Commercial Litigation and Arbitration

Joint Defense / Common Interest Privilege — Circuit Split as to Whether Parties Must Anticipate Litigation for the Privilege to Apply — Written Agreement Unnecessary — What Is a Common Legal Interest?

United States v. Env’l Defense Fund, 2012 U.S. Dist. LEXIS 59565 (M.D. N.C. 2012):


The Fourth Circuit recognizes an exception to waiver of attorney-client privilege in the joint defense rule, now "more properly identified as the 'common interest rule.'" In re Grand Jury Subpoenas 89-3 and 89-4, 902 F.2d 244, 249 (4th Cir. 1990) (quoting United States v. Schwimmer, 892 F.2d 237, 243 (2d Cir. 1989)). Although not a privilege in and of itself, the rule applies to material covered by attorney-client privilege and work product protection. Id. According to the Fourth Circuit,

Whether an action is ongoing or contemplated, whether the jointly interested persons are defendants or plaintiffs, and whether the litigation or potential litigation is civil or criminal, the rationale for the joint defense rule remains unchanged: persons who share a common interest in litigation should be able to communicate with their respective attorneys and with each other to more effectively prosecute or defend their claims.


Despite the Fourth Circuit's elaboration on and even expansion of the rule, litigation remains a central component. The Fourth Circuit referred to "ongoing or contemplated" actions, "defendants or plaintiffs," "litigation or potential litigation," and a "common interest in litigation." Id. As a district court for the Eastern District of Virginia observed,

In every case cited by the Fourth Circuit to support its broad reading of the privilege in Under Seal, both parties claiming the common interest privilege were involved in some type of litigation. It is true that the prospect for litigation could be so remote that it involved 'potential co-parties to prospective litigation,' but the prospect of litigation still had to be there.

Fed. Election Comm'n v. Christian Coal., 178 F.R.D. 61, 73 (E.D.V.A. 1998) (internal citations omitted), aff'd in part and modified in part, 178 F.R.D. 456 (E.D.Va. 1998).

In United States v. Aramony, the Fourth Circuit explained, "To be entitled to the protection of this [joint defense] privilege the parties must first share a common interest about a legal matter. But it is unnecessary that there be actual litigation in progress for this privilege to apply." 88 F.3d 1369, 1392 (4th Cir. 1996) (internal citations omitted); see also Sheet Metal Workers Int'l Ass'n. v. Sweeney, 29 F.3d 120, 124 (4th Cir. 1994). The Fourth Circuit in Aramony held that the joint defense rule did not protect a defendant's communications with his employer's attorneys because he and his employer "clearly did not share a common interest about a legal matter" despite the defendant's claims that he and his employer shared a common strategy, which included investigating and preparing defenses to accusations against the defendant, "with respect to the press inquiries and any potential litigation to which the press reports could give rise." Aramony, 88 F.3d at 1392. The Fourth Circuit explained,

The development of defenses to allegations against Aramony simply is not a legal matter concerning UWA. Although these defenses could help preserve UWA's reputation, the preservation of one's reputation is not a legal matter. If the allegations concerning Aramony could have subjected UWA to civil or criminal liability, Aramony's claim would be stronger. But, because Aramony has not shown how UWA would be affected (apart from the stain of its reputation) by the allegations concerning him, the joint defense privilege is inapplicable here.


The Fourth Circuit, while acknowledging that "it is unnecessary that there be actual litigation in progress for this privilege to apply," has not clarified how attenuated the prospect of litigation can be for the common interest rule to still apply. Aramony, 88 F.3d at 1392. The cases where the Fourth Circuit has recognized a common interest privilege, however, have all involved existing or at least pending litigation. See In re Grand Jury Subpoenas 89-3 and 89-4, 902 F.2d 244 (joint prosecution of a claim and joint defense of a counterclaim); Hanson v. United States Agency for Int'l Dev., 372 F.3d 286 (4th Cir. 2004) (construction dispute); see also In Re Grand Jury Subpoena: Under Seal, 415 F.3d 333, 341 (4th Cir. 2005) (affirming the district court's refusal to apply the joint defense privilege prior to the time the parties actually cooperated in a common defense, when there was no joint-defense agreement, no evidence that the parties were pursuing a common legal strategy, one party was in the "early stages of its internal investigation," and interviews with the proponent of the privilege were to "gather information" rather than to "formulat[e] a joint defense"); Fed. Election Comm'n, 178 F.R.D. at 73 (finding the common interest rule did not apply when the record showed no evidence "any actual, contemplated, or prospective litigation" at the time the privileged information was shared and the third party was involved in the litigation only to the extent that he supplied information to prepare for an IRS audit, he did not receive any benefit from the shared information, and he was not [*51] "directly" effected by the outcome of the litigation); Front Royal Ins. Co. v. Gold Players, Inc., 187 F.R.D. 252, 258 (W.D.Va. 1999) ("While the Fourth Circuit has recognized this common interest rule, it appears that the Fourth Circuit cases recognizing this rule have all involved privileged materials which were shared with parties which were directly involved in litigation.") (internal citations omitted).

