Drafting Joint Defense Agreements: Protecting
the Privilege, Sharing Work Product, Avoiding
Disqualification
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TUESDAY, MARCH 3, 2020
Presenting a live 90-minute webinar with interactive Q&A
Ronald J. Levine, General Counsel, Herrick Feinstein, Newark, N.J.
Patrick F. Linehan, Partner, Steptoe & Johnson, Washington, D.C.
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Ronald J. Levine, Esq.
Herr ick , Fe inste in LLPN e w Yo r k / N e w a r k , N . J .
( 2 1 2 ) 5 9 2 - 1 4 2 4
r l e v i n e @ h e r r i c k . c o m
w w w. h e r r i c k . c o m
Joint Defense
Strategies
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
attorney-client privilege:
-Remember the 5 C’s
Not an independent privilege
May not protect direct party-
to-party communications
6
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
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
How?
Explain necessity
Confirm conflict checks
Provisions on when waiver and termination can
occur
Address settlements
9
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
Can set up subgroups where not all parties are
similarly situated10
Lessons Learned From Coordinating
With Other Companies
Need leadership to organize calls and prepare
agenda – note leadership can be expensive
Need participants “in the know” about recent
developments
Need to run internal screens at your firm
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
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
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
Joint Defense
Agreements
Patrick F. Linehan
202-429-8154
www.steptoe.com
Joint Defense/Common Interest Agreements
▪ Recurring Questions Regarding Joint
Defense/Common Interest Agreements
– Enforceability
– Discoverability
– Application Outside of Litigation Context
▪ Joint Defense Agreements in the Criminal context
– Generally
– Impact of Yates Memo
▪ Ethical Considerations
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The Enforceability of Joint Defense/Common
Interest Agreements
Recent Caselaw
▪ Importance of Commonality
– United States v. Gonzalez, 669 F.3d 974 (9th Cir. 2012)
▪ Business Interests vs. Legal Interests
– FSP Stallion 1, LLC v. Luce, 2010 WL 3895914 (D. Nev. Sept. 30, 2010)
– Heartland Consumer Prod. LLC v. DineEquity, Inc., 2018 WL 3574737 (S.D.
Ind. July 25, 2018)
▪ Use of Written Agreements
– Wells Fargo Bank, N.A. v. LaSalle Bank Nat’l Ass’n, 2010 WL 2594828 (W.D.
Okla. June 22, 2010)
– SEC v. Rashid, 17-cv-8223 (PKC) (S.D.N.Y. Dec. 13, 2018)
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The Discoverability of Joint
Defense/Common Interest Agreements
Are JDAs themselves privileged?
Usually Not…
– Pac. Coast Steel v. Leany 2011 WL 4572008 (D. Nev. Sept.
30, 2011)
– Rodriguez v. Gen. Dynamics Armament & Technological
Prods., Inc. 2010 WL 1438908 (D. Haw. Apr. 7, 2010)
…Except Where Agreement May Contain Sensitive
Information
– Steuben Foods, Inc. v. GEA Process Eng’g, Inc., 2016 WL
1238785 (W.D.N.Y. Mar. 30, 2016)
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Does the common interest doctrine
apply in the absence of pending or
anticipated litigation?
▪ Recent Caselaw
– Ambac Assur. Corp. v. Countrywide Home Loans, Inc., 27 N.Y.3d 616, 57 N.E.3d 30
(2016)
– Schaeffler v. United States, 806 F.3d 34 (2d Cir. 2015)
– O’Boyle v. Borough of Longport, 94 A.3d 299 (2014)
▪ The Delaware Rule: D.R.E. 502(b)(3)
▪ What Can Deal Parties Do Regarding Potential Privilege Waiver?
– Document basis for assertion of common interest
– Use of written agreement
– Hire new counsel for joint advice on joint issue
– Limit information sharing to non-privileged communications pre-closing
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Joint Defense Agreements in Criminal CasesThe DOJ’s Official Policy on JDAs Has Changed Over Time
▪ Under the Holder Memo (1999), a company’s decision to form a JDA was to be considered by the government when deciding whether to bring charges against the company itself.
▪ Justice Manual § 9-28.700: “Similarly, the mere participation by a corporation in a joint defense agreement does not render the corporation ineligible to receive cooperation credit, and prosecutors may not request that a corporation refrain from entering into such agreements. Of course, the corporation may wish to avoid putting itself in the position of being disabled, by virtue of a particular joint defense or similar agreement, from providing some relevant facts to the government and thereby limiting its ability to seek such cooperation credit.”
▪ Until September 2015, the DOJ awarded cooperation credit to corporations on a spectrum based on the corporation’s degree of cooperation.
▪ Under new guidelines, issued in a memo by then-Deputy Attorney General Sally Yates, the DOJ will no longer give any cooperation credit to corporations seeking leniency unless they divulge all facts about individual employee misconduct.
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Joint Defense Agreements After the Yates Memo
▪ Companies must now balance the benefits of JDAs against the
potential loss of cooperation credit if the government decides a
company has not sufficiently implicated individual employee
wrongdoers.
▪ The Yates Memo may chill the entering into and the sharing of
facts pursuant to JDAs by leaving JDAs vulnerable to attack
based on arguments that the parties lack a “common interest.”
– Handicaps company’s ability to conduct thorough internal
investigation
– Handicaps individual’s ability to defend itself in government
investigation
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Practice Pointers
▪ A written agreement setting forth the specific grounds for finding
commonality of interests and the terms of post-withdrawal
sharing of information may be preferable.
▪ When client is a company:
– Seek feedback from government on its view of whether particular
individuals have common interests with company and whether it is
concerned about a JDA’s application in the civil litigation context.
– When retaining separate representation for current employees,
company counsel should consider the potential impact on the joint
defense privilege.
▪ When client is an individual:
– Exercise care in what information it shares with company counsel
and the manner in which that information is shared.
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Ethical Considerations▪ Creation of Attorney-Client Relationship
– United States v. Henke, 222 F.3d 633 (9th Cir. 2000)
– City of Kalamazoo v. Mich. Disposal Serv. Corp., 125 F. Supp. 2d 219 (W.D. Mich. 2000)
– Takeda Pharmaceutical Company Limited, et al. v. Zydus Pharmaceuticals (USA), Inc., et al., Case No. 18-1994 (FLW) (D.N.J. Dec. 18, 2018)
– ABA Opinion 95-395
▪ Risk of Disqualification– Wilson P. Abraham Constr. Corp. v. Armco Steel Corp., 559 F. 2d 250, 253 (5th Cir.
1977)
– Diva Limousine Ltd. v. Uber Technologies Inc., No. 18-cv-05546-EMC, 2019 BL 8013 (N.D. Cal. Jan. 9, 2019)
– D.C. Bar Opinion 349
▪ Advance Waivers of Potential Conflicts – All Am. Semiconductor, Inc. v. Hynix Semiconductor, Inc., 2008 WL 5484552 (N.D. Cal.
2008)
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Practical Advice To Avoid Ethical Pitfalls
▪ Always include language in JDA that disclaims creation of attorney-client privilege and all rights to seek disqualification of attorneys in joint defense group
▪ Include specific waivers in JDA:
– Cross-examination and possible impeachment of any defecting JD member
– Seeking disqualifications based on lawyers’ moves to new firms
– Express permission of other lawyers representing clients in matters adverse to other joint defense members
▪ Have lawyers sign JDA in individual capacity, not on behalf of firm
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