Strategic Use of Joint Defense Agreements in Litigation: Avoiding Disqualification and Privilege Waivers
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1 Presenting a live 90-minute webinar with interactive Q&A Strategic Use of Joint Defense Agreements in Litigation: Avoiding Disqualification and Privilege Waivers Drafting Agreements That Minimize Risks and Maximize Benefits TUESDAY, JULY 7, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Ronald J. Levine, Partner, Herrick Feinstein, New York, NY Adam M. Koss, Director, Murphy Pearson Bradley & Feeney, San Francisco Hugh F. Young, Jr., President, Product Liability Advisory Council, Reston, Va. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.
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5 Joint Defense Strategies RONALD J. LEVINE, ESQ. H E R R I C K, F E I N S T E I N L L P N E W Y O R K / N E W A R K, N. J R L E V I N H E R R I C K. C O M W W W. H E R R I C K. C O M
6 THE BIG PICTURE Joint Defense Privilege applies to communications that are part of an ongoing and joint effort to establish a common defense Allows for communications without waiving attorneyclient privilege Not an independent privilege 6
7 BENEFITS Allows industry to present aggressive, united defense Consistency of defense positions Uniform discovery and motion strategy Coordination of knowledge and resources Facilitates information sharing about judges, venues, plaintiffs' lawyers, etc. Alert system for "copy cat" cases Reduce costs and streamline resources 7
8 WHEN? Active or threatened litigation (with exceptions) Share a common litigation-related interest Objective agreement among the parties Is the agreement in the best interests of your client? What if things fall apart or break down? 8
9 HOW? Explain necessity Confirm conflict checks Provisions on when waiver and termination can occur Address settlements 9
10 PRACTICAL CONSIDERATIONS Coordination of motion practice will competitors agree on when, and before whom, motions should be brought? Coordination of settlement will competitors share information and their settlement strategies? Coordination of information will competitors share data and experts? Need not cooperate during entire litigation can be limited phases or issues 10
11 LESSONS LEARNED FROM COORDINATING WITH OTHER COMPANIES Need leadership to organize calls and prepare agenda Need participants in the know about recent developments Need to be able to screen participants Need to be able to preserve security Need to involve outside counsel to share information among parties 11
12 SUGGESTIONS FOR COORDINATION Expert Witness Bank Deposition and Trial Transcript Bank Designated Gurus who track settlements and court decisions Exchange of Pleadings and Motion Papers 12
13 CAUTION! Companies may not be on the same page Competitors may be seeking a competitive advantage Friend today can become enemy tomorrow Outside counsel can change sides One of the companies may settle (or may have settled) and leave your company high and dry 13
14 JOINT DEFENSE AGREEMENTS: AVOIDING ETHICAL PITFALLS Adam M. Koss Murphy Pearson Bradley & Feeney Los Angeles San Francisco Sacramento
15 15 Attorney-Client Privilege Joint Defense Agreements Grounded in the joint-defense privilege, also referred to as the common-interest doctrine The rule that a defendant can assert the attorneyclient privilege to protect a confidential communication made to a codefendant lawyer if the communication was related to the defense of both defendants.
