Association of the Bar of the City of New York
Council on Judicial Administration
January 28, 1998
RECOMMENDATION THAT STATE
CIVIL COURTS ADOPT THE COMMON INTEREST PRIVILEGE
Although traditionally the attorney-client privilege and the attorney work product doctrine were limited to material kept confidential by a lawyer and a client, courts increasingly have come to realize that materials shared among litigants with a common interest should remain confidential. Originally denominated a "joint defense privilege," more recent cases recognize that the doctrine extends beyond co-defendants, and call it a "common interest" privilege.
This privilege is rooted in common sense, efficiency and fairness because it promotes joint conferences between attorneys and their respective clients and inter-attorney exchanges in potential joint defense or information pooling situations that arise in multiple defendant or plaintiff actions and in non-litigated situations such as labor or commercial negotiations and general corporate and securities practice. The common interest privilege promotes more open discourse and cooperation between attorneys and their clients. This discourse and cooperation is essential for the effective and efficient administration of justice because it allows litigants to coordinate their positions and thus reduces duplicative research and investigation by attorneys and minimizes duplicative presentations to a court. This kind of coordination, however, requires that counsel and their clients be free to share attorney work product and confidential communications with each other.
Federal decisions have been more explicit than state court decisions about recognizing the common interest doctrine. In general, it protects (a) confidential communications between a client or his lawyer and a lawyer representing another in a matter of common interest, made for the purpose of facilitating the rendition of legal advice and (b) the communication of work product to persons sharing a common interest. Properly understood, however, the doctrine is not the creation of a new privilege at all, but rather, a recognition that material protected by the attorney-client privilege or the attorney work product doctrine will not lose its protection merely because it is shared among parties having a common interest. Unfortunately, New York courts have not been as explicit as federal courts in the articulation of the common interest privilege. The Council on Judicial Administration of the Association of the Bar of the City of New York (the "Council") believes that the privilege is salutary, that New York courts should recognize and articulate the doctrine in their decisions, and that the New York Legislature should amend the New York Civil Practice Law and Rules ("CPLR") to expressly incorporate the common interest privilege.
II. ATTORNEY-CLIENT PRIVILEGE GENERALLY
The federal law of privilege is not statutory but is based solely on the common law. United States v. (Under Seal), 748 F.2d 871, 873-74 (4th Cir. 1984). As a result, federal courts have relied on Supreme Court Standard 503 for guidance. Citibank, N.A. v. Andros, 666 F.2d 1192, 1195 n. 6 (8th Cir. 1981). "[A]lthough Congress did not adopt [Sup. Ct. Standard 503], courts have relied upon it as an accurate definition of the federal common law of attorney-client privilege." United States v. Spector, 793 F.2d 932, 938 (8th Cir. 1986). Supreme Court Standard 503(b) states:
(b) General rule of privilege. A client has a privilege to refuse to disclose and to prevent any other person from disclosing confidential communications made for the purpose of facilitating the rendition of professional legal services to the client, (1) between himself or his representative and his lawyer or his lawyers representative, or (2) between his lawyer and the lawyers representative, or (3) by him or his lawyer to a lawyer representing another in a matter of common interest, or (4) between representatives of the client or between the client and a representative of the client, or (5) between lawyers representing the client.
See Jack B. Weinstein & Margaret A. Berger, Weinsteins Evidence ¶503.01 (1998).1 This Standard specifically incorporates the common interest privilege.
