Case Highlights an Additional Risk of Common Interest Agreements

March 11, 2009

Although some lawyers jump at the chance to arrange for common interest agreements between their clients and others, such arrangements carry great risks. Among other things, neither the clients nor the lawyers will know for sure whether the common interest agreement will prevent a waiver of the privilege until after they have shared protected communications.

The lawyers themselves also face a risk. In Meza v. H. Muehlstein & Co., No. B201427, 2009 Cal. App. Unpub. LEXIS 396 (Cal. Ct. App. Jan. 20, 2009), a lawyer who had represented one defendant in a common interest arrangement later joined the law firm representing the plaintiff who had dismissed that defendant from the lawsuit. Other defendants moved to disqualify the plaintiff’s firm, arguing that the lawyer had also obtained their confidences as part of the common interest arrangement. The lawyer filed a declaration stating that he never spoke with any of the other defendants while representing his former client, and that he did not share any information about the case with any lawyer at the plaintiff’s firm. Despite this declaration, and the fact the lawyer left the plaintiff’s firm after only seven months, the court disqualified the plaintiff’s law firm.

Absent some prospective consent arrangement in the common interest agreement, lawyers representing common interest participants should realize that they may be barred from later adversity to the other participants.