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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

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

TUESDAY, JULY 7, 2015

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.

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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 .

2 1 2 - 5 9 2 - 1 4 0 0

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

Not an independent privilege

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

10

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

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: AVOIDING

ETHICAL PITFALLS Adam M. Koss

Murphy Pearson Bradley & Feeney

Los Angeles | San Francisco | Sacramento

415-788-1900

akoss@mpbf.com

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 attorney-

client privilege to protect a confidential communication

made to a codefendant lawyer if the communication

was related to the defense of both defendants.”

15

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

16

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

17

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

18

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

19

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

20

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

21

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

22

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

23

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

24

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

25

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

26

Fiduciary Relationship

Attorneys representing one defendant in a joint-

defense agreement generally owe certain fiduciary

duties to the other defendants, which arises by

sharing and receiving confidential information

27

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

28

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

29

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

30

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 joint-

defense agreement on a client’s behalf

Don’t share before fully executed agreement!

31

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

32

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

33

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

34

Strategic Collaboration

Hugh F. Young, Jr. Product Liability Advisory Council hyoung@plac.net

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

The Vision Thing

Put another way…

Your case on appeal is no longer just your case, it’s everybody’s case.

38

The Vision Thing

• What have others experienced?

• How does our case fit in—does it?

• Appellate escalator—what’s on it?

39

“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

APPEAL TRIAL

Litigation Is Not Linear

41

Is It Even Possible to Shape

Common Law?

42

Federal State • Constitutional

• Applied in every case in every court

• State and Federal

• Procedure or Evidence • Applied in every

Federal court • May percolate

down

• Affects laws within the state only

43

Sustained Effort

Cross-Industry Effort

Cross-Industry Communication

Self-Interest Cannot Be Exclusive Focus

Advantageously Advance Specific Issues

44

Case Study -

Preemption

45

28.2 million accidents (vast majority were property

damage only)

3.4 million physical injuries

51,019 fatalities

46

Passenger Restraint Regulation/Litigation

“No air bag” liability

158,000,000 cars on the roads without airbags

Does FMVSS 208 preempt or not?

47

Case Study –

Expert Evidence

48

Expert Evidence – Federal

Daubert v. Merrell Dow 1993

GE v. Joiner 1997

Kumho v. Carmichael 1998

Weisgram v. Marley 2000

49

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

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

Expert Evidence – The States

51

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

APPEAL TRIAL

Litigation Is Not Linear

53

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

Some Final Thoughts

55

56

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

My Take

In house counsel will be required to do

more with less FOREVER.

58

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

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