In the Second Circuit, (1) where legal advice of any kind is sought (2) from a professional legal advisor in his or her capacity as such, (3) the communications relating to that purpose (4) made in confidence (5) by the client (6) are at the clients instance permanently protected (7) from disclosure by the client or by the legal advisor, (8) except the protection be waived.2 In re Grand Jury Subpoena Duces Tecum Dated September 15, 1993, 731 F.2d 1032, 1036 (2d Cir. 1984).3 The attorney-client privilege protects communications with agents of the client or attorney as long as the communications are for the purpose of assisting the attorney to render legal advice. United States v. Kovel, 296 F.2d 918, 922 (2d Cir. 1961) (protecting communications to accountant who was employed by lawyer and was lawyers agent; "if the lawyer has directed the client, either in the specific case or generally, to tell his story in the first instance to an accountant engaged by the lawyer, who is then to interpret it so that the lawyer may better give legal advice, communications by the client reasonably related to that purpose ought to fall within the privilege"). See also In re Grand Jury Proceedings, 947 F.2d 1188, 1190-91 (4th Cir. 1991) (protecting as privileged communication to accountant of matters to be discussed with attorney while client and accountant were on route to meet with attorney because communications "were made for the purpose of the accountant assisting appellant in the rendition of legal services rather than merely for the purpose of receiving accounting advice"); Golden Trade v. Lee Apparel Co., 143 F.R.D. 514, 518-19 (S.D.N.Y. 1992) (communications between client and patent agent acting to assist the lawyer were held privileged).
In the corporate context, the privilege extends to communications among corporate employees related to legal advice. Bank Brussels Lambert v. Credit Lyonnais (Suisse) S.A.,160 F.R.D. 437, 442 (S.D.N.Y. 1995); see Upjohn Co. v. United States, 449 U.S. 383, 101 S. Ct. 677 (1981) (protecting as privileged employee responses to inquiries by in-house counsel). "This follows from the recognition that since the decision-making power of the corporate client may be diffused among several employees, the dissemination of confidential communications to such persons does not defeat the privilege." Id. See Coastal States Gas Corp. v. Dept of Energy, 617 F.2d 854, 863 (D.C. Cir. 1980) ("[w]hen the client is by nature a group, as is true of both the government and corporations, the courts have agreed that the privilege should not be defeated by some limited circulation beyond the attorney and the person within the group who requested the advice"); SCM Corp. v. Xerox Corp., 70 F.R.D. 508, 518 (D. Conn. 1976) ("a privileged communication should not lose its protection if an executive relays legal advice to another who shares responsibility for the subject matter underlying the consultation"); see also Schriver v. Baskin-Robbins Ice Cream Co., Inc., 145 F.R.D. 112, 114 (D. Colo. 1992) ("[a]n otherwise privileged communication by a lawyer to a corporate agent does not lose its protected status simply because the agent then conveys the attorneys opinion to a corporate committee charged with acting on such issues"); Ferguson v. Lurie, 139 F.R.D. 362, 364 (N.D. Ill. 1991) (protecting disclosure of legal advice to in-house accountant).4
In New York, the attorney-client privilege is governed by CPLR 4503(a), which states:
Unless the client waives the privilege, an attorney or his employee, or any person who obtains without the knowledge of the client evidence of a confidential communication made between the attorney or his employee and the client in the course of professional employment, shall not disclose, or be allowed to disclose such communication, nor shall the client be compelled to disclose such communication in any action . . .
See Rossi v. Blue Cross Blue Shield, 73 N.Y.2d 588, 593, 542 N.Y.S.2d 508, 511 (1989) (the privilege extends to communications to or from the attorney, but the communications must be made "for the purpose of facilitating the rendition of legal advice or services, in the course of a professional relationship"). The privilege is triggered only by a clients request for legal, as contrasted with business advice, and protects the advice of the attorney to the client, at least to the extent that such advice may reflect confidential information conveyed by the client. Id. at 1037; Spectrum Systems Intl Corp. v. Chemical Bank, 78 N.Y.2d 371, 575 N.Y.S.2d 809, 814 (1991) (the communication itself must be primarily or predominantly of a legal character); see also Bank Brussels Lambert v. Credit Lyonnais (Suisse) S.A.,160 F.R.D. 437, 441-42 (S.D.N.Y. 1995). See Footnote 2, supra.
New York similarly recognizes that "communications made to counsel through a hired interpreter, or one serving as an agent of either attorney or client to facilitate communication, generally will be privileged." People v. Osorio, 75 N.Y.2d 80, 85, 550 N.Y.S.2d 612, 615 (1989).
