In National Union Fire Insurance Company of Pittsburgh, PA v. Porter Hayden Company, Civ. No. CCB-03-3408, 2012 WL 4378160 (D. Md. Sept. 24, 2012), the federal court for the District of Maryland denied two insurers’ joint motion to compel production of attorney work product documents that their policyholder had shared with current and future asbestos claimants’ representatives during the negotiation of a bankruptcy reorganization plan and trust distribution procedures for settling asbestos claims.  The court held that the policyholder and the claimants’ representatives had a common legal interest when they shared the documents, such that the documents remain protected from disclosure. 

The insurers sought production of emails and attachments withheld by the policyholder that were responsive to the insurers’ discovery request for “communications between [the policyholder] and any Pre-Petition Claimant, or any representative of a Pre-Petition Claimant . . . concerning [the policyholder’s] drafting of each Plan of Reorganization . . . .”  The policyholder initially claimed attorney work product privilege for all of the documents and attorney-client privilege for some of the documents, but the policyholder’s reply brief withdrew the attorney-client privilege claims.  Although the insurers’ brief conceded that the documents were protected by the attorney work product privilege, the insurers argued that the privilege had been vitiated by the policyholder’s sharing the documents with certain claimants’ representatives.  In response, the policyholder argued that it and the claimants’ representatives shared a “common interest” in “maximizing the Trust’s assets and gaining approval of the Plan of Reorganization.”  The district court agreed with the policyholder, finding that, although the policyholder and the asbestos claimants “had certain interests that were adverse,” they “shared the documents . . . to maximize the resulting trust’s assets and to win court approval of the resulting Plan.”  According to the court, a confidentiality agreement entered into between the policyholder and the asbestos claimants had further created a reasonable expectation that the shared documents would remain confidential.  Neither the court’s opinion nor the parties’ briefs addressed the issue of choice of law.

The Porter Hayden decision clarifies that parties who share privileged documents need not have every interest in “common” in order to invoke the “common interest” doctrine in order to protect privilege.  Further, it illustrates the importance of having a confidentiality agreement in place in order to bolster the privilege claim.