Courts Continue to Insist that Common Interest Participants Anticipate Litigation

February 8, 2017

The common interest doctrine can allow separately represented clients to safely share privileged communications in certain circumstances. Although many lawyers hope that courts will begin extending this helpful protection to transactional contexts, nearly every court continues to limit the protection to litigants or would-be litigants.

In One World Foods, Inc. v. Stubb’s Austin Restaurant Co., Case No. A-14-CA-1071-SS, 2016 U.S. Dist. LEXIS 167125 (W.D. Tex. Dec. 2, 2016), plaintiff argued that the common interest doctrine protected its pre-closing disclosure of a privileged trademark legal opinion to its purchaser McCormick. Plaintiff ultimately sued defendant over the trademark issue, but not until months after McCormick purchased plaintiff. The court held that at the time McCormick purchased plaintiff there was no “palpable threat of litigation.” Id. at *19. One week later, a New York state court similarly rejected a common interest argument advanced by defendants – holding that “there is no pending or anticipated litigation” against one of the common interest participants. Kagan v. Minkowitz, No. 500940/2016, 2016 N.Y. Misc. LEXIS 4577, at *7 (N.Y. Sup. Ct. Dec. 9, 2016). As in all similar situations, these common interest participants waived their privilege protection despite having entered into common interest agreements they undoubtedly thought would avoid such a waiver.

Courts have not only failed to expand the common interest doctrine to transactional settings, they also have injected enormous uncertainty into the doctrine’s application. Court take widely varying approaches to the work product “anticipation” element that underlies most courts’ common interest doctrine – ranging from “some possibility” of litigation to requiring “imminent” litigation.