Privilege — Common Interest/Joint Defense — Existing Litigation Unnecessary — Party Asserting Privilege Need Not Put Forward Evidence Establishing the Details of a Joint Legal Strategy

Hanwha Azdel, Inc. v. C&D Zodiac, Inc., 2015 U.S. App. LEXIS 9602 (4th Cir. June 9, 2015):

Finally, Azdel appeals the [*39]  district court's denial of Azdel's motion to compel certain Crane documents that the district court deemed protected under the common interest privilege. We review factual findings as to whether a privilege applies for clear error, and the application of legal principles de novo. In re Grand Jury Subpoena , 341 F.3d 331, 334 (4th Cir. 2003).

"The joint defense privilege, an extension of the attorney-client privilege, protects communications between parties who share a common interest in litigation." In re Grand Jury Subpoena: Under Seal , 415 F.3d 333, 341 (4th Cir. 2005) (citing  United States v. Schwimmer , 892 F.2d 237, 243-44 (2d Cir. 1989)). The privilege allows "persons with a common interest to 'communicate with their respective attorneys and with each other to more effectively prosecute or defend their claims.'" Id. (quoting In re Grand Jury Subpoenas 89-3 and 89-4, John Doe 89-129 , 902 F.2d 244, 249 (4th Cir. 1990)). The proponent of the privilege has the burden to establish that the parties had "some  common interest about a legal matter." Sheet Metal Workers  Int'l Ass'n v. Sweeney , 29 F.3d 120, 124 (4th Cir. 1994).  Importantly, "it is unnecessary that there be actual litigation in progress for this privilege to apply." United  States v. Aramony , 88 F.3d 1369, 1392 (4th Cir. 1996). Indeed we have recognized that "[w]hether an action is ongoing or contemplated . . . the rationale for the joint defense rule remains unchanged." In re Grand Jury Subpoenas 89-3 and 89-4,  [*40] John Doe 89-129 , 902 F.2d at 249.

While Azdel does not challenge the existence of a common legal interest between Crane and SABIC,9 it argues that Crane failed to establish that it had a "joint legal strategy" with SABIC. Appellant's Br. at 31. Yet we have never held that in order to assert the common legal interest privilege, the party asserting the privilege must put forward evidence establishing the details of a joint legal strategy. Moreover, such a holding would undermine the logic of our prior cases holding that the privilege applies even to actions which are not "ongoing." See, e.g. , In re Grand Jury Subpoenas 89-3 and 89-4, John Doe 89-129 , 902 F.2d at 249. We therefore affirm the district court's denial of Azdel's motion to compel.

9.   Indeed, SABIC received a letter from Azdel outlining claims that Azdel might bring against SABIC. Because those claims implicated Crane's interests, Crane and SABIC entered into a common interest agreement. Thus, there can be no doubt that a common legal interest existed between the two entities.

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