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American Bar Association

Trial Evidence Committee

The Common Interest Privilege

By Matthew D. LaBrie – September 30, 2014

The attorney-client privilege may be the oldest evidence law on the books. Nearly every interaction a lawyer has with a client—regardless of how extremely relevant, damning, or inculpating—is excluded from the fact-finding, truth-searching judicial process. And for good reason: a lawyer could hardly provide effective counsel—and in some cases, constitutionally required effective counsel—without the privilege. It is a cornerstone of our profession.

Yet, all too often, the privilege is unknowingly waived as a result of lawyers entering into common interest agreements without knowing the scope and enforceability of such agreements under the governing laws of the applicable jurisdiction. Courts throughout the United States vary wildly on the degree to which they enforce common interest agreements, and thus attorneys who do not thoroughly analyze the law governing their agreement risk destroying the privilege and doing so in a drastic fashion: discovery of entire data rooms can be compelled as a result of a poorly researched common interest agreement. Attorneys would be wise to consider their choice of law carefully before entering into such agreements.

The first half of this article traces the origins of the common interest privilege from its theoretical grounding in the attorney-client privilege through its modern iteration as memorialized in the Restatement (Third) of the Law Governing Lawyers. The second half of this article examines the extent to which seven representative jurisdictions—Massachusetts, Delaware, New York, Texas, California, Illinois, and Pennsylvania—recognize a common interest privilege.

History of the Common Interest Privilege
Though it goes by many names—“pooled information privilege,” “joint defense privilege,” “community of interest privilege,” “allied litigant privilege,” and so on—the common interest privilege, regardless of the name, has a simple function: it extends the attorney-client privilege—and in some jurisdictions, attorney work-product protection—beyond an attorney and his or her client to a third party. The privilege generally allows “persons who have common interests to coordinate their positions without destroying the privileged status of their communications with their lawyers.” Restatement (Third) of the Law Governing Lawyers § 76 cmt. b [hereinafter Rest. 3d].

Attorney-Client Privilege. While recognition of the privilege varies greatly from state to state, all jurisdictions agree that the common interest privilege is an expansion of the attorney-client privilege, the evidentiary privilege that protects from disclosure confidential communications made for the purpose of providing legal advice between an attorney and his or her client. The United States Supreme Court formally recognized the existence of the attorney-client privilege in 1888 in Hunt v. Blackburn, 128 U.S. 464, 470 (1888), and reaffirmed the privilege in Upjohn Co. v. United States, 449 U.S. 383, 390 (1981). In Upjohn, the Court established that the privilege—codified as Rules 501 and 502 of the Federal Rules of Evidence—serves two purposes: (1) to encourage the free flow of information between client and attorney, and (2) to enhance the quality of legal advice. By assuring clients that what they tell their attorneys is confidential, clients have an incentive to provide more and accurate information, which, in theory, results in more effective and accurate counsel.

Criminal Joint Defense Privilege. Because the privilege only protects communications intended to remain confidential, generally, sharing such communications with a third party destroys the protection of the privilege and exposes the communications to discovery. However, in 1871, the Virginia Supreme Court expanded the attorney-client privilege beyond its traditionally narrow boundaries. In Chahoon v. Commonwealth, 62 Va. (21 Gratt.) 822, 841–42 (1871), three defendants indicted as co-conspirators to commit fraud each hired separate attorneys, and all six individuals met to prepare a joint defense strategy. At trial, the Commonwealth attempted to compel the defendants to testify to what the other defendants said during the joint meetings. The defendant-witnesses’ lawyers objected, and the trial court refused to compel the defendant-witnesses to testify. Both the Virginia appellate court and supreme court agreed with the trial court that a criminal defendant does not waive the attorney-client privilege by sharing confidential information with the counsel of his criminal codefendants. The Virginia Supreme Court held that there existed no material difference between the three defendants hiring the same attorney and the three defendants hiring three separate attorneys; thus, there should be no difference in the existence of the attorney-client privilege. As summarized by one legal scholar, “[b]ecause the purpose of the attorney-client privilege is to encourage the free flow of information to produce the most effective legal advice, and because permitting the exchange of communications among defendants with a common defense strategy promotes this goal,” the Virginia Supreme Court recognized what today courts across the nation refer to as the joint defense privilege. Katharine Traylor Schaffzin, An Uncertain Privilege: Why the Common Interest Doctrine Does Not Work and How Uniformity Can Fix It, 15 B.U. Pub. Int. L.J. 49, 58–59 (2005); see, e.g., United States v. Melvin, 650 F.2d 641, 645 (5th Cir. 1981).

