Commentary: Raising the Bar - What is a joint defense agreement?

Last month you received a call from a lawyer friend who represented a codefendant in a civil case. Before he talked to you substantively about the case, he said in passing, Of course, this is stated as part of our joint defense agreement. You do not recall ever signing such an agreement or even discussing it with him. The conversation seemed innocuous.

But suppose your friend had imparted harmful information about his client. Then, in a parallel criminal case, your client pled guilty. Now you and your client are asked by the prosecutor to share the earlier conversation you had with your lawyer friend.

Your friend insists that the communication is protected under the attorney/client privilege by virtue of a joint defense agreement. Is it?

In order to assert the joint defense privilege, there must be a common interest among the parties. There must also be intent on the part of all parties to keep the communication confidential. A written joint defense agreement memorializes and protects the joint defense privilege, which stems from the attorney/client privilege.

In the case of In Re: Grand Jury Subpoenas, 902 F.2d 244 (4th Cir. 1990), the 4th U.S. Circuit Court of Appeals held that the joint defense privilege is an exception to the general rule that disclosure to a third party of privileged information-waives the privilege. The court also held that a joint defense privilege cannot be waived without the consent of all parties who share the privilege. Id. at 248.

Individuals sharing common interest in litigation should be able to communicate with their respective attorneys and each other to more effectively defend or prosecute their claims. The benefits of joint defense agreements are bountiful; members of the joint defense group may share resources and shield clients from communication from adverse parties.

Nevertheless, there are serious drawbacks. Perhaps the greatest is the risk that a court will determine that the joint defense agreement is invalid, and that communications of counsel could constitute a waiver of their clients' attorney/client privilege.

A court could decide that the communication between counsel did not relate to the claim that gave rise to the joint defense agreement. Thus, the communications would not be deemed privileged. When making disclosures pursuant to a joint defense agreement, counsel need to be conscious of the scope of the disclosure in the context of the litigation.

Still another problem hovers over the joint defense agreement in criminal cases, especially those involving corporations. Companies seeking lenient sentences, for example, will cooperate with the government's investigation. In such a case, invocation of a joint defense agreement may cause problems if one of the parties enters into a plea agreement. The party who enters the plea may then be called upon to share damaging information with prosecutors, threatening the integrity of the joint defense agreement.

For lawyers seeking to understand the pitfalls of joint defense agreements, two cases will be of interest: Sheet Metal Workers Int'l. Ass'n. v. Sweeney, 29 F. 3d 120,124-25 (4th Cir. 1994) and Baltimore Scrap Corp. v. David J. Joseph Co., 1996 WL 720285 (D. Md. 1996).

In Sheet Metal, the 4th Circuit reviewed a joint defense agreement in a criminal case involving Sweeney, his employer, Sheet Metal Workers, as well as its pension fund. During the investigation Sweeney spoke about the investigation to counsel for the fund. In subsequent civil litigation involving Sweeney, the lawyer with whom he spoke issued a deposition subpoena. Sweeny moved to quash the subpoena on the basis that the communications from him to the attorney were within the scope of the attorney/client privilege. Though there was nothing in writing to this effect, he had proceeded under the impression that he and the union had a common interest and were working within the parameters of a joint defense agreement.

The court found there was no joint defense agreement, emphasizing that any such agreement must rest on the existence of a common interest about a legal matter. The court found as a fact that Sweeney's interests and the fund's were not the same. This fundamental requirement should always be kept in mind when you are considering a joint defense agreement.

In Baltimore Scrap, the court addressed the defendant's claim that a memo was privileged pursuant to a joint defense agreement, although the document was inadvertently shared with a third party. The plaintiff had accused the defendant, a competitor business, of antitrust violations stemming from the defendant's secret funding of litigation by community groups against the plaintiff's zoning application. The plaintiff sought to depose the community groups' counsel. The defendant claimed that the parties involved had a common threat of confronting an antitrust lawsuit and asserted the joint defense privilege.

The court ruled that the joint defense privilege was not applicable in the case. While the defendant and the community groups it funded may have had a joint strategy to defeat the plaintiff's zoning application, this interest was distinguishable from a joint strategy to combat the antitrust suit. Moreover, the court found that the defendant failed to meet its burden of showing an intention to keep the document confidential.