The Common-Interest Doctrine and Its Effect on Attorney-Client Privileged Communications
by Jeffrey Basso, Esq.

It is widely understood that communications between an attorney and his/her client are protected from disclosure under the attorney-client privilege. It should be equally understood that the attorney-client privilege is lost or waived if a third party is present for those communications. However, there is an exception to the latter rule: the common-interest doctrine.

The common-interest doctrine holds that a third party may be privy to an attorney-client privileged communication, and the privilege will stay intact, if the communication is made for the purpose of furthering a nearly identical legal interest shared by the client and the third party. Hyatt v. State Franchise Tax Bd., 105 A.D.3d 186, 205 (2d Dep't 2013). Courts have interpreted the "furthering a nearly identical legal interest" portion of the doctrine to require that the communication be made in pending litigation or in reasonable anticipation of litigation where the client and third party have a common legal interest. Id., Aetna Cas. And Sur. Co. c. Certain Underwriters at Lloyd's London, 176 Misc.2d 605 (N.Y. Sup. 1998), aff'd, 263 A.D.3d 367 (1st Dep't 1999).

In a recent decision dated October 16, 2013 from the New York County Supreme Court, the Court refused to expand the reach of the common interest doctrine to communications between two parties involved in a merger and one of the parties' counsel. In Ambac Assur. Corp. v. Countrywide Home Loans, Inc., 2013 NY Slip Op 51673(U), the Court reviewed the determination of a Special Referee following a discovery dispute who decided not to extend attorney-client privilege protection over communications related to a merger between Countrywide Home Loans, Inc. ("Countrywide"), its counsel, and co-defendant Bank of America Corp. ("BOA").

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A judge ruled last month that Apple violated antitrust laws in conspiring with some of the largest book publishers to fix e-book prices. While Apple continues to fight the allegations, there is a lot to be learned from the released e-mail exchange between Steve Jobs and James Murdoch. The e-mails had an important role in the lawsuit, but they also provide an savvy high-stakes negotiation between the leaders of two powerful firms.

Eric Sherman writer for Inc.com, reviews the series of e-mails and the negotiation principles used to create the best conditions for winning.

"A series of emails about ebook prices between Apple and HarperCollins, including ones written by Steve Jobs, were recently released as part of the Department of Justice price-fixing suit against Apple and a number of major publishers. As the site Quartz pointed out, these offer some great insight into how Jobs negotiated.

However, Zachary Seward at Quartz called it an example of "hard-nosed" negotiation at which Jobs excelled. I'd take a different view. This is not hard-nosed. The emails show how an excellent negotiator used a series of principles to create the best conditions for winning. Let's look in greater detail at the exchange between Steve Jobs and James Murdoch, son of Rupert Murdoch and the ultimate decision maker, and see how Jobs ultimately got his way."

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This blog previously explored the Supreme Court's June 2013 decision in American Express Co. v. Italian Colors Restaurant, in which the Court validated the credit card company's contract with merchants mandating arbitration and eliminating the possibility of a class action (a result Justice Elena Kagan memorably described as "Too darn bad").

Shortly before deciding the apparently contentious Italian Colors case, however, the Supreme Court unanimously decided Oxford Health Plans LLC v. Sutter. The facts leading up to this case began over a decade ago, when physician Ivan Sutter and Oxford Health Plans entered into an agreement whereby Oxford would pay Dr. Sutter for the medical services he provided to Oxford members. The agreement contained an arbitration clause prohibiting litigation of disputes in court, instead mandating arbitration.

Several years into the agreement, Dr. Sutter filed a class action on behalf of himself and other physicians in Oxford's network, claiming that Oxford had failed to promptly and fully pay the doctors for their services. Oxford moved to compel arbitration, which request was granted by the New Jersey Superior Court. The parties then agreed that the arbitrator should decide whether their agreement authorized class arbitration.

During the course of the arbitration proceedings, the Supreme Court decided Stolt-Nielsen S.A. v. AnimalFeeds International Corp., 559 U.S. 662 (2010), holding that the Federal Arbitration Act ("FAA") prohibits class arbitration absent contractual evidence that the parties had agreed to allow it. Meanwhile, in Sutter, the arbitrator found that the contract between Oxford and Sutter did allow for class arbitration.

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Last month I discussed how to avoid a Will contest. I noted that one way to at least minimize that risk is to talk to your heirs about your estate plan. It sounds simple, but the subject of inheritance is one that most people arduously avoid for a number of different reasons: superstition, fear, lack of knowledge, or a misguided desire for secrecy.

Many adults, such as my parents, were raised to believe that money was a private affair, and that talking about it was inappropriate. But beyond that, many people simply fear that if they talk about their estate plan with their heirs, they will meet with resistance, disagreement or, in a worst-case scenario, their heirs will try to counter the estate plan with legal action of their own. If that scenario exists, then a revocable trust should probably be part of your plan. But that's a topic for another time.

While in some families and circumstances these fears are justified, in most circumstances being silent about your estate plan can have more disastrous consequences. If nothing else, a refusal to talk about money or your estate plans with your children means that they will have a difficult time following your wishes in regards to your medical treatment or protection of your assets should disaster strike. Most adult children are actually eager to fulfill their parents' last wishes, regardless of how it may or may not impact their own inheritance, especially if they understand why their parents are doing what they're doing.

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