Civil Joint Defense Privilege. More than 70 years later, in 1942, the Minnesota Supreme Court extended the joint defense privilege from the criminal to the civil context. In Schmitt v. Emery, 2 N.W.2d 413, 416 (Minn. 1942), the court applied the same principles that protected from disclosure confidential communications between multiple criminal codefendants and their individual attorneys to confidential communications between multiple civil codefendants and their individual attorneys. The court found that codefendants in a personal injury civil suit do not waive their attorney-client privileges by making disclosures to counsel “engaged in maintaining substantially the same cause on behalf of other parties [on] the same [side of the same] litigation.” Schmitt, 2 N.W.2d at 417. Like the courts in Chahoon and its progeny, the Minnesota court found that recognition of the joint defense privilege in this context similarly furthered the two core purposes of the attorney-client privilege: (1) to encourage the free flow of information, and (2) to increase effectiveness of counsel. Like the criminal joint defense privilege, the civil joint defense privilege has been recognized in courts across the nation.

Common Interest Privilege. It was from this development of the joint defense privilege that the common interest privilege evolved. After the Schmitt decision and the general recognition of the joint defense privilege, some jurisdictions extended the joint defense privilege beyond disclosures made among coparties and their lawyers on the same side of pending litigation to “confidential” disclosures to third parties regarding any common interest—legal or otherwise—when the disclosures are made in furtherance of that common interest. See Rest. 3d § 76. Jurisdictions that recognize this common interest privilege believe that it, like both the criminal and civil joint defense privileges, furthers the two goals of the attorney-client privilege. See, e.g., In re Grand Jury Subpoenas, 89-3 & 89-4, John Doe 89-129,902 F.2d 244, 248–49 (4th Cir. 1990).

The common interest privilege is broadly defined in the Restatement (Third) of the Law Governing Lawyers:

If two or more clients with a common interest in a litigated or nonlitigated matter are represented by separate lawyers and they agree to exchange information concerning the matter, a communication of any such client that otherwise qualifies as privileged . . . that relates to the matter is privileged as against third persons.

Rest. 3d § 76. The Restatement version of the privilege allows persons (they need not be parties) who have (merely) common interests to share information without waiving the attorney-client privilege as to that information. Thus, to protect communications under the common interest privilege: (1) a privilege (e.g., the attorney-client privilege or attorney work-product protection) must serve as the basis of the claim; (2) the communication must have been made while the parties shared a legal, factual, or strategic common interest (interests of the parties need not be entirely congruent); (3) the parties must have shared the information in furtherance of that common interest; and (4) the parties must not have otherwise waived the privilege or protection. Rest. 3d § 76; Schaffzin, supra, at 63 (citing Haines v. Liggett Grp. Inc., 975 F.2d 81, 94 (3d Cir. 1992)).

By broadening the traditionally narrow joint defense privilege, the common interest privilege widens the circle of people to whom clients and clients’ attorneys may disclose otherwise privileged or protected information and limits what would otherwise be discoverable as a result of waiver of the privilege or protection. Under the Restatement, not only can codefendants and coplaintiffs develop legal strategies jointly without waiving the privilege or protection, but also, for example, an acquiring corporation A can review otherwise confidential, litigation-related documents and strategies of a target corporation B when both corporations have a “common interest” in merging.

Selective Recognition. It is easy to see the appeal of a broad common interest privilege. For either coplaintiffs or corporations A and B, a freer flow of information facilitates more effective legal counsel. Additionally, common interest agreements create efficiencies: clients and their counsel can share brainpower, experts, and time so each client will bear only a fraction of the costs that they would have otherwise borne.

