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The Community-of-Interest Privilege: You Have to Walk the Walk, Not Just Talk the Talk

November 2011
Practice: Professional Liability
Offices: Boston
People: Gary M. Ronan

A recent decision by the Eastern District of Pennsylvania stands as a reminder that entering into a joint defense agreement is not, in and of itself, sufficient to cloak communications between two parties with the protection of the community-of-interest privilege. Instead, parties must engage in a joint, coordinated, and ongoing shared legal strategy with one another for the privilege to apply.

In King Drug Company of Florence, Inc. v. Cephalon, Inc., an antitrust case, the plaintiff moved to compel the production of communications between one of the defendants, a generic drug manufacturer, and a company that supplied it with the active ingredient in the drug. The defendant argued that it need not produce the communications because they were protected by the community-of-interest privilege. It pointed to the existence of a written joint defense agreement between it and the supplier, under which the supplied agreed to share with the manufacturer legal expenses incurred in connection with an underlying case.

Generally speaking, the community-of-interest privilege allows parties (and their attorneys) who share a substantially similar legal interest to share confidential information as part of a joint, coordinated, ongoing legal strategy.

Notwithstanding the written agreement in the King Drug case, the court held that the communications were not protected by the privilege because there was no evidence other than the written agreement itself, which was executed in 2003, that the parties were engaged in a joint, coordinated, ongoing legal strategy at the time the communications at issue were made in 2005 and 2006. As the court put it, “nothing else in the record before me reflects that any actual, concrete, tangible steps were taken to effectuate or implement [the] joint defense. A joint defense agreement, drafted in February of 2003, that recites terms such as ‘mutuality of interest in a common and joint defense’ does not establish that communications made two years later were part of a joint, ongoing, coordinated defense strategy.”

The moral of the story: in order to protect communications from disclosure under the community-of-interest privilege, it is not enough for parties to say that they are engaged in a joint, coordinated defense. Instead, they must take meaningful, concrete steps to effectuate a common defense throughout the period of time during which they wish to protect communications between them.

This blog entry was originally posted on Legal OnRamp.  Goulston & Storrs attorneys provide blogs, discussion forums, collaboration, and pertinent news and related key cases regarding attorney-client privilege and work product protection information for Legal OnRamp.

This information should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer concerning your situation and any specific legal questions you may have.

Pursuant to IRS Circular 230, please be advised that, this communication is not intended to be, was not written to be and cannot be used by any taxpayer for the purpose of (i) avoiding penalties under U.S. federal tax law or (ii) promoting, marketing or recommending to another taxpayer any transaction or matter addressed herein.

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