The Moment When You Learn Your Client's Confidential Communications Are Not Covered by the Common-Interest Doctrine

Do not take the common-interest privilege for granted if you represent a client in multiple-party litigation.

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), Finjan held board meetings attended by a representative of Cisco, an investor who had a contractual right to observe Finjan's board meetings. Finjan claimed privilege protection based on the common-interest doctrine for documents disclosed during its board meetings. But the court rejected the common interest argument. The court held that Cisco’s status as an investor right a right to observe board meetings "did not create a common legal interest.” Id. at *11. Finjan and Cisco also did not anticipate joint litigation. Id. Instead, Finjan's “voluntary disclosure waived whatever attorney-client privilege otherwise attached to these materials.” Id. at *12.

But before you rush to create a joint-defense agreement to cover your client, consider a few things.

A joint-defense agreement should always be in writing and reviewed with and signed by the client. United States v. Stepney, 246 F. Supp. 2d 1069, 1080 (N.D.Cal. 2003). An oral joint-defense agreement might be enforceable, but I would not count on it.

But when you consider a joint-defense agreement, beware that the Ninth Circuit has found this "establishes an implied attorney-client relationship with the co-defendant," which "can also create a disqualifying conflict." United States v. Henke, 222 F.3d 633. In Henke, the agreement apparently did not contain a waiver of the right to seek disqualification of counsel or the right to object to the use of joint-defense materials.

But see Stepney, 246 F. Supp. 2d 1069 (joint-defense agreements merely create a duty of confidentiality, which is limited to information actually shared within the group; the agreement does not create a "true" attorney-client relationship).

The Stepney court took a uniquely proactive stance, requiring joint-defense agreements to be in writing and submitted to the court for review in camera prior to going into effect.

Also note that the joint-defense doctrine is not a standalone privilege. Rather, it merely extends an underlying privilege. Thus, when creating a privilege log, never list the common interest doctrine or joint-defense doctrine by itself. Instead, assert the underlying privilege or work-product doctrine, followed by the common interest doctrine. See OXY Resources California LLC v. Superior Court (2004) 115 Cal.App.4th 874 at 894 (compelling production of documents asserted to be protected solely by the “common interest privilege).

Moreover, where the common interest is not obvious (such as where parties who shared privileged communications based on their “common interest” are adversaries), courts may scrutinize claims that the documents were shared to further a common legal purpose and may even order in camera review.

Last but not least, the privilege does not extend beyond the areas where the parties' interests overlap. “[T]he attorneys do, at a minimum, need to be ‘engaged in maintaining substantially the same cause on behalf of other parties in the same litigation.’” United States v. Gonzalez, 669 F.3d 974, 980 (9th Cir.2012).

Be aware of the limits of the joint interest, and thus the limits of the protection.