WL 396522, at *5 (S.D.N.Y. April 19, 2001) ("a business strategy
which happens to include a concern about litigation is not a
ground for invoking the common interest rule").
The lack of a common interest is further highlighted by the
actual "Common Interest/Joint Prosecution and Defense Agreement"
that was ultimately executed by the Bank and Palladium. The
document is undated but its text states that the two entities
did not enter into the agreement until April 24, 2000. See May
17 Letter, Ex. C, at unnumbered second page. Thus, there was "no
joint defense effort or strategy," Schwimmer, 892 F.2d at 243,
in place in 1999 when the Disputed Documents were created.
The case of United States v. United Techs., 979 F. Supp. 108
(Conn. 1997), cited by the Bank, is not to the contrary. In
that case, five aerospace companies entered into a
"collaboration agreement" to form a consortium to produce jet
engines. The Internal Revenue Service sought documents relating
to the development of the agreement. The court concluded that
the "goal" of the parties' dealings during the development of
the agreement was to create a corporate structure "that would
minimize the U.S. tax liability of all consortium members."
Id. at 110. In other words, the very purpose of the parties'
dealings was to reduce their legal liability for taxes and each
of the companies had identical interests in this respect. The
agreement between the parties permitted the executives of each
company to obtain legal advice from each other's attorneys in
order to effectuate the purpose of reducing their tax liability.
The court concluded that the parties therefore shared a common
"legal" interest. Here, by contrast, the parties' agreement was
not made to achieve some legal goal — such as the avoidance of
tax liability — but rather to embark on a commercial venture.
The parties' interests, while similar, were not identical with
respect to this venture. Nor was there any agreement that
explicitly provided that the parties would be seeking advice
from each other's counsel.
For these reasons, the Bank has not met its burden of
establishing privilege under federal law.
The Common Interest Doctrine Under New York Law
The Bank fares even worse under New York law. The only New
York Court of Appeals case on the common interest doctrine deals
with a criminal proceeding. See People v. Osorio, 75 N.Y.2d 80,
85, 550 N.Y.S.2d 612, 549 N.E.2d 1183 (1989) (statements by
co-defendants mounting a common defense are privileged if made
with the purpose of supporting their common defense). While
lower court cases have applied the doctrine to civil matters,
they have explicitly limited the doctrine to "communication
between counsel and parties with respect to legal advice in
pending or reasonably anticipated litigation." Aetna Cas. and
Sur. Co. v. Certain Underwriters at Lloyd's London, 176 Misc.2d 605,
612, 676 N.Y.S.2d 727 (1998) (emphasis added), aff'd,
263 A.D.2d 367, 692 N.Y.S.2d 384 (1st Dep't 1999); see also Parisi
v. Leppard, 172 Misc.2d 951, 957, 660 N.Y.S.2d 307 (1997) ("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 legal counsel in or in anticipation of litigation,
as opposed to transmitting information that was
business-oriented . . . in nature"); 8 Carmody-Waite New York
Practice 2d § 56:198 (2002) ("[t]he common interest exception,
. . . is limited to communications . . . with respect to advice
in pending or reasonably anticipated litigation"). Thus,
existing New York case law would not permit application of the
doctrine to the Disputed Documents and there is no reason to
believe the New York courts would extend the doctrine beyond
what is permitted by federal law. Thus, the Bank's claim of
privilege fails under New York law as well.
Terra Nova's request for an order compelling the production of
the Disputed Documents is granted.
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