Nevada Adopts Common Interest Rule for Work-Product

You client sues X.  If Y is also suing X for the same issues, can you share information with Y’s lawyers to mutually advance your clients’ claims against X, but without waiving privilege?  Are your emails with Y’s lawyers protected work product?  It is a topic previously discussed in a prior post, where I guessed either the emails were beyond the scope of discovery or were protected work product.  Last Thursday the Supreme Court of Nevada considered this exact scenario.

In Cotter, Jr. v. Dist. Ct. CEO was terminated and then sued Board.[1]  Shareholders also filed a derivative action against Board involving CEO’s termination, and other issues.  The cases were consolidated.  During discovery the Board apparently sought communications between CEO and Shareholders’ lawyers.  A privilege log asserted a work-product privilege for “approximately 150 emails between Lewis Roca Rothgerber LLP, counsel for petitioner, and Robertson & Associates, counsel for the intervening plaintiffs….”  CEO and Shareholders argued “these emails, dated from August 2015 to June 2016, constituted work product because they contained mental impressions of matters related to the case.”  Board “filed a motion to compel production of these emails, arguing that petitioner waived his claim of work-product protection by sharing these communications with the intervening plaintiffs. [Board] also noted that there was no joint prosecution agreement or confidentiality agreement between the parties.”  The district court agreed and ordered the emails produced.

The Supreme Court reversed and concluded “that common interest exists between [CEO] and the [Board].”  “[N]umerous jurisdictions have recognized a broad common interest rule, allowing attorneys to share work product with other counsel for clients with the same interest without waiving the privilege.  We take this opportunity to adopt the common interest rule as an exception to waiver of the work-product privilege.”

For the common interest rule to apply, the “transferor and transferee must anticipate litigation against a common adversary on the same issue or issues” and “have strong common interests in sharing the fruit of the trial preparation efforts.” The rule is not narrowly limited to co-parties.  In addition, a written agreement is not required, and common interest “may be implied from conduct and situation, such as attorneys exchanging confidential communications from clients who are or potentially may be codefendants or have common interests in litigation.” However, waiver of the privilege is “usually found when the material is disclosed to an adversary.”  As a result, disclosure to third parties will waive the privilege “when it has substantially increased the opportunities for potential adversaries to obtain the information.”

Applied to the facts of the case, the CEO and Shareholders had a sufficient common interest to share information without waiving the work product privilege.  However, the case was still remanded for the district court to review “the emails in camera to evaluate whether they contain impressions, conclusions, opinions, and legal theories of counsel, as required pursuant to the work-product privilege.”

As applied to my prior post, Cotter concludes the work-product privilege could apply, but lacked an appellate record to determine if it did apply.[2]  While I appreciate that this in turn required an in camera review of some type, I also view this as a tool that could be used to harass opposing parties.  By sending requests for production seeking such emails, the opposing parties are burdened with the extensive cost of gathering the emails, producing a privilege log, likely a motion to compel, perhaps an in camera hearing of all or a selected sample, all the while wondering if their strategy could be destroyed.  I’m not a fan of that aspect of the opinion, but the harassing nature of the request was not at issue.  Someday it might.

[1] 134 Nev. Adv. Op. 32 (2018).
[2] For those keeping score, Cotter addressed one of the two arguments in that post.  That one of those arguments turned out to be semi-legitimate is cause for celebration as far as I’m concerned.