to Wells’s desk; (5) it is entirely
unclear why anyone would want to break into Wells’s desk;
(6) Bailley’s sister said that Wells had a relationship with
Bailley; and (7) there were rumors circulating among DNC
staffers after the Watergate break-in regarding a call-girl
ring.
Wells, 186 F.3d at 542. As we noted in the first appeal, this evidence
tends to corroborate the call-girl theory generally, but it fails specifi-
cally to corroborate Bailley’s statements concerning Wells’s personal
participation in the call-girl ring. In other words, the eight pieces of
evidence listed above would not prevent a reasonable jury from infer-
ring that Liddy’s sole source of information on Wells’s personal
involvement in procuring prostitutes for visitors to the DNC was Bail-
ley, who Liddy admits is not a credible source.7 See id. at 543. A rea-
sonable jury could conclude further that sole reliance on such an
unreliable source violates Virginia’s negligence standard, because it
suggests that Liddy lacked reasonable grounds to believe that his
statements were true.8 See Ingles v. Dively, 435 S.E.2d 641, 645 (Va.
1993) (citing Gazette, Inc., 325 S.E.2d at 724-25).
We conclude that the evidence enumerated by the district court
7
Likewise, that Liddy obtained the information from Bailley in a for-
mal interview and that Hougan also relied on Bailley do not corroborate
Wells’s alleged role. See Wells, 135 F.Supp. at 670-71.
8
Indeed, we have already held that sole reliance on such an unreliable
source creates a genuine issue of material fact with regard to the higher
standard, that is, whether Liddy acted with actual malice. See Wells, 186
F.3d at 544 ("The inference that Bailley was Liddy’s only source directly
connecting Wells to prostitution activity combined with Liddy’s
acknowledgment that he knew Bailley was not reliable is sufficient to
create a genuine issue of material fact regarding whether Liddy acted
with actual malice.").
WELLS v. LIDDY 11
does not support judgment as a matter of law because it fails to prove,
as a matter of law, that Liddy’s actions were prudent. In other words,
the question of whether Liddy was negligent presents a genuine issue
of material fact for a jury to resolve and, therefore, the district court
erred in granting judgment as a matter of law in Liddy’s favor. Conse-
quently, we reverse the district court’s judgment and remand for a
new trial.
IV.
Although we have determined that remand is appropriate, in light
of the protracted litigation in this case, the likelihood that many of the
same issues will be revisited on remand, and the potential need for
further discovery, we review the remaining three contentions Wells
makes on appeal. With regard to Wells’s challenges to the district
court’s evidentiary rulings, while a majority are unfounded and do not
warrant further discussion,9 two are meritorious and will be reviewed
9
Wells divides her assignments of error regarding evidentiary rulings
into four categories. Our general analysis of the merit of each category
is as follows. First, the district court carefully explained various consid-
erations weighing against the introduction of evidence probative to
Liddy’s state of mind and was within its discretion when it excluded or
placed reasonable limits on the introduction of such evidence. Cf., e.g.,
Benedi v. McNeil-P.P.C., Inc., 66 F.3d 1378, 1385 (4th Cir. 1995)
(describing the district court’s discretion to exclude evidence of notice
under Rule 403 and instruct the jury regarding such evidence). Second,
the district court did not abuse its discretion by admitting testimony on
the call-girl theory. This evidence was probative of Liddy’s state of mind
when he made the JMU and cruise ship speeches. Moreover, because
state-of-mind evidence is not introduced to prove the truth of its content,
the best evidence rule does not apply. See Weinstein’s Federal Evidence
§ 1002.05[1] (2d ed. 2001) ("The rule is inapplicable when content is not
at issue."). Third, the district court properly admitted evidence on the
issue of truth-falsity. Evidence that a prostitution ring was operating at
the Columbia Plaza is only one piece of circumstantial evidence that
Liddy presents in an attempt to draw the conclusion that Wells was con-
nected with the prostitution ring. It is a well-settled principle that "cir-
cumstantial evidence is no less probative than direct evidence." Stamper
v. Muncie, 944 F.2d 170, 174 (4th Cir. 1991) ("[C]ircumstances alto-
gether inconclusive, if separately considered, may, by their number and
12 WELLS v. LIDDY
briefly below. We review the district court’s decision to admit or
exclude evidence under the narrow abuse of discretion standard. See
United States v. Hassouneh, 199 F.3d 175, 182 (4th Cir. 2000).
A.
