24.3 Jointly Represented Clients

• Library: The Attorney-Client Privilege and the Work Product Doctrine: A Practitioner's Guide (Virginia CLE) (2013 Ed.)

24.3 JOINTLY REPRESENTED CLIENTS

24.301 Introduction. As in nearly every other way, joint representations on the same matter generate complicated and subtle issues involving the fate of the attorney-client privilege. Two issues are fairly easy. First, courts generally hold that a jointly represented client has the sole power to waive the privilege for his or her own private communications with the joint lawyer. Second, joint clients must unanimously vote to waive their joint privilege in order to allow disclosure of joint communications to a third party.

The real trouble comes when jointly represented clients have a falling out. In that situation, one former jointly represented client might try to block the other former jointly represented client's access to communications and documents reflecting his or her private communications with their joint lawyer.

Of course, a lawyer in this awkward situation does not face a dilemma if both of the former jointly represented clients agree to the lawyer's disclosure of the joint files and communications to both clients or their new lawyers. A controversy arises only if one of the former clients objects to the lawyer providing such access to both of the former clients.

It is important to recognize that the privilege issue focuses on the ability of the former clients to obtain and then use communications and documents that deserved privilege protection when they were created. ²⁸ Most importantly, the

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privilege protection prevents third parties from obtaining access to those communications and documents—absent a unanimous waiver. Thus, the privilege generally continues to shield the communications and documents from the world— the issue is whether one former jointly represented client can shield the communications and documents from the other former jointly represented client. As explained more fully below, however, the issue of one former jointly represented client's access to the other's communication might affect whether third parties will also be given access to them.

One might have thought that the privilege effect of a dispute among former jointly represented clients would simply mirror the arrangement they had during happier days. The ABA Model Rules seem to indicate (although not very clearly) that a lawyer for jointly represented clients must keep each client's secrets from the other clients, absent an agreement to the contrary. However, both the Restatement and the ACTEC Commentaries apparently take the opposite approach (although, again, not very clearly). Chapter 5 of this book discusses this issue.

If a court applied one of these general principles during a joint representation, one would expect a court to apply the same standard after a joint representation ends, whether the former jointly represented clients are in litigation with each other or not. And certainly if the law recognizes, or the clients agree to, a "no secrets" standard, there is no reason why the same standard would not apply after the joint representation ends. Thus, it is somewhat odd that the law developed a separate jurisprudence on the effect of former jointly represented clients' disputes with each other.

Although the authorities differ somewhat in their approach, the bottom line is that most authorities allow the former jointly represented clients to obtain such access, and then use the privileged communications and documents in a dispute with the other former jointly represented clients. Although some of the authorities and case law use the term "waiver" in discussing this approach, it would seem more accurate to use the term "evaporation" in describing what happens to the privilege in that situation. Neither former jointly represented client can unilaterally disclose any jointly owned privileged communications to third parties, even if there is a falling-out among the former clients. Still, their use of such communications or documents might provide access to such third parties, thus causing the privilege to essentially "evaporate."

24.302 Joint Client's Own Communications. The authorities and case law agree that each client has the power to waive the privilege for that client's own communications with the joint lawyer. As the Restatement explains, "in the absence of an agreement with co-clients to the contrary, each co-client may waive the privilege with respect to that co-client's own communications with the lawyer, so long as the communication relates only to the communicating and waiving client." ²⁹ The reference to an agreement by co-clients "to the contrary" does not make much sense. As explained in Chapter 5 of this book, a "keep secrets" approach allows each client to maintain control over (and privilege for) its own confidential communications with

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the lawyer. Here, the issue is whether the client has the power to waive his or her own communications with the lawyer—which seems obvious. There is no reason to give the other jointly represented clients any veto power over that client's power to control his or her own communications with the lawyer. However, the reference to a possible agreement "to the contrary" in this provision apparently means that a client may voluntarily give the other jointly represented clients a veto over the client's waiver of such private communications. It is difficult to imagine why a client would ever agree to such a provision.

If a document contains the client's own communications (over which the client has sole power) and other communications over which the client does not have sole power, it may be necessary to redact part of the document.

One co-client does not have authority to waive the privilege with respect to another co-client's communications to their common lawyer. If a document or other recording embodies communications from two or more co-clients, all those co-clients must join in a waiver, unless a nonwaiving co-client's communication can be redacted from the document. ³⁰

Thus, the rule might be applied on a sentence-by-sentence basis.

The case law agrees with this approach. For instance, the Third Circuit explicitly indicated that "a client may unilaterally waive the privilege as to its own communications with a joint attorney, as long as those communications concern only the waiving client." ³¹ Other courts take the same approach. ³² Thus, each joint client essentially has power over its own communications with a joint lawyer, but not power to waive the privilege covering other joint clients' communications to the lawyer or presumably the lawyer's communications to the client relaying the other jointly represented clients communications to the lawyer.

24.303 Waiver for Joint Communications. In contrast to a jointly represented client's power to waive privilege for its own communications, it is equally clear that all jointly represented clients must unanimously join in any waiver of communications by or involving the other clients.

Many courts have stated the general proposition that all jointly represented clients must join in a waiver absent a dispute among them.

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It bears noting that waiver by one joint client of its communications with an attorney does not enable a third party to discover each of the other joint clients' communications with the same counsel. Rather, "[o]ne co-client does not have authority to waive the privilege with respect to another co-client's communications to their common lawyer." ³³

The Restatement ³⁴ articulates the same principle. Courts have also taken the same approach in the case of attempted intentional waiver ³⁵ and even inadvertent waiver. ³⁶

Although not many courts have addressed it, this principle presumably also applies to one of the joint clients' successors. In other words, the successor steps into the shoes of the joint client and does not gain any greater power to unilaterally waive the privilege than the original joint client possessed. In 2012, the Eastern District of Virginia dealt with a bankruptcy trustee's claim for access to the files a law firm which had jointly represented the company and executives in a derivative case. ³⁷ The court ordered the law firm's file turned over to the trustee. The court then explained that the trustee could use otherwise privileged joint communications in litigation against the other former joint clients, but not against third parties. ³⁸

[T]he Trustee is entitled to production of the attorney's files, and the Trustee is entitled to use the documents in litigation with the three, jointly represented Individual Defendants; however, the Trustee is not entitled to waive the privilege in litigating against third parties. . . . [T]he Court will make it clear that the Trustee

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is not entitled to waive the privilege unilaterally in the litigation against the non-jointly represented defendants. ³⁹

Thus, a joint client's successor usually...