However, the common interest privilege does not enjoy universal acceptance. In fact, it was proposed as an amendment to the Federal Rules of Evidence in 1973 and rejected. See Rest. 3d § 76 reporter’s note. Because the attorney-client privilege—by design—excludes otherwise relevant (and, usually, extremely relevant) facts from a judicial proceeding, exercising the privilege may frustrate the fact-finding process and may be at odds with the search for truth.

For centuries, the common law has considered the “social good derived from the proper performance of the functions of lawyers acting for their clients . . . to outweigh the harm that may come from the suppression of [relevant] evidence.” United States v. United Shoe Mach. Corp., 89 F. Supp. 357, 358 (D. Mass. 1950); see Commonwealth v. Goldman, 480 N.E.2d 1023, 1029 (Mass. 1985). However, many jurisdictions apply the attorney-client privilege as narrowly as possible; the privilege is extended only to the point where effective counsel is possible and no further. See, e.g., In re XL Specialty Ins. Co., 373 S.W.3d 46, 50–53 (Tex. 2012). Thus, in many jurisdictions, such a broad expansion of the attorney-client privilege through the common interest privilege is not recognized and is contrary to its common law.

This selective recognition of the common interest privilege may have significant consequences. Think back to hypothetical corporation B, the target corporation currently in litigation unrelated to its intended merger with acquiring corporation A. If corporation A and corporation B entered into a common interest agreement and corporation A reviewed otherwise privileged or protected litigation-related materials in a jurisdiction that does not recognize the common interest privilege, corporation B would have waived its privilege, and its litigation materials would become discoverable. Thus, attorneys must determine whether the common interest privilege is recognized by the laws of the applicable jurisdiction before sharing such materials.

And, because it varies from jurisdiction to jurisdiction, attorneys must also determine the scope of the common interest privilege in the applicable jurisdiction. Many jurisdictions sanction only a limited common interest privilege, and only one fully embraces the entire scope of the Restatement privilege. Jurisdictions differ as to, among other things, (1) the definition of a “common interest” (is it a legal interest, a business interest, any interest?); (2) when the common interest privilege may be invoked (when a client anticipates litigation, only in actual litigation, any time the “common interest” is furthered?); and (3) whether a writing is required to formalize a common interest agreement.

Although beyond the scope this article, attorneys contemplating entering into a common interest agreement should also consider the ethical implications of doing so as well as the choice of law principles of the applicable jurisdiction.

Scope of the Common Interest Privilege
The scope of the common interest privilege varies from jurisdiction to jurisdiction. Even among seven of the most commercially active jurisdictions—Massachusetts, Delaware, New York, Texas, California, Illinois, and Pennsylvania—the scope of the privilege varies greatly.

Massachusetts. In 2007, the Supreme Judicial Court of Massachusetts expressly adopted the common interest privilege as defined in the Restatement, noting that “[t]he common interest doctrine does not create a new or separate privilege, but prevents waiver of the attorney-client privilege when otherwise privileged communications are disclosed to and shared, in confidence, with an attorney for a third person having a common legal interest for the purpose of rendering legal advice to the client.” Hanover Ins. Co. v. Rapo & Jepsen Ins. Servs., 870 N.E.2d 1105, 1110, 1112 (Mass. 2007).