Wells argues that the district court erred by excluding evidence
tending to show that Liddy’s reliance on the publication of Silent
Coup was disingenuous. Specifically, Wells sought to introduce dis-
position testimony by Roy Gainsburg, president of St. Martin’s Press
and Thomas McCormack, chairman of the board of St. Martin’s
Press. Gainsburg testified that if St. Martin’s Press had knowledge
that a book contained an important untrue statement of fact that would
be damaging to someone, the book would not be publishable. He also
stated, however, that in his view, St. Martin’s Press did not have an
"obligation to insure that the facts in every book that it published
were true." (Exh. at 184-85.) Both Gainsburg and McCormack testi-
fied to having no knowledge of Bailley’s mental condition. Wells
claims that from this evidence, which Liddy had in his possession
when he made the statements at issue, a jury could conclude that
Liddy’s reliance on the book was unreasonable. We agree.
Liddy’s knowledge that the publisher of Silent Coup disavowed all
responsibility for verifying the accuracy of the book and had no
knowledge of Bailley’s mental condition is relevant to Liddy’s state
of mind when he relied on the book in making his allegedly defama-
joint operation, especially when corroborated by moral coincidences, be
sufficient to constitute conclusive proof." (internal quotations omitted)).
Fourth, the district court properly admitted into evidence the letter Wells
wrote to a close friend on September 13, 1972, just prior to her appear-
ance before the grand jury that indicted Liddy. In this letter, written at
the time Wells was working at the DNC, she expresses concerns about
being implicated in immoral and possibly illegal activities. Liddy’s state-
ments concerned Wells’s involvement in an illegal prostitution ring
while working at the DNC office. Therefore, the district court did not
abuse its discretion by admitting this letter as evidence of Liddy’s state
of mind when he made the cruise ship speech. Liddy found out about the
letter after he made the JMU speech but before he made the cruise ship
speech. See Wells, 135 F. Supp. 2d at 673.
WELLS v. LIDDY 13
tory statements. Choosing simply to ignore such evidence might,
along with other facts, suggest negligence or actual malice. The dis-
trict court, in excluding the evidence under Federal Rule of Evidence
401, concluded that it "doesn’t prove anything." (J.A. at 3123).
Because the district court’s basis for excluding the deposition testi-
mony of Gainsburg and McCormack was legally incorrect, we find
that it abused its discretion.
B.
Wells also challenges two portions of Jeannine Bailley Ball’s testi-
mony, which were admitted for their relevance on the issue of truth-
falsity in addition to the issue of Liddy’s state of mind. In 1972, Ball
was serving as a secretary to her brother, Phillip Bailley. She testified
that early in 1972, someone identifying herself as Maxie Wells called
Bailley and that Wells’s name appeared in her brother’s address book,
which served as a record of his calls. Wells argues that admission of
this evidence violates Federal Rule of Evidence 901(a), contending
that self-identification is not enough to authenticate the call. We
agree.
Rule 901 provides that "[t]he requirement of authentication or iden-
tification as a condition precedent to admissibility is satisfied by evi-
dence sufficient to support a finding that the matter in question is
what its proponent claims." Fed. R. Evid. 901(a). The burden to
authenticate evidence under Rule 901 is not a high one. See Wein-
stein’s Federal Evidence § 901.02[3] (2d ed. 2001) ("Generally speak-
ing, the proponent of a proffered exhibit needs only to make a prima
facie showing that the exhibit is what the proponent claims it to be.").
Once this requisite prima facie showing has been met, if the evidence
satisfies all other rules of admissibility, the "[r]esolution of whether
evidence is authentic calls for a factual determination by the jury."10
See United States v. Branch, 970 F.2d 1368, 1370 (4th Cir. 1992);
10
The district court properly defined the jury’s role in judging authenti-
cation by explaining to the jury that it must determine whether callers
who identified themselves were telling the truth about who they were.
The district court must, however, determine whether there is sufficient
evidence for a reasonable juror to find in favor of authenticity before
submitting this issue to the jury.
14 WELLS v. LIDDY
Weinstein’s Federal Evidence § 901.02[3] (2d ed. 2001) ("[I]ssues the
opponent has raised about flaws in the authentication . . . go to the
weight of the evidence instead of its admissibility."). Before the evi-
dence is admitted for consideration by the jury, however, "the district
court must determine whether its proponent has offered a satisfactory
foundation from which the jury could reasonably find that the evi-
dence is authentic." Branch, 970 F.2d at 1370.
