Showing 84 of 84 results

Chapter: 5.7

Case Name: DePuy Orthopaedics, Inc. v. Orthopaedic Hospital, Cause No. 3:12-cv-299-JVB-MGG, 2016 U.S. Dist. LEXIS 166537 (N.D. Ind. Dec. 1, 2016)
February 1, 2017 (PRIVILEGE POINT)

"An In-House Counsel Learns the Hard Way About a Key Difference Between Common Interest Agreements and Joint Representations: Part II"

Last week's Privilege Point described an in-house counsel's vigorous argument that she had represented her employer/client in a common interest agreement with a hospital in jointly prosecuting patents -- rather than having jointly represented both her employer/client and the hospital. DePuy Orthopaedics, Inc. v. Orthopaedic Hospital, Cause No. 3:12-cv-299-JVB-MGG, 2016 U.S. Dist. LEXIS 166537 (N.D. Ind. Dec. 1, 2016).

After reciting facts that could have evidenced either a common interest agreement or a joint representation, the court explained why it agreed with the Hospital that there had been a joint representation: "[T]he evidence does not show that DePuy's in-house counsel . . . provided any kind of disclaimer about representation when answering the Hospital's questions with legal information or consequence regarding the patent prosecution." Id. at *12-13 (emphasis added). The court then gave the punchline. Because DePuy's in-house counsel had jointly represented DePuy and the Hospital, the former joint client Hospital could discover "DePuy's internal communications related to the [patent] prosecution." Id. at *13 (emphasis added). Thus, the Hospital's understandable desire to discover these internal DePuy communications had led it to "vociferously contend[] that it believed that DePuy's in-house counsel was acting on its behalf." Id. at *12.

If common interest participants later become litigation adversaries, privilege protection evaporates for any communications they have shared, but remains for each participant's internal communications with its own lawyer. In a joint representation, such later adversity normally allows any former joint client to discover all of their joint lawyer's communications on that matter with any jointly represented clients. In-house and outside counsel should remember this key distinction, and explicitly define any relationship if there might be confusion – including providing socially awkward but legally significant disclaimers of a joint representation.

Case Date Jurisidction State Cite Checked
2016-12-01 Federal IN
Comment:

key case


Chapter: 5.7

Case Name: DePuy Orthopaedics, Inc. v. Orthopaedic Hospital, Cause No. 3:12-cv-299-JVB-MGG, 2016 U.S. Dist. LEXIS 166537 (N.D. Ind. Dec. 1, 2016)
January 25, 2017 (PRIVILEGE POINT)

"An In-House Counsel Learns the Hard Way About a Key Difference Between Common Interest Agreements and Joint Representations: Part I"

Common interest agreements and joint representations share many characteristics. Both types of arrangements involve lawyers engaging in protected communications with multiple clients. But they are structurally distinct. In common interest agreements, separately represented clients cooperate in a common legal strategy. In a joint representation, the same lawyers represent several clients on the same matter. As long as everything rolls along smoothly, the structural difference has few privilege consequences. But adversity reveals a key privilege distinction.

In DePuy Orthopaedics, Inc. v. Orthopaedic Hospital, Cause No. 3:12-cv-299-JVB-MGG, 2016 U.S. Dist. LEXIS 166537 (N.D. Ind. Dec. 1, 2016), plaintiff DePuy and defendant Hospital had worked together on patent prosecutions – but later become litigation adversaries. DePuy resisted the Hospital's attempt to discover communications to and from DePuy's in-house counsel. The in-house counsel claimed that DePuy and the Hospital had only entered into a common interest agreement – noting that O'Melveny & Myers had acted as patent "prosecution counsel" on behalf of both companies. In contrast, the Hospital "claim[ed] that DePuy's in-house counsel jointly represented both parties." Id. at *4. The court recited facts that could have proven either a common interest agreement or a joint representation: DePuy and the Hospital shared confidential information and cooperated on a common legal strategy; DePuy's in-house counsel communicated with and gave direction to O'Melveny, etc. But the court ultimately concluded that DePuy's in-house counsel had jointly represented DePuy and the Hospital -- rather than represented just DePuy in a common interest arrangement with the separately represented Hospital.

Given the privilege implication similarities between a common interest agreement and a joint representation, one might wonder why DePuy's in-house counsel argued so strenuously against the latter. Next week's Privilege Point will explain the court's key reason for finding such a joint representation, and its frightening implication.

Case Date Jurisidction State Cite Checked
2016-12-01 Federal IN
Comment:

key case


Chapter: 5.7

Case Name: Friday Investments, LLC v. Bally Total Fitness of the Mid-Atlantic, Inc., No. COA15-680, 2016 N.C. App. LEXIS 613 (N.C. App. June 7, 2016)
("The extension of privilege applies in disputes between third parties and one or more members of the tripartite arrangement, but not in disputes inter sese.")

Case Date Jurisidction State Cite Checked
2016-06-07 Federal NC

Chapter: 5.7

Case Name: Marketel Media, Inc. v. Mediapotamus, Inc., 5:13-CV-427-D, 2015 U.S. Dist. LEXIS 76523 (E.D.N.C. June 11, 2015)
(analyzing a situation in which Ortiz and Hassell formerly co-owned Marketel; explaining that Marketel and one of the owners sued the other owner, who sought to discover communications between the plaintiff and his brother, who was a lawyer; holding that the fiduciary exception did not apply, and that the plaintiff could not obtain discovery of the communications even if the lawyer had represented both the company and one of the owners; "Ortiz [Defendant] appears to argue that deRosset and his firm had a conflict in providing advice or other legal services to Hassell [Plaintiff] contrary to the interests of Ortiz and that such conflict negated any privilege otherwise applicable to the withheld documents. Such a conflict, though, even if it exists, does not waive the attorney-client privilege otherwise applicable to the documents. '[T]he fact that an attorney has a conflict of interest does not mean that the client forfeits the benefit of the attorney-client privilege.". . . The documents accordingly remain cloaked with the protection of the attorney-client privilege.")

Case Date Jurisidction State Cite Checked
2015-06-11 Federal NC

Chapter: 5.7

Case Name: Anten v. Superior Ct. of Los Angeles, B258437, 2015 Cal. App. LEXIS 96 (Cal. App. 2d Div. 1 Jan. 30, 2015)
(analyzing effective joint representation; "[B]ecause Anten and the Rubins were joint clients of Weintraub, the Rubins' communications with Weintraub were not confidential as to Anten. '[I]n a joint client situation, confidences are necessarily disclosed.'. . . Consequently, 'communications made by parties united in a common interest to their joint or common counsel, while privileged against strangers, are not privileged as between such parties nor as between their counsel and any of them, when later they assume adverse positions.'. . . Weintraub's joint representation of Anten and the Rubins, with their knowledge and consent and on a matter of common interest, thus distinguishes this case from Glade [Glade, supra, 76 Cal. App. 3d at pp. 746-747], which declined to apply section 958 to communications between the defendant attorney and other . . . . In Glade, the communications at issue were privileged as to the very plaintiffs who were seeking their disclosure. Here, in contrast, the communications at issue are not confidential as to Anten.")

Case Date Jurisidction State Cite Checked
2015-01-30 State CA

Chapter: 5.7

Case Name: Integrated Global Concepts, Inc. v. j2 Global, Inc., Case No. 5:12-cv-03434-RMW (PSG), 2014 U.S. Dist. LEXIS 37027 (N.D. Cal. March 20, 2014)
(holding that contract in parties' choice of California law governed the court's privilege determination; noting that California presumed confidentiality of attorney-client communications; "Here, IGC claims breach of a contract that expressly selects California law as the applicable law. Morosoff's post-employment agreement with j2 makes clear that Morosoff was providing legal advice, and under California law, communications in the course of the attorney-client relationship are presumed confidential for privilege purposes.")

Case Date Jurisidction State Cite Checked
2014-03-20 Federal CA

Chapter: 5.7

Case Name: In re Equaphor Inc., Ch. 7 Case No. 10 20490 BFK, 2012 Bankr. LEXIS 2129, at *8 (Bankr. E.D. Va. May 11, 2012)
(analyzing the ramifications of a law firm jointly representing a company and two of its executives in a derivative case; noting that the company later declared bankruptcy, and that the bankruptcy trustee moved to compel the turnover of documents the law firm created during the joint representation; inexplicably confusing the joint defense/common interest doctrine and the joint representation situation; "The common interest privilege, also known as the joint defense privilege, is universally accepted."; "The Restatement (Third) of Law Governing Lawyers states the rule as follows: 'Unless the co-clients have agreed otherwise, a communication described in Subsection (1) [communication that otherwise qualifies as privileged] is not privileged as between the co-clients in a subsequent adverse proceeding between them.'")

Case Date Jurisidction State Cite Checked
2012-05-11 Federal VA B 4/13

Chapter: 5.7

Case Name: In re Equaphor Inc., Ch. 7 Case No. 10 20490 BFK, 2012 Bankr. LEXIS 2129, at *9-10 (Bankr. E.D. Va. May 11, 2012)
(analyzing the ramifications of a law firm jointly representing a company and two of its executives in a derivative case; noting that the company later declared bankruptcy, and that the bankruptcy trustee moved to compel the turnover of documents the law firm created during the joint representation; inexplicably confusing the joint defense/common interest doctrine and the joint representation situation; ordering the law firm to produce the documents; "WTP and the Individual Defendants place great reliance on the fact that the corporation is named as a 'nominal defendant' in the shareholders' Complaint. In doing so, WTP and the Individual Defendants imply that the interests of the Individual Defendants are entitled to greater weight than those of the Debtor (and now, its creditors). However, while the Debtor may have been named as a nominal defendant, there is no such thing as a nominal client of a law firm. Further, there is no support in the case law for a 'nominal defendant exception' to the principle that all clients are entitled to an attorney's files. The corporation's status as a nominal defendant is of no consequence in considering the common interest privilege of the parties.")

Case Date Jurisidction State Cite Checked
2012-05-11 Federal VA

Chapter: 5.7

Case Name: Duncan v. Duncan, 56 Va. Cir. 262, 263, 263-64 (Va. Cir. Ct. 2001)
(addressing efforts by a lawyer to avoid discovery sought by plaintiff (administrator of a daughter's estate) from the lawyer, who formerly represented both the plaintiff and his former wife (mother of the deceased daughter); "Although no Virginia Court appears to have addressed this issue directly, the clear majority of reviewing courts has held that the attorney-client privilege does not preclude an attorney, who originally represented both parties in a prior matter, from disclosing information in a subsequent action between the parties."; "Plaintiff's exhibits establish that Greenspun's [lawyer] representation of Plaintiff and Defendant was joint in nature. The parties executed a joint agreement engaging Greenspun's services. He represented both parties in an investigation related to the parties' common interest, namely criminal liability for their daughter's death and loss of parental rights. Furthermore, Greenspun freely shared information regarding elements of the case with, and between, both parties. The Defendant recognized that Greenspun was sharing information disclosed by the Defendant with Plaintiff during the parties' prior joint representation. Lastly, the parties did not have an implied or express agreement with Greenspun that he would maintain their respective confidences in this joint representation. Defendant's communications with Greenspun are not privileged in the absence of an agreement between the parties stipulating otherwise."; ordering the lawyer to answer deposition questions and produce documents to plaintiff)

Case Date Jurisidction State Cite Checked
2001-01-01 State VA N 11/08

Chapter: 5.8

Case Name: United States v. Under Seal (In re Grand Jury Subpoenas 89-3 & 89-4, John Doe 89-129), 902 F.2d 244, 247, 247-48, 248, 249, 250 (4th Cir. 1990)
(holding that a parent and subsidiary corporation could enter into a valid common interest agreement although the subsidiary was not a named party -- because the subsidiary was the "real party in interest"; concluding that the valid common interest agreement prevented the subsidiary from unilaterally waiving the attorney-client privilege and protected documents relating to the common interest participants' prosecution of a claim against the Army and defense of the Army's counterclaim; agreeing with the district court that the subsidiary could unilaterally control its own privilege once it had been sold to another company, and that the parent had no control over documents created by the subsidiary after it was sold; assessing a situation described more fully in the district court's opinion (In re Grand Jury Subpoenas 89-3, 89-4 & 89-129, 734 F. Supp. 1207 (E.D. Va. 1990)) in which a government grand jury subpoenaed documents relating to possible fraud in connection with a government contract; explaining a company ["Movant"] objected to the grand jury subpoena on attorney-client privilege and work product grounds; explaining that the district court had divided the subpoenaed documents into three categories: (1) documents created by one of Movant's divisions while it was undertaking the contractual work; (2) documents created by the division after it had become a Subsidiary of Movant; and (3) documents created by Subsidiary after Movant had sold controlling interest in Subsidiary to independent investors; noting that the Subsidiary had advised Movant and the government that it wished to cooperate with the grand jury and to produce the responsive documents; [Although not described fully in the Fourth Circuit opinion, the district court found that: (1) as to the Category 1 documents, generated by the division that was then part of Movant, it was "unclear" whether the Subsidiary gained ownership of any privilege covering those documents when the division became a subsidiary, but that it was unnecessary to resolve "this somewhat metaphysical issue" because Movant "permitted at least some of these documents to remain in the Subsidiary's custody and control" after selling the Subsidiary, and therefore "effectively waived its privilege with respect to these documents" meaning that the now-independent Subsidiary could waive the privilege and work product protections as to those documents (734 F. Supp. at 1213); (2) as to the Category 2 documents, generated by Subsidiary when it was owned by Movant, Movant could not block Subsidiary's waiver of those documents in its possession because the "joint defense privilege" did not give both Movant and Subsidiary veto power over the other's waiver the joint defense doctrine did not cover documents created while Movant and Subsidiary were merely "cooperating to assert [Movant's] claim" against the Army in seeking to recover under the underlying government contract; acknowledging that Subsidiary would have received a portion of whatever amount was ultimately recovered from the Army in connection with that claim, but that "[t]o extend the joint defense privilege to non-parties simply because they are financially interested in the litigation stretches the rationale for the privilege beyond its reach" (734 F. Supp. at 1212); and (3) as to the Group 3 documents, created by the newly-independent Subsidiary, finding that Movant had no control over those documents, and Subsidiary could produce them to the government.]; affirming the district court's analysis as to any document not related to what the Fourth Circuit described as "prosecution of the claim against the Army for an equitable adjustment and those prepared for the defense of the counter-claim" which involved "joint efforts on the part of Movant and Subsidiary"; agreeing with Movant that such "claim-related documents are subject to a joint defense privilege that Subsidiary cannot waive without Movant's consent"; acknowledging that Subsidiary "was not named as party in either the civil claim against the Army or in the Army's counter-claim," but finding that "persons who share a common interest in litigation should be able to communicate with their respective attorneys and with each other to more effectively prosecute or defend their claims," and thus the common interest doctrine applied to Movant's and Subsidiary's "joint prosecution of a claim against the Army, as well as in the joint defense of the Army's counterclaim. Although Subsidiary was not a named party, it was the real party in interest. Recovery would inure to it."; holding that the district court's ruling was in error because it was "apparently based on the notion that the joint defense privilege is limited to codefendants" [although the district court's opinion instead was based on the fact that Subsidiary was not a party to any litigation, not on the fact that the Subsidiary was not a co-defendant]; in analyzing the Category 1 documents, rejecting the government's argument that the joint defense privilege could not apply because the creating entity was then a division of Movant rather than a separate entity; holding that "[t]he rationale underlying the joint defense privilege focuses not on when documents were generated, but on the circumstances surrounding the disclosure of privileged documents to a jointly interested third party"; explaining that here the disclosure "occurred on the day Movant incorporated Subsidiary as a separate entity," and was made to allow Subsidiary "to continue to participate in the ongoing litigation"; ultimately holding that "all documents that relate to the prosecution of the claim against the Army or to the defense of the Army's counterclaim, and which are subject to the attorney-client or work-product privilege, are subject to a joint defense privilege that Subsidiary may not waive unilaterally"; reversing the district court's opinion to that extent)

Case Date Jurisidction State Cite Checked
1990-01-01 Federal

Chapter: 5.302

Case Name: Robinson Mechanical Contractors Inc. v. PTC Group Holding Corp., Case No. 1:15-CV-77 SNLJ, 2017 U.S. Dist. LEXIS 72636 (E.D. Mo. May 12, 2017)
(holding that a parent and a wholly-owned subsidiary were jointly represented by the same lawyer; "[S]everal Delaware courts have held that parent corporations and their wholly-owned subsidiaries have the same interests 'because all of the duties owed to the subsidiaries flow back up to the parent.'. . . In fact, 'the only interest of a wholly owned subsidiary is in serving its parent.'")