III. COMMON INTEREST EXTENSION OF ATTORNEY-CLIENT PRIVILEGE
The common interest privilege originated as the "joint defense privilege" which protected the confidentiality of certain communications passing from one party to the attorney for another party where a joint defense effort or strategy had been undertaken. United States v. Schwimmer, 892 F.2d 237, 243 (2d Cir. 1989), cert. denied, 502 U.S. 810 (1991) (joint defense privilege protected information defendant provided to accountant hired by co-defendants attorney to serve joint interests of defendants); Eisenberg v. Gagnon, 766 F.2d 770, 787-88 (3d Cir.), cert. denied, 474 U.S. 946 (1985) (held as privileged communications between defendant and the attorney representing defendants insurer). Certain federal courts recognize a common interest extension of the joint defense privilege to cover "communications made by the client or his lawyer to a lawyer representing another in a matter of common interest." Johnson Elec. North America, Inc. v. Mabuchi North America Corp., 1996 U.S. Dist. LEXIS 5227, 1996 WL 191590 at *2-3 (S.D.N.Y. April 18, 1996), citing Jack B. Weinstein & Margaret A. Berger, Weinsteins Evidence ¶503.21 (1998).
Judge Weinstein has noted that the common interest privilege properly applies "not only if litigation is current or imminent but, consistently with the rest of the standard, whenever the communication was made in order to facilitate the rendition of legal services to each of the clients involved in the conference." Id., quoting 2 Weinstein & Berger, supra, ¶503(b) at 503-59 and citing N.Y.C. Bar Assn, "Ethical Implications of Joint Defense/Common Interest Agreements," 51 The Record 115, 116-17 (March 1996). See Schwimmer, 892 F.2d at 244 ("it is therefore unnecessary that there be actual litigation in progress for the common interest rule of the attorney-client privilege to apply"). Nonetheless, the common interest privilege is most often applied to information shared by attorneys for potential defendants in anticipation of, or in defense of, actual litigation.
In U.S. v. American Society of Composers, Authors and Publishers ("ASCAP"), 1996 U.S. Dist. LEXIS 16201 (S.D.N.Y. Oct. 29, 1996), defendant ASCAP sought testimony and documents concerning discussions at a series of meetings held between 1988 and 1994, among representatives of various cable program suppliers and their lawyers. The meetings concerned issues related to music performance rights fees. The court protected the information pursuant to the common interest privilege on the grounds that the communications at issue were requests for legal advice or the rendition of legal advice by attorneys to their respective clients for the purpose of a common legal and economic interest, the minimization of music performance rights fees.
In Polycast Technology Corp. v. Uniroyal, Inc., 125 F.R.D. 47 (S.D.N.Y. 1989), Polycast sued Uniroyal alleging financial misrepresentations in connection with Polycasts purchase of Uniroyals subsidiary, Uniroyal Plastics. Polycast sought notes taken by a vice president of Uniroyal Plastics related to his conversation with the general counsel of Uniroyal regarding his legal obligations to disclose business data to Polycast. The court stated that the notes were protected by a common interest privilege jointly held by Uniroyal and its subsidiary Uniroyal Plastics. The court then held that Polycast acquired rights to the privilege when it acquired Uniroyal Plastics. Because the litigation was therefore between joint holders of the privilege, Polycast had the right to unilaterally waive the privilege, and thus the privilege did not protect the notes.5 The court noted that if a joint defense privilege had existed, a waiver would have required unanimous not unilateral consent. Id. at 50. The court distinguished between the attorney-client privilege where any of several clients represented by an attorney may unilaterally waive the privilege in any later controversy between the clients, and the joint defense privilege where the consent of all involved is required to waive the privilege. Id.
In Bank Brussels Lambert v. Credit Lyonnais (Suisse) S.A.,160 F.R.D. 437 (S.D.N.Y. 1995), a group of banks (the "Bank Group") financed an oil trading enterprise controlled by William Harris. Harris defrauded the Bank Group and transferred certain monies to defendants Bank Lyonnais and Bank Paribas. The Bank Group sued to recover these monies. In the litigation, the Bank Group sought to protect as privileged a draft opinion letter written by Coudert Brothers, representing only Bank Brussels Lambert, that addressed concerns that the proposed financing transactions would lead to litigation. This draft opinion letter was stamped confidential and circulated to the members of the Bank Group. The court acknowledged the existence of the common interest privilege but held that it did not apply because "while each member shared a concern about the threat of shareholder litigation, there is no evidence that they formulated a joint legal strategy to deal with the possibility." Id. at 448. The court held that the "common interest doctrine does not encompass a joint business strategy which happens to include as one of its elements a concern about litigation." Id. at 447. The court found it important that there were no efforts to coordinate legal efforts among the individual attorneys representing the different members of the Bank Group and that these individual attorneys were not present at the meeting where representatives of the Bank Group reviewed the Coudert letter. Id. at 448.
