strategic use of joint defense agreements in litigation...
TRANSCRIPT
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Presenting a live 90-minute webinar with interactive Q&A
Strategic Use of Joint Defense
Agreements in Litigation: Avoiding
Disqualification and Privilege Waivers Drafting Agreements That Minimize Risks and Maximize Benefits
Today’s faculty features:
1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific
TUESDAY, JULY 7, 2015
Ronald J. Levine, Partner, Herrick Feinstein, New York, NY
Adam M. Koss, Director, Murphy Pearson Bradley & Feeney, San Francisco
Hugh F. Young, Jr., President, Product Liability Advisory Council, Reston, Va.
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RONALD J. LEVINE, ESQ. H E R R I C K , F E I N S T E I N L L P
N E W Y O R K / N E W A R K , N . J .
2 1 2 - 5 9 2 - 1 4 0 0
R L E V I N E @ H E R R I C K . C O M
W W W . H E R R I C K . C O M
Joint Defense Strategies
THE BIG PICTURE
Joint Defense Privilege applies to communications that are part of an ongoing and joint effort to establish a common defense
Allows for communications without waiving attorney-client privilege
Not an independent privilege
6
BENEFITS
Allows industry to present aggressive, united defense
Consistency of defense positions
Uniform discovery and motion strategy
Coordination of knowledge and resources
Facilitates information sharing about judges, venues, plaintiffs' lawyers, etc.
Alert system for "copy cat" cases
Reduce costs and streamline
resources
7
WHEN?
Active or threatened litigation (with exceptions)
Share a common litigation-related interest
Objective agreement among the parties
Is the agreement in the best interests of your client?
…What if things fall apart or
break down?
8
HOW?
Explain necessity
Confirm conflict checks
Provisions on when waiver and termination can occur
Address settlements
9
PRACTICAL CONSIDERATIONS
Coordination of motion practice– will competitors agree on when, and before whom, motions should be brought?
Coordination of settlement – will competitors share information and their settlement strategies?
Coordination of information – will competitors share data and experts?
Need not cooperate during entire litigation – can be limited phases or issues
10
LESSONS LEARNED FROM COORDINATING WITH OTHER COMPANIES
Need leadership to organize calls and prepare agenda
Need participants “in the know” about recent developments
Need to be able to screen participants
Need to be able to preserve security
Need to involve outside counsel to share information among parties
11
SUGGESTIONS FOR COORDINATION
Expert Witness Bank
Deposition and Trial Transcript Bank
Designated “Gurus” who track settlements and court decisions
Exchange of Pleadings and Motion Papers
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CAUTION!
Companies may not be on the same page
Competitors may be seeking a competitive advantage
Friend today can become enemy tomorrow
Outside counsel can change sides
One of the companies may settle (or may have settled) and leave your company high and dry
13
JOINT DEFENSE
AGREEMENTS: AVOIDING
ETHICAL PITFALLS Adam M. Koss
Murphy Pearson Bradley & Feeney
Los Angeles | San Francisco | Sacramento
415-788-1900
Attorney-Client Privilege
Joint Defense Agreements
Grounded in the joint-defense privilege, also
referred to as the common-interest doctrine
“The rule that a defendant can assert the attorney-
client privilege to protect a confidential communication
made to a codefendant lawyer if the communication
was related to the defense of both defendants.”
15
Attorney-Client Privilege
Joint defense privilege is waived when one of
the joint defendants become an adverse party
Some courts hold that participants in a joint defense
agreement can unilaterally waive the privilege protection
for their own communications
16
Attorney-Client Privilege
Jurisdictions view the doctrine differently
California:
• Common-interest doctrine operates as an
exception to the general rule that a privilege is
waived upon voluntary disclosure to a third party
17
Attorney-Client Privilege
California (continued)
A party does not waive an existing privilege when the
following three requirements are satisfied:
• the information shared with a co-party would
otherwise have protection from disclosure
• the parties had a reasonable expectation that the
information disclosed would remain confidential
• the disclosure was reasonably necessary to
advance the party’s shared interest in securing
legal advice on a common matter
18
Attorney-Client Privilege
Federal • Distinct joint defense privilege that extends the attorney-client privilege to disclosures made in the presence of two or more clients who share a common interest in a legal matter
• Protects communications that were made in the course of a common defense effort so long as the statements were designed to further the effort and the privilege has not otherwise been waived
19
Potential Liability for Attorneys
• To client:
• Professional negligence
• Breach of fiduciary duty
• Damages based upon subsequent disqualification
• To other defendants
• Professional negligence or breach of fiduciary duty under
implied attorney-client relationship
• Liability to other defendants as third party beneficiaries
• Contractual liability
20
Potential Liability for Attorneys
Even in early cases involving joint defense efforts, courts
recognized that in a joint-defense arrangement “the
counsel of each was in effect the counsel of all.”