Case Date Jurisidction State Cite Checked
2017-05-12 Federal MO
Comment:

key case


Chapter: 5.302

Case Name: Robinson Mechanical Contractors Inc. v. PTC Group Holding Corp., Case No. 1:15-CV-77 SNLJ, 2017 U.S. Dist. LEXIS 72636 (E.D. Mo. May 12, 2017)
(holding that a parent and a wholly-owned subsidiary were jointly represented by the same lawyer; "Here, PTC Group [parent of now-dissolved former subsidiary Seamless, possessing Seamless's documents] claims that it can independently assert the attorney-client privilege shared by it and Seamless in the alleged joint-client representation. This is so because, as PTC Group alleges, essentially at all times and for all matters relevant to this action, PTC Group and Seamless shared a common interest and shared in-house counsel, making them joint-clients. This Court agrees that PTC Group may assert the joint-client privilege, on behalf of itself and Seamless, for documents that otherwise qualify as privileged and relate to matters of common interest of the two corporations. For the same reasons, PTC Group can assert Seamless' work product doctrine privilege.")

Case Date Jurisidction State Cite Checked
2017-05-12 Federal MO
Comment:

key case


Chapter: 5.302

Case Name: Margulis v. The Hertz Corporation, Civ. A. No. 14-1209 (JMV), 2017 U.S. Dist. LEXIS 28311 (D.N.J. Feb. 28, 2017)
(holding that a corporate family was not "one" client, but that a United States law firm jointly represented a U.S. company and an overseas affiliate; "This raises the question of, in the context of the attorney-client privilege, who exactly is the attorney and who exactly is the client when considering privilege questions in the context of multiple-related companies with a centralized in-house legal department."; "Of course, the particular facts and circumstances of the corporate structures and relationships must be such that there is an actual joint attorney-client relationship between the in-house counsel and the corporation that the attorney represents. A joint representation -- that is, that a given lawyer actually has as separate clients the individual members of a larger corporate family -- will always be a fact specific inquiry. Simply stating it does not make it so.")

Case Date Jurisidction State Cite Checked
2017-02-28 Federal NJ
Comment:

key case


Chapter: 5.302

Case Name: Supreme Forest Prods., Inc. v. Kennedy, No. 3:16-cv-0054 (JAM), 2017 U.S. Dist. LEXIS 4421 (D. Conn. Jan. 12, 2017)
(holding that the privilege protected communications between two former company employees who had filed separate lawsuits against the same employer, using the same lawyer; finding it unnecessary for them to do an identical interest because they were jointly represented by the same lawyer rather than creating a common interest agreement; finding that the privilege did not protect the two clients' employee without the lawyer present; "[T]he attorney-client privilege may properly extend to communications that occur between an attorney in the presence of two or more clients that the attorney jointly represents."; "Here, it is clear to me that Kennedy and Welch share a common interest based on their highly similar employment claims brought against the same employer. They are for all practical purposes jointly represented by one attorney, and the fact that their attorney filed separate lawsuits rather than joining his two clients together in a single lawsuit does not dispel the application of the co-client privilege. If the clients share a common interest, the co-client rule requires joint representation, not necessarily joint litigation."; "This 'community of interest' privilege, however, differs from the co-client privilege. . . . For the co-client privilege, it suffices for the clients to have a common interest, not necessarily interests that are identical in all respects. So long as their interests are common, co-clients who consult the same lawyer would reasonably expect that their communications with the lawyer to which they are mutually privy would be protected from disclosure to third parties by the attorney-client privilege. The legitimate expectation of privilege is unmistakably higher in the co-client context than the broader community-of-interest context involving parties who are not represented by the same counsel."; "In any event, Kennedy and Welch had nearly identical legal interests. They both sought legal representation to pursue what was essentially the same major claim -- that Supreme Forest Products had violated federal law by retaliating against them when they resisted driving overweight vehicles. There were, of course, minor factual differences between their claims, but the gravamen of their complaint --Supreme Forest's alleged insistence on driving illegally loaded vehicles, and its alleged willingness to retaliate against drivers who didn't toe the line -- was the same. Although Welch had an additional claim related to his post-termination health benefits, the fact that Welch had an additional interest in his suit does not vitiate his common interest with Kennedy. I therefore find that defendants' interests were sufficiently common for them to properly invoke the co-client attorney-client privilege."; "Plaintiffs further contend that there is no evidence that Kennedy and Welch had a joint representation agreement with their counsel prior to when they were sued by plaintiffs in January 2016. But this argument ignores the course of dealing between defendants prior to January 2016 when they had both retained counsel within days of each other in May 2014 to represent them for purposes of the claims they eventually filed against Supreme Forest Products, Inc. Even if prior to January 2016 Kennedy and Welch did not have a formal written agreement of joint representation, it is clear to me that they would have justifiably expected their co-client communications with counsel to be protected by the privilege.")

Case Date Jurisidction State Cite Checked
2017-01-12 Federal CT
Comment:

key case


Chapter: 5.302

Case Name: Loop AI Labs Inc. v. Gatti, Case No. 15-cv-00798-HSG (DMR), 2017 U.S. Dist. LEXIS 4254 (N.D. Cal. Jan. 11, 2017)
(finding that a firm represented an Italian company and its subsidiary, even if there was no retainer agreement; "Plaintiff argues that Almawave never established a privileged relationship with Orrick, lacked the ability to assert privilege on behalf of Almaviva S.p.A. and Almawave S.r.l., and therefore did not have standing to move to quash the Orrick subpoena. This argument is without merit. Almawave submitted the declaration of Valeria Sandei, the Chairman and President of Almawave USA and CEO of Almawave S.r.l., in which she stated that Almawave S.r.l. formally engaged Orrick to assist in setting up a United States subsidiary. . . . After the establishment of Almawave USA, Sandei states that 'Orrick served as counsel to both Almawave S.r.l. as well as to Almawave USA, providing legal advice to each company.'. . . Given this undisputed evidence, Almawave could reasonably have believed that Orrick was acting as its attorney during the relevant period, even if Orrick was never formally retained to represent that entity.")

Case Date Jurisidction State Cite Checked
2017-01-11 Federal CA

Chapter: 5.302

Case Name: Depuy Orthopaedics, Inc. v. Orthopaedic Hosp., Cause No. 3:12-cv-299-JVB-MGG, 2016 U.S. Dist. LEXIS 166537 (N.D. Ind. Dec. 1, 2016)
(after admitting its earlier error in concluding that a patent prosecution agreement automatically made one participant's in-house lawyer the joint lawyer for the other party, finding that after factual inquiry that plaintiff's in-house lawyer had jointly represented the other prosecution participant; rejecting her argument that she only represented her client/employer and had entered into a common interest agreement with the other participant; acknowledging that the plaintiff and defendant had both relied on O'Melveny & Myers as prosecution counsel, concluding that plaintiff's in-house lawyer had jointly represented her client/employer and the other participant, and pointing to the joint representation in ordering plaintiff to produce internal communications between its in-house lawyer and its executives; "The Court based its order on its conclusion that 'Section 6.1 of the PRLA established the mutual consent necessary to make the Hospital and DePuy joint clients on the prosecution of the 110 Patent Family . . . .' The heart of DePuy's argument on this issue had been that DePuy's in-house counsel had not consented to represent the Hospital in the prosecution of the patents, which precluded application of the joint client doctrine such that DePuy's internal communications with its in-house counsel related to the prosecution of the 110 Family patent applications were privileged and undiscoverable even as to the Hospital. DePuy acknowledged that it shared a common interest with the Hospital, but rejected the Hospital's claim that DePuy's in-house counsel jointly represented both parties."; "DePuy continues to argue that its in-house counsel never consented to represent the Hospital and that without such consent, a joint attorney-client relationship never existed. Even without relying upon Section 6.1 to establish joint representation, the Court finds otherwise."; "Communications among joint clients and their shared attorneys who are allied in a common legal cause are privileged from disclosure as to those outside their group but are not privileged in a subsequent controversy between the two joint clients."; "[T]he Hospital references testimony from both the inventor, Harry McKellop, and DePuy's in-house counsel, Blossom Loo, to affirm that documents produced in discovery show that the Hospital regularly sought advice from DePuy's in-house counsel on issues related to patent prosecution, such as claim scope, office action strategy, and selection of outside counsel."; "Additionally, DePuy concedes confidential information was exchanged between the Hospital and its in-house counsel. Yet in the face of these extensive communications, some of which demonstrate that DePuy's in-house counsel was providing direction on prosecution strategy to Wong and O'Melveny, DePuy's in-house counsel, Blossom Loo, testified that she never consented and had no intention of forming an attorney-client relationship with the Hospital. Loo's protestations are not persuasive, however, given the conduct established by the totality of the evidence."; "Of course, there is no evidence of any discussion of any fee arrangement, any Hospital client file in the offices of DePuy's in-house counsel, or any billing from DePuy's in-house counsel to the Hospital. Nevertheless, the evidence shows that DePuy's in-house counsel was actively involved with the Hospital and the prosecution counsel in the prosecution of the 110 Family patent applications. Moreover, the evidence does not show that DePuy's in-house counsel intentionally avoided advising the Hospital or provided any kind of disclaimer about representation when answering the Hospital's questions with legal information of consequence regarding the patent prosecution. Through such conduct, DePuy's in-house counsel impliedly consented to representing the Hospital in addition to DePuy on the matter of prosecuting the 110 Family patent applications."; "[T]he Court's prior Order, the Court FINDS that mutual consent still exists such that the joint client doctrine applies and any of DePuy's and the Hospital's communications with shared counsel (i.e., DePuy's in-house counsel) are only privileged to the outside world, but are not privileged between DePuy and the Hospital. Therefore, DePuy's internal communications related to the prosecution of the 110 Family patents remains discoverable.")

Case Date Jurisidction State Cite Checked
2016-12-01 Federal IN
Comment:

key case


Chapter: 5.302

Case Name: DePuy Orthopaedics, Inc. v. Orthopaedic Hospital, Cause No. 3:12-cv-299-JVB-MGG, 2016 U.S. Dist. LEXIS 166537 (N.D. Ind. Dec. 1, 2016)
February 1, 2017 (PRIVILEGE POINT)

"An In-House Counsel Learns the Hard Way About a Key Difference Between Common Interest Agreements and Joint Representations: Part II"

Last week's Privilege Point described an in-house counsel's vigorous argument that she had represented her employer/client in a common interest agreement with a hospital in jointly prosecuting patents -- rather than having jointly represented both her employer/client and the hospital. DePuy Orthopaedics, Inc. v. Orthopaedic Hospital, Cause No. 3:12-cv-299-JVB-MGG, 2016 U.S. Dist. LEXIS 166537 (N.D. Ind. Dec. 1, 2016).

After reciting facts that could have evidenced either a common interest agreement or a joint representation, the court explained why it agreed with the Hospital that there had been a joint representation: "[T]he evidence does not show that DePuy's in-house counsel . . . provided any kind of disclaimer about representation when answering the Hospital's questions with legal information or consequence regarding the patent prosecution." Id. at *12-13 (emphasis added). The court then gave the punchline. Because DePuy's in-house counsel had jointly represented DePuy and the Hospital, the former joint client Hospital could discover "DePuy's internal communications related to the [patent] prosecution." Id. at *13 (emphasis added). Thus, the Hospital's understandable desire to discover these internal DePuy communications had led it to "vociferously contend[] that it believed that DePuy's in-house counsel was acting on its behalf." Id. at *12.

If common interest participants later become litigation adversaries, privilege protection evaporates for any communications they have shared, but remains for each participant's internal communications with its own lawyer. In a joint representation, such later adversity normally allows any former joint client to discover all of their joint lawyer's communications on that matter with any jointly represented clients. In-house and outside counsel should remember this key distinction, and explicitly define any relationship if there might be confusion – including providing socially awkward but legally significant disclaimers of a joint representation.

Case Date Jurisidction State Cite Checked
2016-12-01 Federal IN
Comment:

key case


Chapter: 5.302

Case Name: DePuy Orthopaedics, Inc. v. Orthopaedic Hospital, Cause No. 3:12-cv-299-JVB-MGG, 2016 U.S. Dist. LEXIS 166537 (N.D. Ind. Dec. 1, 2016)
January 25, 2017 (PRIVILEGE POINT)

"An In-House Counsel Learns the Hard Way About a Key Difference Between Common Interest Agreements and Joint Representations: Part I"

Common interest agreements and joint representations share many characteristics. Both types of arrangements involve lawyers engaging in protected communications with multiple clients. But they are structurally distinct. In common interest agreements, separately represented clients cooperate in a common legal strategy. In a joint representation, the same lawyers represent several clients on the same matter. As long as everything rolls along smoothly, the structural difference has few privilege consequences. But adversity reveals a key privilege distinction.

In DePuy Orthopaedics, Inc. v. Orthopaedic Hospital, Cause No. 3:12-cv-299-JVB-MGG, 2016 U.S. Dist. LEXIS 166537 (N.D. Ind. Dec. 1, 2016), plaintiff DePuy and defendant Hospital had worked together on patent prosecutions – but later become litigation adversaries. DePuy resisted the Hospital's attempt to discover communications to and from DePuy's in-house counsel. The in-house counsel claimed that DePuy and the Hospital had only entered into a common interest agreement – noting that O'Melveny & Myers had acted as patent "prosecution counsel" on behalf of both companies. In contrast, the Hospital "claim[ed] that DePuy's in-house counsel jointly represented both parties." Id. at *4. The court recited facts that could have proven either a common interest agreement or a joint representation: DePuy and the Hospital shared confidential information and cooperated on a common legal strategy; DePuy's in-house counsel communicated with and gave direction to O'Melveny, etc. But the court ultimately concluded that DePuy's in-house counsel had jointly represented DePuy and the Hospital -- rather than represented just DePuy in a common interest arrangement with the separately represented Hospital.

Given the privilege implication similarities between a common interest agreement and a joint representation, one might wonder why DePuy's in-house counsel argued so strenuously against the latter. Next week's Privilege Point will explain the court's key reason for finding such a joint representation, and its frightening implication.

