California Federal Court Takes a Narrow View of the Common Interest Doctrine

McGuireWoods LLP

The common interest doctrine sometimes allows separately represented parties to avoid the normal waiver implications of sharing privileged communications -- but some courts do not recognize the doctrine, and other courts take widely varying views of its applicability.

In Finjan, Inc. v. SonicWall, Inc., Case No. 17-cv-04467-BLF (VKD), 2020 U.S. Dist. LEXIS 128725, at *3-4 (N.D. Cal. July 7, 2020), plaintiff Finjan claimed privilege protection for documents disclosed during board meetings attended by a representative of Cisco (which “was an investor in Finjan and had a contractual right to observe meetings of Finjan’s board of directors”). The court rejected Finjan’s common interest argument – surprisingly holding that “Cisco’s investment in Finjan and its status as a board observer, with or without an obligation of confidentiality, did not create a common legal interest between Cisco and Finjan.” Id. at *11. The court also noted that: (1) “Cisco did not own any interest in any of the patents [the subject of the pertinent withheld documents]; its sole interest was as a shareholder of Finjan”; and (2) “[n]or did Finjan and Cisco anticipate joint litigation.” Id. Because “Finjan voluntarily disclosed the disputed materials to a third-party investor who merely observed its board meetings,” that “voluntary disclosure waived whatever attorney-client privilege otherwise attached to these materials.” Id. at *12.

Not all courts would take this narrow and somewhat counter-intuitive approach. But cases like this highlight the dangerous unpredictability of the common interest doctrine.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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