The Fourth Circuit most recently addressed the subject of the common interest rule in Hunton & Williams v. United States Dep't of Justice, 590 F.3d 272 (4th Cir. 2010), within the context of a suit under the Freedom of Information Act ("FOIA"). The Fourth Circuit explained, "The common interest doctrine requires a meeting of the minds, but it does not require that the agreement be reduced to writing or that litigation actually have commenced." Id. at 287. The court distinguished between an agreement to undertake a joint legal strategy and an "agreement to exchange information in order to make an assessment." Id. at 285. According to the Fourth Circuit,

First, although a common interest agreement can be inferred where two parties are clearly collaborating in advance of litigation, mere "indicia" of joint strategy as of a particular point in time are insufficient to demonstrate that a common interest agreement has been formed. Second, it is not clear that the particular "indicia" identified by the district court [that the parties "agreed to exchange declarations, other proposed pleadings, and their views on issues relating to the effect of any injunction"] pointed to an actual common interest agreement, as opposed to a mere confidentiality agreement.

Id. at 284-85. Furthermore, the fact that the parties later concluded that they shared each other's interest failed to shield "communications between the two before that decision was made." Id. at 286.

In Hunton & Williams, the Fourth Circuit observed that, based on the fact that the attorney representing DOJ "routinely" created common interest agreements, his delay in creating a written common interest agreement may have indicated that DOJ had not yet made a final decision about becoming involved in the litigation. Id. at 286. Here, although UARG and its members' failure to create a written common interest agreement is not dispositive, it may indicate that no such agreement existed. According to the Fourth Circuit, the fact that two or more parties may have different motivations for pursuing their common interest is irrelevant in determining whether the common interest rule applies. Id. at 282-83. The court explained that

the agreement between RIM and DOJ . . . makes it clear that RIM and DOJ had committed to working together to achieve that goal. . . . It does not matter that RIM was motivated by the commercial benefit that would accrue to it if it succeeded in opposing the BlackBerry injunction while the government was motivated by concern for the public interest. What matters is that there was a unity of interest in preserving a non-disruptive pattern of governmental BlackBerry use, and RIM and DOJ could rely on one another's advice, secure in the knowledge that privileged communications would remain just that.

Id. at 282-83. "A fair interpretation of a common interest agreement, however, must leave room for the parties to debate the means by which they will secure their common end." Id. at 283 n.1.

While the Fourth Circuit has yet to explicitly address whether there must be actual or pending litigation in order for the common interest rule to apply, other circuits are split on this issue. In In re Santa Fe Int'l Corp., the Fifth Circuit held that there must be a "palpable threat of litigation at the time of the communication, rather than a mere awareness that one's questionable conduct might some day result in litigation, before communications between one possible future co-defendant and another . . . could qualify for protection." 272 F.3d 705, 711 (5th Cir. 2001). In contrast, in United States v. BDO Seidman, LLP, the Seventh Circuit held that the common interest doctrine applies "where the parties undertake a joint effort with respect to a common legal interest" and, though the rule is strictly limited to "those communications made to further an ongoing enterprise," communications "need not be made in anticipation of litigation to fall within the common interest doctrine." 492 F.3d 806, 815-16 (7th Cir. 2007) (affirming the district court's finding that the common interest doctrine applied when two companies "acting as joint venturers, shared a common legal interest 'in ensuring compliance with the new regulation issued by the IRS,' and in making sure that they could defend their product against potential IRS enforcement actions") (internal citations omitted).

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