Case Date Jurisidction State Cite Checked
2016-12-01 Federal IN
Comment:

key case


Chapter: 5.302

Case Name: Naturalock Solutions, LLC v. Baxter Healthcare Corporation¸No. 14-cv-10113, 2016 U.S. Dist. LEXIS 66982 (N.D. Ill. May 22, 2016)
(analyzing a product inventor's efforts to obtain the files of K&L Gates, which was obtained by Baxter, but which also assisted the inventor in prosecuting a patent; ultimately concluding that K&L Gates jointly represented Baxter and the inventor, which meant that the inventor could obtain the law firm's files in connection with its later dispute with Baxter; "The parties have submitted numerous exhibits that they claim support their respective positions as to whether Naturalock was a client of K&L Gates."; "Given the extensive nature of Baxter's involvement in the patent prosecution, this Court does not find persuasive Naturalock's attempt to cast itself as K&L Gates's sole client. Thus, the question is whether Naturalock was a joint client along with Baxter."; "'Baxter asserts that Delaware, not federal, law applies to this privilege dispute. Baxter does not, however, show that the privilege analysis would be different under Delaware and federal law. . . . In fact, Baxter itself cites federal law in support of its arguments.'"; "Here, based on the record before the Court, it is clear that K&L Gates provided legal advice and services to Naturalock and acted at the direction of Naturalock in addition to Baxter. This is not a situation where there is no evidence of the nature of communications between the licensor and licensee's counsel. . . . It does not matter what K&L Gates or Baxter perceived the relationship to be."; "Baxter focuses on the facts that Naturalock had separate counsel and that all of the parties involved referred to K&L Gates as Baxter's counsel. But those facts do not lead to the conclusion that K&L Gates's representation of Baxter was to the exclusion of Naturalock. Furthermore, Baxter does not contend that Naturalock was ever explicitly informed that K&L Gates represented only Baxter. To the contrary, the record makes clear that K&L Gates had a professional relationship with both Naturalock and Baxter, and that both Naturalock and Baxter manifested an intention to seek professional legal advice from K&L."; "In sum, it appears that Naturalock and Baxter were joint clients of K&L Gates, and thus there is no basis for Baxter to assert the attorney-client privilege to deny Naturalock discovery regarding correspondence regarding the prosecution of patents for Naturalock's technology. This is true even if Naturalock is correct that Baxter, unbeknownst to Naturalock at the time, was actually acting in a manner that was adverse to Naturalock's interests and even if K&L Gates was complicit in Baxter's scheming.")

Case Date Jurisidction State Cite Checked
2016-05-22 Federal IL
Comment:

key case


Chapter: 5.302

Case Name: L.W. v. Lackawanna County, Pa., Civ. A. No. 3:14-CV-01610, 2015 U.S. Dist. 65103 (M.D. Pa. May 19, 2015)
(holding that the privilege protected communications between the plaintiff's lawyer and several witness considering retaining the same lawyer; "Defendants contend that the group meeting held between Plaintiffs' counsel, Plaintiffs, and two nonparty witnesses represented by Plaintiffs' counsel for the purpose of determining the claims at issue and to receive informed legal advice effectively waived attorney-client privilege. The crux of this issue is whether Plaintiff and the two nonparty witnesses formed a joint client relationship with the same lawyer. If a co-client relationship is found to exist, then the communications between those co-clients and their commonly retained attorneys are 'in confidence' for privilege purposes."; "Based upon Plaintiffs' representation at the discovery conference that the group meeting was organized for the purpose of evaluating potential claims, discussing a potential litigation strategy and determining whether joint representation would be in Plaintiffs' and the nonparties' best interest, this Court finds that the parties may have intended (though ultimately have not, at least to the extent the parties are not co-parties here) to form a co-client relationship when they came together with the purpose of seeking legal services or advice. Accordingly, Defendants cannot compel disclosure of the communications between counsel, Plaintiffs and the two nonparties at the meeting, because such communication is protected.")

Case Date Jurisidction State Cite Checked
2015-05-19 Federal PA

Chapter: 5.302

Case Name: Alliance Industries Ltd. v. A-1 Specialized Svcs. & Supplies, Inc., Civ. A. No. 13-2510, 2015 U.S. Dist. LEXIS 45983 (E.D. Pa. April 8, 2015)
(analyzing privilege issues in connection with two closely held corporations owned by two brothers in varying percentages; ultimately finding that neither of the brothers expected confidentiality, so that the law firms representing the various corporations had to provide access to their communications to both brothers; "There is conflicting evidence regarding whether Mr. Massias, Mr. Dange, or Mr. Bullock represented A-1 at the material times in this dispute or only represented Suresh and Kumar in their personal capacities. Although Mr. Massias and Mr. Bullock explicitly deny representing A-1, the Court must examine the evidence in the record and cannot simply rely on an attorney's statement."; "[F]airness requires that each one be able to call upon the recollection of their counsel in terms of developing testimony of the relevant facts for use in dispositive motions and/or at trial. . . . Although it is true, as Plaintiffs point out, that Kumar and Suresh are not parties to this litigation, this case involves closely held companies that Kumar and Suresh control. . . . There is ample evidence in the record that Suresh and Kumar were not scrupulous about respecting corporate formalities, including emails sent to counsel from corporate email accounts, the fact that A-1 paid Mr. Massias's legal bill, testimony that A-1 reimbursed Kumar for his payment of Mr. Dange's legal expenses, and the involvement of A-1's accountant and other A-1 employees in communications with the lawyers."; "Even if the Court were to accept at face value Plaintiffs' contention that the lawyers only represented Suresh and Kumar in their personal capacities and did not represent A-1, it is obvious from the documents that both Kumar and Suresh shared their communications with the lawyers with others, including Ms. Jerath, the accountant for A-1, Suresh, and Kumar, Leena, Suresh's wife and a 5 percent owner of A-1, and Sameer, Kumar's son, whose role is unclear. This sharing of communications with third parties indicates a lack of effort by both Kumar and Suresh to keep the communications with their attorneys confidential."; "In this case, there are numerous instances in which communications with attorneys were shared or disclosed among a broader group of people. The Court is not necessarily being critical in this regard, but merely stating a fact, which leads to a conclusion that the clients did not intend these communications to be confidential and, therefore, that no attorney-client privilege attached to those communications."; "The factual record resembles, not physically but conceptually, a large house where Kumar and Suresh both live and chatter with the three lawyers, and the others mentioned above, on the stairs and in the hallways, about corporate ownership and control, with smatterings of legal advice occurring from time to time. This scenario does not preserve the attorney-client privilege, and plaintiffs cite no case supporting their arguments."; "The conflicting evidence as to who Mr. Massias, Mr. Bullock, and Mr. Dange were representing and when, the evidence that Suresh and Kumar shared their attorney communications with third parties, the breakdown in the relationship between these two brothers, this subsequent litigation between the closely held corporations they control, and the possibility that the lawyers have knowledge of relevant facts obtained outside of confidential client communications, lead the Court the conclude that Plaintiffs have not met their burden of showing the attorney-client privilege applies at this time.")

Case Date Jurisidction State Cite Checked
2015-04-08 Federal PA

Chapter: 5.302

Case Name: Berndt v. Snyder, Civ. No. 13-cv-368-SM, 2014 U.S. Dist. LEXIS 170098 (D.N.H. Dec. 9, 2014)
("McDonald testified at his deposition that from mid-2012 until early 2013, he was representing both Berndt and Snyder in an attempt to resolve their dispute regarding the 2010 transaction. Subsequent to the deposition, after obtaining counsel, McDonald submitted the errata sheet which corrected his deposition testimony to the extent he suggested that he was representing both Berndt and Snyder at that time. McDonald states in his errata sheet that he was representing only Berndt in the effort to unwind the 2010 transaction.")

Case Date Jurisidction State Cite Checked
2014-12-09 Federal NH

Chapter: 5.302

Case Name: First South Bank v. Fifth Third Bank, N.A., Civ. A. No. 7:10-2097-MGL, 2013 U.S. Dist. LEXIS 62238, at *20, *26-27, *27-28 (D.S.C. May 1, 2013)
(holding that a loan participation agreement did not create a joint representation by the lead lender's lawyer of the other participating banks; pointing to communication as evidence that there was no joint representation; "The extent of Plaintiff's beneficial interest in the Loan Documents and Loan related documents is set forth in and limited by the Participation Agreement -- a contract that does not explicitly or implicitly eradicate either party's right to counsel, or their attorney-client relationships, or lawful privileges and protections that apply to documents related to the Loan."; "[A] presupposition of separate privileges is required in order for the joint defense privilege to have any meaning or import and it is the agreement that allows parties with a common interest to communicate with their respective attorneys and with each other to prosecute and defend claims without waiving privileges and protections. . . . There would in fact, be no need for this type of special confidentiality agreement to maintain and preserve privileges, if McGuire Woods was representing both Fifth Third and First South in the underlying litigation matters. Plaintiff cannot have it both ways. Plaintiff's reading would strip the entire agreement of any meaning, discount the unique nature of participation agreements, and ignore the importance of separate representation and conflicts of interests of counsel."; "The Participation Agreement and the Litigation Agreement work in tandem to take into account the unique nature of participation agreements between banks, and to allow select information to be exchanged between the two banks while preserving applicable privileges and protections. Thus, the court finds no basis for Plaintiff's claims that Defendant compromised or waived its rights to assert privileges and protections over the subject documents.")

Case Date Jurisidction State Cite Checked
2013-05-01 Federal SC B 12/13

Chapter: 5.302

Case Name: Distefano v. Law Offices of Barbara H. Katsos, PC, No. CV 11-2893 (JS) (AKT), 2013 U.S. Dist. LEXIS 47031, at *12 (E.D.N.Y. Mar. 29, 2013)
("In general, the clients of an attorney who operates under a conflict of interest still have a right to have their attorney-client communications remain privileged as against each other because 'counsel's failure to avoid a conflict of interest should not deprive the client of the privilege.'" (citation omitted))

Case Date Jurisidction State Cite Checked
2013-03-29 Federal NY B 3/14

Chapter: 5.302

Case Name: Dempsey v. Bucknell Univ., 296 F.R.D. 323, 330 (M.D. Pa. 2013)
("[T]he evidence of record establishes that Dempsey's parents were also clients of Attorney Stephen Becker with respect to non-criminal matters involving Bucknell University. In his unrebutted affidavit, Attorney Becker stated unequivocally that he was engaged to represent Dempsey and his parents with respect to non-criminal matters involving Bucknell University.")

Case Date Jurisidction State Cite Checked
2013-01-01 Federal PA B 5/14

Chapter: 5.302

Case Name: Maplewood Partners, L.P. v. Indian Harbor Ins. Co., 295 F.R.D. 550, 594 (S.D. Fla. 2013)
(in a first party insurance setting, finding that an insurance company and its insured had a common interest that acted much like a joint representation, so there was no privilege when they later litigated against each other about coverage; "There is no need to evaluate whether the legal interests of such co-clients are in common or aligned because the clients are joint clients of a single attorney and are entitled, jointly, to a continuing attorney-client privilege." (footnote omitted))

Case Date Jurisidction State Cite Checked
2013-01-01 Federal FL B 4/14

Chapter: 5.302

Case Name: Brownfield v. Hodous and Hodous, L.L.P., 82 Va. Cir. 315, 318-19 (Va. Cir. Ct. 2011)
("Plaintiff cites no authority for the proposition that a lawyer who denies having jointly represented one client thereby forfeits the privilege that belongs to his other client. The mere allegation of a joint relationship by a party seeking discovery from a lawyer does not overcome the attorney-client privilege over that lawyer's communications with his client.")

Case Date Jurisidction State Cite Checked
2011-01-01 State VA

Chapter: 5.302

Case Name: United States v. Under Seal # 4 (In re Grand Jury Subpoena # 06-1), 274 F. App'x 306, 310, 311 (4th Cir. 2008) (unpublished opinion)
(assessing the crime-fraud exception; rejecting a corporate subsidiary's motion to intervene to assert privilege; noting that "[a] third party has standing to intervene in grand jury proceedings and challenge the validity of a subpoena directed to another person or entity when the third party has a legally cognizable interest in the materials sought."; rejecting the subsidiary's argument that it had its own attorney client privilege protection; "Subsidiary has failed to put forth sufficient evidence to support its claim that the communications at issue in any way pertained to Counsel's representation of Subsidiary. Therefore, Subsidiary may not assert its own attorney client privilege independent of any joint privilege it may share with Parent in the communications."; also rejecting the subsidiary's argument that it had a joint attorney client relationship with its parent; "Second, Subsidiary argues that it may assert a joint attorney client privilege in the communications between Parent and Counsel because of its status as a former subsidiary of Parent."; "In the present case, the district court held that Subsidiary failed to demonstrate that the withheld communications pertained to a matter in which both Parent and Subsidiary shared a common legal interest, and thus Subsidiary lacked standing to intervene to quash the subpoena. After reviewing Subsidiary's ex parte submissions in support of its claim to the contrary, we conclude that the district court did not err in its determination. Subsidiary has failed to demonstrate that the communications reflected any 'legal matter of common interest.' See Restatement (Third) of the Law Governing Lawyers § 75 cmt. c. Therefore, it has not satisfied its burden of establishing that the joint client or co client privilege applies, and the district court properly denied its motion to intervene.")

Case Date Jurisidction State Cite Checked
2008-01-01 Federal B 5/09; n

Chapter: 5.302

Case Name: United States v. Under Seal # 4 (In re Grand Jury Subpoena # 06-1), 274 F. App'x 306, 310-11 (4th Cir. 2008)
("Subsidiary argues that it may assert a joint attorney-client privilege in the communications between Parent and Counsel because of its status as a former subsidiary of Parent. . . . Indeed, a number of courts have held that close corporate affiliation, including that shared by a parent and a subsidiary, suffices to render those entities "joint clients" or "co-clients," such that they may assert joint privilege in communications with an attorney pertaining to matters of common interest. . . . As the Third Circuit has explained in some detail, however, the scope of the joint client or co-client privilege is circumscribed by the 'limited congruence of the clients' interests.' [See] In re Teleglobe Communs. Corp., 493 F.3d at 362-63 [3d Cir. 2007)] ('As the Restatement notes, a co-client relationship is limited by "the extent of the legal matter of common interest.'" (quoting the Restatement (Third) of the Law Governing Lawyers § 75 cmt. c)); see also id. at 366 ('[B]ecause co-clients agree to share all information related to the matter of common interest with each other and to employ the same attorney, their legal interests must be identical (or nearly so) in order that an attorney can represent them all with the candor, vigor, and loyalty that our ethics require.' (emphasis added)). In the present case, the district court held that Subsidiary failed to demonstrate that the withheld communications pertained to a matter in which both Parent and Subsidiary shared a common legal interest, and thus Subsidiary lacked standing to intervene to quash the subpoena. After reviewing Subsidiary's ex parte submissions in support of its claim to the contrary, we conclude that the district court did not err in its determination. Subsidiary has failed to demonstrate that the communications reflected any 'legal matter of common interest.' See Restatement (Third) of the Law Governing Lawyers § 75 cmt. c. Therefore, it has not satisfied its burden of establishing that the joint client or co-client privilege applies, and the district court properly denied its motion to intervene.")

