Most people communicating with their lawyer rightfully believe their discussions are privileged and cannot be disclosed to others without permission. However, when litigation ensues, because the attorney-client privilege interferes with full discovery and testimony, the privilege is strictly construed. Particularly in the context of disputes between shareholders, directors, officers and corporations, the lines have become blurred whether, and to what extent, otherwise privileged communications may be discovered in litigation. Two courts recently reached opposite results in deciding whether privileged communications should be produced to the parties' adversaries in litigation. While both courts were careful to note that they were basing their decisions upon the peculiar facts in the case, the differing results are remarkable.

In Chambers v. Gold Medal Bakery, Inc., 983 N.E.2d 683 (Mass. 2013), the Massachusetts Supreme Court held that directors/shareholders of a closely-held company who were adverse to the corporation did not have the right to obtain privileged corporate communications. The Court recognized that, although directors may generally have a right to access the company's books and records, and have fiduciary duties to manage the corporation, those principles are premised on the notion that the interests are not adverse to those of the corporation. Based upon the facts presented there— multiple lawsuits over time, efforts to gain control of the corporation, and a desire to drive up the stock price—the Court found that the interests were sufficiently adverse to deny the directors access to the company's privileged communications. The significant factor in the decision was the directors' adversity reflected in the desire to sell shares at the highest possible price which was adverse to the corporation's interests. "The idea that a director whose interests are adverse to those of a corporation on a given issue is not automatically entitled to access the corporation's confidential communications with counsel furthers the policy rationale underlying the attorney-client privilege: it promotes candid communications between attorneys and organizational clients." Id. at 693 (citing Upjohn Co.v. United States, 449 U.S. 383 1981)). The court precluded the directors' discovery of and access to the privileged materials. Id. at 698 (also noting that the directors' status as shareholders did not change the result).