Rule 901(b), as an illustration, explains that "[t]elephone conversa-
tions, by evidence that a call was made to the number assigned at the
time by the telephone company to a particular person or business, if
. . . in the case of a person, circumstances, including self-
identification, show the person answering to be the one called" may
be considered identified or authenticated. Fed. R. Evid. 901(b)(6).
From this illustration, it is clear "that the mere announcement of iden-
tity by a person who has placed a telephone call does not suffice to
make it admissible against the person so identified." See United States
v. Benjamin, 328 F.2d 854, 864 n.3 (2d Cir. 1964) (citing 7 Wigmore,
Evidence 617 (3d ed. 1940) (emphasis in original)). Instead, Rule 901
requires evidence to support the claim that the self-identifying caller
is indeed who he says he is. For example, "telephone conversation
may be shown to have emanated from a particular person by virtue
of its disclosing knowledge of facts known peculiarly to him." See
Fed. R. Evid. 901 advisory committee notes ex. (4). In other words,
"the content of the conversation combined with the caller’s self-
identification" can sufficiently support a finding that the caller is who
she says she is. United States v. Console, 13 F.3d 641, 661 (3d Cir.
1993). Because the caller identifying herself as Wells provided no
other information that could verify her identity, the testimony lacks
sufficient evidence for a reasonable juror to find in favor of authentic-
ity or identification. The district court, therefore, abused its discretion
by admitting this portion of Ball’s testimony on the issue of truth-
falsity.
V.
Wells next contends that the district court erred by ruling that
Liddy had not waived his attorney-client and work-product privileges.
Wells argues that Liddy waived his attorney-client privilege by dis-
WELLS v. LIDDY 15
closing confidential communications and that he waived the work-
product privilege by making testimonial use of work product.11
The district court, while acknowledging that Liddy had disclosed
confidential communications and made testimonial use of work-
product, determined that Liddy’s actions did not constitute a "classic
waiver." (J.A. at 490-91.) Because Liddy’s "affirmative use" of privi-
leged material did not constitute a classic waiver, the district court
reasoned, discovery of privileged material was limited to items that
Liddy saw and relied upon to demonstrate his state of mind. (J.A. at
489-93; id. at 491 ("Anything factual communicated to Mr. Liddy has
to be disclosed.").) We review the district court’s application of the
law of privilege de novo. See Hawkins v. Stables, 148 F.3d 379, 382
(4th Cir. 1998).
"The attorney-client privilege is the oldest of the privileges for con-
fidential communications known to the common law." Upjohn Co. v.
United States, 449 U.S. 383, 389 (1981). By protecting confidential
communications between attorneys and their clients, the attorney-
client privilege "encourage[s] full and frank communication . . . and
thereby promote[s] broader public interests in the observance of law
and administration of justice." Id. The attorney-client privilege, how-
ever, is not absolute. See Hawkins, 148 F.3d at 384 n.4.
Under Virginia law,12 the attorney-client "privilege may be
expressly waived by the client, or a waiver may be implied from the
client’s conduct." Commonwealth v. Edwards, 370 S.E.2d 296, 301
(Va. 1988) (citing Grant v. Harris, 82 S.E. 718 (Va. 1914)). When
11
We previously reviewed and affirmed the district court’s denial of
Wells’s June 25, 1997 Motion to Compel. See Wells, 186 F.3d at 518
n.12. That motion was based on Liddy’s alleged failure to produce a
privilege log and therefore law of the case does not apply to the issue
now before us: whether Liddy waived the attorney-client and work-
product privileges through disclosure.
12
The Federal Rules of Evidence provide that "in civil actions and pro-
ceedings, with respect to an element of a claim or defense as to which
State law supplies the rule of decision, the privilege of a witness, person,
government, State, or political subdivision thereof shall be determined in
accordance with State law." Fed. R. Evid. 501.
16 WELLS v. LIDDY
"deciding whether the privilege has been waived by implication
regard must be had to the double elements that are predicated in every
waiver, i.e., not only the element of implied intention, but also the
element of fairness and constancy." Id. (internal quotation omitted).
There is always also the objective consideration that when
his conduct touches a certain point of disclosure, fairness
requires that his privilege shall cease whether he intended
that result or not. He cannot be allowed, after disclosing as
much as he pleases, to withhold the remainder. He may elect
to withhold or to disclose, but after a certain point his elec-
tion must remain final.
