DTCI: Joint Defense Agreements

Susan R. Shan

Introduction

A joint defense agreement (JDA) is an agreement between attorneys for two or more defendants to extend the attorney-client privilege and work product doctrine in order to share confidential information for the mutual benefit of the defendants. Developing a joint defense strategy to advocate common interests and goals among defendants promotes efficiency and limits litigation costs because work can be coordinated and divided among attorneys.

“Joint defense agreements are based on the common interest privilege, also known as the common interest doctrine. The common interest privilege is an extension of the attorney-client privilege.” Price v. Charles Brown Charitable Remainder Unitrust Trust, 27 N.E.3d 1168, 1173 (Ind. Ct. App. 2015) (citing United States v. BDO Seidman, LLP, 492 F.3d 806, 815 (7th Cir. 2007)). “The [common interest] privilege is an exception to the general rule that the attorney-client privilege is waived when privileged information is disclosed to a third party.” Id. (citing BDO Seidman, 492 F.3d at 815). “In effect, the common interest privilege extends the attorney-client privilege to otherwise nonconfidential communications between parties represented by separate attorneys.” Id. (citing BDO Seidman, 492 F.3d at 815).

“The common interest privilege ‘treats all involved attorneys and clients as a single attorney-client unit, at least insofar as a common interest is pursued,’” id. (internal citation omitted), and “permits parties whose legal interests coincide to share privileged materials with one another in order to more effectively prosecute or defend their claims.” Id. (citing Hunton & Williams v. United States DOJ, 590 F.3d 272, 277 (4th Cir. 2010)). “The privilege is limited to those communications made to further an ongoing joint enterprise with respect to a common legal interest,” id. (citing BDO Seidman, 492 F.3d at 816), and “cannot be waived without the consent of all parties to the defense.” Id. (citing John Morrell & Co. v. Local Union 304A of United Food & Commercial Workers, 913 F.2d 544, 556 (8th Cir. 1990)).

“The Fourth Circuit Court of Appeals has held the doctrine applies as long as the parties share a common interest about a legal matter, even when the holder of the interest is a non-party, or litigation has not yet commenced.” Fort v. Leonard, No. 7:05-1028-HFF-WMC, 2006 U.S. Dist. LEXIS 68001, at *4 (D.S.C. Sept. 20, 2006) (citing In re Grand Jury Subpoenas, 902 F.2d 244, 249-50 (4th Cir. 1990)). “[A]s an exception to waiver, the joint defense or common interest rule presupposes the existence of an otherwise valid privilege, and the rule applies not only to communications subject to the attorney-client privilege, but also to communications protected by the work-product doctrine.” Id. (quoting Grand Jury Subpoenas, 902 F.2d at 249).

A JDA essentially confirms that a common interest privilege exists between defendants and defines the scope of that interest. See LaSalle Bank Nat’l Ass’n v. Lehman Bros. Holdings, Inc., 209 F.R.D. 112, 116 (D. Md. 2002) (stating that a joint defense agreement “does no more than confirm the existence of the common legal interest which exists”). “More and more, to protect the joint defense privilege, parties enter into written joint defense agreements in an effort to assure that information shared amongst the attorneys for each of the defendants will remain privileged despite the sharing.” Broessel v. Triad Guar. Ins. Corp., 238 F.R.D. 215, 219 (W.D. Ky. 2006).

Because the JDA is a contract, courts “review its terms according to principles of contract interpretation.” Id. “The goal of contract interpretation is to ascertain and give effect to the parties’ intent as reasonably manifested by the language of the agreement.” Id. (citing Reuille v. E.E. Brandenberger Constr., Inc., 888 N.E.2d 770, 771 (Ind. 2008)).

Discoverability of JDA itself

“As a general matter, a joint-defense agreement fits within the broad definition of work product, which embraces documents prepared because of the prospect of litigation.” R.F.M.A.S., Inc. v. So, 2008 U.S. Dist. LEXIS 14969, at *2 (S.D.N.Y. Feb. 15, 2008) (citing United States v. Adlman, 134 F.3d 1194, 1202-03 (2d Cir. 1998)). “Indeed, most courts to address the matter have so found or assumed.” Id. The Southern District of New York recognized that perhaps a JDA should not be given the status of work product, but “the more cogent analysis treats the agreement as work product, and, like all work product, it may have to be disclosed on an adequate showing of need, including in the context of such a waiver dispute.” Id. at *3 n.2.

JDAs are also subject to a relevancy determination. Although they may be helpful in providing the scope of a joint defense to the court, they are not discoverable if not “relevant to the claim or defense of any party.” Broessel, 238 F.R.D. 215, 218. Sometimes, “[w]hen a party seeks to compel production of a joint defense agreement, courts will examine the agreement in camera and make an independent determination regarding the nature of the agreement.” Biovail Labs. Int’l SRL v. Watson Pharms., Inc., No. 10-20526-CIV-MORENO/GOODMAN, 2010 U.S. Dist. LEXIS 95769, at *4 (S.D. Fla. Aug. 30, 2010). “In certain instances, it may also be appropriate for courts to order the production of relevant, non-privileged portions of a joint defense agreement while permitting the producing party to redact privileged or non-relevant information.” Id.

