With the growth of litigation funding as a mechanism for financing litigation, companies interviewing and ultimately selecting a funder inevitably share work product with them. In such circumstances, courts must assess (1) whether disclosure of work product to such a funder waives that protection and (2) whether such funders can create their own protected work product.
In Design with Friends, Inc. v. Target Corp., No. 1:21-cv-01376-SB, 2024 U.S. Dist. LEXIS 175505 (D. Del. Sept. 27, 2024), plaintiff disclosed work product to a litigation funder while planning to file a copyright infringement case against defendant Target. The court first predictably held that disclosing work product to the litigation funder did not waive that robust protection. The court also held that the funder could create protected work product as the plaintiff’s “representative” both before and after determining that it would fund plaintiff’s litigation. Id. at *6-7. Perhaps equally significantly, the court adopted the broad work product approach articulated in United States v. Adlman, 134 F.3d 1194, 1201-02 (2d Cir. 1998), which expanded work product protection beyond communications used “to assist in the conduct of the litigation” and brought within the protection “documents analyzing anticipated litigation . . . to assist in a business decision.” Id. at *5. This broad approach is frequently called the “because of” work product standard — in contrast to the much narrower “aid and assist” standard. It obviously provides dramatically more protection, as demonstrated by opinions such as this.
Most circuits follow the “because of” standard — but some courts in the Fifth Circuit and elsewhere still follow the “aid and assist” standard. One would think that the U.S. Supreme Court would have settled this critical issue governing the reach of a federal rule. At some point it surely will do so.