Presenting a live 90-minute webinar with interactive Q&A Structuring Joint Defense Agreements in Environmental Litigation Weighing Key Considerations, Navigating Privilege, and Ensuring Ethical Compliance WEDNESDAY, NOVEMBER 4, 2015 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Jeffery J. Carlson, Partner, Carlson & Messer , Los Angeles Pamela Hanebutt, Partner, Eimer Stahl LLP , Chicago Robert C. Mitchell, Partner, Vorys Sater Seymour and Pease , Cincinnati The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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CONSIDERATIONS BEFORE ENTERING INTO A JOINT DEFENSE AGREEMENT Pamela Hanebutt Eimer Stahl LLP phanebutt@eimerstahl.com 5
JDA What is a Joint Defense Agreement? • Agreement among different parties with common interests governing the exchange of privileged information by their attorneys. • Mechanism to invoke the joint defense privilege which allows attorneys to share privileged information without waiving attorney-client or work product privileges. 6
JDA What is a Joint Defense Agreement? • The assertion of privilege in a joint defense context does not create a new type of privilege, but rather is an extension of the attorney-client privilege, work product doctrine and an exception to the general rule that the privilege is waived when privileged information is disclosed to third parties. United States v. Schwimmer , 892 F.2d 237, 243 (2d Cir. 1989). 7
What Law Governs? FEDERAL RULE OF EVIDENCE 501 • In federal cases, the common law governs a claim of privilege. • State law governs privilege regarding a claim or defense for which state law supplies the rule of decision. • Source and scope of the joint defense privilege varies by jurisdiction. 8
Requirements of the Privilege • communications. • Related to a common legal interest. • Most courts do not require parties ’ interests to be congruent in all respects. United States v. McPartlin , 595 F2d 1321, 1336-37 (7th Cir. 1979); Hunydee v. United States , 355 F.2d 183, 185 (9th Cir. 1965); In re LTV Sec. Litig. , 89 F.R.D. 595, 604 (N.D. Tex. 1981) (upholding privilege even as to parties asserting cross-claims); R ESTATEMENT (3 D ) OF THE L AW G OVERNING L AWYERS § 76 cmt. (e). 9
Requirements of the Privilege • In furtherance of a joint legal strategy. • Purely bu$ine$$ communications are not protected. United States v. Aramony , 88 F.3d 1369, 1392 (4th Cir. 1996); Power Mosfet Technologies v. Siemens AG , 206 F.R.D. 422, 424 (E.D. Tex. 2000); Oxy Resources California LLC v. Superior Court , 9 Cal. Rptr. 3d 621, 643 (Cal. App. 1st Dist. 2004) (disclosures must be necessary to accomplish the purpose for which lawyers were consulted). 10
Requirements of the Privilege • Pending or threatened litigation is not necessary in most jurisdictions. United States v. BDO Seidman, LLP , 492 F.3d 806, 814-818 (7th Cir. 2007) (communications need not be in anticipation of litigation); Hanover Ins. Co. v. Rapo & Jepsen Ins. Servs. , 870 N.E.2d 1105, 1112 (Mass. 2007) (“confidentiality of consultations between parties to business transactions with their respective attorneys is no less essential ”). • Other jurisdictions require threat of litigation. In re Santa Fe Int’l Corp. , 272 F.3d 705, 710-714 (5th Cir. 2001) (threat of litigation must be “palpable”). 11
What Does the Privilege NOT Protect? Communications not otherwise privileged. Communications not related to or in furtherance of a mutual legal concern or strategy. Power Mosfet Technologies v. Siemens AG , 206 F.R.D. 422, 426 (E.D. Tex. 2000) (“where the common interest ends, so does the privilege”). Communications between clients without counsel present. 12
Advantages of a JDA? Shared knowledge Shared resources (e.g. , experts ) Division of labor; cost savings Efficiency Coordination of legal strategy Consistent, unified approach Discourage piecemeal settlements 13
Disadvantages of a JDA? Decision-making by committee; delay Lack of trust Free-riding Appearance of being aligned with a wrongdoer May limit claims or defenses Over-reliance on group work product 14
Disadvantages of a JDA? May be discoverable. Warren Distributing Co. v. InBev USA LLC , No. 07-1053, 2008 WL 4371763, at *3 (D.N.J . Sept. 18, 2008) (“A party’s mere characterization of a document as a joint defense agreement is not controlling as to whether the document [is] relevant and therefore subject to discovery.”). Subsequent related litigation between JDA members may waive the privilege. Potential for conflicts and disqualification. 15
Settlement Issues Require notice of settlement discussions. Use of shared work-product. Return of confidential information. 16
Practical Considerations Before Entering JDA • Know the applicable law. • Know the judge and opposing counsel. • Consider CMO approving JDA. • Are there divergent interests? • Limit shared information to common issues. • Are the parties likely to be adverse down the road? • Are the parties otherwise usually adverse? • Can limit the use of shared information to the particular case, but cannot “ unhear ” privileged information. • Will sensitive business information be shared? • Consider limiting the exchange of information to outside counsel. 17
Practical Considerations Before Entering JDA • Skill of other counsel. • Is your client the primary target? • Will a JDA unduly constrain strategy? • Is your client a de minimis party? • Cost may exceed benefits. • Risk of being “tainted” by association with other defendants. • Pace of litigation. • Will a JDA unduly delay decision-making? • Are you planning to settle early? 18
Joint Defense Agreements (“JDA”) Jeffery J. Carlson Carlson & Messer carlsonj@cmtlaw.com 19
Tips On Drafting JDA • Although a JDA is not required to be in writing ( See SIG Swiss Indus. Co v. Fres-Co Sys., U.S.A., Inc. 1993 U.S. Dist. Lexis 3576 (E.D. Pa. 1993)), however, it is highly advisable to have a written agreement. A well written JDA provides better evidence of the scope of defense protection. See e.g., Grand Jury Subpoena (Newparent) , 274 F.3d 563, 569, 274 F.3d 563 (2001) (noting lack of specificity that arose from oral joint defense agreement). 20
Tips On Drafting JDA • The JDA should clearly state the common interest of the parties to the JDA in order to determine the scope of the coverage. 21
Tips On Drafting JDA • For example, “the ‘common interests’ of the parties are to defend the failure to warn claims, the claims of toxic exposure and causation.” 22
Tips On Drafting JDA • The JDA should also provide that each party knowingly waives any conflict of interest, which may result from his lawyer’s receipt of confidential joint defense information. 23
Tips On Drafting JDA • Each party should acknowledge that it is represented by its own counsel, and that the other lawyers owe an unqualified duty of loyalty to their clients (the other parties to the JDA). 24
Tips On Drafting JDA • The JDA should provide that the parties will reasonably cooperate with each other in the defense of the parties common interests, including the sharing of information protected by the attorney- client privilege to assert joint defenses to the claims in the litigation. 25
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