By adopting the Restatement, Massachusetts recognized the broadest scope of the privilege. First, Massachusetts considers a “common interest” to be a “sufficiently similar interest.” Hanover, 870 N.E.2d at 1113. The interest need not be “congruent,” and some Massachusetts lower courts seem to condone and even expect disagreements between clients despite a “common interest.” See, e.g., Am. Auto. Ins. Co. v. J.P. Noonan Transp., 12 Mass. L. Rptr. 493 (Super. Ct. 2000). Indeed, dicta suggests that only disagreements between clients with a “common interest” that are so “deep and profound that litigation is the likely outcome” defeats a common interest. J.P. Noonan, 12 Mass. L. Rptr. 493. Second, the Hanover court also held that the privilege may be invoked any time clients’ lawyers collaborate to render advice: litigation need not be pending. In fact, the Hanover court encouraged the use of the privilege in business transactions. Third, Massachusetts does not require a writing to formalize the common interest privilege. The privilege is deemed to exist as a derivative of the common law and the Massachusetts Rules of Professional Conduct. Simply engaging in communications that qualify for protection under the privilege triggers the privilege. Hanover, 449 Mass. at 617–18. Finally, at least one Massachusetts trial court has explicitly held that the common interest privilege operates no differently when the attorney work-product protection serves as the basis for the claim of protection than it does when the attorney-client privilege anchors the claim. Savery v. Duane, 21 LCR 275, 276 (Mass. Land Ct. 2013).

Because Massachusetts recognizes a very broad common interest privilege, choosing Massachusetts law to govern a common interest agreement whenever supportable would be wise. Massachusetts law is so protective that—absent an intentional disclosure—confidential communications among parties with common interests are as protected as those between a single client and his or her attorney.

Delaware. Delaware also recognizes a version of the common interest privilege, but its scope is narrower than the scope of the privilege recognized in Massachusetts. Since 1972, Delaware has codified its version of the common interest privilege in Rule 502(b)(3) of the Delaware Rules of Evidence, which states:

A client has a privilege to refuse to disclose . . . confidential communications made for the purpose of facilitating the rendition of profession legal services to the client [inter alia] . . . (3) by the client or the client’s representative or the client’s lawyer or a representative of the lawyer to a lawyer or a representative of a lawyer representing another in a matter of common interest . . . .

See 3Com Corp. v. Diamond II Holdings, Inc., No. 3933-VCN, 2010 Del. Ch. LEXIS 126, at *25 (May 31, 2010); 1 Paul R. Rice, Attorney-Client Privilege in the United States § 4:35 (2d ed. 2009). Delaware has not adopted the Restatement version. Thus, due to the narrower scope of Rule 502(b), the privilege in Delaware is more limited than the Restatement.

Delaware courts have ruled that a common interest must be congruent, a stricter standard than is required in Massachusetts. In Delaware, individual clients must, regarding the pertinent common interest, “have interests that are so parallel and non-adverse that . . . [the clients] may be regarded as acting as joint venturers. . . . [or] co-defendants.” Jedwab v. MGM Grand Hotels, Inc., No. 8077, 1986 Del. Ch. LEXIS 383, at *5–6 (Mar. 20, 1986). Other decisions indicate that a “common interest” exists when there is a “common adversary,” WT Equip. Partners, L.P. v. Parrish, No. 15616, 1999 Del. Ch. LEXIS 187, at *3–4 (Sept. 1, 1999), or when two parties—regardless of their positions in a transaction—both want the transaction to succeed, Zirn v. VLI Corp., No. 9488, 1990 Del. Ch. LEXIS 135, at *17–22 (Aug. 13, 1990).

Importantly, the Delaware common interest privilege is limited both temporally and substantively. Only communications that occur during the common interest are protected from disclosure: communications that occur before the parties’ interests align are not protected. See Zirn, 1990 Del. Ch. LEXIS 135, at *17–22 (holding that only documents exchanged between two corporations after they began merger discussions were protected; those exchanged prior to discussions were not). Similarly, communications after the parties no longer have a common interest are not protected. Communications that do not substantively pertain to the “common interest” are also not protected. See Ryan v. Gifford, No. 2213-CC, 2008 Del. Ch. LEXIS 2, at *12–13 (Jan. 2, 2008) (holding that communications between the board of directors of a company and the special investigative committee were not protected because, although all parties were officers of the corporation, they had adverse interests in their present situation).

