Can Contracting Transactional Parties Select Favorable Privilege Law?: Part I

November 9, 2016

Federal privilege common law governs federal question cases, but federal courts hearing diversity cases must choose the applicable attorney-client privilege law.

Many litigants do not even focus on the choice of law issue. In Greyhound Lines Inc. v. Viad Corp., the court noted that “[t]he parties do not address this choice of law issue.” No. CV-15-01820-PHX-DGC, 2016 U.S. Dist. LEXIS 121483, at *2-3 (D. Ariz. Sept. 8, 2016). The court eventually applied Arizona privilege law, because plaintiff cited Arizona law and defendant “does not cite contrary authority.” Id. at *3. To be sure, in many cases the choice of laws does not make any difference. In Wellin v. Wellin, Nos. 2:13-cv-1831-, -3595-DCN, & 2:14-cv-4067-DCN, 2016 U.S. Dist. LEXIS 135604 (D.S.C. Sept. 30, 2016), the court extensively analyzed the choice of law issue — correctly using South Carolina’s standard for that analysis. The court ultimately concluded that South Carolina privilege law applied, but then acknowledged that “this may be something of a hollow victory for [plaintiffs] as the court is not convinced there is any significant difference between New York and South Carolina [privilege] law.” Id. at *32.

But in some situations there are huge differences between states’ privilege laws. Next week’s Privilege Point will discuss a noteworthy case where such a difference was dispositive, and in which the Southern District of New York gave a road map for corporations seeking to maximize their privilege protection.