Case Date Jurisidction State Cite Checked
2008-01-01 Federal B 8/13

Chapter: 5.302

Case Name: Teleglobe Commc'ns Corp. v. BCE Inc. (In re Teleglobe Commc'ns Corp.), 493 F.3d 345, 379 (3d Cir. 2007)
("The majority -- and more sensible -- view is that even in the parent-subsidiary context a joint representation only arises when common attorneys are affirmatively doing legal work for both entities on a matter of common interest. See, e.g., Polycast, 125 F.R.D. at 49 [Polycast Tech. Corp. v. Uniroyal, Inc., 125 F.R.D. 47 (S.D.N.Y. 1989)](finding a joint representation when a parent's officer and general counsel affirmatively advised subsidiary on how to comply with merger agreement to which parent and subsidiary were both parties). A broader rule would wreak havoc because it would essentially mean that in adverse litigation a former subsidiary could access all of its former parent's privileged communications because the subsidiary was, as a matter of law, within the parent entity's community of interest.")

Case Date Jurisidction State Cite Checked
2007-01-01 Federal B 6/13

Chapter: 5.302

Case Name: Dexia Credit Local v. Rogan, 231 F.R.D. 268, 273 (N.D. Ill. 2004)
(analyzing privilege protection for communications between a hospital and a management company; declining to rule on any specific withheld documents, but stating general rules in the abstract; quoting Ohio-Sealy Mattress Mfg. Co. v. Kaplan, 90 F.R.D. 21, 29 (N.D. Ill. 1980): "'[W]here two or more persons jointly consult an attorney concerning a mutual concern, "their confidential communications with the attorney, although known to each other, will of course be privileged in the controversy of either or both of the clients with the outside world. . . ." (citations omitted). Moreover, the joint defense privilege cannot be waived without the consent of all parties to the defense, except in the situation where one of the joint defendants becomes an adverse party in a litigation.'"; using the common interest analysis, and not clearly explaining whether the hospital and the management company were joint clients or separately represented entities)

Case Date Jurisidction State Cite Checked
2004-01-01 Federal IL B 6/13

Chapter: 5.303

Case Name: DePuy Orthopaedics, Inc. v. Orthopaedic Hospital, Cause No. 3:12-cv-299-JVB-MGG, 2016 U.S. Dist. LEXIS 166537 (N.D. Ind. Dec. 1, 2016)
January 25, 2017 (PRIVILEGE POINT)

"An In-House Counsel Learns the Hard Way About a Key Difference Between Common Interest Agreements and Joint Representations: Part I"

Common interest agreements and joint representations share many characteristics. Both types of arrangements involve lawyers engaging in protected communications with multiple clients. But they are structurally distinct. In common interest agreements, separately represented clients cooperate in a common legal strategy. In a joint representation, the same lawyers represent several clients on the same matter. As long as everything rolls along smoothly, the structural difference has few privilege consequences. But adversity reveals a key privilege distinction.

In DePuy Orthopaedics, Inc. v. Orthopaedic Hospital, Cause No. 3:12-cv-299-JVB-MGG, 2016 U.S. Dist. LEXIS 166537 (N.D. Ind. Dec. 1, 2016), plaintiff DePuy and defendant Hospital had worked together on patent prosecutions – but later become litigation adversaries. DePuy resisted the Hospital's attempt to discover communications to and from DePuy's in-house counsel. The in-house counsel claimed that DePuy and the Hospital had only entered into a common interest agreement – noting that O'Melveny & Myers had acted as patent "prosecution counsel" on behalf of both companies. In contrast, the Hospital "claim[ed] that DePuy's in-house counsel jointly represented both parties." Id. at *4. The court recited facts that could have proven either a common interest agreement or a joint representation: DePuy and the Hospital shared confidential information and cooperated on a common legal strategy; DePuy's in-house counsel communicated with and gave direction to O'Melveny, etc. But the court ultimately concluded that DePuy's in-house counsel had jointly represented DePuy and the Hospital -- rather than represented just DePuy in a common interest arrangement with the separately represented Hospital.

Given the privilege implication similarities between a common interest agreement and a joint representation, one might wonder why DePuy's in-house counsel argued so strenuously against the latter. Next week's Privilege Point will explain the court's key reason for finding such a joint representation, and its frightening implication.

Case Date Jurisidction State Cite Checked
2016-12-01 Federal IN
Comment:

key case


Chapter: 5.303

Case Name: DePuy Orthopaedics, Inc. v. Orthopaedic Hospital, Cause No. 3:12-cv-299-JVB-MGG, 2016 U.S. Dist. LEXIS 166537 (N.D. Ind. Dec. 1, 2016)
February 1, 2017 (PRIVILEGE POINT)

"An In-House Counsel Learns the Hard Way About a Key Difference Between Common Interest Agreements and Joint Representations: Part II"

Last week's Privilege Point described an in-house counsel's vigorous argument that she had represented her employer/client in a common interest agreement with a hospital in jointly prosecuting patents -- rather than having jointly represented both her employer/client and the hospital. DePuy Orthopaedics, Inc. v. Orthopaedic Hospital, Cause No. 3:12-cv-299-JVB-MGG, 2016 U.S. Dist. LEXIS 166537 (N.D. Ind. Dec. 1, 2016).

After reciting facts that could have evidenced either a common interest agreement or a joint representation, the court explained why it agreed with the Hospital that there had been a joint representation: "[T]he evidence does not show that DePuy's in-house counsel . . . provided any kind of disclaimer about representation when answering the Hospital's questions with legal information or consequence regarding the patent prosecution." Id. at *12-13 (emphasis added). The court then gave the punchline. Because DePuy's in-house counsel had jointly represented DePuy and the Hospital, the former joint client Hospital could discover "DePuy's internal communications related to the [patent] prosecution." Id. at *13 (emphasis added). Thus, the Hospital's understandable desire to discover these internal DePuy communications had led it to "vociferously contend[] that it believed that DePuy's in-house counsel was acting on its behalf." Id. at *12.

If common interest participants later become litigation adversaries, privilege protection evaporates for any communications they have shared, but remains for each participant's internal communications with its own lawyer. In a joint representation, such later adversity normally allows any former joint client to discover all of their joint lawyer's communications on that matter with any jointly represented clients. In-house and outside counsel should remember this key distinction, and explicitly define any relationship if there might be confusion – including providing socially awkward but legally significant disclaimers of a joint representation.

Case Date Jurisidction State Cite Checked
2016-12-01 Federal IN
Comment:

key case


Chapter: 5.303

Case Name: Depuy Orthopaedics, Inc. v. Orthopaedic Hosp., Cause No. 3:12-cv-299-JVB-MGG, 2016 U.S. Dist. LEXIS 166537 (N.D. Ind. Dec. 1, 2016)
(after admitting its earlier error in concluding that a patent prosecution agreement automatically made one participant's in-house lawyer the joint lawyer for the other party, finding that after factual inquiry that plaintiff's in-house lawyer had jointly represented the other prosecution participant; rejecting her argument that she only represented her client/employer and had entered into a common interest agreement with the other participant; acknowledging that the plaintiff and defendant had both relied on O'Melveny & Myers as prosecution counsel, concluding that plaintiff's in-house lawyer had jointly represented her client/employer and the other participant, and pointing to the joint representation in ordering plaintiff to produce internal communications between its in-house lawyer and its executives; "The Court based its order on its conclusion that 'Section 6.1 of the PRLA established the mutual consent necessary to make the Hospital and DePuy joint clients on the prosecution of the 110 Patent Family . . . .' The heart of DePuy's argument on this issue had been that DePuy's in-house counsel had not consented to represent the Hospital in the prosecution of the patents, which precluded application of the joint client doctrine such that DePuy's internal communications with its in-house counsel related to the prosecution of the 110 Family patent applications were privileged and undiscoverable even as to the Hospital. DePuy acknowledged that it shared a common interest with the Hospital, but rejected the Hospital's claim that DePuy's in-house counsel jointly represented both parties."; "DePuy continues to argue that its in-house counsel never consented to represent the Hospital and that without such consent, a joint attorney-client relationship never existed. Even without relying upon Section 6.1 to establish joint representation, the Court finds otherwise."; "Communications among joint clients and their shared attorneys who are allied in a common legal cause are privileged from disclosure as to those outside their group but are not privileged in a subsequent controversy between the two joint clients."; "[T]he Hospital references testimony from both the inventor, Harry McKellop, and DePuy's in-house counsel, Blossom Loo, to affirm that documents produced in discovery show that the Hospital regularly sought advice from DePuy's in-house counsel on issues related to patent prosecution, such as claim scope, office action strategy, and selection of outside counsel."; "Additionally, DePuy concedes confidential information was exchanged between the Hospital and its in-house counsel. Yet in the face of these extensive communications, some of which demonstrate that DePuy's in-house counsel was providing direction on prosecution strategy to Wong and O'Melveny, DePuy's in-house counsel, Blossom Loo, testified that she never consented and had no intention of forming an attorney-client relationship with the Hospital. Loo's protestations are not persuasive, however, given the conduct established by the totality of the evidence."; "Of course, there is no evidence of any discussion of any fee arrangement, any Hospital client file in the offices of DePuy's in-house counsel, or any billing from DePuy's in-house counsel to the Hospital. Nevertheless, the evidence shows that DePuy's in-house counsel was actively involved with the Hospital and the prosecution counsel in the prosecution of the 110 Family patent applications. Moreover, the evidence does not show that DePuy's in-house counsel intentionally avoided advising the Hospital or provided any kind of disclaimer about representation when answering the Hospital's questions with legal information of consequence regarding the patent prosecution. Through such conduct, DePuy's in-house counsel impliedly consented to representing the Hospital in addition to DePuy on the matter of prosecuting the 110 Family patent applications."; "[T]he Court's prior Order, the Court FINDS that mutual consent still exists such that the joint client doctrine applies and any of DePuy's and the Hospital's communications with shared counsel (i.e., DePuy's in-house counsel) are only privileged to the outside world, but are not privileged between DePuy and the Hospital. Therefore, DePuy's internal communications related to the prosecution of the 110 Family patents remains discoverable.")

Case Date Jurisidction State Cite Checked
2016-12-01 Federal IN
Comment:

key case


Chapter: 5.303

Case Name: Naturalock Solutions, LLC v. Baxter Healthcare Corporation¸No. 14-cv-10113, 2016 U.S. Dist. LEXIS 66982 (N.D. Ill. May 22, 2016)
(analyzing a product inventor's efforts to obtain the files of K&L Gates, which was obtained by Baxter, but which also assisted the inventor in prosecuting a patent; ultimately concluding that K&L Gates jointly represented Baxter and the inventor, which meant that the inventor could obtain the law firm's files in connection with its later dispute with Baxter; "The parties have submitted numerous exhibits that they claim support their respective positions as to whether Naturalock was a client of K&L Gates."; "Given the extensive nature of Baxter's involvement in the patent prosecution, this Court does not find persuasive Naturalock's attempt to cast itself as K&L Gates's sole client. Thus, the question is whether Naturalock was a joint client along with Baxter."; "'Baxter asserts that Delaware, not federal, law applies to this privilege dispute. Baxter does not, however, show that the privilege analysis would be different under Delaware and federal law. . . . In fact, Baxter itself cites federal law in support of its arguments.'"; "Here, based on the record before the Court, it is clear that K&L Gates provided legal advice and services to Naturalock and acted at the direction of Naturalock in addition to Baxter. This is not a situation where there is no evidence of the nature of communications between the licensor and licensee's counsel. . . . It does not matter what K&L Gates or Baxter perceived the relationship to be."; "Baxter focuses on the facts that Naturalock had separate counsel and that all of the parties involved referred to K&L Gates as Baxter's counsel. But those facts do not lead to the conclusion that K&L Gates's representation of Baxter was to the exclusion of Naturalock. Furthermore, Baxter does not contend that Naturalock was ever explicitly informed that K&L Gates represented only Baxter. To the contrary, the record makes clear that K&L Gates had a professional relationship with both Naturalock and Baxter, and that both Naturalock and Baxter manifested an intention to seek professional legal advice from K&L."; "In sum, it appears that Naturalock and Baxter were joint clients of K&L Gates, and thus there is no basis for Baxter to assert the attorney-client privilege to deny Naturalock discovery regarding correspondence regarding the prosecution of patents for Naturalock's technology. This is true even if Naturalock is correct that Baxter, unbeknownst to Naturalock at the time, was actually acting in a manner that was adverse to Naturalock's interests and even if K&L Gates was complicit in Baxter's scheming.")

Case Date Jurisidction State Cite Checked
2016-05-22 Federal IL
Comment:

key case


Chapter: 5.303

Case Name: Alliance Industries Ltd. v. A-1 Specialized Svcs. & Supplies, Inc., Civ. A. No. 13-2510, 2015 U.S. Dist. LEXIS 45983 (E.D. Pa. April 8, 2015)
(analyzing privilege issues in connection with two closely held corporations owned by two brothers in varying percentages; ultimately finding that neither of the brothers expected confidentiality, so that the law firms representing the various corporations had to provide access to their communications to both brothers; "There is conflicting evidence regarding whether Mr. Massias, Mr. Dange, or Mr. Bullock represented A-1 at the material times in this dispute or only represented Suresh and Kumar in their personal capacities. Although Mr. Massias and Mr. Bullock explicitly deny representing A-1, the Court must examine the evidence in the record and cannot simply rely on an attorney's statement."; "[F]airness requires that each one be able to call upon the recollection of their counsel in terms of developing testimony of the relevant facts for use in dispositive motions and/or at trial. . . . Although it is true, as Plaintiffs point out, that Kumar and Suresh are not parties to this litigation, this case involves closely held companies that Kumar and Suresh control. . . . There is ample evidence in the record that Suresh and Kumar were not scrupulous about respecting corporate formalities, including emails sent to counsel from corporate email accounts, the fact that A-1 paid Mr. Massias's legal bill, testimony that A-1 reimbursed Kumar for his payment of Mr. Dange's legal expenses, and the involvement of A-1's accountant and other A-1 employees in communications with the lawyers."; "Even if the Court were to accept at face value Plaintiffs' contention that the lawyers only represented Suresh and Kumar in their personal capacities and did not represent A-1, it is obvious from the documents that both Kumar and Suresh shared their communications with the lawyers with others, including Ms. Jerath, the accountant for A-1, Suresh, and Kumar, Leena, Suresh's wife and a 5 percent owner of A-1, and Sameer, Kumar's son, whose role is unclear. This sharing of communications with third parties indicates a lack of effort by both Kumar and Suresh to keep the communications with their attorneys confidential."; "In this case, there are numerous instances in which communications with attorneys were shared or disclosed among a broader group of people. The Court is not necessarily being critical in this regard, but merely stating a fact, which leads to a conclusion that the clients did not intend these communications to be confidential and, therefore, that no attorney-client privilege attached to those communications."; "The factual record resembles, not physically but conceptually, a large house where Kumar and Suresh both live and chatter with the three lawyers, and the others mentioned above, on the stairs and in the hallways, about corporate ownership and control, with smatterings of legal advice occurring from time to time. This scenario does not preserve the attorney-client privilege, and plaintiffs cite no case supporting their arguments."; "The conflicting evidence as to who Mr. Massias, Mr. Bullock, and Mr. Dange were representing and when, the evidence that Suresh and Kumar shared their attorney communications with third parties, the breakdown in the relationship between these two brothers, this subsequent litigation between the closely held corporations they control, and the possibility that the lawyers have knowledge of relevant facts obtained outside of confidential client communications, lead the Court the conclude that Plaintiffs have not met their burden of showing the attorney-client privilege applies at this time.")