Delaware courts, like the Restatement and Massachusetts, do not require that actual litigation be pending for a common interest to arise. 3Com Corp., 2010 Del. Ch. LEXIS 126, at *32. However, unlike the Restatement and Massachusetts, Delaware courts do require that, to be protected, the communications among lawyers “actually concern[] legal advice.” Am. Legacy Found. v. Lorillard Tobacco Co., No. 19406, 2004 Del. Ch. LEXIS 157, at *18–19 (Nov. 3, 2004). Clearly, communications that anticipate or concern litigation satisfy this requirement, but so do communications in connection with business transactions, provided that they involve regulatory, compliance, or other legal matters. See 3Com Corp., 2010 Del. Ch. LEXIS 126, at *31–33. On the other hand, communications that deal solely with business interests, or that are only tangentially related to legal matters, are not protected by the common interest privilege. See Glassman v. CrossFit, Inc., No. 7717-VCG, 2012 Del. Ch. LEXIS 248, at *10–11 (Oct. 12, 2012). For example, the Delaware Chancery Court held that communications between a client and its public relations firm were not protected because the absence of counsel suggested that the communications did not concern legal advice, even though the communications concerned how to comply with a settlement agreement. Am. Legacy Found., 2004 Del. Ch. LEXIS 157, at *18–19. More recently, the Delaware Chancery Court held that two parties with a common interest in a merger could not withhold communications between their attorneys simply because the communications involved litigation that might affect the parties’ pending deal. The court ruled that the communications were not protected because the subject litigation was between unrelated third parties and the communications were only about the parties’ desire to avoid litigation: “[t]he doctrine only protects those communications that directly relate to the parties’ legal interests.” Id.

Finally, although no Delaware decision speaks directly to the point, it does not appear that a writing is required for the common interest privilege to apply in Delaware. The conspicuous absence of any mention of a writing in most Delaware common interest cases suggests that it is not a concern. Satisfying the conditions and exchanging communications seem to trigger the privilege. Of course, memorializing a common interest agreement in writing is always prudent, especially to choose which jurisdiction’s law will govern exchanges of information under the common interest privilege, thereby providing counsel and their clients comfort that their communications are governed by a jurisdiction that recognizes the privilege.

New York. New York’s recognition of the common interest privilege diverges from that of the Restatement, Massachusetts, and Delaware. Like Delaware, New York has declined to adopt the Restatement but, unlike Delaware, New York has not codified the privilege. Rather, New York courts see the common interest privilege as a narrow “exception” to the “traditional rule that the presence of a third party waives the attorney-client privilege.” Hyatt v. State of Cal. Franchise Tax Bd., 962 N.Y.S.2d 282, 295–96 (App. Div. 2013). New York courts already narrowly construe the attorney-client privilege, viewing it as an obstacle to “proper discovery and the use of relevant information.” See Aetna Cas. & Sur. Co. v. Certain Underwriters at Lloyd’s London, 676 N.Y.S.2d 727, 732 (Sup. Ct. 1998). Thus, it follows that any extension of the privilege to a common interest setting would also be narrow.

One way that New York courts have limited the scope of the common interest privilege is to require any shared interest between clients to be “identical (or nearly identical), as opposed to merely similar.” Hyatt, 962 N.Y.S.2d at 296. While it is clear that communications among codefendants or coplaintiffs and their separate lawyers meet this requirement, New York courts have provided little guidance as to what other factual situations would be considered “nearly identical” for purposes of the privilege. See, e.g., Arkin Kaplan Rice LLP v. Kaplan, 967 N.Y.S.2d 63, 64 (App. Div. 2013).

Additionally, New York also requires that, for the common interest privilege to apply, any communications must occur during litigation, or at least when litigation is anticipated. Ambac Assurance Corp. v. Countrywide Home Loans, Inc., 980 N.Y.S.2d 274, 274 (Sup. Ct. 2013). Therefore, to remain privileged or protected, communications must be legal in nature, not merely commercial. Hyatt, 962 N.Y.S.2d at 296–97. Significantly, business advice is not protected, even if attorneys are involved in providing the advice. See Grande Prairie Energy LLC v. Alstom Power, Inc., 798 N.Y.S.2d 709, 709 (Sup. Ct. 2004). This limitation perhaps explains why New York courts have failed to provide guidance for what constitutes a “nearly identical” common interest outside a codefendant or coplaintiff scenario. Under New York law, there simply may be no other sufficiently close common interest.