The emergence of the common interest privilege has been slower in the state courts in New York than in their federal counterparts. The common interest privilege is not mentioned in New York States statute covering attorney-client privilege. See CPLR §4503. Nevertheless, the New York Court of Appeals has in dicta recognized the common interest privilege as an extension of the joint defense privilege that protects communications between codefendants and their separate attorneys for the purpose of mounting a common defense. People v. Osorio, 75 N.Y.2d 80, 85, 550 N.Y.S.2d 612, 615 (1989) (despite recognizing common interest privilege, court held that statements to attorney from defendant, that were translated by a co-defendant, were not privileged because co-defendant was not an agent of defendant and was not planning a common defense). New York lower courts have followed this dicta to establish a common interest privilege that is similar to the federal joint defense privilege.
A Kings County court recently held that there is a common interest privilege in New York. People v. Pennachio, 167 Misc. 2d 114, 637 N.Y.S.2d 633, 635 (Sup. Ct. Kings Co. 1995). In Pennachio, the court held that the common interest privilege attached to confidential communications by one criminal defendant to the attorney for another defendant where a joint defense effort or strategy had been agreed to by the defendants and their attorneys. Pennachio, 167 Misc. 2d at 117, 637 N.Y.S.2d at 635. Although the privilege attached, the court held that the information was not protected because one of the defendants waived the privilege by disclosing the information to the police. The court refused to adopt the federal unanimous consent rule related to the waiver of the joint defense privilege.
Recently, a Nassau County court held that the common interest privilege, recognized by Pennachio, applies also to civil actions. Parisi v. Leppard, 172 Misc. 2d 951, 660 N.Y.S.2d 307, 310 (Sup. Ct. Nassau Co. 1997). Parisi involved a litigation arising from the breakup of a medical practice. In Parisi, the court protected information related to four-way meetings between two defendants and their respective attorneys. Although some of the meetings took place before the litigation commenced, the court held that they were protected because they were in contemplation of legal action. Id. at 311. The court stated:
[T]he privilege serves its purpose when parties who are concerned with potential litigation, as well as those who are already involved in a law suit, may attend a strategy session with their respective attorneys without fear that the full contents of the meeting will later be available to an adversary. . . . A proper assertion of the privilege in a given instance therefore will rest on whether the exchange was for the purpose of giving and receiving shared legal counsel in or in anticipation of litigation, as opposed to transmitting information that was business-oriented or personal in nature.
Id. at 310-11.
More recently, in Aetna Casualty and Surety Co. v. Certain Underwriters at Lloyds London, 176 Misc. 2d 605, 676 N.Y.S.2d 727 (Sup. Ct. N.Y. Co. 1998), the court agreed with the conclusion of federal courts that New York would extend the common interest privilege to civil cases. Id., 176 Misc. 2d at 611, 676 N.Y.S.2d at 732. See In re Subpoena Duces Tecum Served on New York Marine & General Ins. Co., 1997 WL 599399 at *4 (S.D.N.Y. 1997); Magna Leasing Inc. v. Staten Island Mall, 76 F.R.D. 559, 563 n. 6 (S.D.N.Y. 1977). Nevertheless, the court rejected the extension of the common interest privilege to communications made prior to pending or anticipated litigation on the grounds that "[s]ince the parameters of a common problem are often not defined until actual litigation ensues, the common interest privilege could easily be used to protect communications with counsel involving merely commercial interests." Id., 176 Misc. 2d at 612, 676 N.Y.S.2d at 732. Accordingly, the court held that the "common interest privilege must be limited to communications between counsel and parties with respect to legal advice in pending or reasonably anticipated litigation in which the joint consulting parties have a common legal interest." Id., 176 Misc. 2d at 612, 676 N.Y.S.2d at 732.