Case Date Jurisidction State Cite Checked
2015-04-08 Federal PA

Chapter: 5.303

Case Name: Berndt v. Snyder, Civ. No. 13-cv-368-SM, 2014 U.S. Dist. LEXIS 170098 (D.N.H. Dec. 9, 2014)
("McDonald testified at his deposition that from mid-2012 until early 2013, he was representing both Berndt and Snyder in an attempt to resolve their dispute regarding the 2010 transaction. Subsequent to the deposition, after obtaining counsel, McDonald submitted the errata sheet which corrected his deposition testimony to the extent he suggested that he was representing both Berndt and Snyder at that time. McDonald states in his errata sheet that he was representing only Berndt in the effort to unwind the 2010 transaction.")

Case Date Jurisidction State Cite Checked
2014-12-09 Federal NH

Chapter: 5.304

Case Name: Waymo LLC v. Uber Technologies, Inc., Case No. 17-cv-00939-WHA (JSC), 2017 U.S. Dist. LEXIS 96037 (N.D. Cal. June 21, 2017)
(holding that the privilege did not protect the investigation report of a forensic firm hired by acquiring company Uber and acquired company Ottomotto to investigate whether Ottomotto's CEO had stolen information from Google; also holding that they did not share a common interest or have a joint representation; "[T]he Court finds that there was no joint retention: Uber's attorneys did not hire Stroz on behalf of Levandowski and Uber; they hired Stroz to investigate Levandowski. Indeed, even as of the signing of the Put Call Agreement, counsel for Uber and Otto directed Stroz to modify its investigation protocol to clarify that they -- and not Levandowski's attorney -- were directing the Stroz investigation."; "Levandowski's emphasis on his attorney's representation to Stroz on March 14, 2016 and March 21, 2016 that he shared a common legal interest with Otto confirms the Court's finding of a lack of a joint defense agreement among Uber, Otto and Levandowski. At that time Levandowski and Otto shared an interest in having Uber acquire Otto for millions of dollars and they shared a common interest in at least having Uber sign the Put Call Agreement so that Uber would be obligated to indemnify Levandowski and Otto in the event Waymo sued them. What they did not share was any common legal interest with Uber, the party on the other side of the proposed transaction. It is thus unsurprising that Levandowski's attorney did not state that his client shared a legal interest with Uber."; "Levandowski has never explained why he would need to meet alone with Stroz -- an agent for Uber -- in order to obtain legal advice from his attorney on litigation risk. He would not. He needed to give an interview to Stroz, unencumbered by legal counsel, because Uber insisted on such a process as part of its pre-signing due diligence and to create a record that would govern indemnification rights should the parties execute the Put Call Agreement."; "The expansion of the attorney-client privilege Levandowski seeks here would violate the rule that the privilege should be construed 'narrowly to serve its purposes.' In re Pacific Pictures Corp., 679 F.3d at 1126. As the Term Sheet demonstrates, Levandowski disclosed his devices and gave the Stroz interview to enable Uber to decide whether it wanted to pay Otto and Levandowski millions of dollars. The Stroz investigation also created an evidentiary record that would determine whether Uber is required to indemnify Levandowski should Uber, following its pre-signing due diligence, decide to sign the Put Call Agreement. This indemnification right is likewise worth millions of dollars. To hold that Levandowski did not waive the attorney-client privilege when it provided this information to Uber 'does little, if anything, to serve the public good underpinning the attorney-client privilege.'"; approved by the district court on June 27, 2017)

Case Date Jurisidction State Cite Checked
2017-06-21 Federal CA

Chapter: 5.304

Case Name: Polylok, Inc. v. Bear Onsite, LLC, Civ. A. No. 3:12-CV-00535-DJH-CHL, 2017 U.S. Dist. LEXIS 41960 (W.D. Ky. March 23, 2017)
(inexplicably confusing a common interest agreement and a joint representation; "The main thrust of the Hornback Defendants' argument is that the two parties to the communication are commonly represented, that the Plaintiffs knew that the parties were commonly represented, and that statements made regarding this action between Terry and Hornback would be privileged. The Hornback Defendants believe that with these facts, '[there] simply could be no other way.'. . . It is true that communications between Hornback and Terry may be privileged if those communications were in furtherance of a common joint defense strategy. It is also true that joint-defense agreements may be oral. However, the Hornback Defendants forget that they have the burden to establish the applicability of the privilege. . . . The Hornback Defendants, by merely claiming that an oral joint defense agreement was in effect and stating that Plaintiffs knew of the single representation between the co-parties, have not made a sufficient argument to show that the redacted portions of the text messages were privileged. Furthermore, the unredacted portions of the text messages strongly suggest that the communications were not in furtherance of a common defense strategy. Therefore, the Court rejects the Hornback Defendants' assertion that counsel's 'statement that she believed there was a joint defense agreement should have been more than sufficient' to satisfy the obligation to produce a privilege log.")

Case Date Jurisidction State Cite Checked
2017-03-23 Federal KY

Chapter: 5.304

Case Name: Margulis v. The Hertz Corporation, Civ. A. No. 14-1209 (JMV), 2017 U.S. Dist. LEXIS 28311 (D.N.J. Feb. 28, 2017)
(holding that a corporate family was not "one" client, but that a United States law firm jointly represented a U.S. company and an overseas affiliate; "This raises the question of, in the context of the attorney-client privilege, who exactly is the attorney and who exactly is the client when considering privilege questions in the context of multiple-related companies with a centralized in-house legal department."; "Of course, the particular facts and circumstances of the corporate structures and relationships must be such that there is an actual joint attorney-client relationship between the in-house counsel and the corporation that the attorney represents. A joint representation -- that is, that a given lawyer actually has as separate clients the individual members of a larger corporate family -- will always be a fact specific inquiry. Simply stating it does not make it so.")

Case Date Jurisidction State Cite Checked
2017-02-28 Federal NJ
Comment:

key case


Chapter: 5.304

Case Name: Federal Housing Finance Agency v. Nomura Holding America, Inc., 11cv6201 (DLC), 2015 U.S. Dist. LEXIS 26811 (S.D.N.Y. March 4, 2015)
(analyzing a situation in which the defendant's lawyer Sullivan & Cromwell began to represent four appraisers; finding that the lawyers' communications with the appraisers after the representation began deserved privilege protection; "On January 26, 2015, defendants listed four appraisers as trial witnesses. Affidavits constituting their direct testimony were submitted on February 20 with the Pretrial Order. On March 2, after the Court granted FHFA's request to depose the appraisers, defendants advised that Nomura's counsel, Sullivan & Cromwell LLP, had been engaged that same day to represent the four appraisers. Defendants represent that none of the appraisers had previously been represented by counsel."; "FHFA cites no controlling authority, and none has been found, in support of its request for an order directing an adverse party's counsel to provide information sufficient to determine if its representation of a third-party trial witness is a bona fide attorney-client representation."; "[C]ommunications between Nomura's counsel and the appraisers prior to March 2 are not privileged.")

Case Date Jurisidction State Cite Checked
2015-03-04 Federal NY

Chapter: 5.304

Case Name: Maplewood Partners, L.P. v. Indian Harbor Ins. Co., 295 F.R.D. 550, 594 (S.D. Fla. 2013)
(in a first party insurance setting, finding that an insurance company and its insured had a common interest that acted much like a joint representation, so there was no privilege when they later litigated against each other about coverage; "There is no need to evaluate whether the legal interests of such co-clients are in common or aligned because the clients are joint clients of a single attorney and are entitled, jointly, to a continuing attorney-client privilege." (footnote omitted))

Case Date Jurisidction State Cite Checked
2013-01-01 Federal FL B 4/14

Chapter: 5.403

Case Name: Alliance Industries Ltd. v. A-1 Specialized Svcs. & Supplies, Inc., Civ. A. No. 13-2510, 2015 U.S. Dist. LEXIS 45983 (E.D. Pa. April 8, 2015)
(analyzing privilege issues in connection with two closely held corporations owned by two brothers in varying percentages; ultimately finding that neither of the brothers expected confidentiality, so that the law firms representing the various corporations had to provide access to their communications to both brothers; "There is conflicting evidence regarding whether Mr. Massias, Mr. Dange, or Mr. Bullock represented A-1 at the material times in this dispute or only represented Suresh and Kumar in their personal capacities. Although Mr. Massias and Mr. Bullock explicitly deny representing A-1, the Court must examine the evidence in the record and cannot simply rely on an attorney's statement."; "[F]airness requires that each one be able to call upon the recollection of their counsel in terms of developing testimony of the relevant facts for use in dispositive motions and/or at trial. . . . Although it is true, as Plaintiffs point out, that Kumar and Suresh are not parties to this litigation, this case involves closely held companies that Kumar and Suresh control. . . . There is ample evidence in the record that Suresh and Kumar were not scrupulous about respecting corporate formalities, including emails sent to counsel from corporate email accounts, the fact that A-1 paid Mr. Massias's legal bill, testimony that A-1 reimbursed Kumar for his payment of Mr. Dange's legal expenses, and the involvement of A-1's accountant and other A-1 employees in communications with the lawyers."; "Even if the Court were to accept at face value Plaintiffs' contention that the lawyers only represented Suresh and Kumar in their personal capacities and did not represent A-1, it is obvious from the documents that both Kumar and Suresh shared their communications with the lawyers with others, including Ms. Jerath, the accountant for A-1, Suresh, and Kumar, Leena, Suresh's wife and a 5 percent owner of A-1, and Sameer, Kumar's son, whose role is unclear. This sharing of communications with third parties indicates a lack of effort by both Kumar and Suresh to keep the communications with their attorneys confidential."; "In this case, there are numerous instances in which communications with attorneys were shared or disclosed among a broader group of people. The Court is not necessarily being critical in this regard, but merely stating a fact, which leads to a conclusion that the clients did not intend these communications to be confidential and, therefore, that no attorney-client privilege attached to those communications."; "The factual record resembles, not physically but conceptually, a large house where Kumar and Suresh both live and chatter with the three lawyers, and the others mentioned above, on the stairs and in the hallways, about corporate ownership and control, with smatterings of legal advice occurring from time to time. This scenario does not preserve the attorney-client privilege, and plaintiffs cite no case supporting their arguments."; "The conflicting evidence as to who Mr. Massias, Mr. Bullock, and Mr. Dange were representing and when, the evidence that Suresh and Kumar shared their attorney communications with third parties, the breakdown in the relationship between these two brothers, this subsequent litigation between the closely held corporations they control, and the possibility that the lawyers have knowledge of relevant facts obtained outside of confidential client communications, lead the Court the conclude that Plaintiffs have not met their burden of showing the attorney-client privilege applies at this time.")

Case Date Jurisidction State Cite Checked
2015-04-08 Federal PA

Chapter: 5.403

Case Name: In re Fundamental Long Term Care, Inc. v. Gen. Elec. Capital Corp., Case No. 8:11-bk-22258-MGW, Chapter 7, Adv. No. 8:13-ap-00893-MGW (consolidated), 2014 Bankr. LEXIS 3927, at *16-17, *20 (M.D. Fla. Sept. 12, 2014)
(in this and a later opinion (In re Fundamental Long Term Care, Inc. v. Gen. Elec. Capital Corp., Chapter 7, Case No. 8:11-bk-22258-MGW, Adv. No. 8:13-ap-00893-MGW (consolidated), 2014 Bankr. LEXIS 4060 (M.D. Fla. Sept. 20, 2014)); analyzing the co-client "exception" to the attorney-client privilege; concluding that Kirkland & Ellis represented in litigation two companies who are now adversaries, and therefore could now obtain and use privileged communications from their joint representation in their current dispute; finding that the law firm did not jointly represent the two companies in a transaction; later taking steps to avoid disclosure to one of the former joint clients' current litigation adversaries in a privileged communication disclosed during the trial of the dispute between the former joint clients; "Documents related to the defense of the Ohio litigation, however, are a different story. Here, it appears that (i) THI retained Kirkland & Ellis to represent THMI in the Ohio litigation; (ii) Kirkland & Ellis actually appeared in the Ohio litigation on behalf of THMI; and (iii) Kirkland & Ellis advanced legal positions on THMI's behalf. The First Circuit Court of Appeals, in FDIC v. Ogden, [FDIC v. Ogden Corp., 202 F.3d 454, 461-63 (1st Cir. 2000)] expressly held that a party is a 'client' of a firm and therefore entitled to invoke the co-client exception where, like here, the law firm appeared in litigation on behalf of the client seeking to invoke the co-client exception and advanced legal positions on the client's behalf."; "So the Trustee is entitled to documents relating to the Ohio litigation, subject to two limitations: First, similar to the Court's previous co-client ruling, the Trustee (standing in the shoes of THMI) is only entitled communications relating to the defense of the Ohio litigation. Second, the Trustee is not entitled to share those documents with any third party that would destroy the co-client privilege. Documents unrelated to the defense of the Ohio litigation otherwise remain privileged.")

Case Date Jurisidction State Cite Checked
2014-09-12 Federal FL

Chapter: 5.403

Case Name: In re Fundamental Long Term Care, Inc. v. Gen. Elec. Capital Corp., Case No. 8:11-bk-22258-MGW, Chapter 7, Adv. No. 8:13-ap-00893-MGW (consolidated), 2014 Bankr. LEXIS 3927, at *15-16 (M.D. Fla. Sept. 12, 2014)
(in this and a later opinion (In re Fundamental Long Term Care, Inc. v. Gen. Elec. Capital Corp., Chapter 7, Case No. 8:11-bk-22258-MGW, Adv. No. 8:13-ap-00893-MGW (consolidated), 2014 Bankr. LEXIS 4060 (M.D. Fla. Sept. 20, 2014)); analyzing the co-client "exception" to the attorney-client privilege; concluding that Kirkland & Ellis represented in litigation two companies who are now adversaries, and therefore could now obtain and use privileged communications from their joint representation in their current dispute; finding that the law firm did not jointly represent the two companies in a transaction; later taking steps to avoid disclosure to one of the former joint clients' current litigation adversaries in a privileged communication disclosed during the trial of the dispute between the former joint clients; "Taking into account all of the relevant circumstances, it would not have been reasonable for THMI to infer it was a client of Kirkland & Ellis with respect to the March 2006 transaction. To begin with, the retainer agreement between Kirkland & Ellis and THI specifically provides the attorney-client relationship is between the firm and THI and that no subsidiary of THI -- i.e., THMI -- had the status of a 'client.' On top of that, the March 2006 transaction culminated in a stock purchase agreement that likewise provided that THI 'retained Kirkland & Ellis . . . To act as its counsel in connection with the transactions" and "that none of the other parties has the status of a client of [Kirkland].' And even if THMI somehow could have inferred it was a client, the stock purchase agreement expressly provided that the 'attorney-client privilege and the expectation of client confidence belongs to [THI]' and that it 'shall not pass to or be claimed by [the Debtor] or [THMI].' So the Trustee (standing in the shoes of THMI) is not entitled to invoke the co-client exception to obtain documents relating to the March 2006 transaction.")