The combination of the narrowly defined “common interest” and the litigation restriction effectively limits the use of the common interest privilege in New York to coordinated litigation prosecutions or defenses.

Finally, like Delaware, although a writing is not required to invoke the common interest privilege in New York, a written or formal agreement is always a best practice. New York courts do note, however, that the mere existence of a written or formal agreement does not create the privilege if the communications do not meet the requirements set out by the New York courts. See Aetna Cas. & Sur. Co., 676 N.Y.S.2d at 733.

Texas. Like New York, Texas does not recognize a broad common interest privilege. In fact, to narrow the privilege as much as possible, Texas has codified its version of the privilege as the “allied litigant doctrine” in its Rules of Evidence. The Rule of Evidence is narrow and remarkably clear.

The allied litigant doctrine states:

A client has a privilege to refuse to disclose and to prevent any other person from disclosing confidential communications made for the purpose of facilitating the rendition of professional legal services to the client . . . (C) by the client or a representative of the client, or the client’s lawyer or a representative of the lawyer, to a lawyer or a representative of a lawyer representing another party in a pending action and concerning a matter of common interest therein . . . .

Tex. R. Evid. 503(b)(1)(C). According to Texas courts, this rule limits the privilege “to situations where the benefit and the necessity are at their highest, and . . . restrict[s] the opportunity for misuse.” In re XL Specialty Ins. Co., 373 S.W.3d 46, 50–53 (Tex. 2012).

The allied litigant doctrine in Texas is more like an extension of the joint defense privilege (one lawyer representing multiple codefendants) than the common interest privilege. By its terms, Rule 503(b)(1)(C) defines a common interest as one that can only exist during a “pending action”; “no common interest can exist absent actual litigation.” See In re XL Specialty Ins. Co., 373 S.W.3d at 50–53; In re Dalco, 186 S.W.3d 660, 666–67 (Tex. App. 2006). Thus, the doctrine, like the privilege in New York, is limited to situations where codefendants or coplaintiffs who are separately represented share otherwise privileged or protected information to coordinate litigation strategies in a pending action.

Texas does not require a formal written agreement to protect communications that otherwise satisfy the requirements discussed above. See In re Skiles, 102 S.W.3d 323, 326 (Tex. App. 2003).

California. California courts appear to walk a tight-rope-thin line between a broad common interest privilege, as recognized by the Restatement, Massachusetts, and Delaware, and that recognized by New York and Texas. Its jurisprudence on the issue, however, does not approach the clarity of the Texas Rule of Evidence or other jurisdictions’ judicial interpretations.

California courts have declared that “[u]nlike the federal courts, the courts of this state . . . are not free to create new privileges as a matter of judicial policy and must apply only those which have been created by statute.” OXY Res. Cal. LLC v. Superior Court, 9 Cal. Rptr. 3d 621, 634 (Ct. App. 2004) (internal quotation marks omitted). As recently as 2013, a California court of appeals announced that California has “no independent statutory joint defense or common interest privilege, and California courts are not authorized to establish one.” Citizens for Ceres v. Superior Court, 159 Cal. Rptr. 3d 789, 807 (Ct. App. 2013).

Despite these pronouncements, California courts have consistently interpreted California Evidence Code sections 912 and 952 as permitting the sharing of otherwise privileged or protected information in certain circumstances. See McKesson HBOC, Inc. v. Superior Court, 9 Cal. Rptr. 3d 812, 818 (Ct. App. 2004). Section 912 states, in relevant part, that “[a] disclosure in confidence of a communication that is protected by a privilege provided by Section 954 [attorney-client privilege], . . . when disclosure is reasonably necessary for the accomplishment of the purpose for which the lawyer . . . was consulted, is not a waiver of the privilege.” Cal. Evid. Code § 912(d). And Section 952 similarly states, in relevant part, that

“confidential communication between client and lawyer” means information transmitted between a client and his or her lawyer in the course of that relationship and in confidence by a means which, so far as the client is aware, discloses the information to no third persons other than those who are present to further the interest of the client in the consultation or those to whom disclosure is reasonably necessary for the transmission of the information or the accomplishment of the purpose for which the lawyer is consulted, and includes a legal opinion formed and the advice given by the lawyer in the course of that relationship.

