Theranos Founder Holmes Wants Attorney Documents Kept Secret

Ms. Holmes is slated to go to trial in early March, with Mr. Balwani’s trial to follow at a later date. They have both pleaded not guilty to charges that could send them to prison for 20 years.

Prosecutors with the U.S. attorney’s office for the Northern District of California said during a Wednesday court hearing that the 13 documents at issue weren’t protected by attorney-client privilege because they stemmed from work Boies Schiller lawyers were doing for Theranos as a company, not Ms. Holmes personally.

The emails, sent from 2013 to 2016, haven’t been publicly disclosed but generally discuss how Theranos should respond to the media, investors and regulators, court filings show. Most deal with potential legal action Boies Schiller was helping Ms. Holmes pursue against The Wall Street Journal, Lance Wade, an attorney for Ms. Holmes, told a federal judge Wednesday.

The June 2018 indictments followed an investigation that grew out of reporting by the Journal that revealed failings in Theranos’s technology and business practices. Theranos told shareholders it would formally dissolve a few months later.

The privilege issue is one of several Ms. Holmes’s attorneys have raised to try to limit how much jurors hear during the trial. Other requests seek to keep the former CEO’s wealth and certain news coverage out of the courtroom.

Most of the documents under discussion Wednesday were emails Theranos employees exchanged with Boies Schiller, whose lawyers, including famed litigator David Boies, represented Theranos for years.

“This is a unique relationship,” Mr. Wade said during the hearing, noting that they aren’t seeking to shield communications with every law firm that worked for the company.

Mr. Boies’s first assignment for Theranos was a patent lawsuit against a childhood neighbor of Ms. Holmes. The case was settled in early 2014, and Mr. Boies moved into an advisory role at Theranos. The law firm was paid in Theranos stock for its work on the patent case. Boies Schiller was granted more than 300,000 shares valued at $4.5 million based on a valuation of $15 a share at the time, according to a person familiar with the matter.

Mr. Boies became Theranos’s outside counsel after being approached in 2011 by two investors in the Palo Alto, Calif., startup. He fiercely defended Theranos against questions about its technology and operations. And he led the effort to threaten the Journal with a lawsuit—which was never filed—if it published “trade secrets” about Theranos’s operations.

Mr. Boies and his firm stopped doing legal work for Theranos in late 2016 after disagreements over how to handle ongoing government investigations, the Journal reported.

“I think everybody with hindsight says if I had known and understood everything that I know now, I would have done things differently,” Mr. Boies said in an interview with the Journal in May.

The legal documents in question Wednesday first arose in an investor lawsuit Theranos faced, prosecutors said, and were later given to the Securities and Exchange Commission for its own investigation into Theranos.

U.S. Magistrate Judge Nathanael Cousins in San Jose, Calif., said during Wednesday’s hearing, held by videoconference, that he wanted to review the documents confidentially before making a ruling. Ms. Holmes attended the proceeding but didn’t speak.

The SEC probe led to a March 2018 settlement that stripped Ms. Holmes from voting control of Theranos, banned her from being an officer or director of any public company for 10 years and required her to pay $500,000. Ms. Holmes and Theranos neither admitted nor denied wrongdoing in the settlement.

Ms. Holmes has tried to exclude the legal documents since early 2019, court filings show, after she found out that Mr. Boies and an attorney from Cravath, Swaine & Moore LLP had been interviewed by prosecutors. “We are concerned that in providing information to the government, these witnesses may have violated their legal and/or ethical obligations to Ms. Holmes,” Mr. Wade wrote in February of that year.

Representatives for Cravath and Boies Schiller declined to comment Wednesday.

Ms. Holmes has said Boies Schiller represented her personally, while government lawyers have argued that the firm only represented the company and that Ms. Holmes can’t pass a five-part test established by an appellate court to prove the privilege extends to her. Prosecutors said the person tasked with liquidating Theranos has said they won’t claim privilege over the documents.

A Boies Schiller lawyer in March 2019 told Ms. Holmes’s attorneys that “our firm represented the company and did not represent Ms. Holmes personally,” according to a copy of an email exchange included in filings. Mr. Wade wrote to prosecutors: “That assertion is demonstrably false.”

—Michael Amon contributed to this article.

Write to Sara Randazzo at [email protected]