Id. (internal quotation omitted). Consequently, when disclosure to a
third party waives the privilege, the waiver applies "‘not only to the
transmitted data but also as to the details underlying that informa-
tion.’" Id. (citing United States v. Cote, 456 F.2d 142, 145 (8th Cir.
1972)). In other words, "[a] client’s . . . testimony as to a part of any
communication to the attorney is a waiver as to the whole of that
communication, on the analogy of the principle of completeness." Id.(internal quotation omitted). The Supreme Court of Virginia has pro-
vided the following guidance for determining what constitutes the
"underlying details" of a communication:
"The details underlying the published data are the communi-
cations relating the data, the document, if any, to be pub-
lished containing the data, all preliminary drafts of the
document, and any attorney’s notes containing material nec-
essary to the preparation of the [communication]. Copies of
other documents, the contents of which were necessary to
the preparation of the [communication], will also lose the
privilege."
Id. (quoting United States v. (Under Seal), 748 F.2d 871, 875 n.7 (4th
Cir. 1984), vacated as moot on other grounds, 757 F.2d 600 (4th Cir.
1985)). The Supreme Court of Virginia also advised that "[i]f any of
the non-privileged documents contain client communications not
directly related to the published data, those communications, if other-
wise privileged, must be removed by the reviewing court before the
WELLS v. LIDDY 17
document may be produced." Id. (quoting (Under Seal), 748 F.2d at
895 n.7).
The privilege derived from "[t]he work-product doctrine is closely
related to the attorney-client privilege." Id. at 302. Rather than pro-
tecting communications, however, the work-product privilege protects
the attorney’s trial preparations and allows him to "assemble informa-
tion, sift what he considers to be the relevant from the irrelevant facts,
prepare his legal theories and plan his strategy without undue and
needless interference." See Hickman v. Taylor, 329 U.S. 495, 510-11
(1947) ("Not even the most liberal of discovery theories can justify
unwarranted inquiries into the files and the mental impressions of an
attorney."); United States v. Nobles, 422 U.S. 225, 238 (1975) ("[T]he
work-product doctrine shelters the mental processes of the attorney,
providing a privileged area within which he can analyze and prepare
his client’s case."). Like the attorney-client privilege, the work-
product privilege may be waived. See Nobles, 422 U.S. at 239 ("The
privilege derived from the work-product doctrine is not absolute. Like
other qualified privileges, it may be waived.").
Unlike the attorney-client privilege, however, the work-product
privilege is not waived by mere disclosure but instead by making "tes-
timonial use" of the protected material. See Nobles, 422 U.S. at 240
n.14; FEC v. Christian Coalition, 178 F.R.D. 61, 76 (E.D. Va. 1998)
("[W]hile the mere showing of a voluntary disclosure to a third person
will generally suffice to show waiver of the attorney-client privilege,
it should not suffice in itself for waiver of the work product privi-
lege."). When a party makes testimonial use of work product, "the
normal rules of evidence come into play with respect to cross-
examination and production of documents." Nobles, 422 U.S. at 240
n.14.
Liddy, as the proponent of the attorney-client and work-product
privileges, has the burden of establishing that he has not waived them.
Edwards, 370 S.E.2d at 301 ("The proponent has the burden to estab-
lish that the attorney-client relationship existed, that the communica-
tions under consideration are privileged, and that the privilege was
not waived."). Liddy has not met this burden in the instances outlined
by Wells in her brief.
18 WELLS v. LIDDY
To support his motion for summary judgment, for instance, Liddy
disclosed confidential communications between him and his lawyers
and thereby waived his attorney-client privilege. Specifically, in the
Supplemental Declaration of G. Gordon Liddy in Support of Motion
for Summary Judgment, Liddy made the following declarations:
Throughout this six-year period of consistent communica-
tion with my counsel, counsel has expressed confidence in
the Silent Coup thesis in general and the DNC/call-girl ring
connection in particular. During these telephone conversa-
tions counsel in words of substance conveyed to me that the
investigation and discovery in the case significantly under-
scores and reinforces the Silent Coup thesis. In fact, counsel
has stated to me that the DNC/call-girl/John Dean connec-
tion, is particularly bolstered by information uncovered
about Louis Russell, who was associated with the Columbia
Plaza call-girl ring and who was at the Howard Johnson’s
restaurant at the time of the June 17, 1972 break-in.
....