Case Date Jurisidction State Cite Checked
2014-09-12 Federal FL

Chapter: 5.403

Case Name: Daily v. Greensfelder, Hemker & Gale, P.C., No. 5-13-0273, 2014 Ill. App. Unpub. LEXIS 1789 (Ill. 5th Dist. App. Aug. 18, 2014)
(applying the "no secrets" rule in a joint representation context, and requiring jointly represented clients to turn over all otherwise privileged documents to the other in a dispute between them; extending the rule even to documents created three years after the joint representation ended; "An attorney owes a duty of loyalty to his or her clients. This includes a duty to keep each client informed of any matters related to the attorney's representation of that client which might have an impact on the client's interests. Ill. R. Prof. Conduct (2010) R. 1.7 cmt. 31 (eff. Jan. 1, 2010). When an attorney represents two clients in the same matter, the attorney thus has a duty to keep each client informed of matters that might otherwise be protected from disclosure by the attorney-client privilege. As such, the privilege generally does not attach to communications related to matters on which the attorney is representing both clients. . . . Under such circumstances, a client cannot reasonably expect communications related to that matter to be kept confidential from the other client.")

Case Date Jurisidction State Cite Checked
2014-08-18 State IL

Chapter: 5.403

Case Name: McCullough v. Fraternal Order of Police, Chicago Lodge 7, No. 12 C 9359, 2014 U.S. Dist. LEXIS 69498 (N.D. Ill. May 21, 2014)
(analyzing joint representations and the common interest doctrine; finding that two policewomen who claimed sexual harassment did not share a common interest, so that they could not engage in privileged communications after the same lawyer stopped representing both of them in a joint representation; "Under the joint lawyer doctrine, when two or more persons each having an interest in some problem, or situation, jointly consult an attorney, they necessarily agree to share all information related to the matter of common interest with each other.")

Case Date Jurisidction State Cite Checked
2014-05-21 Federal IL

Chapter: 5.403

Case Name: McCullough v. Fraternal Order of Police Chicago Lodge 7, No. 12 C 9359, 2014 U.S. Dist. LEXIS 69498 (N.D. Ill. May 21, 2014)
(analyzing joint representation and common interest agreement issues in connection with two plaintiffs suing defendant Fraternal Order of Police; explaining that they shared a common lawyer for some time, but explaining that the lawyer withdrew from representing one of the clients, who was then unrepresented; including that the two plaintiffs did not have a common interest although they were suing the same defendant, so that the privilege only protected their communications while they were jointly represented; "Under the joint lawyer doctrine, when two or more persons each having an interest in some problem, or situation, jointly consult an attorney, they necessarily agree to share all information related to the matter of common interest with each other. . . . Thus, their otherwise privileged communications with the attorney -- i.e. those that qualify as privileged under the attorney/client privilege -- though known to each other, will be privileged as to outsiders, but not inter se.")

Case Date Jurisidction State Cite Checked
2014-05-21 Federal IL

Chapter: 5.403

Case Name: In re Cardinal Fastener & Specialty Co., Ch. 7 Case No. 11-15719, 2013 Bankr. LEXIS 452, at *18-19 (N.D. Ohio Feb. 4, 2013)
(holding that a lawyer who jointly represented a corporation and various officers and directors must turn over communication created during such a joint representation to the corporation's bankruptcy trustee; "Even if the firm did represent both the debtor and the individual directors and officers in connection with alleged and potential claims covered by the insurance, the rules relating to an attorney representing two clients on a matter of common interest would require the firm to comply with the trustee's request.")

Case Date Jurisidction State Cite Checked
2013-02-04 Federal OH B 2/14

Chapter: 5.403

Case Name: In re Fundamental Long Term Care, Inc., 489 B.R. 451, 460, 463 (M.D. Fla. 2013)
(holding that a trustee's lawyer may seek files of a firm which also represented debtor's subsidiary and another company, based on the co-client privilege; "[T]he co-client exception to the attorney-client privilege ordinarily holds that where a lawyer represents two clients in the same case, communications between the lawyer and one client are not confidential as to the other client. The co-client exception applies regardless of whether both parties are present when the communication is made." (footnote omitted))

Case Date Jurisidction State Cite Checked
2013-01-01 Federal FL B 3/14

Chapter: 5.403

Case Name: Arkin Kaplan Rice LLP v. Kaplan, 967 N.Y.S.2d 63 (N.Y. App. Div. 2013)
(analyzing implications of a joint representation; holding that one former joint client could obtain discovery of communications between the joint clients' lawyer and the other clients, although the communication continued to be privileged as to co-plaintiffs of the former joint client in the current lawsuit, who themselves had not been jointly represented by the same lawyer)

Case Date Jurisidction State Cite Checked
2013-01-01 State NY B 4/14

Chapter: 5.403

Case Name: In re Fundamental Long Term Care, Inc., 489 B.R. 451, 465 (M.D. Fla. 2013)
(holding that a trustee's lawyer may seek files of a firm which also represented debtor's subsidiary and another company, based on the co-client privilege; "Factors relating to the relationship between the undisputed client and the client seeking to invoke the co-client exception include: the conduct of the parties towards each other; the terms of any contractual relationship between the parties; the existence of any fiduciary relationship between the parties; the extent to which the parties communicated with each other; the extent to which there were private communications between either of the parties and counsel (and the extent to which the other parties knew about those communications); the nature and legitimacy of each party's expectations about its ability to access the other party's communications with counsel; the extent to which the parties' interests were in common and the relationship between those common interests and the parties' communications with counsel; the existence of any actual or potential conflicts between the parties; and, if a dispute arose, whether counsel represented both parties with respect to that dispute.")

Case Date Jurisidction State Cite Checked
2013-01-01 Federal FL B 3/14

Chapter: 5.403

Case Name: Covered Bridge Resort on Waldens Creek, LLC v. Johnson, Murrell & Assocs., P.C., No. E2011-01437-COA-R9-CV, 2012 Tenn. App. LEXIS 441, at *4-5, *12, *19-20 (Tenn. Ct. App. May 21, 2012)
(holding that a seller and buyer of property could not assert privilege protection during discovery in litigation between them after they had been represented by the same lawyer; "The Bank had a long-standing, pre-existing relationship with the Lawyers. The Lawyers routinely handled closings of transactions funded by the Bank. The Bank allegedly hired the Lawyers to prepare the documentation for, and handle the closing of, the sale from Seller to Purchaser and the loan from the Bank to Purchaser. This, of course, included the subordination agreement and the personal guaranties of members of the Purchaser to both the Bank and Seller. The Lawyers handled the closing by express mail. One of the documents included in those mailed by the Lawyers to Seller for its signature was a 'Seller/Buyer Disclosure and Consent to Intermediary Representation.'"; explaining that the lawyers had operated under Rule 2.2 of the Tennessee ethics rules agreeing with the lower court's analysis; "The primary basis of the court's holding was that the Lawyers, 'as the drafting attorneys for all the parties in these transactions and specifically as attorney for [Seller] and [the] . . . Bank, thereby, owed a duty of loyalty to each of them in the overall transaction as to every detail of the closing including all the corollary transactions inherent in the law firm's handling of the closing for all the parties. As a result, each party to this discovery dispute i.e. both [Seller] and [the] . . . Bank had no reasonable expectation that communications to or from the law firm to either of them separately (or to or from the law firm and the other parties to the closing including the personal guarantors) would be confidential as to the others. The court finds the American Law Reports article on the inapplicability of the privilege where dual representation is involved persuasive on this point.'"; "The evidence does not, by any stretch of imagination, preponderate against the trial court's findings. It was at a meeting attended by the Bank, Seller, Purchaser, and the Lawyers, that the parties were able to forge an agreement in principle for the purchase agreement and financing. . . . The evidence preponderates in favor of, and not against, the trial court's finding that the communications between Mr. Melton and the Lawyers did not occur with an expectation that they would not be disclosed to the other parties to the transaction.")

Case Date Jurisidction State Cite Checked
2012-05-21 State TN B 6/13

Chapter: 5.403

Case Name: United States v. Under Seal # 4 (In re Grand Jury Subpoena # 06-1), 274 F. App'x 306, 310-11 (4th Cir. 2008)
("Subsidiary argues that it may assert a joint attorney-client privilege in the communications between Parent and Counsel because of its status as a former subsidiary of Parent. . . . Indeed, a number of courts have held that close corporate affiliation, including that shared by a parent and a subsidiary, suffices to render those entities "joint clients" or "co-clients," such that they may assert joint privilege in communications with an attorney pertaining to matters of common interest. . . . As the Third Circuit has explained in some detail, however, the scope of the joint client or co-client privilege is circumscribed by the 'limited congruence of the clients' interests.' [See] In re Teleglobe Communs. Corp., 493 F.3d at 362-63 [3d Cir. 2007)] ('As the Restatement notes, a co-client relationship is limited by "the extent of the legal matter of common interest.'" (quoting the Restatement (Third) of the Law Governing Lawyers § 75 cmt. c)); see also id. at 366 ('[B]ecause co-clients agree to share all information related to the matter of common interest with each other and to employ the same attorney, their legal interests must be identical (or nearly so) in order that an attorney can represent them all with the candor, vigor, and loyalty that our ethics require.' (emphasis added)). In the present case, the district court held that Subsidiary failed to demonstrate that the withheld communications pertained to a matter in which both Parent and Subsidiary shared a common legal interest, and thus Subsidiary lacked standing to intervene to quash the subpoena. After reviewing Subsidiary's ex parte submissions in support of its claim to the contrary, we conclude that the district court did not err in its determination. Subsidiary has failed to demonstrate that the communications reflected any 'legal matter of common interest.' See Restatement (Third) of the Law Governing Lawyers § 75 cmt. c. Therefore, it has not satisfied its burden of establishing that the joint client or co-client privilege applies, and the district court properly denied its motion to intervene.")

Case Date Jurisidction State Cite Checked
2008-01-01 Federal B 8/13

Chapter: 5.502

Case Name: Supreme Forest Prods., Inc. v. Kennedy, No. 3:16-cv-0054 (JAM), 2017 U.S. Dist. LEXIS 4421 (D. Conn. Jan. 12, 2017)
(holding that the privilege protected communications between two former company employees who had filed separate lawsuits against the same employer, using the same lawyer; finding it unnecessary for them to do an identical interest because they were jointly represented by the same lawyer rather than creating a common interest agreement; finding that the privilege did not protect the two clients' employee without the lawyer present; "[T]he attorney-client privilege may properly extend to communications that occur between an attorney in the presence of two or more clients that the attorney jointly represents."; "Here, it is clear to me that Kennedy and Welch share a common interest based on their highly similar employment claims brought against the same employer. They are for all practical purposes jointly represented by one attorney, and the fact that their attorney filed separate lawsuits rather than joining his two clients together in a single lawsuit does not dispel the application of the co-client privilege. If the clients share a common interest, the co-client rule requires joint representation, not necessarily joint litigation."; "This 'community of interest' privilege, however, differs from the co-client privilege. . . . For the co-client privilege, it suffices for the clients to have a common interest, not necessarily interests that are identical in all respects. So long as their interests are common, co-clients who consult the same lawyer would reasonably expect that their communications with the lawyer to which they are mutually privy would be protected from disclosure to third parties by the attorney-client privilege. The legitimate expectation of privilege is unmistakably higher in the co-client context than the broader community-of-interest context involving parties who are not represented by the same counsel."; "In any event, Kennedy and Welch had nearly identical legal interests. They both sought legal representation to pursue what was essentially the same major claim -- that Supreme Forest Products had violated federal law by retaliating against them when they resisted driving overweight vehicles. There were, of course, minor factual differences between their claims, but the gravamen of their complaint --Supreme Forest's alleged insistence on driving illegally loaded vehicles, and its alleged willingness to retaliate against drivers who didn't toe the line -- was the same. Although Welch had an additional claim related to his post-termination health benefits, the fact that Welch had an additional interest in his suit does not vitiate his common interest with Kennedy. I therefore find that defendants' interests were sufficiently common for them to properly invoke the co-client attorney-client privilege."; "Plaintiffs further contend that there is no evidence that Kennedy and Welch had a joint representation agreement with their counsel prior to when they were sued by plaintiffs in January 2016. But this argument ignores the course of dealing between defendants prior to January 2016 when they had both retained counsel within days of each other in May 2014 to represent them for purposes of the claims they eventually filed against Supreme Forest Products, Inc. Even if prior to January 2016 Kennedy and Welch did not have a formal written agreement of joint representation, it is clear to me that they would have justifiably expected their co-client communications with counsel to be protected by the privilege.")

Case Date Jurisidction State Cite Checked
2017-01-12 Federal CT
Comment:

key case


Chapter: 5.502

Case Name: Tracy v. Telemetrix, Inc., 8:12CV359, 2015 U.S. Dist. LEXIS 153852 (D. Neb. Nov. 13, 2015)
("Where two or more parties are jointly represented by the same attorney in litigation, the communications between the attorney and her clients are protected by the attorney-client privilege and are subject to the work product doctrine.")

Case Date Jurisidction State Cite Checked
2015-11-13 Federal NE

Chapter: 5.502

Case Name: Whitney v. Tallgrass Beef Company LLC, Case No. 13 C 7322, 2015 U.S. Dist. LEXIS 78956 (N.D. Ill. June 18, 2015)
(analyzing the privilege implications of the same lawyer representing two plaintiffs suing the same defendant company on different claims (one involving wages and one involving a contract); inexplicably holding that the privilege did not apply despite the joint representation, because of the different nature of the clients' claims; "Plaintiffs do not identify any commonality between their separate legal claims. Whitney was the former Chief Financial Officer of Tallgrass, a single-member company operated by Defendant Kurtis. Whitney claims that Defendants owe him back wages and other reimbursable expenses under the Illinois Wage and Payment Collection Act. The Bloom Agency's allegations have nothing to do with this claim or the facts that support it. The Bloom Agency says it is entitled to payment for work it performed on a marketing plan for Tallgrass. Plaintiffs' Amended Complaint alleges that these payments are owed pursuant to an oral contract that Tallgrass and the Bloom Agency entered into on May 4, 2009."; "As for facts, the Amended Complaint does not allege any that overlap between these two claims by Plaintiffs. It is difficult to understand what such facts would involve."; "Whitney's wage claims are entirely independent of the Bloom Agency's contractual issues."; "Plaintiffs point out that they are both seeking money damages from Defendants. This is insufficient to demonstrate a common interest, at least standing alone. Whitney and the Bloom Agency have no legal interest in the other party's successful recovery of damages."; "The fact that two parties have an interest in pressing a case forward simultaneously is not, in itself, sufficient to show that the common interest doctrine applies. 'A shared rooting interest in the successful outcome of a case . . . Is not a common legal interest.'"; "Plaintiffs concede that they agreed to joint representation in this case to conserve their own monetary resources. That gives them a common financial interest in simplifying the discovery and trial process. That is not the same as showing that they share a legal interest. Plaintiffs' interest in saving litigation expenses refers only to their individual financial interests, not to their legal interests in this case. . . . The fact that they have chosen to pursue this matter in one case instead of two (which they could have done) with joint counsel does not automatically confer a common legal interest that protects the sharing of privileged communications between Plaintiffs.")

