The attorney-client privilege is an old and well-known evidentiary privilege. It fosters candor between attorney and client, protects confidential information from being revealed to others, and ensures that the attorney can render accurate and competent legal advice. On occasion, the privilege extends to third parties. For instance, the “common interest doctrine” may protect communications between business entities with common interests in a lawsuit. A recent decision from Manhattan Commercial Division Justice Robert R. Reed, West 87 LP v. Paul Hastings LLP, exemplifies how instrumental the doctrine can be in commercial practice.
The attorney-client privilege, codified in CPLR § 4503(a), protects certain communications between attorney and client. New York recognizes by statute three categories of privileged materials: privileged matter, attorney work product, and trial-preparation materials (CPLR 3101[b], [c], [d]). Privileged matter includes confidential communications between an attorney and client made to obtain or provide legal advice. Attorney work product and trial-preparation materials include materials prepared by an attorney that contain legal analysis or strategy, along with statements made prior to and during litigation. The party asserting the privilege must establish entitlement to it and show that confidentiality has not been waived.
In general, communications between an attorney and client lose their confidential status if they are made in the presence of, or subsequently disclosed to, a third party. For example, the presence of a client’s friend or relative at an attorney-client meeting could potentially waive the privilege, as could sending an email to someone summarizing the attorney’s advice.
The common-interest doctrine carves out an exception to this rule. Under this doctrine, attorney-client communications disclosed to a third party remain privileged if that party shares a common legal interest in pending or anticipated litigation. This exception ultimately prevented the disclosure of communications between a limited liability company and its part owner in West 87 LP v. Paul Hastings LLP.
In West 87 LP v. Paul Hastings LLP, the plaintiffs—a group of limited liability companies with various interests in a real-estate development project—sued defendant Paul Hastings LLP for legal malpractice. Defendant had represented plaintiffs in the execution of lease agreements for the project, and plaintiffs claimed that defendant failed to properly draft a rent-escalation clause in a lease for the development.
During discovery, plaintiffs produced documents that contained communications between themselves and one of their owners, Quadrum Global, who was not a party to the litigation. Plaintiffs moved for a protective order to shield from disclosure several communications between themselves and Quadrum, which they claimed were privileged. The withheld documents included communications conveying information provided by outside legal counsel, information obtained from outside legal counsel to evaluate claims against defendant, communications about drafting the malpractice complaint, discussions about prior and anticipated legal advice, and requests for legal advice relevant to the litigation.
Plaintiffs conceded that the withheld communications were not actually between attorney and client, and that they did not include their attorneys as senders or recipients. Rather, the communications were between plaintiffs’ representatives and Quadrum’s representatives. Plaintiffs argued that either the attorney-client privilege, the attorney work-product privilege, or the trial-preparation privilege shielded these communications from disclosure.
The court agreed that the common-interest doctrine applied. It reasoned that plaintiffs’ and Quadrum’s representatives were “interrelated,” and their communications addressed the pending litigation, litigation strategies, and the preparation of materials relevant to the litigation. Thus, even these communications between non-party entities and non-lawyers were protected from disclosure because of the parties’ “common legal interests” in the lawsuit.
West 87 LP demonstrates just how useful the common-interest doctrine can be to commercial litigators. A client in some corporate form, like West 87 LP, may well share ownership interests with non-party entities who wish to stay abreast of pending or anticipated litigation. In those instances, the client is likely safe to share privileged communications with such a party, so long as they share “common legal interests” in the litigation.
Nonetheless, the prudent litigator should be cautious. It makes sense that the court in West 87 LP applied the common-interest doctrine to communications with a company’s part owner; Quadrum’s ownership interest necessarily made it interested in the outcome of the litigation. But what if Quadrum were, for example, a subcontractor? Or perhaps a friend’s business embroiled in similar litigation? In those instances, the client may be better served by keeping its attorney’s advice to itself. Otherwise, the privilege may be waived, and those communications may be discoverable.