At my November 7, 1997 deposition, I testified that some-
time in 1996, my counsel advised me not to rely on Phillip
Bailley as my sole source for information I discuss with lis-
teners and audiences. I was given this instruction after Mr.
Bailley’s counsel had circulated a letter stating words of
substance that Bailley’s mental condition had deteriorated to
the point that he would not be able to give reliable deposi-
tion testimony. Ms. Wells [sic] counsel did not ask me what
information was the focus of counsel’s instruction. This
instruction had nothing to do with Ms. Wells’ role in Water-
gate, because there is abundant evidence corroborating her
connection with the call-girl ring servicing the DNC. In
view of Mr. Bailley’s counsel’s 1996 letter concerning Bail-
ley’s deteriorating mental condition, my counsel advised
that I should not rely on Bailley for the unpublished and
uncorroborated information attributed to him in the Stanford
proposal about a number of individuals not identified in
Silent Coup.
WELLS v. LIDDY 19
(Exh. at 358-60.) Once Liddy decided to reveal these confidential
communications, his decision to disclose became final. He may not
reattach the privilege now that the issues in the case have "shifted."13
Fairness, and Virginia’s law of privileges, requires complete disclo-
sure of the confidential communications and the details underlying
those communications, that is, all preliminary drafts and material,
including notes, underlying the communication. Edwards, 370 S.E.2d
at 301. Because of the disclosures described above, Liddy has waived
his privilege to the communications regarding his counsel’s "confi-
dence in the Silent Coup thesis in general and the DNC/call-girl ring
connection in particular" and counsel’s advice "not to rely on Phillip
Bailley," as well as the details underlying these communications.
With regard to waiver of work-product, Liddy clearly made testi-
monial use of several privileged documents. The foremost example is
the June 11, 1992 letter that Liddy’s lawyers sent to counsel for St.
Martin’s Press providing a detailed analysis of investigation into the
Silent Coup theory of the Watergate break-ins. At trial, Liddy testified
that he had received a copy of this letter and relied on the information.14
This constituted testimonial use of the letter and any claim to a work-
product privilege was waived. Two other instances of testimonial use
of work product occurred when Liddy was deposed. First, he stated
that he learned of rumors regarding the dismissal of Oliver and Wells
from his counsel. Second, the source for his knowledge of Wells dat-
ing Baldwin was also his counsel. For all these instances where Liddy
made "testimonial use" of work product,15 the privilege is waived and
the rules of discovery and evidence are therefore applicable. See
Nobles, 422 U.S. at 240 n.14.
13
When asked by the court if he had used privileged material as a
sword, Liddy’s counsel replied, "Yes, I did. [But] we were involved in
an actual malice proceeding at the time. That has shifted. We are not
going to do that at trial." (J.A. at 485.)
14
Liddy also made testimonial use of the June 11, 1992 letter when he
was cross-examined during a deposition and indicated that he relied upon
it.
15
General statements Liddy made about correspondence with counsel,
such as that he "received a lot of materials [and] communications in the
mail from counsel . . ." (J.A. for No. 98-1962 at 1144), do not constitute
"testimonial use" and therefore do not constitute a general waiver of all
work product ever sent to Liddy.
20 WELLS v. LIDDY
On the issue of attorney-client and work-product privileges, we
reverse the district court’s ruling that there was no waiver and remand
to allow discovery on the confidential communications that Liddy has
disclosed and their underlying details, as well as work-product of
which Liddy has made "testimonial use."
VI.
Finally, Wells argues that the district court erred by denying her
motion to amend her complaint. On December 29, 1999, over a year
before trial, Wells sought permission to amend her complaint to
include allegations that Liddy "engaged in a scheme or plan that con-
tained fraudulent activities, including fraudulent conveyances of real
estate and other properties and interests." (J.A. at 967.) Specifically,
Wells alleged that Liddy transferred significant assets to his wife in
an attempt to protect those assets from a potential judgment against
him. On October 12, 2000, the district court entered an order denying
the motion. The order stated that "[u]pon consideration of the memo-
randa submitted in connection with the various pending motions filed
by plaintiff and the correspondence from counsel pertaining to those
motions, it is . . . ordered [that] Plaintiff’s motion for leave to file sec-
ond amended complaint is denied." (J.A. at 992.)
Federal Rule of Civil Procedure 15(a) applies when a party who
has already pleaded in a case seeks to amend her pleadings. Fed. R.
