Not surprisingly, joint clients do not waive their privilege protection when they communicate with their joint lawyer or (in some situations) with each other. But what if a lawyer improperly represents joint clients whose interests are so adverse that the ethics rules prohibit such a joint representation?
In Cantu Services, Inc. v. Worley, No. CIV-12-129-R, 2021 U.S. Dist. LEXIS 106266 (W.D. Okla. June 7, 2021), the court dealt with this scenario. A law firm represented several clients in connection with their provision of food services to an Army base. The plaintiff claimed that those joint clients (now defendants) waived their privilege protections by continuing to communicate with each other after their interests diverged. But the court rejected plaintiff’s waiver argument, citing Eureka Investment Corp. v. Chicago Title Insurance Co., 743 F.2d 932, 937-38 (D.C. Cir. 1984), for the principle that “when an attorney fails to end joint representation despite a conflict . . . the clients retain the privilege notwithstanding the conflict.” Id. at *11. The court noted that “[t]hough the parties’ interests may have diverged, [plaintiff] offers no evidence that [defendants], as co-clients, believed their joint representation ended.” Id. at *12. The court thus found no waiver.
This somewhat counter-intuitive Eureka doctrine can protect from third-party intrusion otherwise privileged communications among joint clients – even if those joint clients’ interests have diverged.