The Court of Appeals, in a lengthy 4-2 decision, recently reversed the Appellate Division, First Department’s unanimous decision that expanded the common interest doctrine to business transactions or mergers in which litigation was neither pending nor reasonably anticipated. The court reaffirmed the long-held precedent that the common interest doctrine applies to communications with a third party having a shared interest only if there is pending or reasonably anticipated litigation.
Business lawyers should be aware that a number of federal circuits, including the U.S. Court of Appeals for the Second Circuit, give the common interest doctrine, an exception to waiver of the attorney-client privilege, a more expansive treatment than the New York state courts. All other issues being equal, attorneys may choose to litigate either in federal or state court depending on whether there is a desire for a more or less restrictive view of the common interest doctrine.
Reaffirmed Narrower Scope
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