In Aetna, a group of London reinsurers sought to protect minutes of a meeting of counsel with an industry-wide group of leading reinsurance underwriters. The court denied protection under the common interest privilege on the grounds that (a) the common interests were commercial in nature, (b) the reinsurers were not expecting any specific litigation and (c) the purpose of the meeting was to discuss business strategy and was not to obtain legal advice. Id., 176 Misc. 2d at 613, 676 N.Y.S.2d at 733. The court stated, "[f]or this court to adopt the argument of the London reinsurers in this case would be to protect market-wide commercial planning, which might impact antitrust issues, merely because counsel to the market is in attendance." Id. The court did find that the common interest privilege protected all documents reflecting cross consultation agreements, retainer agreements with counsel and documents reflecting methods of paying counsel. Id. Because litigation was not pending, the court held that the minutes of the meeting were not protected as work product. Id., 176 Misc. 2d at 613, 676 N.Y.S.2d at 734.
It is not yet clear, however, whether the New York state courts will extend the common interest privilege beyond application to documents prepared in anticipation of litigation.
IV. WORK PRODUCT DOCTRINE
The work product doctrine is a statutory extension of the attorney-client privilege that protects confidential communications made in preparation for litigation. The work product doctrine does not apply to communications made before litigation is anticipated.
Federal Rule of Civil Procedure 26 establishes a conditional privilege for work product. It states:
[A] party may obtain discovery of documents and tangible things otherwise discoverable under subdivision (b)(1) of this rule and prepared in anticipation of litigation or for trial by or for another party or by or for that other partys representative (including the other partys attorney, consultant, surety, indemnitor, insurer, or agent) only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of the partys case and that the party is unable without undue hardship to obtain the substantial equivalent of the materials by other means.
In Hickman v. Taylor, the Supreme Court stated that the doctrine extends to those documents prepared "with an eye toward litigation." 329 U.S. 495, 67 S. Ct. 385 (1947). The doctrine protects "an attorneys mental impressions, opinions or legal theories concerning specific litigation." Horn & Hardart Co. v. Pillsbury Co., 888 F.2d 8, 12 (2d Cir. 1988). The work product doctrine attaches "[w]here a document was created because of anticipated litigation, and would not have been prepared in substantially similar form but for the prospect of litigation." United States v. Aldman, 134 F.3d 1194, 1195 (2d Cir. 1998). The court specifically held that "[w]here a document is created because of the prospect of litigation, analyzing the likely outcome of that litigation, it does not lose protection under this formulation merely because it is created in order to assist with a business decision." Id. at 1202 (remanding privilege issue related to memorandum prepared by tax attorney that analyzed tax consequences of corporate restructuring that was expected to result in litigation with the IRS). The court specifically rejected the "primarily to assist in litigation" test. Id. at 1203.
In New York state courts, CPLR §3101(c) grants an absolute protection to "work product." Work product is defined as "materials which are uniquely the product of a lawyers learning and professional skills, such as materials which reflect his legal research, analysis, conclusions, legal theory or strategy." Hoffman v. Ro-San Manor, 73 A.D.2d 207, 425 N.Y.S.2d 619 (1st Dept 1980). CPLR §3101(d) also grants a conditional privilege to all materials prepared in anticipation of litigation (including materials prepared by an attorney, consultant, surety, indemnitor, insurer or agent), stating that these materials may be discovered only if the party seeking the discovery has substantial need of the materials and is unable without undue hardship to obtain the materials from another source.
