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Standard of Review of Magistrate Judge’s Discovery Decisions — Common Interest Doctrine Applies to Legal Advice Shared between Parent and Sub

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From Weber v. Fujifilm Med. Sys. USA, Inc., 2011 U.S. Dist. LEXIS 6199 (D. Conn. Jan. 21, 2011):

II. Standard of Review

"Matters concerning discovery generally are considered 'nondispositive' of the litigation . . . [and] are committed to the discretion of the magistrate, reviewable by the district court under the 'clearly erroneous or contrary to law' standard." Thomas E. Hoar, Inc. v. Sara Lee Corp., 900 F.2d 522, 525 (2d Cir. 1990) (citations omitted). Under the clearly erroneous standard, a reviewing court may reverse a finding "only if 'although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.'" Mobil Shipping and Transp. Co. v. Wonsild Liquid Carriers Ltd., 190 F.3d 64, 67-68 (2d Cir. 1999) (quoting Anderson v. Bessemer City, 470 U.S. 564, 574, 105 S. Ct. 1504, 84 L. Ed. 2d 518 (1985)).

III. Discussion [of Common Interest Doctrine]

Although the attorney-client privilege generally protects confidential communications between client and attorney in the course of seeking legal advice, the privilege extends to communications between a client and agents for his or her attorney or agents for attorneys who represent parties with a "common interest" in the course of an ongoing enterprise. United States v. Schwimmer, 892 F.2d 237, 243-44 (2d Cir. 1989). This common interest rule protects communications made among parties and their attorneys working towards a common goal as long as, as with all privileged communications, the communication at issue was made in confidence and the client "reasonably understood it to be so given." Id. at 244 (common--interest rule and attorney-client privilege applied to communications between Schwimmer and the accountant hired by his co-defendant's attorney to serve both defendants' joint interests where the information given "was imparted in confidence for the ultimate purpose of assisting attorneys who had agreed upon and undertaken a joint strategy of representation").

This principle has been used to extend the privilege "to communications between a parent corporation and its attorneys which are also communicated to a subsidiary." Roberts v. Carrier Corp., 107 F.R.D. 678, 687 (N.D. Ind. 1985) (collecting cases) ("[I]f a corporation with a legal interest in an attorney-client communication relays it to another related corporation, the attorney-client privilege is not thereby waived. The third party corporation need not be a party to any anticipated or pending litigation; it may share a community of interest (so as to keep communications privileged) if it shares an identical, and not merely similar, legal interest as the client with respect to the subject matter of the communication between the client and its attorney.") (citing Duplan Corp. v. Deering Milliken, Inc., 397 F. Supp. 1146, 1172, 1184-85 (D.S.C. 1974)). Similarly, communications among corporate employees, although not directly to or from corporate counsel, can be privileged if those communications are made among employees who need to know their content, i.e. who share the common interest, and are made for the purpose of seeking or receiving legal advice. See White v. Graceland Coll. Ctr. for Prof'l Dev.& Lifelong Learning, Inc., 586 F. Supp. 2d 1250, 1269 (D. Kan. 2008); Andritz Sprout-Bauer, Inc. v. Beazer East, Inc., 174 F.R.D. 609, 633 (M.D. Penn. 1997).

Magistrate Judge Margolis did not clearly err in finding that the communications between Tada and the FH Corporate Planning Headquarters concerning the FMSU-Empiric merger are privileged. The e-mail communications between Tada and FH's Corporate Planning Headquarters, although not directed or copied to corporate counsel, concern legal advice related to the FMSU-Empiric merger, a matter in which FMSU and FH have a common legal interest. As observed by Magistrate Judge Margolis, these communications relay legal advice or gather information related to legal advice among individuals with a "need to know" (July 15, 2010 Ruling at 3-4), and are therefore privileged under the common interest rule.

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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