California Federal Court Takes a Narrow View of the Common Interest Doctrine

October 28, 2020

The common interest doctrine sometimes allows separately represented parties to avoid the normal waiver implications of sharing privileged communications — but some courts do not recognize the doctrine, and other courts take widely varying views of its applicability.

In Finjan, Inc. v. SonicWall, Inc., Case No. 17-cv-04467-BLF (VKD), 2020 U.S. Dist. LEXIS 128725, at *3-4 (N.D. Cal. July 7, 2020), plaintiff Finjan claimed privilege protection for documents disclosed during board meetings attended by a representative of Cisco (which “was an investor in Finjan and had a contractual right to observe meetings of Finjan’s board of directors”). The court rejected Finjan’s common interest argument – surprisingly holding that “Cisco’s investment in Finjan and its status as a board observer, with or without an obligation of confidentiality, did not create a common legal interest between Cisco and Finjan.” Id. at *11. The court also noted that: (1) “Cisco did not own any interest in any of the patents [the subject of the pertinent withheld documents]; its sole interest was as a shareholder of Finjan”; and (2) “[n]or did Finjan and Cisco anticipate joint litigation.” Id. Because “Finjan voluntarily disclosed the disputed materials to a third-party investor who merely observed its board meetings,” that “voluntary disclosure waived whatever attorney-client privilege otherwise attached to these materials.” Id. at *12.

Not all courts would take this narrow and somewhat counter-intuitive approach. But cases like this highlight the dangerous unpredictability of the common interest doctrine.