An example of work product is a memorandum by in-house counsel at an insurance company addressing a possible law suit against the insurer based on a rejection of claims for certain services performed by a radiologist. The court held that the memorandum contained the attorneys legal analysis and conclusions and thus was immune from discovery as work product under CPLR §3101(c). Rossi v. Blue Cross and Blue Shield, 140 A.D.2d 198, 528 N.Y.S.2d 51 (1st Dept 1988), affd on other grounds, 73 N.Y.2d 588, 542 N.Y.S.2d 508 (1989). However, work product does not include information that was not obtained or prepared in anticipation of a particular litigation. Mahoney v. Staffa, 184 A.D.2d 886, 585 N.Y.S.2d 543 (3d Dept 1992) (documents generated by state agency investigation conducted at behest of Governor were not work product). New York courts have held that materials must be prepared solely for litigation in order to qualify for work product immunity. See J.R. Stevenson Corp. v. Dormitory Authority of the State of New York, 112 A.D.2d 113, 119, 492 N.Y.S.2d 385, 390 (1st Dept 1985) (audit report of companys expenditures was not immune because it was made in ordinary course of business). Thus investigative reports that are motivated both by potential litigation and business considerations are not protected work product. See Carlo v. Queens Transit Corp., 76 A.D.2d 824, 428 N.Y.S.2d 298 (2d Dept 1980) (work product did not attach to muti-purpose report motivated by both litigation and considerations of personnel efficiency and discipline).
V. COMMON INTEREST EXTENSION OF WORK PRODUCT DOCTRINE
Generally, work product privilege is waived if it is disclosed to a third party. In re Crazy Eddie Sec. Litig., 131 F.R.D. 374, 378 (E.D.N.Y. 1990) (disclosure of interview statements to third party waived protection); see also Krenning v. Hunter Health Clinic, Inc., 166 F.R.D. 33, 35 (D. Kan. 1996) (defendant waived work product protection by forwarding witness statements to the Kansas Human Rights Commission). As an exception to the general rule, when work product is shared with codefendants pursuant to a joint defense agreement, federal courts have applied the common interest privilege to uphold the work product protection and prevent waiver. Schwimmer, 892 F.2d at 243; In re In-Store Advertising Sec. Litig., 163 F.R.D. 452, 456 (S.D.N.Y. 1995). Certain federal courts have even extended the protection to non-parties who share a common interest. See United States v. AT&T Co., 642 F.2d 1285, 1299-1300 (D.C. Cir. 1980) (no waiver in MCI attorneys sharing legal analyses with the government attorneys prosecuting separate but parallel claims). Waiver of the common interest protection of work product requires unanimous consent. John Morrell & Co. v. Local Union 304A, United Food and Comml Workers, 913 F.2d 544, 556 (8th Cir. 1990).
New York courts similarly recognize the general rule that the work product protection is waived if the work product is disclosed to a third party. Nab-Tern-Betts v. City of New York, 209 A.D.2d 223, 618 N.Y.S.2d 306, 307 (1st Dept 1994). Although no New York court has specifically extended the common interest privilege to protect work product, New York courts have recognized the common interest privilege as an extension of the attorney-client privilege and thus will likely apply it to extend the work product doctrine as well. Osorio, 75 N.Y.2d at 84-85, 550 N.Y.S.2d at 615; Parisi, 172 Misc. 2d at 955, 660 N.Y.S.2d at 310; Aetna, 176 Misc. 2d at 611, 676 N.Y.S.2d at 732-33.
VI. PREVIOUS PROPOSAL TO ADOPT A COMMON INTEREST PRIVILEGE
In 1980, the New York State Law Revision Commission drafted a Proposed Code of Evidence for the State of New York which included a common interest privilege modeled after Supreme Court Standard 503(b). See p. 3., supra. Proposed Rule 503(b) stated:
(b) General rule of privilege. A client has a privilege to refuse to disclose and to prevent any other person from disclosing confidential communications made for the purpose of facilitating the rendition of professional legal services to the client (1) between himself or his representative and his lawyer or his lawyers representative, (2) between his lawyer and the lawyers representative, (3) by him or his representative or his lawyer or a representative of the lawyer to a lawyer or a representative of a lawyer representing another party concerning a matter of common interest, (4) between representatives of the client or between the client and a representative of the client, or (5) among lawyers and their representatives representing the same client.