Cal. Evid. Code § 952. In the same case in which the California Court of Appeals stated that California has no common interest privilege, the court also held that these “two sections give rise to the common interest doctrine[:] in limited situations, the alignment of the parties’ common interests may mean disclosures between them are reasonably necessary to accomplish the purposes for which they are consulting counsel.” Citizens for Ceres, 159 Cal. Rptr. 3d at 807.

As a result of the tight-rope walking of the California courts, the scope of the common interest privilege in California is not clear. Because of the qualification—“disclosures [that] are reasonably necessary to accomplish”—whether or not the privilege applies becomes a highly fact-specific inquiry, and general rules are difficult to discern.

As in every jurisdiction, it is clear that there must be some type of common interest for the privilege to apply. However, in California, “overlapping interests” alone will not suffice; the sharing of privileged or protected information must “further[] the attorney-client relationship.” Seahaus La Jolla Owners Ass’n v. Superior Court, 169 Cal. Rptr. 3d 390, 400 (Ct. App. 2014). Generally, in California, parties on the same side of a litigation or investigation are considered to have a sufficient common interest such that sharing privileged or protected information will “further the attorney-client relationship.” However, parties on opposite sides of a litigation or investigation are not considered to have a sufficient common interest. See McKesson HBOC, 9 Cal. Rptr. 3d at 818–19 (finding that a shared interest in merely ending a litigation is not considered a sufficient “common interest” between otherwise adverse parties in a litigation).

Some California decisions suggest that courts are willing to find a common interest in transactional settings, assuming, in accordance with California Evidence Code section 912, that the communication involves legal advice. See Citizens for Ceres, 159 Cal. Rptr. 3d at 792–93 (holding that the common interest privilege allowed the city and shopping center developers with a joint interest in receiving state agency approval to communicate without waiving privilege); STI Outdoor LLC v. Superior Court, 91 Cal. App. 4th 334, 337–41 (2001) (holding that trial court erred in finding waiver by disclosure between public agency and private party negotiating for public contract; disclosure of communications was reasonably necessary to further interests of both parties in finalizing contract). In addition, while the common interest between parties need not be identical for the privilege to apply, see OXY Res., 9 Cal. Rptr. 3d at 633–34 (noting that the joint defense concept has expanded to encompass opposing parties who share a particular issue of common interest), in California, the privilege is temporally limited to “reasonably necessary” communications exchanged during the period of the common interest, see Citizens for Ceres, 159 Cal. Rptr. 3d at 792.

Because the qualification that communications be “reasonably necessary” controls the privilege in California, the privilege can apply with or without anticipated or pending litigation. Often, in camera review is required for a court to determine whether the privilege applies in a particular setting.

California courts are clear that, while a writing formally agreeing to a common interest exchange strengthens the case for the privilege to apply, it neither assures that the privilege will apply nor is it required. See OXY Res., 9 Cal. Rptr. 3d at 637–38. In addition, California courts have also explicitly held that attorney work-product protection can be advanced in the same manner as the attorney-client privilege under the common interest privilege.OXY Res., 9 Cal. Rptr. 3d at 636.

In sum, California recognizes a version of the common interest privilege, which seems neither as broad as Massachusetts nor as narrow as Texas. Its precise boundaries are unclear. Because the communication must contain legal advice and both “further the attorney-client relationship” and be reasonably necessary to carry out an attorney’s representation, the exact contours of the privilege in California are difficult to define.

The common interest privilege is in the early stages of development in California. It was first discussed in 1989 and was not applied with any regularity until the 2000s. With time, perhaps the boundaries of the privilege will become clearer.

