How “Common” Must Common Interest Participants’ Interests Be?

September 7, 2011

Under the “common interest” doctrine, separately represented companies can share their privileged communications with each other – without waiving the privilege. Every court agrees that the participants must have a common legal interest, rather than a common business or other non-legal interest. However, courts disagree about just how “common” the legal interest must be.

In SEC, Inc. v. Wyly, No. 10 Civ. 5760 (SAS), 2011 U.S. Dist. LEXIS 72573, at *4 (S.D.N.Y. July 5, 2011), Special Master Daniel Capri indicated that “the parties do not need to be in exact lock-step” for the doctrine to apply. On the same day, another court explained that common interest participants’ interest does not have to be “identical,” as long as it is “substantially similar.” King Drug Co. of Florence, Inc. v. Cephalon, Inc., Civ. A. No. 2:06-cv-1797, 2011 U.S. Dist. LEXIS 71806, at *19 (E.D. Pa. July 5, 2011). Ten days later, another court concluded that the common interest doctrine did not apply – because the participants’ “interest is similar [but] not identical.” Gulf Coast Shippers Ltd. P’ship v. DHL Express (USA), Inc., Case No. 2:09cv221, 2011 U.S. Dist. LEXIS 80938, at *17 (D. Utah July 15, 2011).

It is troubling enough that common interest participants will not know what court’s standard applies until someone files a lawsuit against them – and then challenges their common interest agreement. It is even worse that the participants will have already shared privileged communications by then, so it is too late to avoid a waiver.