However, “[a] joint defense agreement that ‘merely contains language that parties typically include in joint defense agreements to protect from discovery privileged information revealed to a third party’ is not relevant to any parties’ claims or defenses.” Biovail Labs., 2010 U.S. Dist. LEXIS 95769, at *5 (citing Warren Distrib. Co. v. InBev USA L.L.C., No. 07-1053, 2008 U.S. Dist. LEXIS 71320, at *3 (D.N.J. Sept. 18, 2008)). When the JDA is a “garden variety joint defense agreement that merely sets up a framework of procedures for the parties to share information while preventing disclosure of confidential materials to third parties,” it is “not relevant to any party’s claims or defenses.” Id. at *6. “The parties to a joint defense agreement, however, are relevant because the existence of the agreement may demonstrate bias.” Id. at *5 (citing Ford Motor Co. v. Edgewood Props., Inc., 257 F.R.D. 418, 429 (D.N.J. 2009); Warren Distrib. Co., 2008 U.S. Dist. LEXIS 71320, at *3).

Necessity of JDA

Written JDAs are not technically necessary since they derive from the common interest privilege, and courts have concluded as such. See Fort, 2006 U.S. Dist. LEXIS 68001, at *7 (“[D]efend-ants hold a common legal interest and, therefore, they have not waived the attorney-client privilege by sharing privileged information with each other. The existence of any joint defense agreement would not change the application of the common interest rule in this case and any such written or oral agreement would be irrelevant.”); United States v. Bicoastal Corp., No. 92-CR-261, 1992 WL 693384, at *5 (N.D.N.Y. Sept. 28, 1992) (citing United States v. Schwimmer, 892 F.2d 237, 243 (2d Cir. 1989)) (“[N]otwithstanding the possible existence of a written agreement, defendants with common interests in multi-defendant actions are entitled to share information protected by the attorney-client privilege without danger that the privilege will be waived by disclosure to a third person.”).

However, drafting an actual agreement is recommended in order to define the scope of the relationship. Relying on the privilege instead of drafting a specific agreement “can [ ] create a disqualifying conflict where information gained in confidence by an attorney becomes an issue.” United States v. Henke, 222 F.3d 633, 637 (9th Cir. 2000). Furthermore, an agreement that does not specifically disclaim an attorney-client relationship between the attorneys and co-defendants could create an implied relationship. See id. (“A joint defense agreement establishes an implied attorney-client relationship with the co-defendant.”). The 9th Circuit Court of Appeals stated:

“Just as an attorney would not be allowed to proceed against his former client in a cause of action substantially related to the matters in which he previously represented that client, an attorney should also not be allowed to proceed against a co-defendant of a former client wherein the subject matter of the present controversy is substantially related to the matters in which the attorney was previously involved, and wherein confidential exchanges of information took place between the various co-defendants in preparation of a joint defense.”

Id. (quoting Wilson P. Abraham Constr. Corp. v. Armco Steel Corp., 559 F.2d 250, 253 (5th Cir. 1977)).

Drafting a JDA

When drafting JDAs, it is important to include provisions that specify the duties of each party and the scope of the agreement. First, define what constitutes the “joint defense information” that is subject to the agreement. It could include, but is not limited to, discussions, conferences, telephone calls, emails, correspondences, memoranda of law, debriefing memoranda, factual summaries, interviews, transcript digests, analyses, studies, work plans, appraisals, drafts of pleadings and briefs, documents, financial information, recordings, attorney work product, materials provided to or prepared by any consultant or expert retained by any party, tactics and strategies, and any other materials relating to the litigation.

Next, limit the parameters regarding sharing of the joint defense information. This can include what information is shareable, with whom to share the information, when information can be shared, and the privileges attached to the information. A confidentiality provision should be included explicitly stating that all joint defense information previously disclosed or that will be disclosed in the future shall remain confidential and be protected from disclosure to any third party. In addition, it is important to craft instructions regarding what to do when a party is compelled to disclose joint defense information by a subpoena or court order. Relatedly, a provision should also detail the return of previously provided joint defense information upon request by a producing party and the proper exceptions for retaining the information.

As discussed above, a disclaimer of an attorney-client relationship, partnership, joint venture, and agency relationship should be explicit. Furthermore, the parties should not use the JDA as a basis for seeking to disqualify any counsel from representing such other party in any future proceeding, regardless of whether such proceeding is directly adverse to that party and whether such proceeding is related to the subject of this agreement.

A provision detailing the procedures for withdrawal from the agreement should also be included. Furthermore, it should discuss the continuing obligations of the party as well as the binding nature of the agreement even if a party is no longer a defendant in the litigation or a party to the agreement. In any subsequent litigation between the parties, no party may use any joint defense information other than its own against another party. Finally, provisions should only be modified by unanimous written consent of all parties.

Divergent interests of defendants

JDAs are effective for parties who share common legal interests and goals. As such, “[o]nly those communications made in the course of an ongoing common enterprise and intended to further the enterprise are protected.” United States v. Weissman, 195 F.3d 96, 99 (2d Cir. 1999) (citing Schwimmer, 892 F.2d at 243). Once the goals of the defendants diverge, a joint defense agreement becomes ineffective and untenable because information shared between defendants is no longer protected by confidentiality.

For example, in Weissman, the 2nd Circuit distinguished between the parties’ course of conduct before and after their common interests diverged. Before the divergence, the relationship was “one of cooperation. Information was shared and strategy developed in concert.” Id. at 100. However, once their interests diverged, the information shared between them was no longer confidential. As the court stated, “[p]rivileges should be narrowly construed and expansions cautiously extended. University of Pennsylvania v. EEOC, 493 U.S. 182, 189, 107 L. Ed. 2d 571, 110 S. Ct. 577 (1990). Some form of joint strategy is necessary to establish a JDA, rather than merely the impression of one side as in this case.” Id. Thus, defendants must recognize when their interests diverge. At that point, shared information is no longer confidential and a JDA will not protect against disclosure of that information.•

Ms. Shan is an attorney in the Indianapolis office of Kightlinger & Gray and is a member of the Defense Trial Counsel of Indiana. The opinions expressed in this article are those of the author.