Illinois and Pennsylvania. Neither Illinois nor Pennsylvania has codified the common interest privilege, and neither jurisdiction has developed a jurisprudence regarding the privilege.

Both states fully embrace the joint defense privilege. See, e.g., Waste Mgmt., Inc. v. Int’l Surplus Lines Ins. Co., 579 N.E.2d 322, 328–29 (Ill. 1991); Commonwealth v. Scarfo, 611 A.2d 242, 265–66 (Pa. Super. Ct. 1992). Indeed, Pennsylvania courts have suggested that “in complex, multi-defendant trials . . . group consultation [with a single counsel] may be the key to preparing an effective defense” as required by the Sixth Amendment’s guarantee of effective counsel. See Scarfo, 611 A.2d at 266. In both jurisdictions, this defense structure is referred to interchangeably as either “joint defense” or “common interest.” See Waste Mgmt., 579 N.E.2d at 328–29; Scarfo, 611 A.2d at 266.

Illinois courts have not expanded the joint defense privilege beyond its historical criminal and civil bounds. However, they have indicated that Illinois “adhere[s] to a strong policy of encouraging disclosure, with an eye toward ascertaining that truth which is essential to the proper disposition of a lawsuit.” Waste Mgmt., 579 N.E.2d at 327. In other words, the attorney-client privilege is to be “strictly confined within its narrowest limits.” Ctr. Partners, Ltd. v. Growth Head GP, LLC, 981 N.E.2d 345, 355–56 (Ill. 2012). In light of such bold pronouncements, it seems unlikely that Illinois will embrace a broad common interest privilege in the near future.

In recent years, Pennsylvania courts have suggested that a common interest privilege might apply in some litigation settings. However, judicial opinions are few, rely on precedents from other jurisdictions, and do not clearly acknowledge that the privilege exists. Karoly v. Mancuso, 65 A.3d 301, 315 (Pa. 2013). Although, in 2001, a lower Pennsylvania court held that communications with a codefendant’s separate counsel in preparation for litigation was privileged, see Young v. Presbyterian Homes, Inc., No. 2000-C-990, 2001 Pa. Dist. & Cnty. Dec. LEXIS 414, at *9–10 (Ct. Com. Pl. 2001), in 2013, the Pennsylvania Supreme Court suggested that any such privilege had not been definitively established, see Karoly, 65 A.3d at 315.

Conclusion and Practice Tips
As indicated in this article, the recognition and scope of a common interest privilege vary greatly from jurisdiction to jurisdiction. Recognition of the privilege ranges from a broad privilege in Massachusetts, to nonexistent in Illinois, to a case-by-case determination in California. Because the risk of inadvertently waiving the attorney-client privilege or the attorney work-production protection is great and has potentially dire consequences, it is imperative to know the law governing the common interest privilege in all applicable jurisdictions.

Here are a few recommended best practices:

  • Enter into a written common interest agreement that ties the agreement to identified pending litigation or to anticipated litigation flowing from an identified dispute and includes a choice of law provision.

  • Choose as the governing law of the agreement a jurisdiction that not only clearly recognizes the common interest privilege, but also provides the broadest scope of protections. For the greatest protection, if authorized under governing conflict of law principles, choose Massachusetts.

  • If possible, expressly and clearly state that each individual communication is made pursuant to the agreement and in connection with pending litigation or in anticipation of litigation flowing from an identified dispute. Mark each communication “Privileged and Confidential/Attorney Work-Product.”

  • If possible, include some legal advice in each communication.

  • Only share communications among parties during the period in which all parties share a common interest. Include provisions in the agreement that preserve the privileged and protected nature of the communications if one or more parties withdraw from the common interest agreement.

Keywords: litigation, trial evidence, attorney-client privilege, attorney work-product protection, common interest privilege, common interest agreement, joint defense privilege, allied litigant doctrine, choice of law

Matthew D. LaBrie is a 2015 J.D. candidate at Georgetown University Law Center in Washington, D.C., and was a 2014 summer associate at Ropes & Gray LLP in Boston, MA.

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