16 16 Attorney-Client Privilege Joint defense privilege is waived when one of the joint defendants become an adverse party Some courts hold that participants in a joint defense agreement can unilaterally waive the privilege protection for their own communications
17 17 Attorney-Client Privilege Jurisdictions view the doctrine differently California: Common-interest doctrine operates as an exception to the general rule that a privilege is waived upon voluntary disclosure to a third party
18 18 Attorney-Client Privilege California (continued) A party does not waive an existing privilege when the following three requirements are satisfied: the information shared with a co-party would otherwise have protection from disclosure the parties had a reasonable expectation that the information disclosed would remain confidential the disclosure was reasonably necessary to advance the party s shared interest in securing legal advice on a common matter
19 19 Attorney-Client Privilege Federal Distinct joint defense privilege that extends the attorney-client privilege to disclosures made in the presence of two or more clients who share a common interest in a legal matter Protects communications that were made in the course of a common defense effort so long as the statements were designed to further the effort and the privilege has not otherwise been waived
20 20 Potential Liability for Attorneys To client: Professional negligence Breach of fiduciary duty Damages based upon subsequent disqualification To other defendants Professional negligence or breach of fiduciary duty under implied attorney-client relationship Liability to other defendants as third party beneficiaries Contractual liability
21 21 Potential Liability for Attorneys Even in early cases involving joint defense efforts, courts recognized that in a joint-defense arrangement the counsel of each was in effect the counsel of all. Many courts hold that a joint defense agreement does in fact create an implied attorney-client relationship between counsel for one defendant and the other defendants participating in a joint-defense consortium
22 22 Potential Liability for Attorneys Whether an attorney-client relationship exists is a question determined by a Court based on substantive law and the individual facts of a case Courts consider: written agreements intent of the parties other indicia of an attorney-client relationship
23 23 Potential Liability for Attorneys What professional responsibilities and ethical obligations accompany the implied attorney-client relationship? Courts tend to agree that an attorney will owe some duty to the members of the joint-defense group upon receiving confidential information; however, they do not agreed on the scope of that duty
24 24 Potential Liability for Attorneys ABA Standing Committee on Ethics and Professional Responsibility An attorney representing one defendant participating in a joint-defense consortium would not owe ethical obligations to other members of the joint-defense consortium because the Model Rules do not impose such an obligation An attorney would almost surely have a fiduciary obligation to the other members of the consortium, which might well lead to disqualification from representation
25 25 Disqualifications United States v. Henke, 222 F.3d 633 (9th Cir. 2000) Three criminal defendants entered into a joint defense agreement and share privileged information One defendant accepts plea deal and is called as a witness Witness testimony conflicted with statements that he made in confidence during joint-defense meeting
26 26 Professional Negligence Obligations an attorney owes under an implied attorney-client relationship are not clear Generally, an attorney owes the other joint-defense agreement defendants a duty of confidentiality and a duty to avoid conflicts of interest
27 27 Fiduciary Relationship Attorneys representing one defendant in a jointdefense agreement generally owe certain fiduciary duties to the other defendants, which arises by sharing and receiving confidential information
28 28 Third Party Beneficiary Attorneys representing one defendant in a joint-defense agreement can face liability to the others for failure to perform an act as promised
29 29 Contractual Liability An attorney in a joint-defense agreement typically agrees to keep certain information received from codefendants confidential while at the same time the attorney owes his or her client a duty of utmost loyalty
30 30 Limiting the Risks Before entering into a joint-defense agreement develop a thorough understanding of the case and the theories of liability alleged against each defendant
31 31 Limiting the Risks Fully inform your client of the risks and benefits of entering into a joint-defense agreement It is advisable and often necessary to secure a client s informed, written consent before entering into a jointdefense agreement on a client s behalf Don t share before fully executed agreement!
32 32 Limiting the Risks Terms for Inclusion: The parties to the agreement are actual or potential defendants with common interests and the sharing of information is necessary to further those interests All attorneys have performed a conflict check and are free from conflicts with all parties Each client waives any conflict of interest or right to disqualify against any attorney who receives confidential information pursuant to the agreement No attorney-client relationship is intended or created between the codefendants and their respective counsel Each party is represented exclusively by its own attorney