Case Date Jurisidction State Cite Checked
2015-06-18 Federal IL
Comment:

key case


Chapter: 5.502

Case Name: Marketel Media, Inc. v. Mediapotamus, Inc., 5:13-CV-427-D, 2015 U.S. Dist. LEXIS 76523 (E.D.N.C. June 11, 2015)
(analyzing a situation in which Ortiz and Hassell formerly co-owned Marketel; explaining that Marketel and one of the owners sued the other owner, who sought to discover communications between the plaintiff and his brother, who was a lawyer; holding that the fiduciary exception did not apply, and that the plaintiff could not obtain discovery of the communications even if the lawyer had represented both the company and one of the owners; "Ortiz [Defendant] appears to argue that deRosset and his firm had a conflict in providing advice or other legal services to Hassell [Plaintiff] contrary to the interests of Ortiz and that such conflict negated any privilege otherwise applicable to the withheld documents. Such a conflict, though, even if it exists, does not waive the attorney-client privilege otherwise applicable to the documents. '[T]he fact that an attorney has a conflict of interest does not mean that the client forfeits the benefit of the attorney-client privilege.". . . The documents accordingly remain cloaked with the protection of the attorney-client privilege.")

Case Date Jurisidction State Cite Checked
2015-06-11 Federal NC

Chapter: 5.502

Case Name: L.W. v. Lackawanna County, Pa., Civ. A. No. 3:14-CV-01610, 2015 U.S. Dist. 65103 (M.D. Pa. May 19, 2015)
(holding that the privilege protected communications between the plaintiff's lawyer and several witness considering retaining the same lawyer; "Defendants contend that the group meeting held between Plaintiffs' counsel, Plaintiffs, and two nonparty witnesses represented by Plaintiffs' counsel for the purpose of determining the claims at issue and to receive informed legal advice effectively waived attorney-client privilege. The crux of this issue is whether Plaintiff and the two nonparty witnesses formed a joint client relationship with the same lawyer. If a co-client relationship is found to exist, then the communications between those co-clients and their commonly retained attorneys are 'in confidence' for privilege purposes."; "Based upon Plaintiffs' representation at the discovery conference that the group meeting was organized for the purpose of evaluating potential claims, discussing a potential litigation strategy and determining whether joint representation would be in Plaintiffs' and the nonparties' best interest, this Court finds that the parties may have intended (though ultimately have not, at least to the extent the parties are not co-parties here) to form a co-client relationship when they came together with the purpose of seeking legal services or advice. Accordingly, Defendants cannot compel disclosure of the communications between counsel, Plaintiffs and the two nonparties at the meeting, because such communication is protected.")

Case Date Jurisidction State Cite Checked
2015-05-19 Federal PA

Chapter: 5.502

Case Name: Galati v. Pettorini, No. 101712, 2015 Ohio App. LEXIS 1242 (Ohio April 2, 2015)
("When a common attorney acts for two or more clients having a common interest, and each client communicates with the attorney, attorney-client privilege attaches to the communications and they are privileged from disclosure to a third-party.")

Case Date Jurisidction State Cite Checked
2015-04-02 State OH

Chapter: 5.502

Case Name: Nester v. Textron, Inc., Cause No. A-13-CA-920-LY, 2015 U.S. Dist. LEXIS 28182 (W.D. Tex. March 9, 2015)
("The question governing 10 of the 13 withheld emails is whether Texas law allows attorney client privilege or 'Co-Client/Joint Client Common Interest Privileges' to attach to communications between the in-house counsel of a parent company and managing personnel of a separate corporate entity [described as an 'indirect subsidiary of Textron, Inc.]."; "So long as Mr. Rupp [Textron's in-house counsel] was authorized to represent both RJL [the indirect but ultimately wholly owned subsidiary] and Textron [Parent], it is black letter Texas law that both RJL and Textron's 'communications made to the attorney for the purpose of facilitating the rendition of legal services to the clients are privileged, except in a controversy between the clients.'")

Case Date Jurisidction State Cite Checked
2015-03-09 Federal TX

Chapter: 5.502

Case Name: Ford Motor Co. v. Mich. Consol. Gas Co., Civ. A. No. 08-CV-13503, 2013 U.S. Dist. LEXIS 138693, at *14-15, *16-17 (E.D. Mich. Sept. 27, 2013)
(holding that attorney-client privilege protected communications between plaintiff Ford and its consultant, but did not protect documents shared between them, because they were not primarily related to legal advice; "'The joint-defense doctrine, also called the co-client privilege, allows communications between one client (e.g., a defendant) and his attorney to be shared with a co-defendant without waiving the privilege where both are represented by the same attorney.'" (citation omitted); "Plaintiffs contend that much of the communication between Ford and Severstal [plaintiff] was made with the common legal interest of apportioning and recovering costs related to the CACO [Corrective Action Consent Order]. Plaintiffs claim that this protection extends back to 1989, when Ford agreed to work with Rouge Steel (Severstal's predecessor in interest) toward the cleanup of the SRA [Schafer Road Area]. Plaintiffs are correct. Any communication between Ford and Severstal is protected by the common-interest privilege, provided that such communication contains privileged information and that Ford and Severstal's legal interest was identical.")

Case Date Jurisidction State Cite Checked
2013-09-27 Federal MI B 4/14

Chapter: 5.502

Case Name: Maplewood Partners, L.P. v. Indian Harbor Ins. Co., 295 F.R.D. 550, 604 (S.D. Fla. 2013)
(in a first party insurance setting, finding that an insurance company and its insured had a common interest that acted much like a joint representation, so there was no privilege when they later litigated against each other about coverage; "A joint client relationship among the Plaintiffs and Defendant can be considered to have existed at least until January 1, 2008, the date on which the parties agree that they first anticipated that they would be in litigation against each other.")

Case Date Jurisidction State Cite Checked
2013-01-01 Federal FL B 4/14

Chapter: 5.502

Case Name: Maplewood Partners, L.P. v. Indian Harbor Ins. Co., 295 F.R.D. 550, 594 (S.D. Fla. 2013)
(in a first party insurance setting, finding that an insurance company and its insured had a common interest that acted much like a joint representation, so there was no privilege when they later litigated against each other about coverage; "The joint client doctrine simply recognizes that the attorney client privilege can apply to joint clients of the same attorney, in the same litigation. The doctrine provides that disclosure by a client or her attorney, which otherwise might constitute a waiver of the attorney-client privilege, is not considered a waiver if the disclosure is made to a co-client of that attorney.")

Case Date Jurisidction State Cite Checked
2013-01-01 Federal FL B 4/14 B 4/14

Chapter: 5.502

Case Name: Arkin Kaplan Rice LLP v. Kaplan, 967 N.Y.S.2d 63. 64 (N.Y. App. Div. 2013)
("Although we only address the propriety of the in camera review, we note that communications between defendants Howard Kaplan, Michelle Rice, Solbakken, and Ciampi LLC, made during the course of Ciampi's joint representation of them, fall within the scope of the attorney-client privilege because Kaplan, Rice, Solbakken, shared 'a common interest". . . and consulted Ciampi for their "mutual benefit.'" (citation omitted))

Case Date Jurisidction State Cite Checked
2013-01-01 State NY B 4/14

Chapter: 5.504

Case Name: Priestly v. Panmedix Inc., 114874/10, 2017 N.Y. Misc. LEXIS 139 (N.Y. Sup. Ct. Jan. 12, 2017)
("It is undisputed that, where no claim for unpaid legal fees is outstanding, a client 'presumptively' has the right to 'full access to the entire attorney's file in a represented matter with narrow exceptions.'")

Case Date Jurisidction State Cite Checked
2017-01-12 State NY

Chapter: 5.504

Case Name: In re Grand Jury Subpoena, No. 2013R00691-009, Dkt. 3:16-mc-00079-FDW-DCK, 2016 U.S. Dist. LEXIS 110274 (W.D.N.C. Aug. 16, 2016)
("A client communication made for the purpose of effectuating a real estate closing inherently must be made in contemplation of ultimate public disclosure. Therefore, no intention of confidentiality, and thus no privilege, exists."; "In real estate transactions, such public divulgence clearly occurs, at the latest, upon recordation at closing. Even if it could be argued, which Movant does not, that a client communication made in connection with a real estate closing was intended to remain confidential indefinitely, the public filings at closing would eviscerate the client's ability to later protect that communication or its underlying details via privilege. This conclusion is further bolstered in the instant case by the fact that Movant provided dual representations in the subject real estate transactions."; "Here, the Court finds informative not only the type of services Movant performed but also the manner in which the services were provided. The Court has already discussed the attorney-client privilege's general inapplicability to communications made in connection with real estate transactions. These same principles are particularly true where, as is common in North Carolina, closing attorneys represent both the buyer and seller in a single transaction. Because clients contemplate real estate transactions before approaching closing attorneys, the attorney may be said to be employed to 'convey information to third parties rather than to provide legal advice for the client's own guidance.' (Under Seal), 748 F.2d at 875. Indeed, dual representations are commonplace in real estate transactions precisely because both sides intend the attorney to act as a repository of information, facilitate the exchange of that information between the parties, and thereby catalyze the deal's execution."; "While attorneys performing this function undoubtedly owe each side some ethical duty of confidentiality, privilege is far narrower in its application. The Court finds that both the nature and type of services provided by an attorney in a dual representative capacity in a real estate transaction would not only reasonably, but necessarily, be expected to entail publication of a client's communications. Therefore, no attorney-client privilege exists in such circumstances.")

Case Date Jurisidction State Cite Checked
2016-08-16 Federal NC

Chapter: 5.504

Case Name: Anten v. Superior Ct. of Los Angeles, B258437, 2015 Cal. App. LEXIS 96 (Cal. App. 2d Div. 1 Jan. 30, 2015)
(analyzing effective joint representation; "[B]ecause Anten and the Rubins were joint clients of Weintraub, the Rubins' communications with Weintraub were not confidential as to Anten. '[I]n a joint client situation, confidences are necessarily disclosed.'. . . Consequently, 'communications made by parties united in a common interest to their joint or common counsel, while privileged against strangers, are not privileged as between such parties nor as between their counsel and any of them, when later they assume adverse positions.'. . . Weintraub's joint representation of Anten and the Rubins, with their knowledge and consent and on a matter of common interest, thus distinguishes this case from Glade [Glade, supra, 76 Cal. App. 3d at pp. 746-747], which declined to apply section 958 to communications between the defendant attorney and other . . . . In Glade, the communications at issue were privileged as to the very plaintiffs who were seeking their disclosure. Here, in contrast, the communications at issue are not confidential as to Anten.")

Case Date Jurisidction State Cite Checked
2015-01-30 State CA

Chapter: 5.504

Case Name: In re Fundamental Long Term Care, Inc. v. Gen. Elec. Capital Corp., Case No. 8:11-bk-22258-MGW, Chapter 7, Adv. No. 8:13-ap-00893-MGW (consolidated), 2014 Bankr. LEXIS 3927, at *9, *9 n.4 (M.D. Fla. Sept. 12, 2014)
(in this and a later opinion (In re Fundamental Long Term Care, Inc. v. Gen. Elec. Capital Corp., Chapter 7, Case No. 8:11-bk-22258-MGW, Adv. No. 8:13-ap-00893-MGW (consolidated), 2014 Bankr. LEXIS 4060 (M.D. Fla. Sept. 20, 2014)); analyzing the co-client "exception" to the attorney-client privilege; concluding that Kirkland & Ellis represented in litigation two companies who are now adversaries, and therefore could now obtain and use privileged communications from their joint representation in their current dispute; finding that the law firm did not jointly represent the two companies in a transaction; later taking steps to avoid disclosure to one of the former joint clients' current litigation adversaries in a privileged communication disclosed during the trial of the dispute between the former joint clients; "Because THI and THMI were represented by the same lawyers in those cases, this Court ruled that the Trustee (standing in the shoes of THMI) was entitled to all of THMI's litigation files -- including any communications between THI (or its state-court receiver) and any of the lawyers representing THI and THMI -- under the co-client exception to the attorney-client privilege. In re Fundamental Long Term Care, Inc., 489 B.R. 451, 463-69 (Bankr. M.D. Fla. 2013).")

Case Date Jurisidction State Cite Checked
2014-09-12 Federal FL

Chapter: 5.504

Case Name: In re Cutuli, Ch. 7 Case No. 11-35256-BKC-AJC, 2013 Bankr. LEXIS 3843, at *7 8, *10, *10 11 (S.D. Fla. Sept. 13, 2013)
(holding that a trustee for a bankrupt individual could obtain the files of a lawyer who jointly represented the now-bankrupt individual and her husband; "The Andersen Firm has represented the Debtor and 'also represented the debtor's husband in interrelated matters.'. . . The Trustee has discovered that an attorney from The Andersen Firm concurrently communicated with 'Greg, Kathy,' and others unknown to the court. . . . It appears that to the extent Greg Cutuli was a client of The Andersen Firm, he was a co-client with the Debtor."; "Here, the Debtor's privilege (stemming from her former legal representation by The Andersen Firm) 'passed to the Trustee's control on the Petition Date.'. . . As such, the Trustee is entitled to invoke the 'co-client exception' to obtain otherwise privileged documents relating to The Andersen Firm's former co-client(s) with the Debtor."; "Thus, to the extent The Andersen Firm may have represented Greg Cutuli, it did so while jointly representing the Debtor. The Trustee, now standing in the shoes of the Debtor, is adverse to Greg Cutuli; the Trustee has filed adversary proceedings against Greg Cutuli for the benefit of the Debtor's estate . . . and is attempting to liquidate assets that Greg Cutuli claims are owned by him, for the benefit of the Debtor's estate.")

Case Date Jurisidction State Cite Checked
2013-09-13 Federal FL B 4/14

Chapter: 5.504

Case Name: In re Fundamental Long Term Care, Inc., 489 B.R. 451, 476 (M.D. Fla. 2013)
(holding that a trustee's lawyer may seek files of a firm which also represented debtor's subsidiary and another company, based on the co-client privilege; "[N]either the law firms nor Fundamental Administrative Services' [provider of administrative services and in-house counsel services to THI, former parent of wholly owned subsidiary THMI, the current debtor, and therefore within the privilege as THI's and THMI's agent] in-house counsel (Ms. Zack and Ms. Anderson) have the right to invoke the work product doctrine to deny the Trustee access to the litigation files for the wrongful death cases.")

Case Date Jurisidction State Cite Checked
2013-01-01 Federal FL B 3/14

Chapter: 5.504

Case Name: In re Equaphor Inc., Ch. 7 Case No. 10 20490 BFK, 2012 Bankr. LEXIS 2129, at *9-10 (Bankr. E.D. Va. May 11, 2012)
(analyzing the ramifications of a law firm jointly representing a company and two of its executives in a derivative case; noting that the company later declared bankruptcy, and that the bankruptcy trustee moved to compel the turnover of documents the law firm created during the joint representation; inexplicably confusing the joint defense/common interest doctrine and the joint representation situation; ordering the law firm to produce the documents; "WTP and the Individual Defendants place great reliance on the fact that the corporation is named as a 'nominal defendant' in the shareholders' Complaint. In doing so, WTP and the Individual Defendants imply that the interests of the Individual Defendants are entitled to greater weight than those of the Debtor (and now, its creditors). However, while the Debtor may have been named as a nominal defendant, there is no such thing as a nominal client of a law firm. Further, there is no support in the case law for a 'nominal defendant exception' to the principle that all clients are entitled to an attorney's files. The corporation's status as a nominal defendant is of no consequence in considering the common interest privilege of the parties.")