Many courts hold that a joint defense agreement does in
fact create an implied attorney-client relationship
between counsel for one defendant and the other
defendants participating in a joint-defense consortium
21
Potential Liability for Attorneys
Whether an attorney-client relationship exists is a
question determined by a Court based on substantive law
and the individual facts of a case
Courts consider:
• written agreements
• intent of the parties
• other indicia of an attorney-client relationship
22
Potential Liability for Attorneys
What professional responsibilities and ethical
obligations accompany the implied attorney-client
relationship?
Courts tend to agree that an attorney will owe some
duty to the members of the joint-defense group upon
receiving confidential information; however, they do
not agreed on the scope of that duty
23
Potential Liability for Attorneys
ABA Standing Committee on Ethics
and Professional Responsibility
An attorney representing one defendant participating in a joint-defense consortium would not owe ethical obligations to other members of the joint-defense consortium because the Model Rules do not impose such an obligation
An attorney would almost surely have a fiduciary obligation to the other members of the consortium, which might well lead to disqualification from representation
24
Disqualifications
United States v. Henke, 222 F.3d 633 (9th Cir. 2000)
• Three criminal defendants entered into a joint defense
agreement and share privileged information
• One defendant accepts plea deal and is called as a
witness
• Witness’ testimony conflicted with statements that he
made in confidence during joint-defense meeting
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Professional Negligence
Obligations an attorney owes under an “implied”
attorney-client relationship are not clear
Generally, an attorney owes the other joint-defense agreement
defendants a duty of confidentiality and a duty to avoid
conflicts of interest
26
Fiduciary Relationship
Attorneys representing one defendant in a joint-
defense agreement generally owe certain fiduciary
duties to the other defendants, which arises by
sharing and receiving confidential information
27
Third Party Beneficiary
Attorneys representing one defendant in a joint-defense
agreement can face liability to the others for failure to
perform an act as promised
28
Contractual Liability
An attorney in a joint-defense agreement typically agrees to
keep certain information received from codefendants
confidential while at the same time the attorney owes his or
her client a duty of utmost loyalty
29
Limiting the Risks
Before entering into a joint-defense agreement develop a
thorough understanding of the case and the theories of
liability alleged against each defendant
30
Limiting the Risks
Fully inform your client of the risks and benefits of
entering into a joint-defense agreement
It is advisable and often necessary to secure a client’s
informed, written consent before entering into a joint-
defense agreement on a client’s behalf
Don’t share before fully executed agreement!
31
Limiting the Risks
Terms for Inclusion:
• The parties to the agreement are actual or potential
defendants with common interests and the sharing of
information is necessary to further those interests
• All attorneys have performed a conflict check and are free
from conflicts with all parties
• Each client waives any conflict of interest or right to disqualify
against any attorney who receives confidential information
pursuant to the agreement
• No attorney-client relationship is intended or created
between the codefendants and their respective counsel
• Each party is represented exclusively by its own attorney
32
Limiting the Risks
Terms for Inclusion:
• That the agreement is not intended to make any party the
agent of any other party
• The agreement is not intended to interfere with the attorney’s
obligation to zealously advocate for the individual client
• The parties and their counsel have no affirmative duty to
share information or materials
• Any actions taken under the agreement are intended solely
to benefit the attorney’s individual client and not the other
members of the joint defense agreement
• Waiver of the joint privilege can only be made by consent of
all parties, and must be in writing
33
Limiting the Risks
Terms for Inclusion:
• Each party agrees to assert the common-interest doctrine
and underlying privileges when responding to any discovery
request or other compelled disclosure of materials
• No confidential communications shall be admissible in any
proceeding arising from a claim made by one party to the
agreement against another party
• Parties may only withdraw from the agreement upon written
notice and upon returning shared material
• The agreement applies to communications prior to its
effective date and extends past the conclusion of litigation
• All parties shall be notified of any settlement
34
Strategic Collaboration
Hugh F. Young, Jr. Product Liability Advisory Council [email protected]
The Vision Thing
“The doctrine of stare decisis, however, ensures
that the legal rules necessary to the court’s decision become the law for everyone within the
court’s jurisdiction.” (Scalia and Garner, Making Your Case)
37
The Vision Thing
Put another way…
Your case on appeal is no longer just your case, it’s everybody’s case.