Proposed NY Code of Evidence §503(b)(3) (1980). This proposal extended the attorney-client privilege to matters of common interest and eliminated the limitation of the 1974 Uniform Rules of Evidence Rule 502(b), which had applied the privilege only to matters of common interest "in a pending action." The 1982 proposed Rule 503(b) was submitted by the New York State Law Revision Commission to the 1982 Session of the New York Legislature but was never passed. More recently, in 1992, the Commission submitted a revised Proposed Code of Evidence that eliminated the 1980 common interest provision and merely reiterated the privilege law currently stated in CPLR §4503. Proposed NY Code of Evidence §504 (1991). The 1992 Proposal did state in its comments that the "privilege does, however, protect confidential communications made to an attorney by joint clients who consult an attorney in pursuit of common interests as well as communications by the attorney to the clients." Id.
VII. NEW YORK LAW SHOULD EXPLICITLY RECOGNIZE THE COMMON INTEREST PRIVILEGE
The Council recommends that the New York State Legislature amend the CPLR to specifically recognize the common interest extension of the attorney-client privilege and work product doctrine.6 The common interest privilege should protect as privileged "communications between counsel and parties with respect to legal advice . . . in which the joint consulting parties have a common legal interest." Aetna, 176 Misc. 2d at 612, 676 N.Y.S.2d at 732. The protection should extend to attorney-client communications, regardless of whether litigation has commenced or is contemplated, as litigation is not required for attorney-client communications to be privileged. The protection should extend also to attorney work product and should protect work product shared among persons possessing a common legal interest. Where persons possess information that is protected under the common interest privilege, the unanimous consent of all such persons should be required to waive the privilege and permit disclosure. If unilateral waiver were applied to the privilege, the threat of the waiver would frustrate the open communications that the rule seeks to foster.
The Council is pleased that certain New York courts have recognized the common interest privilege as part of the common law. Although the common interest privilege exists in the common law, in order to clarify this common law doctrine, the Council recommends codifying the common interest privilege by amending the CPLR. Specifically, the following underlined language should be added to subdivision (a) of CPLR §4503:
(a) confidential communication privileged; non-judicial proceedings. Unless the client waives the privilege, an attorney or his employee, or any person who obtains without the knowledge of the client evidence of a confidential communication made between the attorney or his employee and the client in the course of professional employment or made between the attorney or his employee and a person or persons with respect to legal advice in which the client and the other person or persons have a common legal interest, shall not disclose, or be allowed to disclose such communication, nor shall the client be compelled to disclose such communication, in any action, disciplinary trial or hearing, or administrative action, proceeding or hearing conducted by or on behalf of any state, municipal or local government agency or by the legislature or any committee or body thereof. Persons may have a common legal interest regardless of whether litigation is pending or anticipated. The Privilege protecting communications among persons with a common legal interest shall not be waived unless all parties to the communications consent to the waiver Evidence of any such communication obtained by any such person, and evidence resulting therefrom, shall not be disclosed by any state, municipal or local governmental agency or by the legislature or any committee or body thereof. The relationship of an attorney and client shall exist between a professional service corporation organized under article fifteen of the business corporation law to practice as an attorney and counselor-at-law and the clients to whom it renders legal services.
In addition, the Council recommends that CPLR §3101 be amended by adding a new subdivision (j) stating:
Material protected under subdivision (c) or paragraph 2 of subdivision (d) of this section shall retain such protection despite being disclosed to persons having a common legal interest in the subject matter of such material. The work product protection of communications among persons with a common legal interest shall not be waived unless all parties to the communications consent to the waiver.
Adopting the common interest privilege would foster communication between lawyers and clients sharing common interests and would promote pre-litigation analysis and studies that could be openly shared and discussed. In the corporate setting, for example, the common interest privilege would permit counsel for multiple lenders, underwriters, employers or joint contractors to work together openly as a group to discuss confidential legal issues when a business transaction goes awry and needs to be restructured. The protection of the privilege could lead to more effective communication and group decision making which would promote compromise and prevent litigation. In the litigation setting, the common interest privilege would encourage the sharing of work product which would eliminate duplication, reduce costs, and promote cooperation. The common interest privilege would not protect market-wide commercial planning because it would apply only to confidential statements of legal advice and would not protect communications between parties related to common business interests or strategies.
