Court Uses Dinner Analogies in Analyzing the Common Interest Doctrine

December 15, 2010

Companies can sometimes avoid waiving the attorney-client privilege when sharing privileged communications by entering into a “common interest” agreement before doing so. Although courts disagree about the impact of possible later adversity among the participants, some courts take a broad approach.

In In re Leslie Controls, Inc., 437 B.R. 493, 497 (Bankr. D. Del. 2010), the court held that the pre-bankruptcy sharing of privileged communication among the debtor, an ad hoc committee of asbestos plaintiffs and representatives of future asbestos claimants did not cause a waiver – because they shared a “common interest” in maximizing insurance coverage. The court used two dinner analogies to explain why possible later adversity did not preclude a common interest agreement. First, the court noted that the common interest participants were working to maximize the “size of the [insurance coverage] pie,” and “[w]hether their competing interests in getting the biggest piece of pie possible prevented the application of the common interest doctrine in this case is another matter.” Id. at 500. Second, the court said: “Think of Thanksgiving. Everyone wants the biggest turkey possible (except, perhaps, the chef), but all bets are off when it’s time to wrestle over who gets a leg.” Id. at 502 n.37.

If common interest participants share a true common legal interest, the possibility of some later adversity does not necessarily doom a common interest agreement.