Case Date Jurisidction State Cite Checked
2012-05-11 Federal VA

Chapter: 5.504

Case Name: Patel v. Allison, 54 Va. Cir. 155, 157 (Va. Cir. Ct. 2000)
("Where an attorney is consulted by two parties in a matter of common interest for their mutual benefit, nothing said by the parties or the attorney is deemed confidential in litigation between those parties or their personal representatives since their common interest forbids concealment of statements made by one from the other."(citation omitted))

Case Date Jurisidction State Cite Checked
2000-01-01 State VA nsvb 2/23/04

Chapter: 5.504

Case Name: Patel v. Allison, 54 Va. Cir. 155, 157 (Virginia Beach 2000)
("Where an attorney is consulted by two parties in a matter of common interest for their mutual benefit, nothing said by the parties or the attorney is deemed confidential in litigation between those parties or their personal representatives since their common interest forbids concealment of statements made by one from the other." (citation omitted)).

Case Date Jurisidction State Cite Checked
2000-01-01 State VA

Chapter: 5.504

Case Name: Board of Dirs. of Port Royal Condo. Unit Owners' Ass'n v. Crossland Sav. F.S.B., 19 Va. Cir. 8, 11 (Va. Cir. Ct. 1989)
("The mere fact that an attorney has represented two or more clients jointly does not give either client carte blanche to all files involving the other client or clients. This is so even where the joint representation comes about because of fiduciary relationship. . . . While the Court finds that the joint client exception to the attorney-client privilege applies, the applicability of the exception will only be to those matters of common interest and concern.")

Case Date Jurisidction State Cite Checked
1989-01-01 State VA

Chapter: 5.801

Case Name: Polylok, Inc. v. Bear Onsite, LLC, Civ. A. No. 3:12-CV-00535-DJH-CHL, 2017 U.S. Dist. LEXIS 41960 (W.D. Ky. March 23, 2017)
(inexplicably confusing a joint defense agreement and a joint representation; "[T]he Court notes that the Hornback Defendants characterize the principles of the 'common-interest rule' and 'joint-defense agreement' as interchangeable, and refer to both principles numerous times throughout their response. . . . In fact, courts within the Sixth Circuit have characterized these privileges separately."; "The common-interest rule applies 'where the parties are represented by separate attorneys but share a common legal interest.'"; "On the other hand, the 'joint-defense' doctrine is potentially applicable in the context of this matter. A 'joint-defense' agreement, also called the co-client privilege, allows communications between one client (e.g., a defendant) and his attorney to be shared with a co-defendant without waiving the privilege where both are represented by the same attorney.'")

Case Date Jurisidction State Cite Checked
2017-03-23 Federal KY

Chapter: 5.801

Case Name: Polylok, Inc. v. Bear Onsite, LLC, Civ. A. No. 3:12-CV-00535-DJH-CHL, 2017 U.S. Dist. LEXIS 41960 (W.D. Ky. March 23, 2017)
(inexplicably confusing a common interest agreement and a joint representation; "The main thrust of the Hornback Defendants' argument is that the two parties to the communication are commonly represented, that the Plaintiffs knew that the parties were commonly represented, and that statements made regarding this action between Terry and Hornback would be privileged. The Hornback Defendants believe that with these facts, '[there] simply could be no other way.'. . . It is true that communications between Hornback and Terry may be privileged if those communications were in furtherance of a common joint defense strategy. It is also true that joint-defense agreements may be oral. However, the Hornback Defendants forget that they have the burden to establish the applicability of the privilege. . . . The Hornback Defendants, by merely claiming that an oral joint defense agreement was in effect and stating that Plaintiffs knew of the single representation between the co-parties, have not made a sufficient argument to show that the redacted portions of the text messages were privileged. Furthermore, the unredacted portions of the text messages strongly suggest that the communications were not in furtherance of a common defense strategy. Therefore, the Court rejects the Hornback Defendants' assertion that counsel's 'statement that she believed there was a joint defense agreement should have been more than sufficient' to satisfy the obligation to produce a privilege log.")

Case Date Jurisidction State Cite Checked
2017-03-23 Federal KY

Chapter: 5.801

Case Name: Depuy Orthopaedics, Inc. v. Orthopaedic Hosp., Cause No. 3:12-cv-299-JVB-MGG, 2016 U.S. Dist. LEXIS 166537 (N.D. Ind. Dec. 1, 2016)
(after admitting its earlier error in concluding that a patent prosecution agreement automatically made one participant's in-house lawyer the joint lawyer for the other party, finding that after factual inquiry that plaintiff's in-house lawyer had jointly represented the other prosecution participant; rejecting her argument that she only represented her client/employer and had entered into a common interest agreement with the other participant; acknowledging that the plaintiff and defendant had both relied on O'Melveny & Myers as prosecution counsel, concluding that plaintiff's in-house lawyer had jointly represented her client/employer and the other participant, and pointing to the joint representation in ordering plaintiff to produce internal communications between its in-house lawyer and its executives; "The Court based its order on its conclusion that 'Section 6.1 of the PRLA established the mutual consent necessary to make the Hospital and DePuy joint clients on the prosecution of the 110 Patent Family . . . .' The heart of DePuy's argument on this issue had been that DePuy's in-house counsel had not consented to represent the Hospital in the prosecution of the patents, which precluded application of the joint client doctrine such that DePuy's internal communications with its in-house counsel related to the prosecution of the 110 Family patent applications were privileged and undiscoverable even as to the Hospital. DePuy acknowledged that it shared a common interest with the Hospital, but rejected the Hospital's claim that DePuy's in-house counsel jointly represented both parties."; "DePuy continues to argue that its in-house counsel never consented to represent the Hospital and that without such consent, a joint attorney-client relationship never existed. Even without relying upon Section 6.1 to establish joint representation, the Court finds otherwise."; "Communications among joint clients and their shared attorneys who are allied in a common legal cause are privileged from disclosure as to those outside their group but are not privileged in a subsequent controversy between the two joint clients."; "[T]he Hospital references testimony from both the inventor, Harry McKellop, and DePuy's in-house counsel, Blossom Loo, to affirm that documents produced in discovery show that the Hospital regularly sought advice from DePuy's in-house counsel on issues related to patent prosecution, such as claim scope, office action strategy, and selection of outside counsel."; "Additionally, DePuy concedes confidential information was exchanged between the Hospital and its in-house counsel. Yet in the face of these extensive communications, some of which demonstrate that DePuy's in-house counsel was providing direction on prosecution strategy to Wong and O'Melveny, DePuy's in-house counsel, Blossom Loo, testified that she never consented and had no intention of forming an attorney-client relationship with the Hospital. Loo's protestations are not persuasive, however, given the conduct established by the totality of the evidence."; "Of course, there is no evidence of any discussion of any fee arrangement, any Hospital client file in the offices of DePuy's in-house counsel, or any billing from DePuy's in-house counsel to the Hospital. Nevertheless, the evidence shows that DePuy's in-house counsel was actively involved with the Hospital and the prosecution counsel in the prosecution of the 110 Family patent applications. Moreover, the evidence does not show that DePuy's in-house counsel intentionally avoided advising the Hospital or provided any kind of disclaimer about representation when answering the Hospital's questions with legal information of consequence regarding the patent prosecution. Through such conduct, DePuy's in-house counsel impliedly consented to representing the Hospital in addition to DePuy on the matter of prosecuting the 110 Family patent applications."; "[T]he Court's prior Order, the Court FINDS that mutual consent still exists such that the joint client doctrine applies and any of DePuy's and the Hospital's communications with shared counsel (i.e., DePuy's in-house counsel) are only privileged to the outside world, but are not privileged between DePuy and the Hospital. Therefore, DePuy's internal communications related to the prosecution of the 110 Family patents remains discoverable.")

Case Date Jurisidction State Cite Checked
2016-12-01 Federal IN
Comment:

key case


Chapter: 5.801

Case Name: Whitney v. Tallgrass Beef Company LLC, Case No. 13 C 7322, 2015 U.S. Dist. LEXIS 78956 (N.D. Ill. June 18, 2015)
(analyzing the privilege implications of the same lawyer representing two plaintiffs suing the same defendant company on different claims (one involving wages and one involving a contract); inexplicably holding that the privilege did not apply despite the joint representation, because of the different nature of the clients' claims; "When, as here, parties are represented by the same counsel, the joint lawyer doctrine applies. . . . By contrast Illinois law appears to include both exemptions under the heading of the common interest doctrine.")

Case Date Jurisidction State Cite Checked
2015-06-18 Federal IL

Chapter: 5.801

Case Name: Berndt v. Snyder, Civ. No. 13-cv-368-SM, 2014 U.S. Dist. LEXIS 170098 (D.N.H. Dec. 9, 2014)
("'This exception is sometimes referred to as the 'common-interest' exception. To be consistent with the parties' filings, the court will refer to the exception as the 'joint client' exception.'")

Case Date Jurisidction State Cite Checked
2014-12-09 Federal NH

Chapter: 5.801

Case Name: Burkhead & Scott, Inc. v. City of Hopkinsville, Case No. 5:12-CV-00198-TBR, 2014 U.S. Dist. LEXIS 166374 (W.D. Ky. Dec. 1, 2014)
(holding that City and and a waste authority could enter into a common interest agreement; "The defendants maintain a joint representation privilege applies. Joint representation refers to situations where two parties share a common attorney for representation in a particular matter. Joint representation, for the purposes of this opinion, refers only to multiple clients represented by a single attorney or firm in a particular matter. Because both the City and HSWA are independently represented, it is not necessary to analyze a joint representation privilege.")

Case Date Jurisidction State Cite Checked
2014-12-01 Federal KY

Chapter: 5.801

Case Name: Ford Motor Co. v. Mich. Consol. Gas Co., Civ. A. No. 08-CV-13503, 2013 U.S. Dist. LEXIS 138693, at *14-15, *16-17 (E.D. Mich. Sept. 27, 2013)
(holding that attorney-client privilege protected communications between plaintiff Ford and its consultant, but did not protect documents shared between them, because they were not primarily related to legal advice; "'The joint-defense doctrine, also called the co-client privilege, allows communications between one client (e.g., a defendant) and his attorney to be shared with a co-defendant without waiving the privilege where both are represented by the same attorney.'" (citation omitted); "Plaintiffs contend that much of the communication between Ford and Severstal [plaintiff] was made with the common legal interest of apportioning and recovering costs related to the CACO [Corrective Action Consent Order]. Plaintiffs claim that this protection extends back to 1989, when Ford agreed to work with Rouge Steel (Severstal's predecessor in interest) toward the cleanup of the SRA [Schafer Road Area]. Plaintiffs are correct. Any communication between Ford and Severstal is protected by the common-interest privilege, provided that such communication contains privileged information and that Ford and Severstal's legal interest was identical.")

Case Date Jurisidction State Cite Checked
2013-09-27 Federal MI B 4/14

Chapter: 5.802

Case Name: DePuy Orthopaedics, Inc. v. Orthopaedic Hospital, Cause No. 3:12-cv-299-JVB-MGG, 2016 U.S. Dist. LEXIS 166537 (N.D. Ind. Dec. 1, 2016)
February 1, 2017 (PRIVILEGE POINT)

"An In-House Counsel Learns the Hard Way About a Key Difference Between Common Interest Agreements and Joint Representations: Part II"

Last week's Privilege Point described an in-house counsel's vigorous argument that she had represented her employer/client in a common interest agreement with a hospital in jointly prosecuting patents -- rather than having jointly represented both her employer/client and the hospital. DePuy Orthopaedics, Inc. v. Orthopaedic Hospital, Cause No. 3:12-cv-299-JVB-MGG, 2016 U.S. Dist. LEXIS 166537 (N.D. Ind. Dec. 1, 2016).

After reciting facts that could have evidenced either a common interest agreement or a joint representation, the court explained why it agreed with the Hospital that there had been a joint representation: "[T]he evidence does not show that DePuy's in-house counsel . . . provided any kind of disclaimer about representation when answering the Hospital's questions with legal information or consequence regarding the patent prosecution." Id. at *12-13 (emphasis added). The court then gave the punchline. Because DePuy's in-house counsel had jointly represented DePuy and the Hospital, the former joint client Hospital could discover "DePuy's internal communications related to the [patent] prosecution." Id. at *13 (emphasis added). Thus, the Hospital's understandable desire to discover these internal DePuy communications had led it to "vociferously contend[] that it believed that DePuy's in-house counsel was acting on its behalf." Id. at *12.

If common interest participants later become litigation adversaries, privilege protection evaporates for any communications they have shared, but remains for each participant's internal communications with its own lawyer. In a joint representation, such later adversity normally allows any former joint client to discover all of their joint lawyer's communications on that matter with any jointly represented clients. In-house and outside counsel should remember this key distinction, and explicitly define any relationship if there might be confusion – including providing socially awkward but legally significant disclaimers of a joint representation.

Case Date Jurisidction State Cite Checked
2016-12-01 Federal IN
Comment:

key case


Chapter: 5.802

Case Name: DePuy Orthopaedics, Inc. v. Orthopaedic Hospital, Cause No. 3:12-cv-299-JVB-MGG, 2016 U.S. Dist. LEXIS 166537 (N.D. Ind. Dec. 1, 2016)
January 25, 2017 (PRIVILEGE POINT)

"An In-House Counsel Learns the Hard Way About a Key Difference Between Common Interest Agreements and Joint Representations: Part I"

Common interest agreements and joint representations share many characteristics. Both types of arrangements involve lawyers engaging in protected communications with multiple clients. But they are structurally distinct. In common interest agreements, separately represented clients cooperate in a common legal strategy. In a joint representation, the same lawyers represent several clients on the same matter. As long as everything rolls along smoothly, the structural difference has few privilege consequences. But adversity reveals a key privilege distinction.

In DePuy Orthopaedics, Inc. v. Orthopaedic Hospital, Cause No. 3:12-cv-299-JVB-MGG, 2016 U.S. Dist. LEXIS 166537 (N.D. Ind. Dec. 1, 2016), plaintiff DePuy and defendant Hospital had worked together on patent prosecutions – but later become litigation adversaries. DePuy resisted the Hospital's attempt to discover communications to and from DePuy's in-house counsel. The in-house counsel claimed that DePuy and the Hospital had only entered into a common interest agreement – noting that O'Melveny & Myers had acted as patent "prosecution counsel" on behalf of both companies. In contrast, the Hospital "claim[ed] that DePuy's in-house counsel jointly represented both parties." Id. at *4. The court recited facts that could have proven either a common interest agreement or a joint representation: DePuy and the Hospital shared confidential information and cooperated on a common legal strategy; DePuy's in-house counsel communicated with and gave direction to O'Melveny, etc. But the court ultimately concluded that DePuy's in-house counsel had jointly represented DePuy and the Hospital -- rather than represented just DePuy in a common interest arrangement with the separately represented Hospital.

Given the privilege implication similarities between a common interest agreement and a joint representation, one might wonder why DePuy's in-house counsel argued so strenuously against the latter. Next week's Privilege Point will explain the court's key reason for finding such a joint representation, and its frightening implication.

Case Date Jurisidction State Cite Checked
2016-12-01 Federal IN
Comment:

key case