Civ. P. 15(a). Rule 15(a) provides that "a party may amend the party’s
pleading once as a matter of course at any time before a responsive
pleading is served . . . . Otherwise a party may amend the party’s
pleading only by leave of court or by written consent of the adverse
party; and leave shall be freely given when justice so requires." Fed.
R. Civ. P. 15(a).
The Supreme Court has demanded that, "[i]n the absence of any
apparent or declared reason — such as undue delay, bad faith or dila-
tory motive on the part of the movant, repeated failure to cure defi-
ciencies by amendments previously allowed, undue prejudice to the
opposing party by virtue of allowance of the amendment, futility of
amendment, etc. — the leave sought should, as the rules require, be
‘freely given.’" Foman v. Davis, 371 U.S. 178, 182 (1962). In appli-
cation of this mandate, the district court is "in a better position than
WELLS v. LIDDY 21
we are to determine whether the motion for leave to amend was
unduly delayed and whether granting the motion would result in
undue prejudice." In re Jeffrey Bigelow Design Group, Inc., 956 F.2d
479, 483 (4th Cir. 1992). We therefore review the district court’s
denial to grant leave to amend the complaint for abuse of discretion.
See Lone Star Steakhouse & Saloon, Inc. v. Alpha of Virginia, Inc.,
43 F.3d 922, 941 (4th Cir. 1995).
Wells argues that the district court abused its discretion by not giv-
ing a reason for its decision. See Foman v. Davis, 371 U.S. 178, 182
(1962) ("Of course, the grant or denial of an opportunity to amend is
within the discretion of the District Court, but outright refusal to grant
the leave without any justifying reason appearing for the denial is not
an exercise of discretion; it is merely abuse of that discretion and
inconsistent with the spirit of the Federal Rules."). Wells quotes the
"curt" language of the district court’s October 12, 2000 order and
argues that "nobody suggested a reason for denying Wells’s motion."
(Appellant’s Br. at 62.) We disagree.
On August 18, 2000, Liddy’s attorneys wrote a letter to the district
court in response to a letter written by Wells’s attorney on August 7,
2000. This letter argued that "there is no reason to address this issue
now, or for Wells to raise it - other than to harass Mr. and Mrs. Liddy.
This plainly is not a jury issue. As such, Wells’s attempt to raise this
issue is premature and the Court need not address it now, if ever."
(J.A. at 3543.) The letter also pointed out that denying the motion
"would not prejudice Wells’s right to pursue relief in the future." (J.A.
at 3543.) This letter clearly constitutes part of the "correspondence
from counsel" upon which the district court relied in rendering its
October 12, 2000 ruling. (J.A. at 992.) We conclude that the reasons
underlying the district court’s denial of Wells’s motion were apparent
and "as long as its reasons are apparent, a district court’s failure to
articulate grounds for denying a plaintiff’s leave to amend does not
amount to an abuse of discretion." Healthsouth Rehabilitation Hosp.
v. American National Red Cross, 101 F.3d 1005, 1010 (4th Cir.
1996). Moreover, we conclude that those reasons fit within the scope
of the district court’s discretion. See 6 Charles Alan Wright et al.,
Federal Practice and Procedure § 1487 (2d ed. 1990) (explaining
that if the district court determines "that the issues raised by the
amendment are remote from the other issues in the case and might
22 WELLS v. LIDDY
confuse or mislead the jury, leave to amend well may be denied").
The district court, therefore, did not abuse its discretion in denying
Wells’s motion for leave to file a second amended complaint.
VII.
In conclusion, we hold that a reasonable jury relying on the evi-
dence in the record could find that Liddy was at least negligent in
making the allegedly defamatory statements, and we therefore reverse
the district court’s grant of judgment as a matter of law in favor of
Liddy. We affirm the district court’s evidentiary rulings with the
exception of its exclusion of deposition testimony from Gainsburg
and McCormack and its inclusion of evidence that someone calling
Phillip Bailley identified herself as Maxie Wells. We reverse the dis-
trict court on the issue of Liddy’s attorney client and work-product
privileges, finding an implied waiver due to Liddy’s disclosures of
confidential information. Finally, we conclude that the reasons justi-
fying the district court’s denial of Wells’s motion for leave to file a
second amended complaint are apparent and proper, and, therefore,
that the court did not abuse its discretion. Accordingly, we remand
this case to the district court for discovery of the formerly privileged
materials described above and a new trial.
AFFIRMED IN PART, REVERSED IN PART,
AND REMANDED FOR FURTHER PROCEEDINGS