33 33 Limiting the Risks Terms for Inclusion: That the agreement is not intended to make any party the agent of any other party The agreement is not intended to interfere with the attorney s obligation to zealously advocate for the individual client The parties and their counsel have no affirmative duty to share information or materials Any actions taken under the agreement are intended solely to benefit the attorney s individual client and not the other members of the joint defense agreement Waiver of the joint privilege can only be made by consent of all parties, and must be in writing
34 34 Limiting the Risks Terms for Inclusion: Each party agrees to assert the common-interest doctrine and underlying privileges when responding to any discovery request or other compelled disclosure of materials No confidential communications shall be admissible in any proceeding arising from a claim made by one party to the agreement against another party Parties may only withdraw from the agreement upon written notice and upon returning shared material The agreement applies to communications prior to its effective date and extends past the conclusion of litigation All parties shall be notified of any settlement
35
36 Strategic Collaboration Hugh F. Young, Jr. Product Liability Advisory Council
37 The Vision Thing The doctrine of stare decisis, however, ensures that the legal rules necessary to the court s decision become the law for everyone within the court s jurisdiction. (Scalia and Garner, Making Your Case) 37
38 The Vision Thing Put another way Your case on appeal is no longer just your case, it s everybody s case. 38
39 The Vision Thing What have others experienced? How does our case fit in does it? Appellate escalator what s on it? 39
40 The courts provide a system for which there is no alternative. Trials, and a steady stream of them, are enormously important to a well-informed trial bar and to giving the law the life that it needs. Judge Patrick E. Higginbotham U.S. Court of Appeals for the Fifth Circuit 40
41 Litigation Is Not Linear TRIAL APPEAL 41
42 Is It Even Possible to Shape Common Law? 42
43 Federal Constitutional Applied in every case in every court State and Federal Procedure or Evidence Applied in every Federal court May percolate down State Affects laws within the state only 43
44 Sustained Effort Industry Effort Cross- Cross- Industry Communication Self-Interest Cannot Be Exclusive Focus Advantageously Advance Specific Issues 44
45 Case Study - Preemption 45
46 28.2 million accidents (vast majority were property damage only) 3.4 million physical injuries 51,019 fatalities 46
47 Passenger Restraint Regulation/Litigation No air bag liability 158,000,000 cars on the roads without airbags Does FMVSS 208 preempt or not? 47
48 Case Study Expert Evidence 48
49 Expert Evidence Federal Daubert v. Merrell Dow 1993 GE v. Joiner 1997 Kumho v. Carmichael 1998 Weisgram v. Marley
50 Vigilance Required Federal judges who pay lip service to their gatekeeping function State court judges who justify allowing virtually all evidence in, explaining that it all goes to weight Milward v. Acuity Products 2011 Incredible miscue by US Supreme Court in denying review A new banner for plaintiffs lawyers and liberal judges to find good law in the 1st Circuit s bizarre weight of the evidence approach to toxicological evidence 50
51 Expert Evidence The States Uniform adoption of Frye or Daubert not essential Frye versus Daubert debate a state-specific issue based on statutes, evidentiary rules, and case law Increasing judicial awareness is paramount 51
52 PLAC has filed briefs in 36 of these cases Many adopted Daubert as their standard Others have kept Frye Hybrids Criminal Cases People v. Brooks (CO) (Yogi the Dog) People v. Leahy (CA) State of Alaska v. Coon (AK) Linkages Grady v. Frito Lay (2003 PA) seminal opinion on PA expert evidence standard Applied in Simikian/Betz v. Pneumo Abex-2011 The any-exposure opinion, as applied to substantial-factor causation, does not consider the three factors [these being potency, intensity, and duration ] which... need to be considered in trying to estimate the relative effects of different exposures. 52
53 Litigation Is Not Linear TRIAL APPEAL 53
54 PLAC has filed briefs in 36 of these cases Many adopted Daubert as their standard Others have kept Frye Hybrids Criminal Cases People v. Brooks (CO) (Yogi the Dog) People v. Leahy (CA) State of Alaska v. Coon (AK) Linkages Grady v. Frito Lay (2003 PA) seminal opinion on PA expert evidence standard Applied in Simikian/Betz v. Pneumo Abex-2011 The any-exposure opinion, as applied to substantial-factor causation, does not consider the three factors [these being potency, intensity, and duration ] which... need to be considered in trying to estimate the relative effects of different exposures. 54
55 Some Final Thoughts 55
56 56
57 I believe the more-for less challenge, above all others, will underpin and define the next decade of legal service. The more for less challenge will, I expect, irreversibly change the way that lawyers work. p. 5 57
58 My Take In house counsel will be required to do more with less FOREVER. 58
59 Additional Avenues Share information on adversarial experts Share experiences with and recommend defense experts Maintain and provide access to a knowledge base briefs, forms, white papers, articles etc. Quality CLEs attend and present 59
60 Key Takeaways Companies as a whole do NOT play well together The Plaintiff s bar does Work assiduously to overcome barriers to collaboration JDA s dot the i s and cross the t s Think creatively and strategically Invest the less you have more strategically 60
61
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