ASSOCIATION OF THE BAR OF THE CITY OF NEW YORK
COUNCIL ON JUDICIAL ADMINISTRATION
JANUARY 28, 1998
Robert L. Haig, Chair
Sarah L. Reid, Secretary
|Richard T. Andrias
Steven J. Antonoff
Robert E. Bailey
Paris R. Baldacci
Celia Goldwag Barenholtz
Helaine M. Bennett
Gary S. Brown
Nancy A. Brown
Deirdre A. Burgman
Austin V. Campriello
Roy H. Carlin
P. Kevin Castel
Brendan M. Connell, Jr.
Melanie L. Cyganowski
William M. Dallas, Jr.
George B. Daniels
Julia R. Davis
Charles E. Dorkey III
Joan L. Ellenbogen
Linda A. Fairstein
Gerald J. Fields
John E. Finnegan
Steven G. Foresta
John L. Gardiner
David R. Gelfand
Thomas H. Golden
Erika D. Gorrin
Salvatory J. Graziano
James W. Harbison, Jr.
Alexander W. Hunter, Jr.
Barry M. Kamins
Beth L. Kaufman
Norman C. Kleinberg
Marilyn C. Kunstler
Deborah E. Lans
Robert J. Levisohn
Robert P. LoBue
|Mitchell A. Lowenthal
Jerianne E. Mancini
Jonathan W. Miller
Charles G. Moerdler
David M. Morris
Brian J. Noona
Marilyn G. Ordover
Steven R. Paradise
Sheryl L. Parker
Jane W. Parver
Gerald G. Paul
Ann T. Pfau
Richard Lee Price
Porfirio F. Ramirez, Jr.
William C. Rand
Claudia E. Ray
Roy L. Reardon
Steven A. Reiss
Rosalyn Heather Richter
Stephen G. Rinehart
David E. Ross
Jay G. Safer
Shira A. Scheindlin
Edward T. Schorr
Marcia Lynn Sells
Steven B. Shapiro
Jaqueline W. Silbermann
George Bundy Smith
Debra B. Steinberg
Andrew W. Stern
Guy Miller Struve
Eric A. Tirschwell
Paul A. Tumbleson
Eric D. Welsh
Aviva O. Werthimer
John S. Willems
Ronald P. Younkins
1 The language of Supreme Court Standard 503(b) has been incorporated into the statutory evidence codes of Arkansas, Hawaii, Louisiana, Nebraska, Nevada, Oregon, South Dakota, Texas and Wisconsin. See People v. Pennachio, 167 Misc. 2d 114, 637 N.Y.S.2d 633, 635 (Sup. Ct. Kings Co. 1995).
2 The authorities are split over whether advice from the attorney to the client is protected without limitation or only to the extent it may reveal facts communicated in confidence by the client to the attorney. Compare United States v. Amerada Hess Corp., 619 F.2d 980, 986 (3d Cir. 1980) (legal advice from attorney is protected without limitation) with Bank Brussels Lambert v. Credit Lyonnais (Suisse) S.A.,160 F.R.D. 437, 442 (S.D.N.Y. 1995) (legal advice from attorney protected to the extent it reveals confidential communications from the client to the attorney).
3 The presence and extent of an attorney-client privilege is a matter to be determined under federal common law on a case-by-case basis. Upjohn Co. v. United States, 449 U.S. 383, 389-96, 101 S. Ct. 677, 682-86 (1981). State privilege law applies to state claims litigated in federal court. See 28 U.S.C. 501 (1997).
4 Federal cases do not extend the attorney-client privilege to discussions where a lawyer is not present unless a party is acting as an agent for the lawyer or the client. United States v. Kovel, 296 F.2d 918, 922 (2d Cir. 1961).
5 See In re Grand Jury Subpoena Duces Tecum Dated November 16, 1974, 406 F. Supp. 381, 386 (S.D.N.Y. 1975) (privileged communication to joint clients "cannot be deemed to be confidential inter sese; in any later controversy between or among those clients, the privilege could not stand as a bar to full disclosure at the instance of any one of them")
6 New York Criminal Procedure Law §60.10 adopts
by reference the civil rules of evidence where the criminal rules are silent.
This report recommends only a change in the civil rules and reserves comment
on whether these rules should also be adopted by the criminal rules.