One of my law school classmates asked me several month ago about the merits of entering into a joint defense agreement with another party to protect communications he had with that party’s counsel in connection with a potential dispute with a third company. He was concerned that entering into such a joint defense agreement might make his client and its ally look guilty. I told him that no formal agreement was necessary; the key was whether the communications concerned a matter of common interest to the parties communicating. Last week, I happened to come across The Hilsinger Co. v. Eyeego, LLC, which put a new spin on what the judge in that case referred to as the “Community of Interest Privilege.”
In Hilsinger, the defendant was trying to protect from discovery an email chain amongst its president, its general counsel and a third party’s president, general counsel and counsel for the third party’s parent corporation. The District Court Judge began her analysis by noting that:
The community-of-interest privilege prevents clients from waiving the attorney-client privilege when attorney-client communications are shared with a third person who has a common legal interest with respect to these communications. For the privilege to apply, the asserted common interest must typically entail an identical (or nearly identical) legal interest as opposed to a merely similar interest. Thus the proponent of the privilege must establish cooperation in fact toward the achievement of a common [legal] objective.
Hilsinger argued that Eyeego and the third party did not have a common legal interest because they were in negotiations towards a contract that, if executed, would give them a common legal interest. While the Judge acknowledged that the lack of a consummated agreement between Eyeego and its potential business partner militated against applying the privilege, she found another factor to be much more important:
A review of the emails show that the parties were communicating about legal rather than commercial interests. Indeed, statements in the emails illustrate the existence of a coordinated legal strategy as well [as] positive steps taken to further that strategy.
It was for this reason that Eyeego ultimately was successful in defeating Hilsinger’s motion to compel the disclosure of the email chain at issue.
To me, the key takeaway from Hilsinger for in-house counsel is that if you are going to have communications with another entity that you may want to protect from disclosure, separate your legal communications from the business/deal communications. Doing so will give you a much better chance of keeping those legal communications privileged from an probing adversary.