38
The Vision Thing
• What have others experienced?
• How does our case fit in—does it?
• Appellate escalator—what’s on it?
39
“The courts provide a system for which there is no alternative.
Trials, and a steady stream of them, are enormously important
to a well-informed trial bar and to giving the law the life
that it needs.”
Judge Patrick E. Higginbotham
U.S. Court of Appeals for the Fifth Circuit
40
APPEAL TRIAL
Litigation Is Not Linear
41
Is It Even Possible to Shape
Common Law?
42
Federal State • Constitutional
• Applied in every case in every court
• State and Federal
• Procedure or Evidence • Applied in every
Federal court • May percolate
down
• Affects laws within the state only
43
Sustained Effort
Cross-Industry Effort
Cross-Industry Communication
Self-Interest Cannot Be Exclusive Focus
Advantageously Advance Specific Issues
44
Case Study -
Preemption
45
28.2 million accidents (vast majority were property
damage only)
3.4 million physical injuries
51,019 fatalities
46
Passenger Restraint Regulation/Litigation
“No air bag” liability
158,000,000 cars on the roads without airbags
Does FMVSS 208 preempt or not?
47
Case Study –
Expert Evidence
48
Expert Evidence – Federal
Daubert v. Merrell Dow 1993
GE v. Joiner 1997
Kumho v. Carmichael 1998
Weisgram v. Marley 2000
49
Vigilance
Required • Federal judges who pay lip service
to their gatekeeping function
• State court judges who justify
allowing virtually all evidence in,
explaining “that it all goes to
weight”
Milward v. Acuity
Products 2011
• Incredible miscue by US Supreme
Court in denying review
• A new banner for plaintiffs’
lawyers and liberal judges to find
“good law” in the 1st Circuit’s
bizarre “weight of the evidence”
approach to toxicological evidence
50
Uniform adoption of Frye or Daubert not essential
Frye versus Daubert debate a state-specific issue based
on statutes, evidentiary rules, and case law
Increasing judicial awareness is paramount
Expert Evidence – The States
51
PLAC has filed briefs in 36 of these cases
– Many adopted Daubert as their standard
– Others have kept Frye
– Hybrids
Criminal Cases – People v. Brooks (CO)
(Yogi the Dog)
– People v. Leahy (CA)
– State of Alaska v. Coon (AK)
Linkages
• Grady v. Frito Lay (2003 PA) – seminal opinion on PA expert
evidence standard
– Applied in Simikian/Betz v. Pneumo Abex-2011
• The any-exposure opinion, as applied to substantial-factor causation, does not consider the three factors [these being “potency,” “intensity,” and “duration”] which . . . need to be considered in trying to estimate the relative effects of different exposures.
52
APPEAL TRIAL
Litigation Is Not Linear
53
PLAC has filed briefs in 36 of these cases
– Many adopted Daubert as their standard
– Others have kept Frye
– Hybrids
Criminal Cases – People v. Brooks (CO)
(Yogi the Dog)
– People v. Leahy (CA)
– State of Alaska v. Coon (AK)
Linkages
• Grady v. Frito Lay (2003 PA) – seminal opinion on PA expert
evidence standard
– Applied in Simikian/Betz v. Pneumo Abex-2011
• The any-exposure opinion, as applied to substantial-factor causation, does not consider the three factors [these being “potency,” “intensity,” and “duration”] which . . . need to be considered in trying to estimate the relative effects of different exposures.
54
Some Final Thoughts
55
56
I believe the more-for less challenge,
above all others, will underpin and
define the next decade of legal
service. The more for less challenge
will, I expect, irreversibly change the
way that lawyers work.
p. 5
57
My Take
In house counsel will be required to do
more with less FOREVER.
58
Additional Avenues
• Share information on adversarial
experts
• Share experiences with and
recommend defense experts
• Maintain and provide access to a
knowledge base
• briefs, forms, white papers,
articles etc.
• Quality CLEs—attend and present
59
Key Takeaways
• Companies as a whole do NOT play
well together
• The Plaintiff’s bar does
• Work assiduously to overcome
barriers to collaboration
• JDA’s—dot the “i’s” and cross the
“t’s”
• Think creatively and strategically
• Invest the “less” you have more
strategically
60